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99 P.3d 1239 (2004) 195 Or. App. 546 STATE v. GUISTI. Court of Appeals of Oregon. October 6, 2004. Affirmed without opinion.	{ "pile_set_name": "FreeLaw" }
UNPUBLISHED UNITED STATES COURT OF APPEALS FOR THE FOURTH CIRCUIT JEFFREY STEVENS, Petitioner, v. BATH IRON WORKS CORPORATION; No. 96-2599 DIRECTOR, OFFICE OF WORKERS' COMPENSATION PROGRAMS, UNITED STATES DEPARTMENT OF LABOR, Respondents. On Petition for Review of an Order of the Benefits Review Board. (BRB-95-1950) Argued: March 6, 1998 Decided: July 27, 1998 Before NIEMEYER, HAMILTON, and LUTTIG, Circuit Judges. _________________________________________________________________ Affirmed by unpublished per curiam opinion. _________________________________________________________________ COUNSEL ARGUED: Edward Paul Gibson, RIESEN LAW FIRM, L.L.P., North Charleston, South Carolina, for Petitioner. Richard Fenn van Antwerp, ROBINSON, KRIGER & MCCALLUM, Portland, Maine, for Respondents. ON BRIEF: Allison A. Stover, RIESEN LAW FIRM, L.L.P., North Charleston, South Carolina, for Petitioner. Thomas R. Kelly, Daniel Nuzzi, ROBINSON, KRIGER & MCCAL- LUM, Portland, Maine, for Respondent Bath Iron Works. Unpublished opinions are not binding precedent in this circuit. See Local Rule 36(c). _________________________________________________________________ OPINION PER CURIAM: Jeffrey Stevens, proceeding under the Longshore and Harbor Workers' Compensation Act, seeks to compel Bath Iron Works to bear the cost of back surgery and temporary total disability benefits relating to the surgery. Although Stevens had a prior history of back problems, he aggravated his condition in 1989 while working for Bath Iron Works. The ALJ denied benefits, finding that Stevens' need for back surgery is not related to his 1989 work-related injury, and the Benefits Review Board affirmed by operation of Public Law 104-134. On appeal, Stevens contends (1) that the ALJ's determination that his need for surgery is unrelated to his prior workplace injury is not supported by substantial evidence, and (2) that the ALJ erred in not holding that a 1992 compensation order voluntarily entered into by Bath Iron Works to obtain Special Fund relief precludes Bath Iron Works from now arguing that it is not liable for the requested bene- fits. For the reasons given below, we affirm. I Stevens was first employed at Bath Iron Works located in Bath, Maine, in 1978, working as a tinsmith. In March 1989, he sustained a lower back injury at work when he attempted to pick up a box of bolts weighing between 100 and 175 pounds. As a result of this injury, Stevens missed more than four months of work and returned to work on limited duty. Shortly thereafter, in January 1991, he moved to South Carolina where he found work in a grocery store. Even before his work-related injury, Stevens had had a lengthy his- tory of lower back problems. In addition to a congenital abnormality in his spine, Stevens was involved in an automobile accident in December 1973, for which he received treatment to his back for three 2 months. In 1979, his back condition flared up again, requiring contin- uing treatment until 1981. In January 1988, he sustained another back injury in an automobile accident that caused him to remain out of work for eight months. He settled a lawsuit based on that accident for $82,500. Stevens currently suffers from a symptomatic pseudarthrosis of the lower lumbar vertebrae in the sacrum and degenerative lumbar disc disease. Essentially, Stevens has an extra spinal segment in his lower back and a degenerative condition in the tissues between his lower lumbar vertebrae. His treating physician, Dr. Donald Johnson, a board-certified orthopedic surgeon, has recommended that Stevens undergo surgery to remove the discs at the lowest two lumbar levels with a fusion done across the vertebrae above and below those discs. It is for this operation that Stevens seeks compensation from Bath Iron Works on the grounds that his current condition is related to his 1989 work-related injury. Relying on the opinions of Dr. Johnson and Dr. John W. Wicken- den, the only doctor who had seen Stevens both before and after his work-related injury, the ALJ concluded that Stevens' degenerative lumbar disc disease and the symptomatic congenital pseudarthrosis of the lowest lumbar vertebrae in the sacrum were present in 1988 and were not affected by the lifting incident at Bath Iron Works in 1989. The ALJ quoted approvingly from Dr. Wickenden's opinion as fol- lows: The lifting incident which occurred at Bath Iron Works on March 2, 1989 is of no orthopedic/medical consequence to the history of this man's spinal pathology. That injury caused a transient exacerbation of symptoms which had been consistently present for at least fourteen months prior to that time, and symptoms which had occurred intermit- tently since 1973. Images taken prior to March, 1989 are essentially the same as images which have been taken in the interval since that time. . . . The basis for his surgery is con- genital and degenerative disease which first showed itself in 1973 and became more chronically persistent after January 1988. I see no meaningful way in which any current, or 3 hypothetical future, physical restrictions can be attributed to a lifting incident at Bath Iron Works during March, 1989. Accordingly, the ALJ denied any further benefits. From the affir- mance of the Benefits Review Board by operation of law, this appeal followed. II Under the Longshore Act, an employer is liable to his employees for "such medical, surgical, and other attendance or treatment . . . for such period as the nature of the injury or the process of recovery may require." 33 U.S.C. §§ 904, 907. Furthermore, it is presumed that a claim for compensation under the Longshore Act comes within the scope of the Act's coverage "in the absence of substantial evidence to the contrary." Id. at 920(a). An employer, however, must provide benefits for only those injuries that "aris[e] out of and in the course of employment." Id. at § 902(2). In this case, the ALJ found that the need for the proposed surgery on Stevens' back was unrelated to Stevens' 1989 work injury and that therefore Bath Iron Works was not required by the Longshore Act to pay the costs of surgery. We must uphold this decision if it is "sup- ported by substantial evidence in the record considered as a whole." 33 U.S.C. § 921(b)(3); see also Newport News Shipbuilding and Dry Dock Co. v. Tann, 841 F.2d 540, 543 (4th Cir. 1988). Substantial evi- dence is "such relevant evidence as a reasonable mind might accept as adequate to support a conclusion." Richardson v. Perales, 402 U.S. 389, 401 (1971) (quoting Consolidated Edison Co. v. NLRB, 305 U.S. 197, 229 (1938)). Moreover, "the ALJ's findings may not be disre- garded on the basis that other inferences might have been more rea- sonable. Deference must be given the fact-finder's inferences and credibility assessments, and we have emphasized[that] the scope of review of ALJ findings is limited." Newport News Shipbuilding, 841 F.2d at 543 (citation omitted). The ALJ's finding that Stevens' lower back problems were "not related in any way to the trivial lifting incident at Bath Iron Works on March 2, 1989," is supported by the medical evidence provided by both Dr. John Wickenden, a board-certified orthopedic surgeon who 4 treated Stevens from November 1988 until April 1990 and who reviewed Stevens' medical records from 1979 to 1994, and by Dr. Johnson, Stevens' current treating doctor. According to Dr. Wicken- den, Stevens' lower back problems started in 1973, following his involvement in the first of two automobile accidents, and continued intermittently over the next two decades. In Dr. Wickenden's opinion, the "real cause" of Stevens' back problems"was some combination of congenital anomalies and degenerative changes in his low back." Dr. Wickenden stated that x-rays taken of Stevens' lower back as early as 1979 revealed "essentially the same pathology" as imaging studies done as recently as 1993. Based on these findings, Dr. Wick- enden concluded, The basis for [Stevens'] surgery is congenital and degenera- tive disease which first showed itself in 1973 and became more chronically persistent after January 1988. I see no meaningful way in which any current, or hypothetical future, physical restrictions can be attributed to a lifting inci- dent at Bath Iron Works during March 1989. Dr. Johnson seconded Dr. Wickenden's finding that Stevens' lower back problems predated Stevens' March 1989 injury by well over a year and were of "longstanding" and "permanent" duration. Stevens presented no medical evidence at the hearing before the ALJ that contradicted the opinions offered by Dr. Wickenden and Dr. Johnson. The only evidence that Stevens presented that even remotely supported his claim that his current back condition is related to his March 1989 injury was his own testimony which the ALJ discredited in light of Stevens' admitted failure to disclose his complete medical history to three of his treating physicians. We cannot say that this credibility determination was in error. See Newport News Shipbuilding, 841 F.2d at 543. Accordingly, we find that the ALJ's decision to deny the requested benefits is supported by substantial evidence in the record considered as a whole. III Stevens objects to the ALJ's having decided the causation issue in this proceeding because the issue was not properly before the ALJ, 5 having been decided when Stevens was first provided benefits for his 1989 injury. He argues that because 33 U.S.C. § 907(a) requires the employer to pay medical benefits indefinitely, the only issue was whether Bath Iron Works "is responsible for payment for the surgery prescribed by Dr. Johnson" and for related disability and medical expenses. Stevens, however, misunderstands the statutory scheme because Bath Iron Works' continuing liability under the Longshore Act for the costs of the proposed surgery is predicated on a finding that the sur- gery is intended to treat an injury that arose out of and in the course of Stevens' employment at Bath Iron Works. See 33 U.S.C. § 902(2); see also Colburn v. General Dynamics Corp., 21 B.R.B.S. 219 (1988) (where employee's condition is not natural or unavoidable result of workplace injury, but is result of intervening cause, employer is relieved of liability for disability and medical expenses). Thus, dem- onstrating a causal connection between Stevens' current need for sur- gery and his March 1989 workplace injury is a necessary precondition to Bath Iron Works' liability for the surgery under the Longshore Act. Stevens also contends that the issue of causation had already been decided by a 1992 compensation order voluntarily entered into by Bath Iron Works and that that order constitutes res judicata in this case. The 1992 order provided that starting in April 1992 the Long- shore Act's § 8(f) Special Fund would pay Stevens permanent partial disability benefits based on the "combined result of the injury sus- tained on March 2, 1989, superimposed on the pre-existing permanent partial disability to the back." See 33 U.S.C. § 908(f). In addition, the order stated that Bath Iron Works "remains liable for medical care related to the employment injury." (Emphasis added). This provision clearly leaves open the question of whether Stevens' current need for surgery was caused, even in part, by the March 1989 lifting incident. Because the order did not decide the causation issue before us, res judicata does not apply. For the foregoing reasons, the decision of the Benefits Review Board is AFFIRMED. 6	{ "pile_set_name": "FreeLaw" }
763 F.Supp. 1282 (1991) MOUNTAIN RIDGE STATE BANK, Plaintiff, v. INVESTOR FUNDING CORPORATION, et al., Defendants. Civ. A. No. 91-80. United States District Court, D. New Jersey. March 21, 1991. 1283 John G. Geppert, Jr., Wiley, Malehorn & Sirota, Morristown, N.J., for plaintiff F.D. I.C. Gary Trachten, Kudman & Trachten, New York City, for defendants Daniel H. Cohen, Louis L. Cregler, Paul Glaser, Carolyn Glaser, John J. Keelin, Betty A. Keelin, Howard Kitain, Sandra Kitain, Ursala Meyer, Jose Saavedra and Angela Saavedra. David R. Rudd, Rudd and Poss, South Orange, N.J., for defendants Mahesh Agashiwala, Loma Agashiwala, Mukesh Ajmera, Dina Ajmera, Avinash Bapat, Shahsultan Bapat, Custodians of Anil Bapat, Robert Beckerle, Elgene Beckerle, Samuel J. Berman, Anand M. Dhanda, Russel J. Dunlop, Linda Dunlop, Robert A. Emmett, John R. Everitt, Peter J. Ferrara, Consuelo C. Ferrara, Manhar Ghandi, Daksha Ghandi, Jean Goddard, William Goddard, Mandukant Gosalia, Eugene McCloskey, Jayaprakash Modi, Subramanian Natarajan, James L. Nolan, Mary E. Nolan, William Nurse, Phyllis Nurse, Elliot Palmer, Shirish C. Parikh, Chhaya Parikh, David Rand, Rhonda Rand, Samuel Klein and Co., Paul Taenzler, Warren Lieberman, Marvin Gottlieb, Joseph Faccone, Jerome Fien, John Dashuta, Howard Ehrlich, James Tennant, George Huss, Nathan Honig, Estate of Frederick M. Stern, Subramanian Sundaraman, Trygve S. Vik, Sharadkuman Saraiya, Raksha Saraiya, Subodhchandra Trivedi, Sudha Trivedi, James R. Baehler and Jeffrey Singer. OPINION LECHNER, District Judge. This matter is before the court on the motion of certain defendants (the "Moving Defendants") to remand this case to the 1284 Superior Court of New Jersey, Law Division, Essex County (the "Superior Court").[1] For the reasons set forth below, the motion is granted. Facts and Procedural History The plaintiff, Mountain Ridge State Bank ("Mountain Ridge"), is a New Jersey banking corporation. FDIC Brief at 1. Mountain Ridge had entered into a two participation agreements with defendant Investor Funding Corporation ("IFC") whereby IFC transferred all of its rights and obligations with respect to numerous promissory notes (the "Notes") to Mountain Ridge. Id. The Notes were executed by, among others, the Moving Defendants. Id.; Defendants' Brief at 1. The Moving Defendants claim the proceeds of the Notes were paid not to them directly, but to partnerships in which they had invested. Defendants' Brief at 1. The Moving Defendants claim they ceased to make payments due and owing under the Notes when they discovered that the partnerships were in fact part of "ponzi scheme" involving IFC and defendant John Kimble. Id. Subsequently, Mountain Ridge commenced an action on 22 August 1989 in the Superior Court to recover for the Moving Defendants' default under the Notes. Id. at 2; FDIC Brief at 1. The Moving Defendants answered Mountain Ridge's complaint and asserted, among other things, the affirmative defenses of fraud and failure of consideration. Defendants' Brief at 2. On 4 October 1990, after a series of motions in the Superior Court, the defendants, represented by the law firm of Kudman & Trachten ("Kudman"), were granted leave to amend their answer to assert counterclaims against Mountain Ridge for rescission and restitution. Id. at 2-3. On 5 October 1990, the Commissioner of Banking of the State of New Jersey declared Mountain Ridge insolvent and appointed and confirmed the FDIC as receiver pursuant to N.J.S.A. 17:9A-272(D).[2] Defendants' Brief at 3; FDIC Brief at 3-4. On the same day, the FDIC filed an ex parte application in the Superior Court pursuant to 12 U.S.C. § 1821(d)(12)[3] for a ninety-day stay of all proceedings in the Superior Court to which Mountain Ridge was a party. FDIC Brief at 4; Defendants' Brief at 3. The FDIC's ex parte application was apparently made in a proceeding separate from the action to enforce the Notes. Defendants' Brief at 3; FDIC Brief at 3. The application for the stay, however, was heard by Hon. Paul B. Thompson, who was the Judge in the Superior Court before whom the action to enforce the Notes was pending. FDIC Brief at 3. Judge Thompson, by an Order, dated 9 October 1990, stayed until 3 January 1991 all cases or matters in the Superior Court in which Mountain Ridge was a party. FDIC Brief at 3; Defendants' Brief at 3. The Moving Defendants did not learn of the stay until 20 November 1990, when they received from the law firm of Wiley, Malehorn & Sirota ("Wiley") a copy of the Order granting a stay. FDIC Brief at Exhibit L. 1285 It is apparent from various orders of the Superior Court that Wiley represented Mountain Ridge in this case in state court prior to the appointment of the FDIC. See FDIC Brief at Exhibits C, D, E & F. For example, in a letter-opinion, dated 4 October 1990, Judge Thompson declined to grant Mountain Ridge's motion for summary judgment. FDIC Brief at Exhibit G. The letter-opinion was addressed to Wiley. Id. It does not appear Wiley had been formally retained by the FDIC to handle any Mountain Ridge litigation at the time Wiley sent a copy of the Order granting the stay to the Moving Defendants. By a letter sent to Wiley, dated 13 November 1990, the FDIC stated it was attempting to ascertain whether Wiley was qualified to represent the FDIC in the Mountain Ridge cases pending in the Superior Court. FDIC Brief at Exhibit K. Although that letter did not specifically refer to this case, the letter did state that Wiley should "continue to handle" the unspecified Mountain Ridge cases discussed in a meeting between Wiley and the FDIC on 7 November. Id. On 24 December 1990, the FDIC directed Wiley to commence proceedings to remove this case from state to federal court. FDIC Brief at Exhibit M. The FDIC desired removal because it anticipated the defendants represented by Kudman would assert a counterclaim. Id. It is assumed that sometime in December 1990, Wiley was formally retained to continue as counsel for the FDIC on this matter. See Geppert Affidavit at ¶ 10. On 3 January 1991, the FDIC filed its Notice of Removal with this court. On 15 January 1991, the parties appeared for a status conference at which time the parties discussed whether the removal from state to federal court was appropriate.[4] Discussion The Moving Defendants oppose removal of this case to federal court and seek remand to the Superior Court. The Moving Defendants contend removal is improper for several reasons. First, the Moving Defendants contend removal is precluded because this is a "state action" involving purely state law. Defendants' Brief at 6. Second, the Moving Defendants contend the notice of removal was untimely. Id. at 7. Third, they contend the stay was improperly obtained. Id. at 13. Last, the Moving Defendants contend this court should decline or defer exercise of jurisdiction because the Superior Court has retained jurisdiction to determine whether appointment of the FDIC as receiver was appropriate. Id. at 15. The FDIC disputes all of these contentions. A. Removal Under 12 U.S.C. § 1819 1. Standard of Review The FDIC may seek the removal from state to federal court of a case in which the FDIC is a party.[5] 12 U.S.C. § 1819(b)(2)(B) (as amended by the Financial Institutions Reform, Recovery and Enforcement Act of 1989, Pub.L. No. 101-73, § 209, 103 Stat. 183 (1989) ("FIRREA"), codified, as amended, at 12 U.S.C. § 1819(b)(2)(B)). Any case in which the FDIC is a party has been deemed by Congress to arise, except in certain circumstances, under the laws of the United States.[6]Id. at § 1819(b)(2)(A). An action does not arise under the laws of the United States when it is an action: 1286 (i) to which the [FDIC], in the [FDIC]'s capacity as receiver of a State insured depository institution by the exclusive appointment by State authorities, is a party other than as a plaintiff; (ii) which involves only the preclosing rights against the State insured depository institution, or obligations owing to, depositors, creditors, or stockholders by the State insured depository institution; and (iii) in which only the interpretation of the law of such State is necessary. Id. at § 1819(b)(2)(D). Section 1819(b)(2)(D) is not to be construed, however, to limit a federal court's jurisdiction when the State insured depository institution could have invoked the jurisdiction of federal courts in the action. 12 U.S.C. § 1819(b)(2)(E). 2. State Action Under 12 U.S.C. § 1819 The Moving Defendants contend that this action is excluded from removal because the counterclaims they have asserted turn this action into an action arising under state, not federal, law. Defendants' Brief at 7. This contention, however, has no merit. There are few cases interpreting Section 1819(b)(2)(D). None of the cases directly address the relevant issue here or even the issue of whether each of the subsections must be met for removal to be barred. From the plain language of Section 1819(b)(2)(D), however, it appears each subsection must be met because subsection (ii) ends with an "and." See Bruce v. First Fed. Sav. & Loan Ass'n, 837 F.2d 712, 715 (5th Cir.1988) ("The word `and' is therefore to be accepted for its conjunctive connotation rather than as a word interchangeable with `or' except where strict grammatical construction will frustrate clear legislative intent."). Consequently, the Moving Defendants' assertion that this action is not removable on the basis of Section 1819(b)(2)(D) will fail if they cannot show any of the three subsections are met. The Moving Defendants argue this action involves only state law and the preclosing rights of the Moving Defendants against Mountain Ridge on the Notes. Defendants' Brief at 6. Assuming that this action is indeed one involving only state law, the relevant issue then is whether the FDIC is a party other than plaintiff. 12 U.S.C. § 1819(b)(2)(D)(i). The FDIC, as receiver, has succeeded to all the rights and obligations of Mountain Ridge. Bacsik Certification at ¶ 9. Thus, the FDIC will litigate this action on behalf of Mountain Ridge, the plaintiff. Consequently, the FDIC is a party in this action in its capacity as the plaintiff. In addition, the mere assertion of counterclaims by the Moving Defendants does not vitiate the FDIC's status as plaintiff and turn this action into a state action. In FDIC v. Kasal, 913 F.2d 487 (8th Cir.1990), cert. denied, ___ U.S. ___, 111 S.Ct. 1072, 112 L.Ed.2d 1178 (1991), it was held that federal courts have jurisdiction to hear counterclaims asserted against the FDIC based on state law. Kasal, 913 F.2d at 493. Although Kasal addressed the issue of when state law governs a case, it suggests counterclaims do not hinder the FDIC's access to federal courts. Consequently, the Moving Defendants' contention that this is a nonremovable state action is without merit. 3. Timeliness of Removal Under 12 U.S.C. § 1819 Section 1819 does not, on its face, limit the time in which the FDIC may remove an action. The FDIC contends a reasonable period should be read into Section 1819, rather than the thirty day period set forth in the general federal removal statute, 28 U.S.C. § 1446(b).[7] FDIC Brief at 4. The FDIC suggests that ninety days is a reasonable time because Congress has allowed the Resolution Trust Corporation ("RTC") ninety days in which to seek removal in 1287 similar actions.[8]Id. (citing 12 U.S.C. § 1441a(l)(3)). In the alternative, the FDIC suggests that a reasonable period would be no less than the thirty days allowed under the general federal removal statute. Id. (citing 28 U.S.C. § 1446(b)). Under either suggestion, the FDIC contends the removal period should begin running only upon the expiration of the ninety day stay of proceedings to which the FDIC is entitled under 12 U.S.C. § 1821(d)(12)(B). FDIC Brief at 8-9. The Moving Defendants argue the proper time period for removal is the thirty day limit under 28 U.S.C. § 1446(b) and the period commences running either when the FDIC is appointed receiver or when the FDIC acquires knowledge of the existence of a removable action. Defendants' Brief at 9-13. The Moving Defendants also contend that a stay of proceedings does not toll the running of the limitations period. Id. at 10-13. a. Removal Under 28 U.S.C. § 1446 Under the general federal removal statutes, an action brought in state court can be removed by defendants to the federal district court encompassing the state court if that federal district court would have had original jurisdiction. 28 U.S.C. § 1441(a).[9] A defendant seeking to remove a case must file "a notice of removal ... containing a short and plain statement of the grounds for removal, together with a copy of all process, pleadings, and orders served...." 28 U.S.C. § 1446(a).[10] Section 1446 provides a thirty day limitations period for removal. 28 U.S.C. § 1446(b). The notice of removal must be filed within thirty days after receipt by service of process or otherwise of the initial pleading setting forth the basis for removal.[11]Id. If the initial pleading does not reveal a basis for removal, then the notice of removal may be filed within thirty days of receipt by any means of an amended pleading, motion, order or other paper which indicates the case is removable. Id. The thirty day limitation is mandatory and cannot be extended by the court. Balestrieri v. Bell Asbestos Mines, Ltd., 544 F.Supp. 528, 529 (E.D.Pa.1982); Typh, Inc. v. Typhoon Fence of Penn., Inc., 461 F.Supp. 994, 996 (E.D.Pa.1978); see also Northern Ill. Gas Co. v. Airco 1288 Indus. Gases Div. of Airco Inc., 676 F.2d 270, 273 (7th Cir.1982); Courtney v. Benedetto, 627 F.Supp. 523 (M.D.La.1986). Moreover, the thirty day period does not commence running from when the party seeking removal has actual knowledge of the propriety of removal; all that is required is the receipt of a paper indicating removal is proper. Rowe v. Marder, 750 F.Supp. 718, 721 (W.D.Pa.1990). Consequently, the party seeking removal cannot attempt to excuse an untimely filing of the notice of removal by claiming that he did not read the paper or that the paper was somehow incomplete. Id. A case may be remanded to state court on the ground of a defect in the removal procedure. 28 U.S.C. § 1447(c).[12] Failure to file a notice of removal within the thirty day limitations period is cause for remand. Capone v. Harris Corp., 694 F.Supp. 111, 112 (E.D.Pa.1988); Blow v. Liberty Travel, Inc., 550 F.Supp. 375, 375-76 (E.D.Pa.1982). The party seeking removal has the burden of showing that federal subject-matter jurisdiction exists, filing of the notice of removal was timely and that removal is proper. Boyer v. Snap-On Tools Corp., 913 F.2d 108, 111 (3d Cir.1990), cert. denied, ___ U.S. ___, 111 S.Ct. 959, 112 L.Ed.2d 1046 (1991); Steel Valley Authority v. Union Switch and Signal Division, Amer. Standard, Inc., 809 F.2d 1006, 1011 (3d Cir.1987), cert. dism'd, 484 U.S. 1021, 108 S.Ct. 739, 98 L.Ed.2d 756 (1988); Capone, 694 F.Supp. at 112. "The removal statutes `are to be strictly construed against removal and all doubts are to be resolved in favor of remand.'" Boyer, 913 F.2d at 111 (quoting Steel Valley, 809 F.2d at 1010). b. The Removal Limitations Period Under 12 U.S.C. § 1819 Courts which have considered the issue of whether Section 1446 governs the time for removal pursuant to Section 1819(b)(2)(B) agree that the section does in fact apply. See, e.g., In re Meyerland Co., 910 F.2d 1257, 1264 (5th Cir.1990) (Higginbotham, J., concurring); FDIC v. Loyd, 744 F.Supp. 126, 128 (N.D.Tex.1990); Hunter's Run, I, Ltd. v. Arapahoe County Public Trustee, 741 F.Supp. 207, 207 (D.Colo.1990); MTech Corp. v. FDIC, 729 F.Supp. 1134, 1136 (N.D.Tex.1990); FDIC v. Taylor, 727 F.Supp. 326, 328 (S.D.Tex. 1989); FDIC v. Norwood, 726 F.Supp. 1073, 1075 (S.D.Tex.1989). Section 1819(Fourth) of Title 12 of the United States Code was the predecessor to Section 1819(b)(2)(B). See 12 U.S.C. § 1819(Fourth), amended by FIRREA, Pub.L. No. 101-73, § 209, 103 Stat. 183, 216-17 (codified, as amended, at 12 U.S.C. § 1819(b)(2)(B)). In decisions involving Section 1819(Fourth), courts uniformly held that Section 1446 governed removal. See, e.g., Bowen v. FDIC, 915 F.2d 1013, 1014-15 (5th Cir.1990); Kasal, 913 F.2d at 489; In re Franklin Nat'l Bank Sec. Litig., 532 F.2d 842, 843 (2d Cir.1976); T & M Dental Lab, Inc. v. First Indus. Bank, 714 F.Supp. 798, 799 (E.D.La.1989); Heafitz v. Interfirst Bank, 711 F.Supp. 92, 94-95 (S.D.N.Y.1989); Yankee Bank for Finance & Savings, FSB v. Hanover Square Associates-One L.P., 693 F.Supp. 1400, 1410 (N.D.N.Y.1988); FDIC v. The Atlantic Org., Inc., 682 F.Supp. 5, 7 (D.P.R.1988). Section 1819(Fourth) contained the language that the FDIC may remove "by following any procedure for removal now or hereafter in effect." 12 U.S.C. § 1819(Fourth). Consequently, courts looked to the general federal removal statutes because they were the removal procedures then in effect. See In re Franklin, 532 F.2d at 846. With FIRREA, Congress eliminated the language referring to removal procedures 1289 in effect. See FIRREA, Pub.L. No. 101-73 at § 209, 103 Stat. at 216-17. Significantly, Congress did not replace that language with any other language indicating the proper procedures for removal. In this regard, "Congress is presumed to be aware of an administrative or judicial interpretation of a statute and to adopt that interpretation when it re-enacts a statue without change." Lorillard v. Pons, 434 U.S. 575, 580, 98 S.Ct. 866, 870, 55 L.Ed.2d 40 (1978) (citations omitted). As well, "if Congress intends for legislation to change the judicial interpretation of a judicially created concept, it makes that intent specific." Midlantic Nat'l Bank v. New Jersey Dep't of Environmental Protection, 474 U.S. 494, 501, 106 S.Ct. 755, 759, 88 L.Ed.2d 859 (1986). In this situation, Congress left a lacuna in the FIRREA as to the procedure for removal. Even though Section 1819 was not re-enacted verbatim, it is presumed Congress was aware of the way courts had applied Section 1446 to Section 1819(Fourth). Absent any indication otherwise, it is also presumed Congress intended that a Section 1819(b)(2)(B) removal should be governed by 28 U.S.C. § 1446. The FDIC has failed to demonstrate Congress intended to eliminate the thirty day limitation. Plainly, had Congress wanted to, it could have done so. For example, Section 1819 diverges from the general federal removal statutes in that Section 1819 allows removal by the FDIC when it is a plaintiff, whereas the general federal removal statutes allow for removal only by defendants. Compare 12 U.S.C. § 1819(b)(2)(B) with 28 U.S.C. 1441. Clearly Congress, when it wanted to expand the FDIC's removal power, explicitly provided as much. In re Meyerland Co., 910 F.2d 1257, 1264 (5th Cir.1990). Nothing in the legislative history of FIRREA, however, indicates Congress intended to uncouple the FDIC's removal powers from the general federal removal statutes. See FIRREA, Pub.L. No. 101-73, 103 Stat. 183, passim. The FDIC's reliance on the RTC removal limitations period is inapposite. Congress created distinctly different procedures for removal for the FDIC and the RTC. Matrix Ski Corp. v. FDIC, 734 F.Supp. 763, 765 (N.D.Tex.1990). For example, Section 1819 allows removal to any federal court, while suits involving the RTC can be removed only to the District of Columbia under 12 U.S.C. § 21A(l)(3). Matrix, 734 F.Supp. at 765. Moreover, Congress explicitly provided for a removal limitations period for the RTC, 12 U.S.C. 1441a(l)(3), whereas Congress declined to do so for the FDIC. RTC v. Key, 733 F.Supp. 1086, 1089-90 (N.D.Tex.1990). The removal provisions for the RTC and the removal provisions for the FDIC are not interchangeable. Key, 733 F.Supp. at 1090 n. 7. In MTech, the FDIC attempted to advance the same arguments it makes here. There the FDIC argued the elimination of the language referring to removal procedures in effect indicated Congress intended to broaden the FDIC's removal powers and that a reasonable limitations period such as the ninety day RTC period should be applied. 729 F.Supp. at 1136 & 1136 n. 4. The court rejected those arguments, stating: This Court cannot countenance such a reading of FIRREA. If Congress had sought to insulate the FDIC from § 1446(b)'s time restrictions, it could have explicitly said so. Nowhere is there a "reasonableness" standard set out in the amended statute. Nor can one find a word mentioned in the voluminous legislative history that accompanied the act as to the applicability or inapplicability of § 1446(b); these materials make but a scant general reference which affirms the FDIC's authority to remove certain state court proceedings. This general affirmance seems the better interpretation of FIRREA's slightly modified language. Moreover, taken to its logical extreme, the FDIC's argument would mean that it need not comply with any provisions of the general removal statute, including the requirement that a removing party file a notice of removal. Id. at 1136 (citations omitted). Accord Norwood, 726 F.Supp. at 1075. 1290 Because Congress failed to otherwise provide, removal under Section 1819(b)(2)(B) is governed by the general federal removal statute 28 U.S.C. § 1446. Accord In re Meyerland, 910 F.2d at 1264; Loyd, 744 F.Supp. at 128; Hunter's Run, 741 F.Supp. at 207; Norwood, 726 F.Supp. at 1075; MTech, 729 F.Supp. at 1136; Taylor, 727 F.Supp. at 328. "A party contending that legislative action changed settled law has the burden of showing that the legislature intended such a change." Green v. Bock Laundry Mach. Co., 490 U.S. 504, 521, 109 S.Ct. 1981, 1991, 104 L.Ed.2d 557 (1989). The FDIC has failed to meet this burden of showing that Congress intended to uncouple Section 1819 from Section 1446. c. Commencement of the Removal Limitations Period Because the thirty day limitations period derives from Section 1446, it must be applied in a manner consistent with Section 1446. Consequently, the limitations period commences upon receipt by the FDIC of "an amended pleading, motion, order or other paper from which it may first be ascertained that the case is one which is or has become removable." 28 U.S.C. § 1446(b); see, e.g., MTech, 729 F.Supp. at 1135. Other courts have ruled differently. Some have held the limitation period commences as soon as the FDIC is appointed receiver. See, e.g., Loyd, 744 F.Supp. at 128-29; Norwood, 726 F.Supp. at 1076; see Structural Sys., Inc. v. Sulfaro, 687 F.Supp. 22, 23 (D.Mass.1988) (decided under 12 U.S.C. § 1819(Fourth)). This approach, however, may not comport with Section 1446. Section 1819(b)(2)(B) gives the FDIC the power to remove a case. 12 U.S.C. § 1819(b)(2)(B). Importantly, an order appointing the FDIC as receiver for a bank may not outline the specific actions in which that bank was a party. Here, for example, the order of the New Jersey Commisioner of Banking appointing the FDIC as receiver does not set forth any details about the Mountain Ridge action to enforce the Notes. See FDIC Brief at Exhibit H. Therefore, an order appointing the FDIC as receiver, when it does not mention any specific litigation, would not place the FDIC on notice that a particular case is removable; it only places the FDIC on notice that it has the power to remove.[13] Others courts have held the limitations period begins when the FDIC is formally substituted as a party. See, e.g., T & M Dental Lab, 714 F.Supp. at 799-800 (decided under 12 U.S.C. § 1819(Fourth)); Heafitz, 711 F.Supp. at 95 (decided under 12 U.S.C. § 1819(Fourth)). The court in T & M Dental Lab based its holding on the language in Section 1819(b)(2)(A) that any action in which the FDIC is a "party" arises under the laws of the United States. 714 F.Supp. at 799. Such a constricted reading of Section 1819, however, does not comport with Section 1446. Neither Section 1819 nor Section 1446 explicitly require the FDIC be formally substituted as a party before removal is proper. Moreover, the FDIC's interest in an action comes into being at the moment it is appointed as receiver, not at the moment it is formally substituted. To hold that the thirty day limitations period commences running only when the FDIC is formally substituted allows the FDIC to ignore an initial pleading or other paper which indicates removal is proper. MTech, 729 F.Supp. at 1135 (citing FDIC v. Brooks, 652 F.Supp. 745, 746 (N.D.Tex.1988)). There is no policy, however, that justifies allowing the FDIC to delay removal of a case it knows can be properly removed until the moment the FDIC is formally substituted. Brooks, 652 F.Supp. at 746. Section 1446 should govern when the limitations period commences because Section 1446 governs the limitations period for removal. MTech, 729 F.Supp. at 1135. As stated above, Section 1446 provides that the limitations period commences by receipt 1291 through service or otherwise of either an initial pleading or "an amended pleading, motion, order or other paper from which it may first be ascertained that the case is one which is or has become removable." 28 U.S.C. § 1446(b). Consequently, after appointment as a receiver which grants removal power, the FDIC must remove a case within thirty days of when it receives through service of process or otherwise a pleading or other paper which reveals that removal is appropriate. It therefore must be determined whether a stay under Section 1821 tolls the running of the removal period and when the FDIC received a paper revealing removal is proper in this case. d. Tolling the Removal Limitations Period with a Stay Under 12 U.S.C. § 1821 The tolling issue appears to be one of first impression.[14] A stay is granted in order to give the FDIC "breathing room" to familiarize itself with the case. Taylor, 727 F.Supp. at 328. "The appointment of a conservator or receiver can often change the character of litigation; the stay gives the FDIC a chance to analyze the pending matters and decide how best to proceed." H.R.Rep. No. 54(I), 101st Cong., 1st Sess. 331 (1989), reprinted in 1989 U.S.Code Cong. & Admin.News 86, 127. This goal, however, is not necessarily impeded if a stay is deemed not to toll the removal limitations period. If a stay does not toll the removal limitations period, then the FDIC would be forced to remove the case prior to or contemporaneously with seeking a stay. Norwood, 726 F.Supp. at 1076-77. Forcing the FDIC to remove prior to seeking a stay would not cause the FDIC to be prejudiced because a stay obtained after removal would still permit the FDIC to familiarize itself with the case. See id. at 1076. Removal does not require an intimate knowledge of a case; all that it requires is some sort of awareness that the case is removable. See 28 U.S.C. 1446(b). This can be determined upon receipt by any means of a paper relating to the case. Id. Moreover, prior removal should not hinder the granting of a stay if the FDIC moves for a stay immediately after removal. Only if the FDIC unnecessarily delays in seeking a stay or if the FDIC has already substantially participated in the case will a stay be denied. See, e.g., Hunter's Run, 741 F.Supp. at 208; Tuxedo Beach Club Corp. v. City Federal Sav. Bank, 729 F.Supp. 1508, 1510 (D.N.J.1990); Taylor, 727 F.Supp. at 327. Given that the thirty day period in Section 1446 is mandatory, this construction is consistent with both the stay and removal statutes. Consequently, a stay of proceedings under Section 1821 should not toll the limitations period of Section 1446(b) as applied to Section 1819(b)(2)(B). e. The FDIC's Notice of Removal Here, the FDIC filed its notice of removal on 3 January 1991. Because the stay of proceedings ordered by the Superior Court does not toll the running of the thirty day limitations period, the next relevant issue is when did the FDIC first receive by service of process or otherwise an initial pleading or other paper which indicated removal was possible. On 5 October 1990, the FDIC was appointed receiver. FDIC Brief at 3. As discussed above, the order of the New Jersey Commissioner of Banking appointing the FDIC as receiver did not state that Mountain Ridge was involved in any particular litigation. See FDIC Brief at Exhibit H. It is therefore assumed at that point in time the FDIC did not know specifically what actions were pending in the state courts with respect to Mountain Ridge. See Bacsik Certification at ¶ 6 ("Immediately after the Commissioner closed the Bank, the [FDIC] sought 90-day stays of action in various courts where it had reason to believe the Bank was engaged in litigation"). In other words, while the FDIC had the power to remove this action on 5 October, 1292 it could not exercise that power because the order appointing it as receiver did not refer to this action. Accordingly, the thirty day limitations period did not commence running in this case on the date the FDIC was appointed receiver. At that point in time, however, when the FDIC knew of its removal power with respect to Mountain Ridge litigation, it should have examined Mountain Ridge files with a view towards removal. An argument can be made that the removal period commenced running when the FDIC was appointed receiver because Wiley, the firm which represented Mountain Ridge, was in possession of papers indicating this case was removable. See Rowe, 750 F.Supp. at 721 (mere possession, not actual knowledge, commences running of the removal period). Thus, even though the FDIC might not have reviewed those papers on the date of appointment, Wiley, as Mountain Ridge's and the FDIC's agent, could have exercised the FDIC's removal power. It is unclear, however, that Wiley was in fact the FDIC's agent at the time the FDIC was appointed receiver. Consequently, it is assumed Wiley could not exercise the FDIC's removal power on 5 October. On 13 November 1990, the FDIC informally requested Wiley to "handle" certain cases involving Mountain Ridge. FDIC Brief at Exhibit K. Although the letter which makes this requests does not so specify, the FDIC has conceded that Wiley was to handle this case. FDIC Brief at 4. The FDIC also requested copies of the files relating to Mountain Ridge litigation in Wiley's possession. FDIC Brief at Exhibit K. It therefore appears that this is the first point in time that the FDIC knew of this litigation. This conclusion is further buttressed by the fact that Wiley represented Mountain Ridge in this case prior to the appointment of the FDIC as receiver. See FDIC Brief at Exhibits C, D, E & F (orders of Superior Court predating FDIC's appointment indicating Wiley represented Mountain Ridge). Wiley therefore had an intimate knowledge of this case and certainly was in a position to discuss with the FDIC the propriety of removal. Consequently, the removal of this case was untimely because it was not removed until fifty-one days after 13 November. Even if the FDIC did not know of this case on 13 November, it certainly had a sufficient opportunity to make that determination by the time it mailed a copy of the stay to the Moving Defendants one week later on 20 November. See FDIC Brief at 4. Because Wiley had represented Mountain Ridge prior to the FDIC's appointment, Wiley would have been in a position to discuss the details of this case with the FDIC. On 1 November 1990, Wiley, on the FDIC's behalf, returned a copy of the order granting the stay to the Superior Court Judge before whom this action was pending. Id. at 4. It is clear, therefore, that during the almost three week period between 1 November and 20 November, the FDIC had ample opportunity to discuss this case with Wiley. Even if the FDIC had not received the Mountain Ridge files it had requested, the FDIC had sufficient information to determine who was the Superior Court Judge and who were the opposing counsel in this action. Accordingly, the FDIC had sufficient information to determine whether this action was removable. Under these circumstances, removal of this action was untimely.[15] 4. The Pending Appeal The Moving Defendants suggest this court should defer the exercise of jurisdiction until after the hearing in the Appellate Division of the Superior Court on the propriety of the appointment of the FDIC as receiver. Defendants' Brief at 15-16. There is no need, however, to consider this suggestion because the FDIC's notice of removal was untimely filed. However, it is doubtful the state court, appellate division or otherwise, had any authority after removal. In point of fact, the removal statute is clear that after removal is effected, "the State court shall proceed no further *1293 unless and until the case is remanded." 28 U.S.C. § 1446(d). Conclusion For the reasons set forth above, the FDIC's notice of removal was filed beyond the thirty day limitation under 28 U.S.C. § 1446(b). Consequently, removal is improper and this case must be remanded to the Superior Court of the State of New Jersey, Law Division, Essex County. The Moving Defendants' motion to remand is granted. NOTES [1] The Moving Defendants have submitted the following in support of the motion to remand: Brief in Support of Motion to Remand ("Defendants' Brief"); and Affidavit of Gary Trachten, Esq., sworn to on 29 January 1991. Certain other defendants have joined in the motion. See Letter from David R. Rudd, Esq., dated 31 January 1991. The Federal Deposit Insurance Corporation ("FDIC") has submitted the following in opposition: Brief in Support of Plaintiff's Notice of Removal ("FDIC Brief"); Plaintiff's Reply Brief; Certification of Dennis G. Bacsik, Esq., dated 22 January 1991 (Bacsik Certification"); and Affidavit of John G. Geppert, Jr., Esq., sworn to on 1 February 1991. [2] The Superior Court, Appellate Division, has apparently retained jurisdiction to determine whether the appointment of the FDIC as a receiver was proper. Defendants' Brief at 4. [3] Section 1821(d)(12) provides, in pertinent part: (12) Suspension of legal actions (A) In general After the appointment of a conservator or receiver for an insured depository institution, the conservator or receiver may request a stay for a period not to exceed . . . . . (ii) 90 days, in the case of any receiver, in any judicial action or proceeding to which such institution is or becomes a party. 12 U.S.C. § 1821(d)(12)(A). [4] It is also appropriate for the court to inquire, sua sponte, whether it has subject matter jurisdiction. Medlin v. Boeing Vertol Co., 620 F.2d 957, 958 & 960 (3d Cir.1980); see also Boyer v. Snap-On Tools Corp., 913 F.2d 108, 111 (3d Cir.1990), cert. denied, ___ U.S. ___, 111 S.Ct. 959, 112 L.Ed.2d 1046 (1991). [5] Section 1819(b)(2)(B) provides, in pertinent part: ... the [FDIC] may, without bond or security, remove any action, suit, or proceeding from a State court to the appropriate United States district court. 12 U.S.C. § 1819(b)(2)(B). [6] Section 1819(b)(2)(A) provides, in pertinent part: ... all suits of a civil nature at common law or in equity to which the [FDIC], in any capacity, is a party shall be deemed to arise under the laws of the United States. 12 U.S.C. § 1819(b)(2)(A). [7] It is interesting to note the incongruity of the FDIC's attempt to avoid application of Section 1446 when its own notice of removal invokes that section. See MTech Corp. v. FDIC, 729 F.Supp. 1134, 1136 (N.D.Tex.1990). [8] The Resolution Trust Corporation was created by Congress to manage federally insured depository institutions for which a receiver or conservator has been appointed. See 12 U.S.C. § 1441a. [9] Section 1441(a) provides, in pertinent part: Except as otherwise expressly provided by Congress, any civil action brought in a State court of which the district courts of the United States have original jurisdiction, may be removed by the defendant or defendants, to the district court of the United States for the district and division embracing the place where such action is pending.... 28 U.S.C. § 1441(a). [10] Section 1446(a) provides: A defendant or defendants desiring to remove any civil action or criminal prosecution from a State court shall file in the district court of the United States for the district and division within which such action is pending a notice of removal signed pursuant to Rule 11 of the Federal Rules of Civil Procedure and containing a short and plain statement of the grounds for removal, together with a copy of all process, pleadings, and orders served upon such defendant or defendants in such action. 28 U.S.C. § 1446(a). [11] Section 1446(b) provides: The notice of removal of a civil action or proceeding shall be filed within thirty days after receipt by the defendant, through service or otherwise, of a copy of the initial pleading setting forth the claim for relief upon which such action or proceeding is based, or within thirty days after the service of summons upon the defendant if such initial pleading has then been filed in court and is not required to be served on the defendant, whichever period is shorter. If the case stated by the initial pleading is not removable, a notice of removal may be filed within thirty days after receipt by the defendant, through service or otherwise, of a copy of an amended pleading, motion, order or other paper from which it may be first ascertained that the case is one which is or has become removable, except that a case may not be removed on the basis of jurisdiction conferred by section 1332 of this title more than 1 year after commencement of the action. 28 U.S.C. 1446(b). [12] Section 1447(c) provides, in pertinent part: A motion to remand the case on the basis of a defect in removal procedure must be made within thirty days after filing of the notice of removal under section 1446(a). If at any time before final judgment it appears that the district court lacks subject matter jurisdiction, the case shall be remanded. An order remanding the case may require payment of just costs and any actual expenses, including attorney fees, incurred as a result of the removal.... 28 U.S.C. § 1447(c). [13] Significantly, an order appointing the FDIC as receiver by its very nature places the FDIC on notice that it may remove an action pursuant to Section 1819. Accordingly, once on notice of its removal power, the FDIC should exercise additional care to ensure that cases are removed promptly. [14] The court in MTech pointed out that there might be merit to the FDIC's argument that a thirty day limitations period would be inconsistent with the ninety day stay provision but declined to address the issue. 729 F.Supp. at 1136 n. 5. [15] Because the FDIC's notice of removal was untimely filed, the question of whether the stay was properly obtained does not need to be considered. See Defendants' Brief at 14-15.	{ "pile_set_name": "FreeLaw" }
29 F.3d 644 NOTICE: Federal Circuit Local Rule 47.6(b) states that opinions and orders which are designated as not citable as precedent shall not be employed or cited as precedent. This does not preclude assertion of issues of claim preclusion, issue preclusion, judicial estoppel, law of the case or the like based on a decision of the Court rendered in a nonprecedential opinion or order.WEST COAST INDUSTRIES, INC., a Washington Corporation,Plaintiff-Appellee,v.FATIGUE TECHNOLOGY, INC., a Washington Corporation,Defendant-Appellant. No. 94-1058. United States Court of Appeals, Federal Circuit. May 24, 1994.Rehearing Denied Aug. 8, 1994. Before NIES, MICHEL, and SCHALL, Circuit Judges. JUDGMENT PER CURIAM. 1 AFFIRMED. See Fed.Cir.R. 36.	{ "pile_set_name": "FreeLaw" }
752 F.Supp. 634 (1990) Herman Benjamin FERGUSON, Plaintiff, v. FEDERAL BUREAU OF INVESTIGATION, Defendant. No. 89 Civ. 5071 (RPP). United States District Court, S.D. New York. December 18, 1990. Center for Constitutional Rights, New York City by Joan P. Gibbs, for plaintiff. Otto G. Obermaier, U.S. Atty., for the Southern District of New York, New York City by Steven I. Froot, Asst. U.S. Atty., for defendant. OPINION AND ORDER ROBERT P. PATTERSON, Jr., District Judge. Plaintiff Herman Ferguson ("Ferguson") moves to compel defendant Federal Bureau of Investigation ("FBI") to reprocess his 1980 and 1989 requests for documents or, in the alternative, to prepare a second, more detailed index of material it claims is exempt from disclosure, under the Freedom of Information Act ("FOIA"). 5 635 U.S.C. § 552 et seq. Defendant moves for partial summary judgment pursuant to Fed.R.Civ.P. 56 and plaintiff cross moves pursuant to Fed.R.Civ.P. 56(f) for an order continuing or denying defendant's motion for summary judgment and directing discovery. The Court reserves decision on defendant's motion for partial summary judgment and on plaintiff's motions for discovery and to compel reprocessing of the document requests, pending in camera review of a limited number of relevant documents. BACKGROUND Plaintiff Ferguson was closely involved in black nationalist politics in New York in the 1960's. In 1968, he was convicted in New York of conspiracy to murder two other black leaders: Whitney M. Young, Jr. of the National Urban League ("Urban League") and Roy Wilkins of National Association for the Advancement of Colored People ("NAACP"). Ferguson was freed on bond pending the outcome of appeals. After hearing that his last appeal had been denied, Ferguson fled the country and eventually settled in Guyana, where he lived for the next 18 years. While a fugitive, Ferguson made an FOIA request in August 1980 for documents located at FBI headquarters which related to him; some documents were delivered in redacted form to plaintiff's attorney in January 1984. In 1989, Ferguson returned to New York and was promptly arrested. He made another FOIA request in April 1989, seeking documents from the files at FBI headquarters and from the files of the New York and Philadelphia field offices of the FBI. This action seeking expedited review of the files in view of the criminal proceeding against Ferguson was commenced on July 26, 1989. In June, 1990, Ferguson pled guilty to jumping bail and was sentenced to one year in prison on that charge, which he is now serving concurrently with his original sentence of three-and-one-half to seven years on the conspiracy to murder charge. Ferguson claims that he was framed in the 1968 prosecution and that the FBI has in its possession either exculpatory material or material which would lead to exculpatory evidence. He alleges that during the 1968 trial and the subsequent appeals he was wrongfully deprived of the statements of witnesses against him, exculpatory evidence, and the names of informants against him. By an Opinion and Order dated October 24, 1989, this Court held that the FBI should treat plaintiff's 1989 request for documents (insofar as it requested documents for the period 1963-70) ahead of other FOIA requesters and ordered the FBI to produce the documents responsive to this request within 35 days or by January 19, 1990. Ferguson v. FBI, 722 F.Supp. 1137 (S.D.N.Y.1989). It also required the FBI to produce a Vaughn index with respect to the 1980 request within 32 days thereafter, or by February 20, 1990.[1]Ferguson v. FBI, 729 F.Supp. 1009 (S.D.N. Y.1990). By January 19, 1990, the FBI produced redacted documents responsive to the 1989 request as ordered. Plaintiff objected to the extent of the redactions and, in an Opinion and Order dated January 31, 1990, this Court ordered, inter alia, that the FBI produce a detailed Vaughn index of the 1963-1970 portion of Ferguson's FOIA request by April 27, 1990. By February 20, 1990, the FBI produced declarations as Vaughn indexes for Ferguson's 1980 and 1989 requests, except for the post-1970 documents' responsive to the 1989 request. Superneau Aff., February 16, 1990; Davis Aff., February 16, 1990. Since then, the FBI has provided additional affidavits by Regina Superneau, Katherine Stricker and Joseph Smith, in explanation of redactions or FBI search methods. Defendant then moved for partial summary judgment with respect to the 1980 FOIA request and the 1989 FOIA request 636 (through 1970) on the ground that it has properly searched for and produced all the documents to which the plaintiff is entitled under the FOIA, taking into account the statutory exemptions from disclosure, in properly redacted form. Ferguson opposes the motion, alleging bad faith and errors in the FBI's processing of his requests, and seeks reprocessing or a more detailed index indicating the nature of the information redacted and the justification for redacting it. Plaintiff also cross moves for a court order denying summary judgment and directing the FBI to submit to discovery, arguing that his ability to oppose summary judgment is hampered by his inability to get information from the FBI. Fed.R.Civ.P. 56(f). Pursuant to the oral argument on October 10, 1990, Ferguson submitted a list of documents considered most relevant to his claims, on October 16, 1990. DISCUSSION To grant a motion for summary judgment a court must find that there is no genuine issue as to any material fact, and that the moving party is entitled to judgment because, after sufficient time for discovery, the non-movant has failed to make a sufficient showing of an essential element of its case as to which it has the burden of proof. Celotex Corp. v. Catrett, 477 U.S. 317, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). See also, Anderson v. Liberty Lobby, 477 U.S. 242, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). The burden rests on the moving party to demonstrate the absence of a genuine issue of material fact, Adickes v. S.H. Kress & Co., 398 U.S. 144, 90 S.Ct. 1598, 26 L.Ed.2d 142 (1970), and the Court must view the facts in the light most favorable to the non-moving party. Meiri v. Dacon, 759 F.2d 989, 997 (2nd Cir.1985), cert. denied, 474 U.S. 829, 106 S.Ct. 91, 88 L.Ed.2d 74 (1985). Defendant asserts that its affidavits and indices sufficiently show that the FBI has fully complied with its duties under the FOIA. The FOIA embodies a strong policy in favor of disclosure to the public. John Doe Agency v. John Doe Corporation, ___ U.S. ___, 110 S.Ct. 471, 107 L.Ed.2d 462 (1989), reh'g denied, ___ U.S. ___, 110 S.Ct. 884, 107 L.Ed.2d 966 (1990); Donovan v. FBI, 806 F.2d 55, 57 (2nd Cir.1986). "[W]hen the Government declines to disclose a document the burden is upon the agency to prove de novo in trial court that the information sought fits under one of the exemptions to the FOIA." Vaughn v. Rosen, 484 F.2d 820, 823 (D.C.Cir.1973), cert. denied sub nom. Rosen v. Vaughn, 415 U.S. 977, 94 S.Ct. 1564, 39 L.Ed.2d 873 (1974). The FOIA is to be liberally construed in favor of disclosure and its exemptions are to be narrowly construed. Julian v. United States Dept. of Justice, 806 F.2d 1411 (9th Cir.1986), aff'd sub nom. United States Dept. of Justice v. Julian, 486 U.S. 1, 108 S.Ct. 1606, 100 L.Ed.2d 1 (1988). The FOIA specifically provides that "the district court ... may examine the contents of such agency records in camera to determine whether such records" are exempt from disclosure. 5 U.S.C. § 552(a)(4)(B) (1982). While it may be true that such review is exceptional, "the propriety of such review is a matter entrusted to the district court's discretion." Local 3, I.B.E.W., AFL-CIO v. N.L.R.B., 845 F.2d 1177 (2d Cir.1988). A district court may consider several factors in deciding whether in camera review is warranted, Donovan, 806 F.2d at 59, including (a) judicial economy, (b) the conclusory nature of the agency affidavits, (c) bad faith on the part of the agency, (d) disputes concerning the contents of the documents, (e) whether the agency requests an in camera inspection, and (f) the strong public interest in disclosure. Id. See also, Allen v. CIA, 636 F.2d 1287, 1298-99 (D.C.Cir.1980). Although plaintiff contests the sufficiency of the search and asks for discovery on the adequacy of the search, he offers no support for such a request. On the basis of evidence presently before the Court, the declarations of Smith, Davis, Stricker and Superneau, the Court finds that defendant has complied with its obligations under FOIA to make a search of its files. Weisberg v. United States Dep't of 637 Justice, 745 F.2d 1476 (D.C.Cir.1984), reh'g denied, 763 F.2d 1436 (D.C.Cir.1985); Meeropol v. Meese, 790 F.2d 942, 952-53, 956 (D.C.Cir.1986). Plaintiff also contests the exemptions from disclosure as provided in 5 U.S.C. § 552(b). Plaintiff has attached ten documents previously disclosed in Moore v. Levi, 75-6203 (MJL) (S.D.N.Y.) and released with redactions to Ferguson. A comparison of the two sets of released documents shows such extensive redactions in defendant's FOIA production in this case, utilizing exemptions (b)(6) and (b)(7), that some of those documents are almost completely blacked out. In contrast, with minor exceptions defendant disclosed those documents almost in their entirety, including names of FBI personnel, in Moore v. Levi. Plaintiff also claims that Section 552(b) exemptions have been used to withhold disclosable reports of public meetings and information about public figures who are now deceased. He asks for discovery with respect to defendant's reliance on exemptions (b)(1), (b)(2), (b)(3), (b)(6) and (b)(7). Defendant points to the propriety of each of the exemptions and opposes such discovery. The scope of each relevant exemption is: Exemption (b)(1): secrecy in national defense and foreign policy matters pursuant to executive order; Exemption (b)(2): relating to internal personnel rules and practices of an agency; Exemption (b)(3): statutory exemptions (e.g., information received through grand jury subpoenas); Exemption (b)(6): personnel files and medical files involving personal privacy; Exemption (b)(7): records compiled for law enforcement purposes; but only to the extent that such law enforcement records or information would result in enumerated types of harm. Under exemption (b)(7), defendant relies solely on three types of harm: 1) information which under (b)(7)(C) could reasonably be expected to constitute an unwarranted invasion of personal privacy, e.g. information about FBI personnel; 2) information which under (b)(7)(D) could reasonably be expected to disclose the identity of a confidential source and 3) information which under (b)(7)(E) would disclose an investigative technique through portions of released records. The tests relating to each of the exemptions give broad discretion to the defendant in the application of those exemptions. The Court is persuaded that discovery of defendant by plaintiff as to the adequacy of defendant's reliance on the exemptions would be an exercise in futility fraught with refusals to answer based on the breadth of the exemptions involved. It is true, however, that the affidavits submitted by defendant are conclusory in nature as to the basis for applying the exemptions, perhaps necessarily so in view of the enormous number of documents involved. The Court recognizes, in addition, that twenty-two years have elapsed since the conviction of plaintiff for the crime for which he is currently in prison; that the FBI internal document cited by the Court in its Opinion of October 24, 1989 describes non-investigative techniques involving prominent black nationalist figures in the 1960's which are contrary to our constitutional heritage; that plaintiff was a prominent black nationalist figure in those years; and that among African-American citizens in particular, as well as others, there is a strong public interest in determining whether any such non-investigative techniques were utilized in connection with the prosecution of plaintiff. Accordingly, in the interests of judicial economy and the strong public interest in disclosure, as well as the conclusory nature of the agency affidavits in applying the exemptions to thousands of documents, the Court will conduct an in camera review, not of the 3500 or more documents produced pursuant to the 1980 and 1989 FOIA requests of plaintiff, but of those documents contained in the October 16, 1990 submission of plaintiff. "[A] finding of bad faith or contrary evidence is not a prerequisite to an in camera review; a trial judge may order such an inspection 638 `on the basis of an uneasiness, a doubt he wants satisfied ...'", Meeropol, 790 F.2d at 958 (quoting Ray v. Turner, 587 F.2d 1187, 1195 (D.C.Cir.1978). Decisions on defendant's motion for partial summary judgment and plaintiff's motions for discovery and to compel reprocessing of the document request are hereby reserved pending the completion of the in camera review. Defendant will produce for the Court's review in camera the documents identified in the October 16, 1990 submission on or before December 27, 1990. IT IS SO ORDERED. NOTES [1] A Vaughn index or affidavit is a "detailed index which separates disclosable from exempt material, and which provides an explanation and cross-reference to specific exemptions." Donovan v. F.B.I., 806 F.2d 55 (2nd Cir.1986). See, Vaughn v. Rosen, 484 F.2d 820, 824, 826 (D.C.Cir.1973).	{ "pile_set_name": "FreeLaw" }
183 F.2d 685 SCHATTE et al.v.INTERNATIOANL ALLIANCE of THEATRICAL STAGE EMPLOYEES ANDMOVING PICTURE MACHINE OPERATORS OF THE UNITEDSTATES AND CANADA et al. No. 12321. United States Court of Appeals Ninth Circuit. July 28, 1950.Writ of Certiorari Denied Oct. 9, 1950.See 71 S.Ct. 64. Clarence E. Todd, Todd & Todd, all of San Francisco, Cal., Kenny & Cohn, Los Angeles, Cal., for appellant Paul Hinst. Zach Lamar Cobb, Los Angeles, Cal., for appellants Schatte, et al., other than Paul Hinst. Bodkin, Breslin & Luddy, Michael G. Luddy, all of Los Angeles, Cal., for appellees Int. Alliance, et al. O'Melveny & Myers, Homer I. Mitchell, W. B. Carman Jr. and William Alsup, all of Los Angeles, Cal., for appellees Ass'n of Motion Picture Prod. et al. Before ORR and POPE, Circuit Judges, and WEINBERGER, District Judge. PER CURIAM. 1 Paul Hinst, one of the appellants in the above entitled action, has moved this court for an order substituting Clarence E. Todd as his counsel and for leave to file a petition for rehearing. Both motions are opposed by counsel for the remaining 25 appellants. The motions were submitted on affidavits, briefs and oral argument. 2 Ordinarily substitution of counsel is granted a litigant upon request.1 But in this case we think the circumstances are such that to permit such a substitution at this stage of the proceedings would result in confusion and perhaps injustice insofar as the remaining twenty-five appellants are concerned. 3 Appellant Hinst and twenty-five other individuals brought this action for damages arising out of the loss of their employment. The complaint purports to have been brought on behalf of 2,000 other individuals similarly situated but, since each plaintiff's claim is individual and several, and no specific property can be affected by the action, the action is a 'spurious class suit' under Rule 23(a)(3) of the Federal Rules of Civil Procedure, 28 U.S.C.A. Such a suit is merely a permissive joinder device in which the right and liability of each individual plaintiff is distinct and no member of the 'class' is bound by a judgment who does not join as plaintiff or intervenor. 3 Moore's Federal Practice, (2nd ed.) § 23.10(1). Of the twenty-six plaintiffs in the instant case, one, through his attorney, Mr. Todd, has asked for leave to file a petition for rehearing. The other twenty-five plaintiffs, represented by another attorney, consider it as not in their best interest that such a petition be filed. It is apparent that so long as this proceeding retains its character as a single action one plaintiff should not be permitted, under the circumstances here presented, to dictate a manner of conducting the litigation contrary to the judgment of counsel who is still the attorney for the other twenty-five plaintiffs. The general rule in class suits is that the member of the class who is the original plaintiff retains control over the action as opposed to other members of the class who may later seek to intervene. Annotations, 91 A.L.R. 587, 3 Moore's Federal Practice § 23.07 n. 7. This rule, while not directly applicable here, is based on an underlying principle that where several parties are joined on the same side of a single case, orderly procedure requires that decisions be made as to how that side shall conduct the case even though such decisions may not accord with the individual desires and opinions of each member of the side. Such is the situation here. There being a difference of opinion concerning the advisability of filing a petition for rehearing, the opinion of twenty-five plaintiffs, acting through their attorney, must prevail over the opinion of one other plaintiff, acting through another attorney. 4 Plaintiff Hinst will not be prejudiced. He will doubtless have the opportunity to ask for substitution of counsel in the United States Supreme Court in the event that court decides to review this case. 5 We are frankly advised by counsel for plaintiff Hinst that the motive underlying the request for substitution of counsel at this time is to permit the filing of a petition for rehearing in order to get a clarification of our decision in this case so as to benefit plaintiffs in an independent action now pending in a lower court. We are unwilling to disrupt the procedure adopted by counsel for twenty-five of the plaintiffs in this action in order to serve such purpose. 6 Motions denied. 1 In re Paschal, 1870, 10 Wall. 483, 77 U.S. 483, 19 L.Ed. 992; The Flush, 2 Cir., 1921, 277 F. 25; Doggett v. Deauville Corp., 5 Cir., 1945, 148 F.2d 881; Evans v. Ockershausen, 1938, 69 App.D.C. 285, 100 F.2d 695, 709, 128 A.L.R. 177; United States v. McMurtry, D.C.S.D.N.Y. 1927, 24 F.2d 145; Binsfield v. Johnson, D.C. Mont. 1934, 6 F.Supp. 29, 32	{ "pile_set_name": "FreeLaw" }
6 Cal.App.2d 49 (1935) E. HOYT, Respondent, v. SOUTHERN PACIFIC COMPANY (a Corporation), Appellant. Civ. No. 9312. California Court of Appeals. Second Appellate District, Division One. April 9, 1935. Laselle Thornburgh for Appellant. Charles F. Blackstock for Respondent. Edmonds, J., pro tem. Plaintiff recovered judgment upon the verdict of a jury for damage to a trailer struck by one of the trains of the defendant railway at a crossing in the city of Oxnard. The points presented by the defendant on appeal are that the evidence shows that the driver of the truck was guilty of contributory negligence as a matter of law; that there is no evidence of negligence on the part of the defendant; and that the court erred in instructing the jury. [1] By the court's instructions the jury was given the definition and effect of a presumption and told that "it is presumed that plaintiff's servant and employee, George 51 Owen, used due care and did everything that a reasonable, prudent person would have done under the same circumstances to avoid the collision and that he was not negligent". It was also told, as requested by plaintiff, that "in weighing the evidence in this case you may consider this presumption of care on the part of said George Owen as evidence in the case and weigh it against other evidence in the case to determine whether or not said plaintiff's servant and employee, George Owen, was guilty of contributory negligence, and, if the evidence, if any, introduced here of negligence on the part of said plaintiff's servant and employee does not produce conviction in your minds, then you are not bound to decide in conformity with such evidence as against the presumption of due care, but may decide that question in conformity with the presumption that said plaintiff's servant and employee, George Owen, was not negligent". The court refused to give an instruction requested by the defendant to the effect that the law presumes that the defendant was not negligent and which, in language almost identical with that of the last-quoted instruction, directed the jury to weigh and consider this presumption in behalf of the defendant against other evidence to determine whether or not the defendant was negligent. Appellant contends that the plaintiff was thus given the benefit of the presumption in his favor while the jury could reasonably conclude that the same rule did not apply to the defendant. In the case of Olsen v. Standard Oil Co., 188 Cal. 20, 25 [204 P. 393], the court approved the following instruction: "The presumption is that every man obeys the law and the presumption in this case is that the plaintiff was traveling at a lawful rate of speed and on the proper side of the highway at all times. This presumption is in itself a species of evidence and it shall prevail and control your deliberations until and unless it is overcome by satisfactory evidence." In Tyson v. Burton, 110 Cal.App. 428, 434 [294 P. 750], the reason and authority for an instruction on this subject was considered at length, and the court said: "Just how this instruction can be considered proper, where each party to an automobile collision charges the other with the sole negligence which resulted in the collision, and the circumstances attending the collision are fully testified to by the respective parties and also by eyewitnesses, does not 52 clearly appear." The court also said in that case: "It would seem that both parties would be equally entitled to the presumption of taking ordinary care for his own welfare, and also that he was obeying the law." This appears to us to be the only logical conclusion which can be reached. [2] Where the same standard of care applies equally to each of two parties, an instruction stating the rule as applying to one without any reference to its application to the other places them in different positions before the jury. This is misleading to the jury (19 Cal.Jur. 754; Howard v. Worthington, 50 Cal.App. 556 [195 P. 709]), and the error of the trial court in refusing to give the instruction requested by the defendant is cause for reversal if, after an examination of the entire cause, including the evidence, it appears that as a result of such error there has been a miscarriage of justice. (Const., art. VI, sec. 4 1/2.) [3] At the time of the accident the railway company maintained five tracks crossing Third Street. The plaintiff's driver was operating a very large truck and trailer on this street, approaching the tracks from east to west in the middle of the afternoon of a clear day. The railroad tracks cross this street on a curve which limits the vision of one looking for trains coming from the north. The main line was the center track of the five, and as one approached them from the east the farther north one could see. It is uncontradicted that at a distance of 10 feet from the center of the main line track, one could see the track to the north for only 800 feet. The driver of the truck testified that he stopped it about 10 feet from the main line track and looked both north and south; that he saw no train approaching in either direction, and heard no bell nor whistle; that he then started his truck in low gear, and that when the front of the truck was about in the center of the track, he saw a train bearing down upon him from the north at a distance of 150 yards. He estimated the speed of the train at the time at thirty-five to forty miles per hour. The engineer of the train testified on behalf of the defendant that his position on the engine, as the train approached the crossing, was on the side opposite from that from which the truck was approaching; that because of the curve he could not see the track as he approached the crossing *53 for more than thirty or forty feet ahead; that he did not see the truck before the accident; that the train was running twenty-five or twenty-six miles per hour with the engine bell ringing continuously; that he had blown the whistle for the station and also for the crossing at the distances prescribed for each; that "the fireman hollered 'hold her'" and that he immediately set the air brakes for an emergency stop. The fireman testified that when he first saw the truck it was in motion 60 or 65 feet east of the tracks; that the engine was then 250 feet from the crossing; that he did not realize that the truck was not going to stop until it was about 8 or 10 feet from the track at which time he "hollered for the engineer to hold 'em hard". He also testified that the engineer had whistled for the station and the crossing some distance north of the place of the accident and that the engine bell was ringing continuously. Other eye-witnesses to the accident testified, and the evidence as to the precautions taken by the truck driver before driving on to the track and the care exercised by the engine crew in approaching the crossing is in direct conflict. If a verdict had been rendered by the jury in favor of the defendant it would be supported by the evidence. It is presumed that the jury followed the court's instructions and we cannot estimate to what extent the instruction concerning the presumption of due care on the part of the truck driver influenced the jury to find a verdict against the defendant. The error is, therefore, substantial and requires a reversal of the case for a new trial. (Zolkoske v. United States F. & L. Co., 72 Cal.App. 63 [236 P. 344 ].) It is, therefore, unnecessary for us to consider the other points raised. The judgment is reversed. Conrey, P. J., and Houser, J., concurred.	{ "pile_set_name": "FreeLaw" }
398 N.E.2d 1298 (1979) Richard H. GERRISH, Plaintiff-Appellant, v. Stanley BREWER, Defendant-Appellee. No. 1-1078A271. Court of Appeals of Indiana, First District. December 26, 1979. 1299 Donald W. Ward, John F. Ittenbach, Ronald L. Jackson, Feeney & Ward, Indianapolis, John W. Donaldson, Lebanon, for plaintiff-appellant. Glenn E. Davis, Sr., Davis & Davis, Indianapolis, Charles W. Ritz, Parr, Richey, Obremsky & Morton, Lebanon, for defendant-appellee. NEAL, Judge. Plaintiff-appellant Richard Gerrish appeals from an adverse judgment in the Boone Superior Court in a suit for personal injuries arising out of a fall suffered by appellant on defendant-appellee Stanley Brewer's premises. The record discloses that appellant rented a basement apartment from appellee in Indianapolis in 1967. Appellant had requested appellee to repair a window in his apartment. The repair work involved a certain raised grating around the window well in a narrow walkway which appellant used daily. At the time of the injury, September 9, 1975, the walkway was unlighted, and appellant incurred his injuries by falling over the unguarded raised grating in the dark. The only error alleged by appellant was the court's giving Defendant's Instruction No. 8, to the jury. That instruction, which is an incurred risk instruction reads as follows: "The defendant has raised the issue that plaintiff incurred the risk of the injuries and damages he seeks in this lawsuit. The Doctrine of Incurred Risk is a separate defense from that of contributory negligence and is based upon the the proposition that one incurs all the ordinary and usual risks of an act upon which he voluntarily enters so long as those risks are known and understood by him, or could be readily discovered and understood by a reasonable and prudent person under like or similar circumstances. If you find, therefore, that the plaintiff knew, or in the exercise of reasonable and ordinary care, should have known, that the grating at the walkway he was using protruded out of the walkway, that at the time he fell the plaintiff voluntarily entered the walkway which at the time was dark and unlighted; and you further find that the plaintiff did trip over the grating, then plaintiff incurred the risk of the injuries and damages he seeks and can not recover from the defendant, even though you find the defendant may have been negligent." At trial Gerrish objected to this instruction as follows: "On behalf of the Plaintiff, Richard Gerrish, the Plaintiff would object to Defendant's tendered Instruction Number 8 for the reason that the second paragraph is an incorrect application of the facts to the law, is an incorrect statement of the law, in that it gives the impression to the jury that knowledge of the risk at any time prior to the accident would bar recovery by the Plaintiff. It is a mandatory instruction and omits the requirement that he know and appreciate the danger at the time he entered the passageway in question. Therefore, it's an incorrect statement of the law. Plaintiff would also object to Defendant's Tendered Instruction Number 8 for the reason that there was no evidence from which inferences could be drawn which would support the giving of the Instruction on incural [sic] of the risk." (Emphasis added.) The errors that appellant has preserved by his objection to Defendant's Instruction No. 8 may be stated as follows: 1. It gives the impression to the jury that knowledge of the risk at any time prior to the accident would bar recovery by the plaintiff. (Emphasis added.) 2. It is a mandatory instruction. 3. Omits the requirement that he knew and appreciated the danger at the time he entered into the passageway in question. 1300 Prior to entering into the discussion of the merits of Instruction No. 8 we wish to note the lament expressed by Justice Arterburn in Perry v. Goss, (1970) 253 Ind. 603, 608, 255 N.E.2d 923, 927. "Instructing a jury is a most difficult and complex process. It is generally conceded that there has been an overemphasis placed upon the wording and refined meaning of instructions which far exceed [sic] their actual effect upon the jury. When an instruction has to be read and reread by a legally trained mind to catch a slight variation or error in its meaning, it is difficult to believe that a jury of laymen could have been misled. Words are mere signs or symbols of meaning and thought, which are never exact. We strive with inexact tools to work out refinements and precise lines in statements of thoughts and ideas, but are never able to reach exact perfection. In the writing of instructions, we are eternally confronted with attempts and failures at exactitude, and we must keep this human frailty in mind when we examine the language of instructions. [Citations omitted.]" The appellant argues that the instruction incorrectly allows constructive knowledge to bar recovery under the incurred risk doctrine, and cites Kroger Co. v. Haun, (1978) Ind. App., 379 N.E.2d 1004, decided after this case was tried. In that case Judge Sullivan, in a lengthy review of the doctrine of incurred risk, correctly held that constructive knowledge has no place in determining incurred risk. However, appellant did not raise this argument in his objections to the instructions at trial level and has therefore waived it. Grinter v. Haag, (1976) Ind. App., 344 N.E.2d 320. We will discuss objections Nos. 1 and 3 which defendant did make at trial level to the instruction, which are set out above, together, as they import the same subject matter. Appellant argues that in this incurred risk instruction, the instruction did not specifically set forth the idea that the defendant must know and appreciate the danger at the time he encountered it. He cites cases which discuss the doctrine of "momentary forgetfulness." Town of Argos v. Harley, (1943) 114 Ind. App. 290, 49 N.E.2d 552; State v. Dwenger, (1976) Ind. App., 341 N.E.2d 776. Town of Argos v. Harley, supra, 114 Ind. App. at 305, 49 N.E.2d at 557-558, states the doctrine as follows: "Where a pedestrian is injured as a consequence of a defect of which he had previous knowledge, the mere fact of previous knowledge does not per se establish contributory negligence. And this is also the rule where previous knowledge is coupled with absence of thought concerning the defect at the time of the injury, or momentary forgetfulness of it. Previous knowledge of a defect and forgetfulness of it are important facts to be considered in connection with all other circumstances in determining whether the party injured was exercising reasonable care. But it is not negligence, as a matter of law, for a person who has knowledge of a defect not to remember it at all times and under all circumstances." (Emphasis added.) All of the cases cited by appellant relating to the doctrine of "momentary forgetfulness" are contributory negligence cases. In Kroger Co. v. Haun, supra, 379 N.E.2d at 1008, incurred risk and contributory negligence are distinguished: "(1) Incurred risk demands a subjective analysis with inquiry into the particular actor's knowledge and voluntary acceptance of the risk. Contributory negligence contemplates an objective standard for the determination whether a reasonable man would have so acted under similar circumstances. [Citations omitted.] (2) Incurred risk is concerned with the perception and voluntariness of a risk and is blind as to the reasonableness of risk acceptance. Contributory negligence is concerned with whether the acceptance of the risk was reasonable and justified in light of the possible benefit versus the degree of danger. [Citation omitted.] (3) Incurred risk involves a mental state of `venturousness' while contributory negligence, ... describes conduct 1301 which is `careless'. [Citations omitted.]" By definition, then, since the very essence of incurred risk is the conscious, deliberate and intentional embarkation upon a course of conduct with knowledge of the circumstances, the doctrine of "momentary forgetfulness" cannot become a part of the doctrine of incurred risk. It is difficult to perceive how a plaintiff could consciously, deliberately and intentionally encounter a risk that he had forgotten about. The doctrine is correctly a part of the doctrine of contributory negligence, and the cases so hold. Therefore, the court did not commit error in not incorporating the doctrine of "momentary forgetfulness" into an incurred risk instruction. It may be noted that the court did so instruct as related to contributory negligence. Plaintiff next argues that under objection No. 2 to instruction No. 8, as set out above, the instruction is erroneous because it is mandatory. A mandatory instruction is one in which there is an attempt to set out certain facts upon which the jury is directed to reach a certain result. Although mandatory instructions are not necessarily bad, the courts look with disfavor upon their use. Perry v. Goss, supra; Board of Commissioners of Delaware County v. Briggs, (1975) Ind. App., 337 N.E.2d 852. A mandatory instruction must set out all of the elements or facts essential to justify the compulsive verdict, and a failure to include all of the essential elements or facts constitutes reversible error. Stauffer, Admx. v. Ely, (1971) 149 Ind. App. 93, 270 N.E.2d 889. Plaintiff claims that instruction No. 8 is deficient in the recital of the essential elements or facts in that it failed to specify the following: "1. How far the grating protruded out of the walkway. 2. Whether the grating was directly in plaintiff's way in walking down the pathway or whether it was off to one side. 3. Whether alternate paths were available to the plaintiff. 4. Whether once he was in the walkway, he could have turned around and avoided any risk. 5. Whether plaintiff knew at the time he entered the walkway that the grating protruded out of the walkway, or whether he had momentarily forgotten about the danger. 6. Whether the injuries the plaintiff sustained were the ordinary or usual risk of using the walkway. 7. Whether plaintiff had previously used the same walkway safely." It is to be noted that in his objections to the instruction at the trial level, the appellant raised only specification No. 5. By the authority of Grinter v. Haag, supra, these objections are waived. We have discussed specification No. 5 above. Even if appellant had not waived those issues, such would not constitute error. It is our opinion that it is not necessary to incorporate every minutia of evidence, or exclude every related hypothesis, for a mandatory instruction to adequately express the facts and the law. Incurred risk is defined as follows in Indiana, etc., Oil Co. v. O'Brien, (1903) 160 Ind. 266, 272-73, 65 N.E. 918, 920: "[If] the injured person had knowledge of the danger in question, and appreciated it, and voluntarily, or of his own choice, exposed himself to or encountered such danger, thereby incurring or taking upon himself, the risk incident thereto [,]" he may not recover. The instruction in question added to that definition the principal facts that the plaintiff with knowledge of the grating which was protruding entered the walkway which was dark, and tripped over the grating. Those are ultimate facts sufficient to invoke the doctrine of incurred risk. Such an incurred risk instruction was approved in Thompson v. Pickle, (1963) 136 Ind. App. 139, 191 N.E.2d 53. There the recital of facts was as follows, at 146, 191 N.E.2d at 57: "I instruct you that if you find from the evidence in this case that the plaintiff 1302 entered the automobile of the defendant at a time when the plaintiff knew that the defendant was under the influence of intoxicating liquor and about to drive his automobile while in such condition ..." For the reasons set forth above, the decision in the court is affirmed. Affirmed. LOWDERMILK, P.J., and ROBERTSON, J., concur.	{ "pile_set_name": "FreeLaw" }
520 F.2d 212 172 U.S.App.D.C. 31 Bestv.Mitchell 74-1890 UNITED STATES COURT OF APPEALS District of Columbia Circuit 8/5/75 1 D.C.D.C. 2 AFFIRMED* * The judgment or order is accompanied by a Memorandum explanatory of the judgment. Such memorandum is not included with the opinions of the Court that are printed, and it may not be cited in briefs or memoranda of counsel as precedents, under local rule	{ "pile_set_name": "FreeLaw" }
215 F.Supp. 249 (1963) PAPER CONVERTING MACHINE CO., Inc., Plaintiff, v. FMC CORPORATION, Defendant. No. 59-C-152. United States District Court E. D. Wisconsin. February 5, 1963. 250 Wheeler, Wheeler & Wheeler, Milwaukee, Wis., Dawson, Tilton, Fallon & Lungmus, Chicago, Ill., for plaintiff. Andrus & Starke, Milwaukee, Wis., Lyon & Lyon, Los Angeles, Cal., for defendant. TEHAN, Chief Judge. In this suit charging infringement by the defendant FMC Corporation[1] of a patent for a web cutting apparatus, the plaintiff, Paper Converting Machine Co., Inc. has filed a motion to produce, portions of which the defendant has opposed claiming that the plaintiff seeks production of privileged communications between attorney and client. Pursuant to order of the court, the defendant has submitted to the court those allegedly privileged documents coming into existence prior to January 27, 1959, the date of issuance of the patent in suit, for ruling as to their privileged character. Most of the documents involved are letters to or from Hans C. Hoffmeister, patent counsel for the defendant, who, although a member of the Bar of the State of Ohio, was not at the times relevant 251 hereto a member of the Bar of the State of California, in which latter state he was employed. As stated by J. Wyznaski in United States v. United Shoe Machinery Corporation (D. C. Massachusetts 1950) 89 F.Supp. 357 at 358-359, with respect to the attorney-client privilege: "The privilege applies only if (1) the asserted holder of the privilege is or sought to become a client; (2) the person to whom the communication was made (a) is a member of the bar of a court, or his subordinate and (b) in connection with this communication is acting as a lawyer; (3) the communication relates to a fact of which the attorney was informed (a) by his client (b) without the presence of strangers (c) for the purpose of securing primarily either (i) an opinion on law or (ii) legal services or (iii) assistance in some legal proceeding, and not (d) for the purpose of committing a crime or tort; and (4) the privilege has been (a) claimed and (b) not waived by the client." We believe that the defendant may assert the privilege with respect to correspondence to or from its patent counsel despite the fact that that counsel was not admitted to the bar of the state in which he was located, providing the above quoted tests have been met, it being our opinion that Mr. Hoffmeister is entitled to the status of an attorney. We also believe that a corporation patent counsel is not excluded from the class concerning whose documents the privilege may be asserted solely by reason of the fact that he is employed in that capacity. (See Georgia-Pacific Plywood Company, United States Plywood Corporation (S.D.N.Y., 1956) 18 F.R.D. 463) We have therefore examined the documents submitted in the light of the tests set forth above, considering always that the purpose of the attorney-client privilege is to encourage clients to make full disclosures to their attorneys and that the privilege is to be strictly construed, and have reached the following conclusions: ITEM 1. Inter-Office Correspondence dated March 21, 1958 from an officer of the original defendant to Mr. Hoffmeister must be produced. Although the officer relayed certain factual information to Mr. Hoffmeister in this document, it does not appear that the information was given to obtain a legal opinion or advice. ITEM 2. Inter-Office Correspondence dated May 5, 1958 from an officer of the original defendant to Mr. Hoffmeister. This communication is privileged, the primary purpose thereof being to seek Mr. Hoffmeister's advice concerning the plaintiff's statements to the trade that the original defendant was copying the plaintiff's machine. ITEM 3. Inter-Office Correspondence dated September 29, 1958, from an employee of the defendant to Mr. Hoffmeister, seeking legal advice concerning the plaintiff's statements to the trade that it would sue for infringement, is privileged. ITEMS 4, 5 and 8. Inter-Office Correspondence dated September 30, 1958, December 26, 1958, and September 25, 1958, between an officer of the original defendant and an employee of the defendant, copies of which were sent to Mr. Hoffmeister. These documents cannot be considered privileged merely because copies were furnished to an attorney, and must be produced. ITEM 6. Inter-Office Correspondence dated December 29, 1958 from an employee of the defendant to Mr. Hoffmeister. Like Item 1, no confidential disclosures were made therein for the purpose of obtaining legal advice or assistance and the document must be produced. ITEM 7. Letter dated December 30, 1958 from Mr. Hoffmeister to an officer of the original defendant, concerned in part with the plaintiff's statements to the trade, is privileged. *252 ITEMS 9, 10, 11 and 12. Correspondence between Mr. Hoffmeister and the U. S. Patent Office. No privilege attaches to these documents and they must be produced under the court's order of July 13, 1960. ITEM 13. Letter dated December 2, 1957 from an employee of the original defendant to Mr. Hoffmeister furnishing information relative to knife cut perforation on toilet tissue and asking Mr. Hoffmeister to check on patentability of and possible infringement by a unit made by that defendant. Since Mr. Hoffmeister was not being asked to apply rules of law to facts known only to his client, but was asked in effect to make "initial office preparatory determinations of patentability," (Zenith Radio Corp. v. Radio Corp. of America (D.Del.1954, 121 F.Supp. 792, at page 794) this document is not privileged. ITEMS 14, 15, 16, 17, 18, 19, 20, 21 and 22 constitute correspondence between Mr. Hoffmeister and others relative to a patent search to determine patentability of, or possible infringement by, a unit made by defendant. In Item 14, dated February 3, 1958, Mr. Hoffmeister requests Washington patent counsel to conduct such a search. In Item 15, dated March 4, 1958, Mr. Hoffmeister is asked by an officer of the original defendant to report on the status of the search. In Item 16, dated March 7, 1958, Mr. Hoffmeister requests Washington counsel to expedite the search. In Item 17, dated March 10, 1958, Mr. Hoffmeister replies to Item 15. In Item 18, dated March 27, 1958, Washington counsel reports to Mr. Hoffmeister giving his opinion on patentability and infringement based on his search. In Item 19, dated April 11, 1958, Mr. Hoffmeister forwards Item 18 to an officer of the original defendant. In Item 20, dated May 12, 1958, the officer furnishes Mr. Hoffmeister with information for proceeding with a patent application. In Item 21, dated May 16, 1958, Mr. Hoffmeister is asked to give his opinion of the patentability of plaintiff's unit and its effect on the patentability of defendant's unit. In Item 22, dated May 23, 1958, Mr. Hoffmeister responds to Item 21. While the defendant contends that Mr. Hoffmeister and Washington counsel were acting in their capacities as lawyers in connection with these documents, we do not believe that they were receiving and applying rules of law to confidential information received from their client. Rather, we believe that their activities were of the nature described in the Zenith Radio Corp. case, supra, as non-legal. The documents must be produced. ITEM 23. Post Script on letter of March 31, 1959. This document need not have been submitted to the court under the order of July 13, 1960. Counsel for the plaintiff will prepare an order in accordance with this opinion and submit it to opposing counsel for approval as to form. NOTES [1] FMC Corporation, formerly Food Machinery and Chemical Corporation was the parent corporation of the original defendant herein, Hudson-Sharp Machine Co. Food Machinery and Chemical Corporation was substituted as defendant herein after a merger with the original defendant.	{ "pile_set_name": "FreeLaw" }
411 F.2d 1208 LEVISA STONE CORPORATION and Johnson Brothers Limestone Company, Plaintiffs-Appellants,v.ELKHORN STONE COMPANY, Inc., Defendant-Appellee. No. 18931. United States Court of Appeals Sixth Circuit. June 19, 1969. James F. Fitzpatrick, Washington, D. C., Arnold & Porter, Washington, D. C., O. T. Hinton, Pikeville, Ky., on brief, for appellants. Francis D. Burke, Pikeville, Ky., Francis D. Burke, Burke & Justice, Pikeville, Ky., on brief, for appellee. Before O'SULLIVAN, PHILLIPS and CELEBREZZE, Circuit Judges. CELEBREZZE, Circuit Judge. 1 This controversy arose as a result of the Secretary of Commerce granting loans and other financial assistance to Appellee pursuant to the Public Works and Economic Development Act of 1965, 42 U.S.C. § 3121 et seq., to enable Appellee to enter the crushed limestone market in southeastern Kentucky. 2 Appellants, who are presently crushing limestone in this area, sued Appellee and the Secretary of Commerce separately in the United States District Court for the Eastern District of Kentucky contending that the Secretary's financial assistance to Appellee violated a provision of the Act that enjoins the Secretary from extending such assistance when it would lead to unfair competition. Sec. 702 Public Works and Economic Development Act of 1965, 42 U.S.C. § 3212. On September 29, 1967 Appellee and the Government, in behalf of the Secretary of Commerce, moved to dismiss the actions. On March 14, 1968 the District Court dismissed the complaint against Appellee but took under advisement the Government's motion to dismiss the complaint against the Secretary of Commerce. 3 The District Court denied the Government's motion on May 13, 1968, well over the time allowed Appellants to file notice of appeal of the judgment dismissing their action against Appellee. Rule 73(a), Federal Rules of Civil Procedure allows thirty days in which to file notice of appeal.1 On that date, however, Appellants moved for leave pursuant to Rule 73(a) (2) to extend the time for filing such notice to and including May 13, 1968. In support of their motion Appellants argued that the consequences arising from the dismissal of their action against Appellee only "became clear" on May 13, 1968, the date that the District Court rejected the Government's motion to dismiss the action against the Secretary. Appellee vigorously opposed the extension of time but the District Court, after a hearing, granted Appellants' motion and ordered that the time for filing notice of appeal be extended to and including May 13, 1968. Appellants promptly filed their notice of appeal. This was more than thirty days but less than sixty days after the judgment of the District Court dismissing Appellants' action against Appellee. The District Court, however, made no findings of fact in support of its order. 4 On September 9, 1968 Appellee filed in this Court a motion to dismiss the appeal. We took the motion under advisement and passed it to the hearing on the merits. On April 9, 1969 we heard oral argument on the motion and on the merits. We have concluded that we have no jurisdiction to hear the appeal and that it must be dismissed. We therefore express no opinion on the merits of this controversy. 5 Notice of appeal from any judgment where the United States was not a party must be filed within thirty days after the entry of such judgment. Rule 73(a) Federal Rules of Civil Procedure; 28 U.S.C. § 2107. If a party does not file within the thirty day period, we lack jurisdiction to hear his appeal. Schlink v. Chesapeake & Ohio Railroad Co., 276 F.2d 116 (6th Cir.1960.) 6 Although this Court cannot waive or extend the filing period, a District Court may extend it "not to exceed thirty days * * * `from the expiration of the original time.'" Rule 73(a) (2); Reed v. People, 398 F.2d 800 (6th Cir.1968). The District Court, however, is not untrammeled in its power to extend the filing period; the movant must allege and show "excusable neglect" for failure to timely file his appeal and the District Court must make such a finding before it may extend the filing period beyond the first thirty days. This is the sole ground upon which the District Court may extend the filing period. Richland Knox Mutual Insurance Co. v. Kallen, 376 F.2d 360 (6th Cir.1967). 7 Under an earlier version of Rule 73(a) (2), "excusable neglect" could only arise where a "party [failed] to learn of the entry of judgment * * *." Although this express limitation was deleted from the Rule in 1966, it still remains the principal ground for a showing of excusable neglect. Winchell v. Lortscher, 377 F.2d 247 (8th Cir.1967.) 8 In the case before us Appellants do not claim that they were unaware of the judgment dismissing their complaint against Appellee. That aside, Appellants did not allege or show that their neglect was excusable, nor did the District Court find that it was; the Court without explanation granted Appellants' motion and extended the time within which Appellants could docket their appeal. 9 Harris Truck Lines, Inc. v. Cherry Meat Packers, Inc., 371 U.S. 215, 83 S. Ct. 283, 9 L.Ed.2d 261 (1962) is cited by Appellants in support of their contention that a District Court's order extending the filing period should be given great deference by reviewing courts. In Harris, however, the party moved to extend the filing period prior to the expiration of the initial thirty-day period. The Court held that the "obvious great hardship" to the party relying on the Judge's finding overcame what the result "should have been on the initial facts." Harris, of course, is distinguishable from the case before us because Appellants did not move to preserve their right within the initial thirty-day period. We do not have here an extraordinary situation where dismissal of Appellants' appeal would yield a grave injustice. Appellants knew exactly when the judgment against them was entered and they could have easily perfected this appeal within the prescribed period. As Appellee correctly points out, Appellants knew nothing more after the District Court rejected the Government's motion to dismiss the action against the Secretary of Commerce than they did before. These circumstances do not suggest "excusable neglect." And since the District Court did not find that they did, its order extending the time for filing notice of appeal was of no effect and we have no jurisdiction to hear the appeal. 10 Appeal dismissed. Notes: 1 The events in this case occurred before July 1, 1968. On this date Rule 73(a) of the Federal Rules of Civil Procedure was superseded by Rule 4 of the Federal Rules of Appellate Procedure	{ "pile_set_name": "FreeLaw" }
11 Cal.App.3d 210 (1970) 89 Cal. Rptr. 669 FRANK P. DONOVAN, Plaintiff and Respondent, v. ALVIN WECHSLER, Defendant and Appellant. Docket No. 36074. Court of Appeals of California, Second District, Division Two. September 16, 1970. 211 COUNSEL Lyn H. Marcus for Defendant and Appellant. Kenneth S. Biely for Plaintiff and Respondent. OPINION ROTH, P.J. Respondent Frank P. Donovan, on May 3, 1966, through the efforts of one Salmonson, an independent salesman, executed a written contract with Venco Construction Company, a corporation (Venco) for the conditional sale of four items of construction equipment totaling in value, including finance charges, the sum of $26,742.39 (Sale). Appellant Wechsler, 212 an attorney who defended the action in the trial court, held 47 1/2 percent of the issued capital stock of Venco. Prior to the consummation of the sale, Wechsler was told by Salmonson that Donovan intended to assign the Sale to Industrial Credit Company (Industrial) and that there could be no sale unless Wechsler executed a personal guaranty of the Sale. Since one of the basic points relied on by Wechsler (appellant herein) is bottomed on the manner in which the Sale was consummated, the testimony of Salmonson on cross-examination by Wechsler and undenied by Wechsler, is detailed in pertinent part: "... [T]he conditional sales contract was signed by Mr. Fuller[1] in my presence. At that time I advised him that Industrial ... would require a personal signature by Mr. Wechsler, and at that time, I had those forms,[2] and then I made an appointment with Mr. Wechsler to have that personal guaranty signed. ".... .... .... .... ... "... I advised him that it was necessary for Mr. Wechsler to sign a personal guaranty, and then, at that time, I made an appointment with Mr. Wechsler. THE COURT: Was this before the equipment was delivered? THE WITNESS: Yes, sir. THE COURT: Was the guaranty signed before the equipment was delivered? THE WITNESS: Yes, sir. THE COURT: And delivered to Venco? THE WITNESS: Yes, sir. THE COURT: Then, in your discussions with Mr. Fuller, was it a condition that Mr. Wechsler sign a guaranty prior to acceptance with of the sale or the contract, is that your testimony? THE WITNESS: Yes, sir." Wechsler did, on May 6, 1966, prior to the delivery of said items of equipment, execute a written guaranty to Industrial. The guaranty did specifically guaranty all the terms of the sale and in pertinent part it provided that it was to "your successor or assigns...." Donovan assigned the Sale to Industrial with recourse. It is not clear from the record whether the Wechsler guaranty was delivered at the same time to Industrial by Donovan or sent directly to Industrial by Wechsler. Since Wechsler had only a vague recollection of executing the guaranty, although he admitted his signature, it is fair to assume that it was delivered to Salmonson, as he in effect testified and that both documents were then delivered to Donovan who in turn delivered them to Industrial. Within two months Venco defaulted. Donovan continued payments due 213 from Venco under the sale for a few months and then discontinued. Venco continued in default. Industrial declared a default, repossessed the equipment and reassigned the sale to Donovan together with the equipment collateral and the Wechsler guaranty. Donovan thereafter, as required by and pursuant to the terms of the contract and section 9504 of the Commercial Code of California, sold the equipment at private sale. Donovan then brought this action against Wechsler on the guaranty for a sum equal to the difference beween the price fixed in the sale and the price obtained at the private sale, plus interest, repossession charges, commissions and attorneys' fees, all included in the guaranty by Wechsler. Donovan obtained judgment. Wechsler appeals. (1) Donovan's amended complaint did not allege an assignment from Industrial to himself, nor did he introduce evidence of the assignment or that proper notice of the private sale of the equipment had been given when he first rested his case. These omissions were called to the court's attention by Wechsler who at that stage of the litigation moved for a nonsuit or dismissal on the ground that the action had been prematurely brought and that the complaint stated no cause of action against him. Donovan promptly asked leave to reopen to supply the missing evidence to amend his complaint. The court granted the motion to reopen and amend. The case was reopened and evidence of assignment, notice of sale and proper adherence to Commercial Code section 9504 were supplied, although the record shows that the assignment from Industrial to Donovan was not completed until a month after the original complaint was filed. The record also shows that although granted leave to amend, to conform to proof, no amendment was actually filed. The case was reopened and tried on the theory that a formal amendment to conform to proof would be filed. Since the proof was made, the fact that no formal amendment was filed is immaterial. (Provost v. Worrall, 142 Cal. App.2d 367, 373 [298 P.2d 726]; 39 Cal.Jur.2d 353.) The findings made by the trial court are supported by ample evidence. In pertinent part the findings are as follows: "2. On May 6, 1966 [Wechsler] executed a guaranty to Industrial Credit Company on behalf of Venco, providing that he would guarantee to Industrial Credit Company or its assigns the performance of the said conditional sales contract. ".... .... .... .... ... "7. That the said equipment was not delivered to Venco until [Wechsler] executed his guaranty and was delivered in consequence of said guaranty. "8. That [Donovan] sold said equipment to Piper Machinery Company 214 for $10,500.00 after having advertised it for sale and attempting to sell the same on the open market. "9. That [Donovan] through his attorney and [Wechsler] on his own behalf stipulated that proper notice of the sale of the collateral was given." The court's conclusions of law in pertinent part were: "1. That there was consideration for [Wechsler's] guaranty. "2. That the sale of said equipment by [Donovan] to Piper Machinery Company was made in a commercially reasonable manner. "3. That proper notice of the sale of the collateral was given. ".... .... .... .... ..." (2) Wechsler argues that the action was prematurely filed; his guaranty was without consideration or in the alternative, that Donovan could not collect on the guaranty because (a) it ran to Industrial and (b) Industrial was not hurt because it recovered in full from Donovan the consideration it had paid Donovan for the sale; no proper notice of sale was given as required by section 9504, subdivision (5), of the Commercial Code of California; that the sale was not made in a commercially reasonable manner as required by said code section, and finally, that the assignment to Donovan by Industrial of the guaranty did not give Donovan the right to sue thereon, since he had parted with the debt which was the subject of the guaranty. The premature filing of the original complaint was cured by the assignment from Industrial to Donovan shown by the evidence and found by the court to have been made a month after the action was filed. (Loop Bldg. Co. v. DeCoo, 3 Cal. App.2d 129, 134-135 [38 P.2d 816]; Meyer Koulish Co. v. Cannon, 213 Cal. App.2d 419, 425 [28 Cal. Rptr. 757]; Baumgarten v. California Pac. Title & Trust Co., 127 Cal. App. 649 [16 P.2d 332].) Finally, the record shows that the tardy assignment of contractual rights represented by the Sale and the guaranty of that Sale were vested in Donovan at the time of trial and the court so found. (3) The trial court specifically concluded that Donovan "... has the same rights as [Industrial] under the conditional sales contract." The trial court's conclusion is further fortified by section 9504, subdivision (5), of the Commercial Code which provides: "A person who is liable to a secured party under a guaranty, indorsement, repurchase agreement or the like and who receives a transfer of collateral from the secured party or is subrogated to his rights has thereafter the rights and duties of the secured party...." (Offer v. Superior Court, 194 Cal. 114, 121 [228 P. 11].) (4) The evidence shows and the court found that no Sale would have *215 been consummated except for the Wechsler guaranty. Assuming the guaranty as Wechsler contends was executed a few days later, and not concurrently with the sale, an assumption contrary to the evidence and the findings of the trial court, there was ample consideration for the guaranty. (Cal.Jur.2d, Suretyship and Guaranty, § 22; Pauly v. Murray, 110 Cal. 13 [42 P. 313]; Stroud v. Thomas, 139 Cal. 274 [72 P. 1008].) Sherwood v. Lowell, 34 Cal. App. 365 [167 P. 554], cited by Wechsler, is not in point. The facts at bench show the guaranty was an intrinsic part of the Sale. The guaranty was made to Industrial and its assigns. Wechsler cites no case and we know of none which prevents the assignment of a guaranty. The fact that Industrial was not damaged because it recovered its purchase price from Donovan does not prevent Donovan from recovering on the Sale. The recourse arrangement between Donovan and Industrial required Donovan to take the Sale back from Industrial. Donovan was in precisely the same position as Industrial. The parties stipulated that proper notice of the private Sale was given.[3] The trial court so found and concluded also from evidence too full to detail, that the Sale was made in a commercially reasonable manner, as required by section 9504, subdivision (3), of the California Commercial Code. The judgment is affirmed. Fleming, J., and Compton, J., concurred. A petition for a rehearing was denied October 6, 1970, and appellant's petition for a hearing by the Supreme Court was denied November 10, 1970. NOTES [1] Fuller signed as President of Venco. Wechsler testified he was the General Manager. [2] The forms were contract of conditional sale with Donovan and guaranty thereof running to Industrial, both of which were introduced in evidence. [3] Speaking in respect of the notice, Mr. Wechsler stated after evidence thereof had been introduced, as follows: "I was unaware of this evidence, ... and I am willing to stipulate that it was given. THE COURT: As required by Section 9504? MR. WECHSLER: That's correct, your Honor."	{ "pile_set_name": "FreeLaw" }
Filed 11/21/13 P. v. Aguayo CA4/2 NOT TO BE PUBLISHED IN OFFICIAL REPORTS California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115. IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA FOURTH APPELLATE DISTRICT DIVISION TWO THE PEOPLE, Plaintiff and Respondent, E058421 v. (Super.Ct.No. FSB026475) GABRIEL AGUAYO, OPINION Defendant and Appellant. APPEAL from the Superior Court of San Bernardino County. Michael A. Smith, Judge. (Retired judge of the San Bernardino Super. Ct. assigned by the Chief Justice pursuant to art. VI, § 6 of the Cal. Const.) Affirmed. Howard C. Cohen, under appointment by the Court of Appeal, for Defendant and Appellant. No appearance for Plaintiff and Respondent. 1 Defendant and appellant Gabriel Aguayo appeals from an order denying his petition for recall of his indeterminate life term under Penal Code section 1170.126, subdivision (f).1 We will affirm the order. I PROCEDURAL BACKGROUND On December 29, 2000, a jury found defendant guilty of one count of residential burglary (§ 459, count 2); two counts of assault with a firearm (§ 245, subd. (a)(2), counts 3 & 5); and one count of possession of a firearm by a felon (§ 12021, subd. (a), count 6).2 In addition, the jury found true the special allegation that defendant personally used a firearm within the meaning of section 12022.5, subdivision (a)(1), in the commission of the assaults. In a bifurcated bench trial, the trial court found true the special allegations that defendant had suffered three prior serious or violent felony convictions (§§ 667, subds. (b)-(i), 1170.12, subds. (a)-(d)), two prior serious felony convictions (§ 667, subd. (a)(1)), and three prior prison terms (§ 667.5, subd. (b)). On September 11, 2001, after granting defendant’s motion for a new trial on counts 2 and 3, and denying 1 All future statutory references are to the Penal Code unless otherwise stated. 2 The jury found defendant not guilty of two counts of robbery. (§ 211, counts 1 & 4.) The jury also found not true the special allegations that in the commission of the robbery in count 1 and the residential burglary defendant had personally used a firearm, to wit, a rifle, and that in the commission of the robbery in count 4 defendant had personally and intentionally discharged a firearm, to wit, a rifle. 2 defendant’s motion for a new trial on counts 5 and 6, the trial court sentenced defendant to a total term of 42 years to life in state prison under the three strikes law.3 Defendant subsequently appealed to this court. Defendant’s claims were rejected and the judgment was affirmed. (People v. Aguayo (Aug. 23, 2002, E030343) [nonpub. opn.].) Defendant later sought federal habeas relief. The federal district court denied defendant’s request for relief. (Aguayo v. Ollison (C.D. Cal., Mar. 20, 2008, No. ED CV 07-607 RGK (SH)) 2008 U.S. Dist. Lexis 25373.) On November 6, 2012, the electorate passed Proposition 36, also known as the Three Strikes Reform Act. Among other things, this ballot measure enacted section 1170.126, which permits persons currently serving an indeterminate life term under the three strikes law to file a petition in the sentencing court, seeking to be resentenced to a determinate term as a second striker. (§ 1170.126, subd. (f).) If the trial court determines, in its discretion, that the defendant meets the criteria of section 1170.126, subdivision (e), the court may resentence the defendant. (§ 1170.126, subds. (f), (g).) Section 1170.126, subdivision (e), provides, as pertinent here, that a defendant is eligible for resentencing if he or she is serving an indeterminate term of imprisonment imposed pursuant to paragraph (2) of subdivision (e) of Section 667 or subdivision (c) of 3 Defendant’s sentence consisted of the following: 25 years to life for the assault with a firearm conviction in count 5, plus 10 years for the personal firearm use finding attached to count 5; five years for one of the prior serious felony convictions, plus two one-year terms for two prior prison term findings; and with respect to the possession of a firearm by a felon (count 6), a stayed sentence pursuant to section 654. The trial court struck one of the prior serious felony convictions and one of the prior prison term findings. The trial court subsequently granted the prosecution’s motion to dismiss counts 2 and 3. 3 Section 1170.12 “for a conviction of a felony or felonies that are not defined as serious and/or violent felonies by subdivision (c) of Section 667.5 or subdivision (c) of Section 1192.7.” (§ 1170.126, subd. (e)(1).) On February 19, 2013, defendant filed in pro. per. a petition for resentencing under section 1170.126. The trial court denied the petition on March 21, 2013, because defendant’s current commitment offense for assault with a firearm, with a special allegation for use of a firearm, is a serious and/or violent felony under section 667, subdivision (e)(2)(C)(iii), which made defendant ineligible for resentencing under section 1170.126, subdivision (e)(2). Defendant filed a timely notice of appeal. II DISCUSSION We appointed counsel to represent defendant on appeal. After examination of the record, counsel has filed a brief under the authority of People v. Wende (1979) 25 Cal.3d 436 and Anders v. California (1967) 386 U.S. 738, setting forth a statement of the case, a summary of the facts and potential arguable issues, and requesting this court conduct an independent review of the record. We offered defendant an opportunity to file a personal supplemental brief, but he has not done so. Pursuant to the mandate of People v. Kelly (2006) 40 Cal.4th 106, we have independently reviewed the record for potential error and find no arguable issues. Defendant’s current commitment conviction for assault with a firearm with an enhancement allegation that defendant used a firearm in the commission of the assault is 4 a serious and/or violent felony within the meaning of section 667, subdivision (e)(2)(C)(iii). III DISPOSITION The order is affirmed. NOT TO BE PUBLISHED IN OFFICIAL REPORTS RAMIREZ P. J. We concur: RICHLI J. CODRINGTON J. 5	{ "pile_set_name": "FreeLaw" }
656 F.2d 698 U. S.v.Stellar 81-1024 UNITED STATES COURT OF APPEALS Fifth Circuit 9/9/81 1 N.D.Tex. AFFIRMED 2 --------------- Fed.R.App. P. 34(a); 5th Cir. R. 18.	{ "pile_set_name": "FreeLaw" }
12 Cal.App.3d 12 (1970) 90 Cal. Rptr. 414 SAFECO INSURANCE COMPANY OF AMERICA et al., Plaintiffs and Respondents, v. HARVEY L. HOUCHINS, Defendant and Appellant. Docket No. 35603. Court of Appeals of California, Second District, Division Four. October 16, 1970. 13 COUNSEL Arthur S. Black for Defendant and Appellant. Allan S. Garber and L.E. Schweiner for Plaintiffs and Respondents. 14 OPINION DUNN, J. On July 31, 1967 appellant, a postal employee, was driving a United States mail truck in the course and scope of his employment and was injured when it collided with a vehicle driven by Gary Gnade, an uninsured motorist. The United States, through its Bureau of Employees' Compensation, paid benefits to appellant pursuant to 5 United States Code Annotated sections 8101-8150, entitled "Compensation for Work Injuries."[1] Before the accident, respondents had issued a policy of automobile insurance to appellant affording uninsured motorist coverage with limits required by California statute and otherwise complying with California Insurance Code section 11580.2. Appellant instituted an arbitration proceeding, pursuant to Insurance Code section 11580.2, subdivision (f). Respondents then filed a superior court action seeking: (1) an injunction prohibiting the arbitration and (2) a declaration that any amount payable by respondents to appellant should be reduced by the amount of compensation benefits paid and payable to appellant by his employer. This action went to trial and the court found the amounts so paid and payable exceeded the limits of respondents' uninsured motorist coverage. Judgment was ordered for respondents and appellant was enjoined from further pursuing arbitration. The appeal is from that judgment. (1) Only one point is presented on this appeal, namely, the right of respondent insurers to reduce uninsured motorist benefits payable to appellant by the amount he received from his employer, the United States government, as compensation for work injuries. Insurance Code section 11580.2, subdivision (a) requires an automobile policy to provide uninsured motorist coverage, unless deleted by written agreement. The insured must be covered, with statutory limits, "... for all sums within such limits which he... shall be legally entitled to recover as damages for bodily injury or wrongful death from the owner or operator of an uninsured motor vehicle." Subdivision (h) states: "Any loss payable under the terms of the uninsured motorist ... coverage to or for any person may be reduced: (1) By the amount paid and the present value of all amounts payable to him under any workmen's compensation law...." The policy issued by respondents adopted the statutory language providing, under its clause entitled "Limits of Liability," that: "(b) Any loss payable under the terms of this coverage to or for any person shall be reduced by: (1) the amount paid and the present value of all amounts payable to him under any workmen's compensation law...." 15 The question to be determined is whether the system of compensation for work injuries provided by the United States Code is a workmen's compensation law. A review of this system discloses that it is entitled "Compensation for Work Injuries" (see fn. 1) and requires the United States to pay compensation "... for the disability or death of an employee resulting from personal injury sustained while in the performance of his duty...." The government is required to furnish such injured employee with medical care and assistance; vocational rehabilitation may be provided for one permanently disabled. An Employees' Compensation Fund is established and total and partial disabilities are compensated according to a schedule; a claim for compensation must be filed by or on behalf of the employee; there is provision for a hearing, findings and an award, the award being subject to review by an Employees' Compensation Appeals Board; in case of a fatal injury, death benefits are payable. It is obvious these provisions constitute a "workmen's compensation law" as contemplated by Insurance Code section 11580.2, subdivision (h) and by the insurance policy. Counsel have cited us to no contrary case and our own research has disclosed none. (2) Appellant contends the United States is an "insured" within the meaning of the policy and is a "person" entitled to recover, citing Government Employees Insurance Co. v. United States (4th Cir.1967) 376 F.2d 836. He contends the government, under 5 United States Code Annotated section 8131, may require him to assign his rights against respondents to the United States and that the Insurance Code conflicts with the government's rights thus to be subrogated. The cited case is not in point. It considered only the right of the United States to sue, not the extent of its recovery. Neither the United States Code, the Insurance Code nor the policy endows the government with rights greater than those of the named or any other insured under the policy. The United States may be subrogated, under 5 United States Code Annotated section 8131, to the rights of its employee where: "... an injury or death for which compensation is payable ... is caused under circumstances creating a legal liability on a person other than the United States to pay damages...." This means only that the government may step into its employee's shoes and based upon his rights, if any, seek reimbursement from a third party. (See generally: 46 Cal.Jur.2d 95, Subrogation, § 13.) The rights the government has against Gary Gnade, who caused the accident, are unaffected by the Insurance Code. Similarly unaffected are the government's rights against respondents. It has only the same rights to recover against them as does appellant, not greater. Appellant's right of recovery from respondents is based upon the terms of his contract with them. He would have no right at all except for the provisions 16 in the policy, required by the statute. Since the statute (and respondents' policy) specifically provides that any loss payable "... may be reduced.... (1) By the amount paid and the present value of all amounts payable ... under any workmen's compensation....", the government's rights against respondents are likewise limited. Accordingly, the effect of the Insurance Code is not to deprive the United States of any right of subrogation; there is no conflict with the United States Code provisions. There is little doubt that the provision for reducing liability by off-setting against the compensation benefits, is a valid provision under California law. (See generally, 24 A.L.R.3d 1369, Annotation, Uninsured Motorist Coverage: Validity and Effect of Policy Provision Purporting to Reduce Coverage by Amount Paid Under Workmen's Compensation Law; and see: Fireman's Fund etc. Co. v. Ind. Acc. Com. (1964) 226 Cal. App.2d 676 [38 Cal. Rptr. 336]; Eliopulos v. North River Ins. Co. (1963) 219 Cal. App.2d 845, 854 [33 Cal. Rptr. 449]; Jarrett v. Allstate Ins. Co. (1962) 209 Cal. App.2d 804 [26 Cal. Rptr. 231].) The language of the policy is clear and its meaning unambiguous. A statement in Darrah v. California State Automobile Assn. (1968) 259 Cal. App.2d 243, 247 [66 Cal. Rptr. 374] is in point: "Finally, Wheatley and Darrah insist that we apply the well-known rule that any ambiguity or uncertainty of an insurance policy will be construed against the insurer which caused the ambiguity to exist. Even if we were to find an ambiguity that rule would not be fairly applicable here. The policy's language under discussion is not the choice of the insurance companies. It is substantially the language of the Legislature as expressed in section 11580.2." The judgment is affirmed. Files, P.J., and Frampton, J.,[] concurred. NOTES [1] Title 5, U.S.C.A., "Government Organization and Employees," part III, sup-part G, chapter 81, subchapter I. [] Retired judge of the superior court sitting under assignment by the Chairman of the Judicial Council.	{ "pile_set_name": "FreeLaw" }
98186CV.Khader-MikeS.twg.dis.wpd IN THE TENTH COURT OF APPEALS No. 10-98-186-CV MIKE S. KHADER, Appellant v. MOHAMED AZIZ MOMIN, Appellee From the 37th District Court Bexar County, Texas Trial Court # 96-CI-12429 DISSENTING OPINION This case involves the breach of a commercial property lease. It was tried before the court. At trial the only two witnesses were the lessee, Momin, and the lessor, Khader. The trial court found in favor of Momin. The only issue Khader brings on appeal is a complaint that the trial court used an improper measure of damages to award Momin damages of $27, 259.65. Neither the judgment or the findings of facts and conclusions of law state the measure of damages the trial court used. Everyone seems to agree that the proper measure is benefit of the bargain. Essentially, Khader complains that the evidence is factually insufficient to support the amount of the damages awarded under a benefit of the bargain measure of damages. It was within the province of the trial court, acting in his capacity as the finder of fact, to determine, based upon the disputed and conflicting testimony, the amount of damages the plaintiff had suffered. The trial court had before him evidence of over $80,000 in damages. He choose to award only $27,259.65. The evidence is factually sufficient to support the damages awarded measured under the benefit of the bargain theory of recovery. Thus I would affirm the judgment of the trial court, and accordingly I respectfully dissent from the majority opinion. The record of the trial in this case is sometimes difficult to follow. At times the testimony from the same witness seems to be conflicting. However what is clear and not in dispute is as follows: 1. Momin agreed to lease the property from Khader for a period of fifteen years. 2. The lease had an option for Momin to purchase the property for $174,000, with certain discounts depending upon when Momin exercised the option. During the first 10 months the discount was $1000 per month. 3. The lease agreement required Khader to pay the property taxes, insurance and repairs. 4. Momin paid the rents as they were due under the lease. 5. Khader owed property taxes and a note on the property. 6. Khader failed to pay the property taxes and note payments. The property was foreclosed upon within the first 5 months of the lease. The conflicting testimony, relates primarily to who purchased the property at foreclosure. What is clear is that Momin did not purchase it alone, if at all. The evidence at trial was that Momin’s brother is the one who purchased the property at foreclosure. However, the unchallenged findings of fact, find that they purchased it together. The legal effect of what is undisputed is that Momin has lost the benefits of his lease and option agreement with Khader. The trial court, in findings of fact and conclusions of law, determined that Momin had been injured in the amount of $27,259.65. There is no discussion about how the amount was calculated or what the amount represents. It is acknowledged that this is the amount of back taxes against the property. It is also the total of two cashiers checks made payable to “Bexar County Tax” which show the remitter as Momin’s sole proprietorship business. The testimony at trial would support damages of zero to over $80,000 depending upon the testimony that was found to be credible. Neither party did an economic analysis of the value of the property, or the value of the lease, or the cost to Momin if he had to relocate his business as a result of Khader’s breach of the lease. Momin did testify that the value of the purchase option he lost was $40,000. In response to questioning about the value of the option, Momin testified as follows: Q. How do you come up with the $40,000? Is it – – is there any mathematical formula we can – – A. It’s not mathematical formula or whatsoever. The thing is I lost the chance to have the property on my name and one day I be owning that property. And I don’t have that. He was the owner of the option. As the owner he could testify regarding its value. Redman Homes, Inc. v. Ivy, 920 S.W.2d 664 (Tex. 1996); State v. Berger, 430 S.W.2d 557 (Tex. Civ. App. – Waco 1968, writ ref’d n.r.e.). Further, there was no objection to his testimony of value. If he and his brother had not purchased the property at foreclosure, which they had no obligation to do, he also would have lost his investment in improvements made to the property. Khader wants this Court to calculate the damages based upon what he contends to be Momin’s lost benefit of the bargain. He asserts that the benefit Momin lost is the price paid at foreclosure plus the back taxes paid, less the option price of $174,000. He does not credit Momin for the option discounts that Momin contracted for and to which Momin would have been entitled if Momin had purchased the property pursuant to the option. Khader’s damage computation also does not allow for the fact that Momin would not have to pay the option price, taxes, insurance, or repairs until after he had exercised the option, which could be as many as fifteen years in the future. Khader’s measure of damages also does not consider that during the period of time prior to exercising the option, Khader had the risk of decreases in the market value of the property. The option agreement had value to Momin because it protected him from decreases in market value because he was not obligated to purchase the property, but would have allowed Momin to benefit from property value increases by exercising the option. According to Khader, Momin’s damages total $177,259.65 less $174,000, or $3,259.65. This is the amount the majority awards Momin for the undisputed breach of the lease. Like Khader, the majority has stripped Momin of the value of the lease and option and only partially compensates him for Khader’s breach of the lease agreement. Momin has not received the benefit of his bargain. It is not our task to try to determine what the trial court did or why. Our task is much more focused. We must analyze the points of error raised by the appellant, and determine, based upon the record before us, if the trial court erred. Great North American Stationers, Inc. v. Ball, 770 S.W.2d 631, 634 (Tex. App. -- Dallas 1989, no writ). Finding that the amount of damages awarded by the trial court as the finder of fact is well within the range of damages supported by the evidence of Momin’s lost benefits of his lease and option, I would affirm the judgment. TOM GRAY Justice Opinion delivered and filed June 9, 1999 Do not publish	{ "pile_set_name": "FreeLaw" }
62 F.3d 1428 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. Frank Charles CARROLL, Petitioner-Appellant,v.D.M. O'NEAL, Respondent-Appellee. No. 94-6453. United States Court of Appeals, Tenth Circuit. Aug. 15, 1995. Before TACHA, LOGAN and KELLY, Circuit Judges. ORDER AND JUDGMENT1 LOGAN, Circuit Judge. 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 case is therefore ordered submitted without oral argument. 2 This matter is before the court on petitioner Frank C. Carroll's application for a certificate of probable cause. The right of a petitioner convicted of a state crime to appeal a federal district court's denial of habeas corpus relief is conditioned upon either the district court or this court granting a certificate of probable cause. See 28 U.S.C. 2253. 3 The Supreme Court in Barefoot v. Estelle, 463 U.S. 880, 892-93 (1983), declared that the "primary means of separating meritorious from frivolous [habeas corpus] appeals should be the decision to grant or withhold a certificate of probable cause." We will not grant such a certificate unless the petitioner makes "a substantial showing of the denial of an important federal right by demonstrating that the issues raised are debatable among jurists, that a court could resolve the issues differently, or that the questions deserve further proceedings." Gallagher v. Hannigan, 24 F.3d 68 (10th Cir.1994) (citing Barefoot, 463 U.S. at 893 & n. 4). 4 Petitioner contends that he was denied due process and equal protection during the proceedings at which he pleaded guilty to three drug-related charges in Oklahoma state court. Petitioner did not appeal those convictions. His principal objection is that he was never put under oath, though he signed a summary of the facts and statement of the rights he waived in the plea hearing. 5 The magistrate judge in the Report and Recommendation of October 31, 1994, and the district court in its Order of December 19, correctly analyzed the facts, the procedural posture of the case, and the applicable law. We conclude that petitioner has failed to make the necessary showing to warrant our issuance of a certificate of probable cause. Therefore, we deny his application and DISMISS the appeal. 6 The mandate shall issue forthwith. 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	{ "pile_set_name": "FreeLaw" }
653 A.2d 241 (1994) Craig HUGHES, Defendant Below, Appellant, v. STATE of Delaware, Petitioner Below, Appellee. No. 168, 1994. Supreme Court of Delaware. Submitted: October 19, 1994. Decided: December 22, 1994. Order Clarifying Decision on Denial of Reargument January 30, 1995. Bernard J. O'Donnell, Asst. Public Defender, Office of the Public Defender, Wilmington, for defendant. Richard E. Fairbanks, Jr., Chief of Appeals Div., Dept. of Justice, Wilmington, for petitioner. Before VEASEY, C.J., WALSH, HOLLAND, HARTNETT, and BERGER, JJ., constituting the Court En Banc. 242 WALSH, Justice: This certification proceeding comes before the Court pursuant to Article IV, Section 11(9) of the Delaware Constitution and Supreme Court Rule 41. The Family Court has certified five questions of law which this Court accepted by order dated May 19, 1994. Briefing and oral argument before the Court en Banc followed. This is the decision of the Court on the certified questions. I As required for certification proceedings, the facts underlying the certified questions are undisputed. The defendant, Craig Hughes ("Hughes"),[1] was arrested on November 6, 1993, for receiving stolen property worth over $500 (11 Del.C. § 851) and second degree conspiracy (11 Del.C. § 512). The charges against Hughes would constitute felonies if he were an adult. Because Hughes was seventeen years old at the time of his arrest, he was subject to the jurisdiction of the Family Court. State v. Connors, Del.Super., 505 A.2d 1301, 1302 (1986). Accordingly, Hughes was arraigned in February, 1994, and his case scheduled for trial in the Family Court on November 1, 1994. Under the statutory scheme in place at the time of his arrest, Hughes fell under the original jurisdiction of the Family Court with the possibility that he could be transferred to Superior Court if, following an amenability hearing, the Family Court determined that Hughes was not amenable to its processes. 243 10 Del.C. § 1010(c)[2]. This statutory scheme was altered subsequent to Hughes' arrest, however. On April 11, 1994, Senate Bill 140 was signed into law. Under the language of this amendment, "if a child reaches his eighteenth birthday prior to an adjudication on a charge of delinquency arising from acts which would constitute a felony," the Family Court must automatically transfer the matter to Superior Court. 69 Del.Laws c. 205. Hughes turned eighteen years old on September 24, 1994, and is therefore subject to the statute as amended. In addition, at least forty-five other cases pending before the Family Court involve children who either have reached the age of eighteen or may reach that age before their cases are adjudicated in the Family Court. Because of the great number of cases affected by the statutory amendment, and its attendant consequences upon the jurisdiction of the Family Court, the following questions implicating the amendment's construction, application, and constitutionality were certified and accepted by this Court: 1. Whether the amendment to 10 Del.C. § 1002, effective as of April 11, 1994, applies to all relevant cases in which the offenses are committed on or after the effective date of the amendment, or to all cases pending in the Family Court as of the effective date of the amendment in which the respondent has already turned 18 years of age or will turn 18 years of age while awaiting trial. 2. Whether extended jurisdiction of the Family Court over juveniles beyond the age of 17, pursuant to 10 Del.C. § 928, is applicable in cases where the juvenile turns 18 while awaiting trial in the Family Court or becomes moot pursuant to the recent amendment to 10 Del.C. § 1002. 3. Whether the Attorney General must obtain an indictment before proceeding to try the defendant on the charges once the case is transferred to the Superior Court pursuant to 10 Del.C. § 1002. 4. Whether the statutory amendment violates the constitutional guarantee of equal protection of the laws. 5. Whether the statutory amendment violates the constitutional guarantee of due process of law. We have concluded that the statutory amendment violates the constitutional guarantees of equal protection of the laws under the Federal Constitution and due process of law under both the Federal and Delaware Constitutions. U.S. Const. amend. 14; Del. Const. art I, § 7.[3] Because we answer question numbers four and five in the affirmative, the remaining questions are rendered moot and, accordingly, we decline to answer them. See State v. Ayers, Del.Supr., 260 A.2d 162, 170 (1969). II Before addressing the merits of Hughes' constitutional claims arising under the due process and equal protection clauses, a review of the statutory framework delineating the jurisdiction of the Family Court, and our prior case law interpreting that scheme, is necessary to appreciate the circumstances which precipitated the enactment of the statutory amendment at issue. Since its inception in 1945, the Family Court has been conferred almost exclusive jurisdiction over those under the age of eighteen charged with violations of State law. 10 Del.C. § 921; State v. J.K., Del.Supr., 383 244 A.2d 283, 285 (1977), cert. denied, 435 U.S. 1009, 98 S.Ct. 1882, 56 L.Ed.2d 392 (1978).[4] Under section 921(2)(a), the Family Court is vested with original jurisdiction over "[a]ny child charged in this State with delinquency or by having committed any act or violation of any law of this State...." The statutory scheme evidences a legislative intent, with some exceptions, to treat child offenders differently from adult offenders. Fletcher v. State, Del.Supr., 409 A.2d 1256 (1979). In its recognition that children generally require distinctive treatment, the General Assembly has established a dual judicial system so that children and adults are segregated and adjudicated separately. To that end, the Family Court Act was enacted to provide uniform jurisdiction, policies and procedure by creating a statewide Family Court system. Wife, S. v. Husband, S., Del.Ch., 295 A.2d 768 (1972). The function of the Family Court in the Delaware dual system is expressly set forth in the Act: § 902. Purpose; construction. (a) In the firm belief that compliance with the law by the individual and preservation of the family as a unit are fundamental to the maintenance of a stable, democratic society, the General Assembly intends by enactment of this chapter that 1 court shall have original statewide civil and criminal jurisdiction over family and child matters and offenses as set forth herein. The court shall endeavor to provide for each person coming under its jurisdiction such control, care, and treatment as will best serve the interests of the public, the family, and the offender, to the end that the home will, if possible, remain unbroken and the family members will recognize and discharge their legal and moral responsibilities to the public and to one another. (b) This chapter shall be liberally construed that these purposes may be realized. 10 Del.C. § 902. Thus, in direct contrast to the criminal nature of an adult prosecution in the Superior Court, an adjudication of delinquency in the Family Court is a civil proceeding. G.D. v. State, Del.Supr., 389 A.2d 764, 765 (1978); see also State v. Wilson, Del.Supr., 545 A.2d 1178, 1181 (1988) ("By its creation of the Family Court, the General Assembly recognized the unique role that Court is called upon to play through the application of its civil processes in the resolution of offenses committed by children."). The civil nature of a proceeding in Family Court removes the stigma of criminality which is inherent in an adult prosecution in Superior Court. Accordingly, the Family Court Act provides that "no child shall be deemed a criminal by virtue of an allegation or adjudication of delinquency...." 10 Del.C. § 1002. We have previously summarized the statutory scheme as follows: The proceedings against a child are not criminal in concept or in practice. Indeed, the child is not even charged with a `crime' no matter what the conduct. See 10 Del.C. § [1002]. In the Family Court the charge is a general one of `delinquency.' § 921(1)(2)a.... State policy in a proceeding against a child in the Family Court is to make it entirely a part of the Court's `civil jurisdiction,' § 921.... State v. J.K., 383 A.2d at 286. Notwithstanding the societal policy to proceed against children in a civil setting, the General Assembly has provided two statutory exceptions under which children may be criminally prosecuted at the adult level. 10 Del.C. § 1010. First, under section 1010(a)(1), children, regardless of age, who are charged with the most serious felonies, as designated by the statute, are prosecuted as adults. Second, under section 1010(a)(2), the Family Court has the discretion to transfer the case of a child over sixteen years of age to the Superior Court for trial as an adult if the court concludes that the child is not amenable to the Family Court processes. Under the statute, the Family Court conducts a so-called amenability hearing, initiated upon motion of the Attorney General or 245 by the court sua sponte, to determine independently whether the child will benefit from the "rehabilitative processes of the Court." § 1010(c). In its inquiry, the Family Court may consider six enumerated, nonexclusive criteria. Id. If the Family Court finds that the child is amenable, the court retains jurisdiction over the child. Upon a finding of nonamenability by the court, however, the child is referred for trial as an adult in the Superior Court or any other court with jurisdiction over the offense. The statutory scheme provides an additional judicial safeguard to children alleged to have either committed a designated felony or those found by the Family Court to be nonamenable. In 1971, the State Assembly created a mechanism, now known as the "reverse amenability" process, in which those children coming within the jurisdiction of the Superior Court may be transferred to the Family Court when adjudication in that forum is proper. 58 Del.Laws c. 116, now 10 Del.C. § 1011.[5] Under section 1011(a), the Attorney General, without leave of Court, may transfer to the Family Court those cases involving either designated felony offenses or those children found nonamenable when a transfer would best serve "the interests of justice." The defendant may exercise a concomitant right under section 1011(b) and may petition the Superior Court for a hearing to determine amenability. The statute permits, but does not require, an evidentiary hearing upon application of a child to consider several enumerated factors and other relevant considerations in deciding whether the interests of justice would best be served by the transfer of the child to Family Court. The reverse amenability hearing thus ensures a judicial determination of amenability which is premised upon the nature of the offense as well as the character of the child. State v. Anderson, Del.Super., 385 A.2d 738, 741 (1978). This Court explicitly upheld the constitutionality of the reverse amenability process in Marine v. State, Del.Supr., 607 A.2d 1185 (1992), cert. dismissed, ___ U.S. ___, 113 S.Ct. 28, 120 L.Ed.2d 952 (1992) ("Marine I"). In Marine I, we held that the reverse amenability process, which was required by legislative enactment, accords the defendant a judicial counterweight to any arbitrary charging authority by granting the Superior Court the power to evaluate the basis for the charge against the child. Id. at 1209. Our decision in Marine, which was based on the statute, apparently provided the impetus for the enactment of the statutory change now under review. Because the application of the statute in that decision appears to be misunderstood, the Marine holding bears analysis. Factually, Marine involved a fourteen year old who was indicted for first degree murder. Because Marine was charged with a designated felony, he fell within the jurisdiction of the Superior Court. §§ 921(2)a, 1010(a). Marine sought transfer of his case to Family Court pursuant to the reverse amenability process under the present section 1011(b). The Superior Court conducted an evidentiary hearing on Marine's amenability after which it denied his motion for transfer. Marine 246 was eventually convicted in the Superior Court of second degree murder the charge for which he had been originally arrested. On appeal, Marine claimed, inter alia, that he was denied due process and equal protection of the law because of the unequal treatment he received when compared with other children found guilty of the same crime in the Family Court, i.e., he was charged with first degree murder as an adult but convicted of an offense (second degree murder) which was not transferrable to Superior Court under section 1010.[6] Marine also claimed that the Superior Court erred in its analysis of the section 1011 factors. After an exhaustive review of the Family Court Act, this Court held that the Delaware statutory scheme, which permitted the Superior Court to convict a child as an adult for an offense which would result in an adjudication of delinquency in the Family Court, did not violate the guarantees of due process or equal protection. Marine I, 607 A.2d at 1209. However, without reaching the correctness of its result, we found that the Superior Court erred in its application of the current section 1011 by failing to make specific factual findings into the "nature of the present offense" as expressly required by the statute. Id. at 1211. Specifically, we held that section 1011 required the Superior Court, in a proceeding similar to a "proof positive" hearing at which a defendant's right to bail is determined when charged with a capital offense, to consider whether the State can establish a prima facie case against the defendant. Marine I, 607 A.2d at 1211-12. A prima facie case is established if the evidence demonstrates that there is a fair likelihood that the defendant may be convicted on the charge. Id. at 1212 n. 17. Accordingly, we vacated the judgment of the Superior Court and remanded, with jurisdiction retained, so that Marine would receive a reverse amenability hearing in which the court properly considered section 1011(b)(1). Marine I, 607 A.2d at 1212. Essentially, our mandate required a "judicial examination of the evidentiary justification for the charging decision...." Id. Upon remand, the Superior Court concluded that the State did not have a fair likelihood of convicting Marine of first degree murder and that Marine's request to have his case transferred to Family Court should have been granted as required by the statute upon such a finding. On appeal, this Court affirmed. Marine v. State, Del.Supr., 624 A.2d 1181 (1993) ("Marine II"). Because the statute provided that the Superior Court could not hold a trial over any fourteen year old child accused of second degree murder, the Superior Court was divested of jurisdiction of a criminal prosecution against Marine by its own finding. Moreover, because Marine was over nineteen years of age at the time of the Marine II decision, under the statute, the Family Court also lacked jurisdiction over Marine because he was then an adult. Marine II, 624 A.2d at 1189. Accordingly, this Court was required to direct the Superior Court to vacate Marine's sentence and conviction and to order his release from custody. Id. The State then moved for reargument, contending that Marine could be retried for either first degree murder or second degree murder in the Superior Court. In denying reargument, we held that Marine could not be retried in the Superior Court for first degree murder because the Superior Court had determined, and this Court had affirmed, that the State did not have a fair likelihood of convicting him of that charge, thus precluding further litigation of the issue through the doctrine of collateral estoppel. 624 A.2d at 1190. Further, a second prosecution of Marine in the Superior Court for second degree murder was barred by the statute because the Family Court had exclusive jurisdiction over a fourteen year old child charged with that offense. Id. at 1190-91. On April 11, 1994, Senate Bill 140 was signed into law to amend 10 Del.C. § 1002 by 247 adding a paragraph to the existing statute. The statute, as amended, provides: § 1002. Delinquent child not criminal; prosecution limited. Except as provided by § 1010, no child shall be deemed a criminal by virtue of an allegation or adjudication of delinquency, nor shall a child be charged with or prosecuted for a crime in any other court. In this Court the nature of the hearing and all other proceedings shall be in the interest of rather than against the child. Except as otherwise provided, there shall be no proceedings other than appellate proceedings in any court other than this Court in the interest of a child alleged to be dependent, neglected, or delinquent. However, if a child reaches his eighteenth birthday prior to an adjudication on a charge of delinquency arising from acts which would constitute a felony were he charged as an adult under the laws of this State, then the Family Court shall retain jurisdiction for the sole purpose of transferring the matter to the Superior Court for prosecution as an adult. Any such transfer under this Section shall not be subject to § 1011 of this title. 69 Del.Laws c. 205 (emphasis added). The statutory amendment was drafted in direct response to our ruling which denied the State's motion for reargument of the Marine decisions. Marine II, 624 A.2d at 1190-91. See 69 Del.Laws c. 205 (Synopsis). The stated purpose for the amendment is to ensure that a Delaware court will always have jurisdiction over felony child offenders. 69 Del.Laws c. 205 (Synopsis). The General Assembly apparently perceived that the Marine decisions had created a "jurisdictional gap" which it undertook to close by requiring that all children who are charged with a felony offense be tried in the Superior Court if they reach eighteen years of age before their cases are adjudicated in the Family Court. The statute also alters the existing scheme by preventing the defendant from obtaining judicial review of an important aspect of the amenability process. First, by mandating that those offenders falling under its purview be automatically transferred to Superior Court, the statute clearly intended to dispense with the right of the accused to seek a judicial determination under section 1010. Moreover, the provision explicitly eliminates the reverse amenability process in the Superior Court under section 1011 for those children transferred to that court for trial as adults. Hughes argues that the statutory amendment violates his rights of due process and equal protection because he has been deprived of the essential protection afforded by the reverse amenability process. U.S. Const. Amend. 14; Del. Const. art. I, § 7. Hughes claims that this procedure is designed to safeguard him from the unfettered authority of the State to impose potential arbitrary or capricious charging decisions, a practice viewed as unconstitutional by this Court in Marine I. The statutory amendment, it is argued, eliminates the independent examination into the basis of a felony charge against a child and vests the prosecution with the authority to determine jurisdiction over those children who will reach age eighteen pending trial in Family Court. We agree with Hughes that the elimination of the reverse amenability process is violative of his constitutional rights. III Hughes concedes that the age-based distinction drawn by the amendment does not pertain to a fundamental right or suspect class. See Marine I, 607 A.2d at 1207. Hence, our standard of review for the statute's constitutionality is well settled. In determining whether a statutory classification, not involving a suspect class or fundamental right, violates the equal protection [or due process] clause, we presume that the distinctions so created are valid. `A statutory discrimination or classification will not be set aside if any state of facts reasonably may be conceived to justify it.' Marine I, 607 A.2d at 1207 (quoting Traylor v. State, Del.Supr., 458 A.2d 1170, 1177 (1983)). The General Assembly is endowed with broad authority as a policy-making body 248 to classify child offenders based on their age for purposes of selecting the appropriate court for adjudication. "It is no novelty in our law to require that for certain crimes juveniles shall be tried as adults in the Superior Court." Ayers, 260 A.2d at 171. This power over classification is not without constitutional limits however. The legislative scheme must bear some rational relationship to the purpose for which it was enacted. We have previously described the State's discretionary authority to treat children as adults under the Constitution as follows: The discretion of the General Assembly in setting policy under its police power is, however, not absolute. It may not be arbitrary or capricious: it must be reasonable. When the power is exercised to classify for purpose of trial for crimes, as this is, then the classification must be founded on differences reasonably related to the purposes of the statute in which the classification is made. Ayers, 260 A.2d at 171. Equal protection does not require identical treatment for all individuals within a class but, rather, when distinctive treatment for individual class members does occur, there must be a reasonable basis for the distinction. Marine I, 607 A.2d at 1207; Mills v. State, Del.Supr., 256 A.2d 752, 756 (1969). For the distinction to be so unreasonable as to be discriminatory and unconstitutional, the distinction must be "patently arbitrary and bear[ ] no rational relationship to a legitimate government interest." Gotleib v. State, Del.Supr., 406 A.2d 270, 275 (1979); Marine I, 607 A.2d at 1207. Similarly, due process also requires that a statutory provision be rationally related to its purpose. State v. Hobson, Del.Supr., 83 A.2d 846, 847 (1951). As noted earlier, the constitutionality of the Delaware statutory scheme establishing age-based distinctions among children was upheld by this Court in the Marine I decision. Marine I, 607 A.2d at 1209. The State thus contends that our holding in Marine is controlling here, as well. It is argued that the amendment merely creates another age-based distinction to ensure that a Delaware court will always have jurisdiction over a felony offender. While this Court did uphold the constitutionality of the statutory scheme in Marine I, we explicitly based our holding on the ground that the amenability process provides the requisite constitutional safeguard for those children charged with a crime before the Superior Court. We rejected Marine's claim that the Delaware legislative framework denied Marine equal protection and due process, in large part because of the Legislature's adoption in 1971 of a reverse amenability statute, the forerunner of section [1011]. See Marine I at 1209. Marine II, 624 A.2d at 1186 n. 11. Here, the amendment abrogates the constitutionally-required continuing existence of a judicial check on prosecutorial authority. Prior to the amendment, the decision whether the Family Court or the Superior Court obtained jurisdiction over a child was premised upon specific factors subject to review by an independent judicial body in an amenability hearing or reverse amenability hearing. §§ 1010, 1011. The presumptive classification of children within the jurisdiction of the Family Court under section 1010 withstands constitutional scrutiny largely because an amenability hearing ensures an impartial judicial determination, which is informed by specific criteria, of whether a child is suitable to the rehabilitative processes available in Family Court. In State v. J.K., we stated: In our judgment, a distinction drawn by the Family Court Judge in the decisional process, after having properly applied the[] extensive criteria, cannot be said to be arbitrary or irrational. Only after it clearly appears to the Court that a reasonable difference exists between two juveniles so as to classify one as amenable and one as non-amenable, may the Court bind each of them over to different treatment. 383 A.2d at 289. We thus found "the classifications drawn by the amenability process to be reasonable, and [to] rest upon a basis of difference bearing a fair and substantial relation to legitimate goals." Id. Similarly, the reverse amenability process under section 1011 protects children 249 by assuring that they are adjudicated in the correct forum. The procedure "is of constitutional dimension." Marine II, 624 A.2d at 1184. Of critical importance, a reverse amenability hearing "provide[s] a judicial counterweight to any perceived prosecutorial charging excess." Marine I, 607 A.2d at 1209. This proceeding vests with the Superior Court the power to examine independently the evidentiary basis for the crime charged by which it considers whether the State can establish a prima facie case for the charge which subjected the child to the Superior Court. Id. at 1211. Thus, the reverse amenability process provides a constitutional minimum which "eliminates the potential for arbitrary or capricious charging decisions to result in unequal treatment." Id. at 1209. Notwithstanding the pivotal constitutional safeguards inherent in the amenability and reverse amenability processes, the statutory amendment attempts to consign those children charged with felonies to the Superior Court, upon reaching age eighteen before adjudication in the Family Court, without independent judicial scrutiny into the basis of the alleged offenses. Under the new legislative scheme, neither the Family Court nor the Superior Court has the authority to review the charge against the child to weigh its evidential foundation and validity. Moreover, the courts have been divested of their discretion to transfer a case to another forum "in the interests of justice." Thus, every child charged with a felony who reaches age eighteen pending trial is subject to prosecution as an adult without regard to the factual basis which underlies the alleged offense. Under this scenario, the fate of a child is entirely entrusted without impartial judicial review to the charging authority, which unilaterally decides whether to charge a child with a felony or misdemeanor, without a mechanism to challenge its charging decision or transfer the case to the appropriate forum. In essence, the statutory amendment has stripped the judiciary of its independent jurisdictional role in the adjudication of children by granting the charging authority the unbridled discretion to unilaterally determine which forum has jurisdiction over every child who will reach eighteen years of age before being adjudicated in Family Court. In theory, under the statutory amendment, the State could attempt to try all seventeen year olds as adults by including a felony charge in every case and delaying trial until the child reaches age eighteen. By abrogating the amenability processes, the statute has deprived children, such as Hughes, the judicial counterweight which they are constitutionally entitled to receive. The State responds that it has very broad discretion in determining whether or not to prosecute and what charge(s) to file against a defendant. We recognized the broad discretion of the charging authority in Marine I: The law is well settled that a legislative scheme vesting broad authority in the state or federal government through the charging process to determine whether a child shall be prosecuted as a juvenile or as an adult is not a denial of due process in the absence of `suspect' factors [race or religion] or other arbitrary classifications. Marine I, 607 A.2d at 1208. Similarly, we noted in Albury v. State, Del.Supr., 551 A.2d 53 (1988), that: ... the State has broad discretion as to whom to prosecute. `[S]o long as the prosecutor has probable cause to believe that the accused committed an offense defined by statute, the decision of whether or not to prosecute, and what charge to file or bring before a grand jury, generally rests entirely in his discretion.' Id. at 61 (quoting Wayte v. United States, 470 U.S. 598, 607, 105 S.Ct. 1524, 1530, 84 L.Ed.2d 547 (1985)) (citations omitted). The State notes that this Court has "recognized a rebuttable presumption that criminal prosecutions are undertaken in good faith and in a nondiscriminatory manner." See id. at 62. The State insists that it acted in good faith and did not selectively charge Hughes based upon a suspect or arbitrary classification. Rather, the fortuity of Hughes' date of birth, date of arrest, and charge indiscriminately determined the appropriate forum for his trial. The State contends that Hughes should bear the risk of this fortuitous combination so long as the State acted in good faith and did not discriminate by bringing charges against him. 250 Despite the very broad discretion the State maintains in its decision to charge and prosecute child offenders, nonetheless, when children are prosecuted as adults, "a judicial examination of the evidentiary justification for the charging decision is required." Marine I, 607 A.2d at 1212. Independent judicial review to assess the basis for prosecuting a child as an adult is "a prerequisite for sustaining the constitutionality of the Delaware statutory framework." Marine II, 624 A.2d at 1186. The good faith of the charging authority in its decision to charge a child with a felony is not sufficient to protect a child's constitutional rights. See, e.g., Hammond v. State, Del.Supr., 569 A.2d 81, 87 (1989); Bailey v. State, Del.Supr., 521 A.2d 1069, 1091 (1987); Deberry v. State, Del. Supr., 457 A.2d 744, 752-53 (1983) (as matter of State Constitutional law, failure to preserve potentially exculpatory evidence requires the court to perform a tripartite analysis for due process violation in which the conduct (good faith) of the State's agents is a relevant but not determinative consideration); compare Arizona v. Youngblood, 488 U.S. 51, 57-58, 109 S.Ct. 333, 337, 102 L.Ed.2d 281 (1988) (as matter of Federal Constitutional law, failure to preserve potentially useful evidence does not constitute due process violation unless defendant can show bad faith). The State's decision to charge a child with a felony implicates constitutional rights not present in the average charging decision of an adult. The consequences of over-charging an adult are limited. While an unfounded felony charge may implicate an adult's liberty interest and provide the State greater bargaining position in any plea negotiations with the adult, a trial buffers any prejudice suffered by the adult by compelling the State to prove the elements of the alleged offense beyond a reasonable doubt. In re Winship, 397 U.S. 358, 90 S.Ct. 1068, 25 L.Ed.2d 368 (1970). An adult acquitted of an alleged felony offense but convicted of a lesser included misdemeanor offense will be subject to the same penalties as if originally charged with the lesser offense. Thus, our judicial review of the charging decision is limited because the prosecution is accorded broad discretion when charging adults already in the adult system. Albury, 551 A.2d at 61. Conversely, judicial review of the charging decision is essential for those children who are prosecuted as adults. While over-charging an adult is of little consequence, a groundless felony charge against a child who reaches age eighteen pending trial in the Family Court results in a criminal prosecution with its grave attendant consequences. The child is subjected to a public trial in the Superior Court and, if found guilty, convicted of a crime with the attendant stigma of possessing a criminal record. Therefore, an unfounded felony charge may arbitrarily deprive a child of the many advantages of adjudication in the Family Court in which, regarding a misdemeanor: the child is afforded treatment in his own interest, 10 Del.C. § 902(a); the child is assured privacy, 10 Del.C. § 1063; the child may have certain delinquency adjudications expunged and arrest records destroyed, 10 Del.C. § 1001; and, most importantly, the child is never designated a criminal. 10 Del.C. § 1010. In view of these consequences, it is unconstitutional to grant unfettered discretion to the prosecution, whose unilateral charging decision can effectively establish the jurisdiction over a child. Some meaningful judicial review into the nature of the charge is essential to the constitutionality of such a scheme. The State argues that the elimination of the reverse amenability process is not constitutionally offensive because adults have never been afforded an amenability procedure under this State's statutory scheme. Under the language of section 1011, only a child (person under the age of eighteen) can be subject to a reverse amenability hearing. Because the statutory amendment only applies to those who have reached adulthood prior to trial, the State argues that such children lost the benefit of reverse amenability upon reaching their eighteenth birthday. It is argued that these children turned adults cannot be deprived of that to which they are no longer entitled. The State claims that the amendment simply reiterates the basic principle that the Family Court loses jurisdiction over a child who reaches 251 the age of eighteen. We find this argument disingenuous. Every child who is under the age of eighteen when arrested for a crime is initially subject to the jurisdiction of the Family Court unless charged with a designated felony or found nonamenable by the Family Court. The reverse amenability process ensures that those children charged with a designated felony receive an independent evaluation into the merits of the alleged offense. In either case, the child is afforded a judicial determination of whether the Superior Court should assume jurisdiction over the child. It is of no consequence that adults are not entitled to an amenability or reverse amenability hearing. As a threshold matter, there must be some mechanism in which a child may seek a disinterested examination into the basis of the felony charge to be prosecuted as an adult. It is now well established in Delaware that the defendant's age at the time of his arrest for a given offense is determinative of whether the Family Court or the Superior Court has jurisdiction over the offense. Marine II, 624 A.2d at 1190; Connors, 505 A.2d at 1303; Howard v. State, Del.Supr., No. 385, 1991, Walsh, J., 612 A.2d 158 (1992) (Order). Thus, it is the date of arrest and the seriousness of the crime charged which determines jurisdiction. Marine II, 624 A.2d at 1191; 10 Del.C. §§ 921, 1002, 1011. The reverse amenability process guarantees that jurisdiction in Superior Court is premised upon the nature of the offense rather than the nature of the charge. The amendment alters this process by fashioning jurisdiction over certain children based upon the date of adjudication and the crime alleged. Under this scheme, a child arrested and charged with a nondesignated felony while under eighteen years of age is subject to the scheduling variables of the Family Court. As a consequence, children charged with felonies are literally at the "mercy of the call of the calendar" of the Family Court. We are informed that currently, the routine trial tract for a case within the Family Court may extend from one year from arrest date until trial date. Moreover, due to the inevitable complications inherent in an overburdened Family Court, even the most efficient caseload management is subject to prolonged adjudicative delays. Hence, jurisdiction over children becomes contingent upon the efficiency of the judicial system rather than the seriousness of the crime and the age and character of the child. Premising jurisdiction over children upon the date their cases are adjudicated imposes an arbitrary deadline on a child's constitutional rights and compounds the risk of arbitrariness in the charging process. Such risks cannot withstand equal protection scrutiny. Arbitrary treatment under the amendment is not difficult to envision. For example, two juveniles are arrested for delinquency arising from the joint theft of property. The value of the property is questionable, but the police or the prosecution decide to treat the property as subject to the felony level had the defendants been adults.[7] One juvenile is 17 years and 10 months of age while the other has just turned 17. Both are referred to Family Court for trial. Since it clearly appears that, under normal Family Court scheduling, the older juvenile will "age out" while awaiting trial, his case will be automatically transferred to the Superior Court after two months. The other offender will likely be able to remain in the Family Court for processing and not run the risk of being convicted of a crime. The older offender, even if innocent, may be tempted to seek an expedited court date in order to plead guilty to a charge of "delinquency" in the Family Court. Under this scenario, there is no rational basis for distinguishing between the defendants in terms of their conduct, and both are arrested as "children." Nonetheless, under the recent amendment differing adjudicative results will surely occur. A law which produces such results plainly violates the right of equal protection. See State v. Owens, 103 N.M. 121, 703 P.2d 898, 901 (1984) ("[S]tatutes which permit the state to subject one person to the possibility of greater punishment than another who has committed 252 an identical act violate the equal protection clauses of the state and federal constitutions."). The amendment deprives children of the constitutional safeguard of judicial review into the charging decision which was mandated by this Court in the Marine decisions. Without an independent examination into the evidentiary basis of a felony charge, the prosecution has the unfettered authority, through its charging decision, to unilaterally determine the jurisdiction over a substantial number of seventeen year old defendants in the Family Court. In effect, Hughes, and other defendants approaching their eighteenth birthday, will be penalized under the statute, via an adult prosecution in Superior Court, upon the nature of the allegation rather than the nature of the offense. Thus, the statute is facially unconstitutional as a violation of the right to due process under the United States and Delaware Constitutions. U.S. Const. amend. 14; Del. Const. art. I, § 7. See also People v. Drummond, Ct.App., 40 N.Y.2d 990, 391 N.Y.S.2d 67, 359 N.E.2d 663 (1976), cert. denied, 431 U.S. 908, 97 S.Ct. 1706, 52 L.Ed.2d 394 (1977); In the Interest of D.D., Fla.App., 564 So.2d 1224, 1225 (1990). Further, under the statute, children unfairly charged with committing a felony but convicted of a misdemeanor are accorded disparate treatment from those children charged with a misdemeanor. The former are treated as criminals on the basis of an unproven accusation while the latter are treated as delinquents and receive proceedings in their best interest. Therefore, the distinction is patently arbitrary and bears no rational relationship to a legitimate government interest. Gotleib, 406 A.2d at 275; see also State v. Johnson, La.Supr., 343 So.2d 705, 708 (1977). Accordingly, we conclude that the statutory elimination of a judicial investigation into the factual basis of a felony charge against a child violates the constitutional guarantees of due process and equal protection of the law. Marine II, 624 A.2d at 1184, 1186 n. 11.[8] We note that there never existed the perceived jurisdictional gap between the Family Court and Superior Court over those children who reach age eighteen before adjudication in the Family Court. The Marine decisions did not establish that children who reach age eighteen pending trial in Family Court become liberated from the jurisdiction of the Delaware judicial system. Rather, the result in Marine simply originated from a flawed amenability process in which Marine should have never been before the Superior Court. Marine was incarcerated throughout his trial and the appellate process and had, by then, served the maximum time period allowed under the then-existing Family Court laws so that a retrial in that court was futile. Marine was released from custody not because of a jurisdictional gap or loophole but, rather, his release was founded upon the traditional margins of jurisdiction between the Superior Court and Family Court. Under the Marine decisions, a child who reaches age eighteen pending trial can be tried in either the Family Court or Superior Court depending upon a number of factors. For most offenses, the Family Court may elect to retain jurisdiction over the child or transfer jurisdiction to the Superior Court if it concludes that the child is not amenable to its processes. Those children charged with a designated felony are tried in the Superior Court unless the alleged felony lacks a factual predicate or a transfer to Family Court is "in the interests of justice." Moreover, the General Assembly has recently granted the Family Court potential jurisdiction over children until they reach the age of twenty-one. Subsequent to the Marine decisions, the General Assembly enacted 10 Del.C. § 928, which permits the Attorney General, prior to a child's trial in Family Court, to petition the court to extend its jurisdiction over the child. 69 Del.Laws, c. 96. Consequently, if the child is adjudged delinquent by the Family Court, the court may decide, after considering the child's age and the seriousness of the offense, as well as 253 the need for rehabilitation and the public's safety, to extend jurisdiction over the child until age twenty-one or until the child is discharged from jurisdiction by the court. § 928(c). Therefore, children do not "age-out" of the Family Court upon their eighteenth birthday. Any perceived "jurisdictional gap" had been closed previously by the General Assembly. Finally, we note that the basic thrust of the statutory amendment would be constitutionally acceptable, if the reverse amenability process under 10 Del.C. § 1011(b) were retained. Since the State has argued that the provisions of the amendment are not severable, we have not attempted to preserve the constitutionality of the statutory amendment by invalidating only the last sentence of the amendment which precludes application of § 1011. IV We conclude that the statutory amendment under review violates the constitutional guarantees of due process and equal protection of the laws. The amendment divests the judiciary of its independent role in assessing the evidentiary basis of a charge against a child. Such a judicial check on the charging authority is mandatory to comply with the principles enunciated in the Marine decisions. The distinctions drawn by the amendment are patently arbitrary and bear no rational relationship to a legitimate government interest. The policy reasons which prompt the enactment of legislation are solely the concern of the General Assembly and it is not the function of the judiciary to question the wisdom underlying the passage of a statute. Ames v. Wilmington Housing Authority, Del.Supr., 233 A.2d 453, 456 (1967). Our role is limited to a review for constitutionality, i.e., does a particular statute contravene the rights or impair the guarantees which the Federal and Delaware Constitutions have established as bedrock principles limiting governmental power? Opinion of the Justices, Del.Supr., 385 A.2d 695 (1978). Where such departures are found to exist, it is the right, indeed the duty, of the judiciary to require conformity with the constitutional standards. Our action invalidating the statutory amendment is intended to ensure that the prosecution of minors is conducted in accordance with standards of equality and due process. One of the oldest and most cherished principles of constitutional due process in our nation is that when a person is arrested (charged), that person is presumed to be innocent until convicted by evidence beyond a reasonable doubt. Goddard v. State, Del. Supr., 382 A.2d 238, 240 (1977). That very same principle requires punishment to be based upon the crime for which a person is convicted and not the crime for which he or she was arrested or charged. Certified questions numbers four and five are answered in the AFFIRMATIVE. ORDER This 30th day of January, 1995 it appears that: (1) The State has moved for reargument asserting various grounds which we find to be without merit. To the extent the State's motion is intended to seek clarification for further guidance we note the following: (a) Because of its accusatory, ex parte function, a grand jury does not serve as an independent check on prosecutorial authority and is not viewed as a protector of a defendant's rights. See United States v. Williams, 504 U.S. 36, ___-___, 112 S.Ct. 1735, 1744-45, 118 L.Ed.2d 352 (1992). (b) The certified questions in the case requested this court to pass upon the constitutionality of 10 Del.C. § 1002, not 11 Del.C. § 1447. This Court will "decide only the case before us." Paramount Communications, Inc. v. QVC Network, Del.Supr., 637 A.2d 34, 51 (1991). Nor was the constitutionality of 11 Del.C. § 1447 before the Court in Cain v. State, Del. Supr., 639 A.2d 74 (1994) (ORDER), since the defendant in Cain did not seek a reverse amenability hearing under then-existing 10 Del.C. § 939 as to the section 1447 offense. *254 (c) In view of the State's explicit rejection at oral argument of a severability analysis as contrary to legislative intent, the State will not be permitted to advance a post-decision contention to the contrary. (d) As the decision of the Court makes clear, those children presently awaiting trial who are affected by 10 Del.C. § 1002 may be tried in either the Superior Court or the Family Court subject to the amenability process under 10 Del.C. § 1010(a)(2), and the Family Court may elect to retain jurisdiction over such persons under the recent amendment to 10 Del.C. § 928. NOW, THEREFORE, IT IS ORDERED that the motion for reargument be, and the same hereby is, DENIED. NOTES [1] A pseudonym adopted to preserve the privacy of the minor defendant. [2] Pursuant to 69 Del.Laws, c. 335, effective July 8, 1994, former Part A of Subchapter III of the Family Court Act, containing §§ 930 to 939, was redesignated as present §§ 1001 to 1011. Accordingly, in this opinion, we will refer to the pertinent statutory provisions as currently designated. [3] Article I, section 7, of the Delaware Constitution provides that no person shall be deprived of property except "by the law of the land." We have previously held that the phrase "due process of law" as contained in the Federal Constitution and the phrase "law of the land" as used in our State Constitution have substantially the same meaning. Goddard v. State, Del.Supr., 382 A.2d 238, 340 n. 4 (1977) (citing Opinion of the Justices, Del.Supr., 246 A.2d 90 (1968)). In comparison, the Delaware Constitution contains no equal protection clause per se. We find it unnecessary, in this case, to determine whether the equal protection concept inures as a matter of due process under the Delaware constitution. But see Attorney General of Md. v. Waldron, Md. App., 426 A.2d 929, 940-41 (1981). [4] In the past, we have used the terms "children," "minors" and "juveniles" when referring to those persons who have not yet reached their eighteenth birthday. For purposes of this opinion, we refer to such individuals as "children" because this term is defined and used throughout the Family Court Act and the amendment in question uses the term "child." See 10 Del.C. § 901(3) "`Child' means a person who has not reached his 18th birthday." [5] The reverse amenability statute provides: § 1011. Transfer of cases from Superior Court to Family Court. (a) In any case in which the Superior Court has jurisdiction over a child, the Attorney General may transfer the case to the Family Court for trial and disposition if, in his opinion, the interests of justice would be best served. (b) Upon application of the defendant in any case where the Superior Court has original jurisdiction over a child, the Court may transfer the case to the Family Court for trial and disposition if, in the opinion of the Court, the interests of justice would be best served by such transfer. Before ordering any such transfer, the Superior Court may hold a hearing at which it may consider evidence as to the following factors and such other factors which, in the judgment of the Court are deemed relevant: (1) The nature of the present offense and the extent and nature of the defendant's prior record, if any; (2) The nature of past treatment and rehabilitative efforts and the nature of the defendant's response thereto, if any; and (3) Whether the interests of society and the defendant would be best served by trial in the Family Court or in the Superior Court. (c) In the event the case is transferred by the Superior Court under this section, the case shall proceed as if it had been initially brought in the Family Court, and the Family Court shall have jurisdiction of the case, anything to the contrary in this chapter notwithstanding. [6] As noted earlier, Marine was fourteen years old at the time of his arrest. Had Marine been tried on the charges for which he was arrested, murder second degree, the Family Court would have had exclusive jurisdiction over him. On the other hand, if Marine was sixteen years of age when charged with the same crime, he would have been subject to a transfer to Superior Court upon a finding of nonamenability by the Family Court under section 1010(c). [7] Under Delaware law, theft is a misdemeanor if the value of the property in question is less than $500, otherwise the offense is deemed a felony. 11 Del.C. § 841. [8] Although we have concluded that the statutory amendment is violative of the due process and equal protection clauses of the Fourteenth Amendment of the United States Constitution, we emphasize that our holding could be sustained exclusively under the due process provision of the Delaware Constitution. Del. Const. art. I, § 7.	{ "pile_set_name": "FreeLaw" }
901 P.2d 123 (1995) Priscilla FORD, Appellant, v. WARDEN, NEVADA WOMEN'S CORRECTIONAL CENTER, Respondent. No. 24961 Supreme Court of Nevada. July 27, 1995 As Amended August 24, 1995. Rehearing Denied October 19, 1995. 124 Michael Pescetta, Nevada Appellate and Postconviction Project, Las Vegas, for appellant. Frankie Sue Del Papa, Atty. Gen., Carson City; Richard A. Gammick, Dist. Atty., and Gregory R. Shannon, Deputy Dist. Atty., Washoe County, for Respondent. OPINION PER CURIAM. Petitioner Priscilla Ford was convicted of six counts of murder and twenty-three counts of attempted murder after driving an automobile onto a sidewalk in downtown Reno on Thanksgiving Day in 1980. See Ford v. State, 102 Nev. 126, 717 P.2d 27 (1986). She was sentenced to death. This is another in a series of appeals by Ford to this court for relief.[1] On appeal, Ford asserts the following claims: (1) that the district court erred in failing to hold a hearing or failing to issue a finding of fact as to Ford's competency prior to dismissing her petition; (2) that the district court erred in not obtaining the entire record in order to determine whether her claims had merit (the voluminous trial record is presently with the federal district court); (3) that the district court erred in refusing to appoint an attorney for Ford; (4) that the district court erred in not reaching the merits of the case, but rather dismissing the case based on procedural default rules; and (5) that the district court erred in determining that the case of Dawson v. Delaware, 503 U.S. 159 (1992), was inapplicable to the case at hand. Ford also requests this court to reduce her sentence from death to life in prison without the possibility of parole. PROCEDURAL BACKGROUND On November 12, 1991, Ford filed a petition for a writ of habeas corpus in the First Judicial District Court. Her basic grounds for relief may be summarized as follows: (1) that she was deprived of a fair trial; (2) that 125 her state and federal constitutional rights were abridged by the ineffective assistance of trial and appellate counsel; and (3) that both the state and the court system engaged in unconstitutional conduct. Ford contends that she was denied effective assistance of counsel by reason of counsel's failure to: (1) seek severance of the counts; (2) voir dire prospective jurors concerning their attitudes about the insanity defense; (3) suppress the seizure and use of Ford's personal writings and books; (4) suppress the introduction of prior bad acts; (5) seek court rulings regarding the prosecution's examination of Ford's expert witnesses; (6) challenge Ford's competence to stand trial; (7) request a jury instruction on mitigation; (8) seek a judicial determination of Ford's competence to proceed pro se and testify in her own defense; (9) effectively handle Ford's direct examination; and (10) object to a jury instruction relating to aggravating circumstances. Ford also claimed that she was denied effective assistance of counsel on direct appeal because appellate counsel failed to brief the following issues that were properly preserved for review: (1) [erroneous, rejected] jury instructions at the guilt and penalty phases; (2) the biased read-back of testimony; (3) the allegedly biased juror; (4) the administration of psychotropic drugs; (5) statements that were involuntary and coerced; (6) the denial of Ford's right of confrontation; (7) the introduction of irrelevant and prejudicial acts; (8) prosecutorial misconduct; (9) the bifurcation of sanity determination from other trial issues; (10) the injection of racial prejudice by the prosecution; and (11) prejudicial and inflammatory comments and statements of personal belief by the prosecutor. Ford maintained that she was prevented from previously presenting these claims due to the unconstitutional conduct of the State of Nevada, its judges, justices, and agencies, which, in a "rush to justice," deprived Ford of her rights to a fair trial, due process, equal protection, and freedom from cruel and unusual punishment. Ford's petition supplied two reasons why she had good cause for not having addressed the foregoing issues in her initial petition for a writ of habeas corpus. First, she claimed that the district court did not allow sufficient time for petitioner's counsel and an expert attorney to read and adequately examine the entire record. Her petition asserted that she was subjected to an unreasonable rush to justice. Ergo, several glaring errors were not recognized and raised. Second, Ford insists that she was incapable of assisting in the isolation and development of the legal issues. On December 19, 1991, the district court ordered the State to file a response to Ford's petition. In response, the State filed a motion to dismiss. The State maintained that Ford's claims of ineffective trial counsel had been litigated and rejected previously by this court in Ford, 105 Nev. 850, 784 P.2d 951 (1989). Conceding that certain claims presented by the petition were slightly distinct from previous claims, the State referred to the following comments by this court concerning the issue of ineffective counsel: (1) "[t]here is nothing in the record to show that [trial counsel] failed to give Ford reasonable assistance," Ford, 105 Nev. at 853, 784 P.2d at 953; and (2) in ruling that Ford's contention that her "appellate counsel failed to raise all meritorious issues is without merit," we noted that "Ford's counsel stated that she did not disregard any crucial issue in Ford's appeal ... [and] that appellate counsel is most effective when she does not raise every conceivable issue on appeal." Finally, we also noted that we reviewed the record and "conclude[d] that Ford's counsel adequately raised the relevant issues on appeal." Id. (Citations omitted.) In addition, the State identified issues raised by Ford which this court had already addressed, including failure to raise the issue of a biased sitting juror, extra peremptory challenges, and administration of psychotropic drugs. Ford, 102 Nev. at 131-34, 717 P.2d at 29-32. The State also insisted that Ford's claims against Nevada's judges, justices, and agencies merely repeated the claims of ineffective trial and appellate counsel. Consequently, the State concluded that the issues raised in Ford's petition were either not new or were waived, thus requiring dismissal. See NRS 34.810. 126 In Ford's response to the State's motion to dismiss, she explained the necessity for exhausting her state remedies in preparation for seeking relief in federal court. She noted that her initial petition for habeas corpus inadequately addressed issues of ineffective assistance of counsel, as the subject was only generally addressed (inexperience and time constraints of trial counsel), except for references to counsel's failure to have her car inspected and to interview State witnesses. See Ford, 105 Nev. at 852-53, 784 P.2d at 952-53. Ford argued that this court's general language, asserting that trial and appellate counsel had been effective, could not be used to bar all issues that could potentially be raised. Ford insisted that this court could not, on its own, review the entire record and ascertain whether her attorneys were effective. She also complained that we failed to discuss the issues presented in her petition, specifically, whether she was sufficiently competent to disregard her attorney's advice and testify at trial,[2] and whether she was subjected to unreasonable time restrictions. Ford rejected the State's waiver argument on grounds that because of her incompetence, she was incapable of "knowingly and understandingly" waiving her right to post-conviction relief. See Rogers v. Warden, 86 Nev. 359, 361, 469 P.2d 993, 994 (1970). As an alternative basis for relief, Ford reinvoked her arguments demonstrating good cause for not having raised the issues in her prior petition. In addition to her answer, Ford filed a motion requesting authorization, at state expense, to copy the entire record and renumber the volumes. She contended that the expense was justified because the record, as it stood, was too complex and time consuming to review. On appeal, Ford submits that her request was, in effect, an effort to provide the court with a reasonably reviewable record. In response, the State asserted that Ford's answer to its motion to dismiss merely repeated issues already raised and addressed. The State also claimed that Ford failed to demonstrate cause and prejudice. The State contended that Ford's ineffective counsel and rush to justice arguments had previously been rejected on direct appeal and in post-conviction relief proceedings. On April 20, 1992, Ford filed a statement of supplemental authority, asserting that the case of Dawson v. Delaware, 503 U.S. 159 (1992), supported her claim that her trial counsel unreasonably failed to seek pretrial suppression of Ford's writings and autobiographical material, the admission of which assertedly violated the First and Fourteenth Amendments to the U.S. Constitution and related Nevada constitutional provisions. On June 11, 1992, Ford's counsel, Annette R. Quintana, having decided to close her practice, sought judicial appointment of counsel for Ford. On September 3, 1993, the district court entered an order dismissing Ford's petition and denying Ford's motion to copy the record and to appoint new counsel. The district court reasoned that Ford's claims of ineffective assistance of trial and appellate counsel and the unconstitutional conduct of the State of Nevada had been previously raised and rejected in her direct appeal to this court. The district court also noted that the issues of competency and the administration of psychotropic medication had also been decided in Ford, 97 Nev. 578, 635 P.2d 578 (1981), and in Ford, 102 Nev. 126, 717 P.2d 27 (1986). Consequently, the district court ruled that issues not raised in the prior post-conviction petition were deemed waived, that there was no "good cause" for raising new issues, and that there was no prejudice to Ford. The district court's ruling also discussed the Dawson case, reasoning that Dawson was limited to its facts and did not apply to Ford's case. The district court distinguished 127 Dawson on the basis that Ford's abstract views were elicited from Ford herself, as opposed to an independent source, and were presented in the guilt phase, as opposed to the sentencing phase. See Dawson, 503 U.S. 159 (1992). For the aforementioned reasons, the district court dismissed Ford's petition. Ford appealed. DISCUSSION NRS 34.810 governs successive petitions for writs of habeas corpus. In part, it provides: 2. A second or successive petition must be dismissed if the judge or justice determines that it fails to allege new or different grounds for relief and that the prior determination was on the merits or, if new and different grounds are alleged, the judge or justice finds that the failure of the petitioner to assert those grounds in a prior petition constituted an abuse of the writ. 3. Pursuant to subsections 1 and 2, the petitioner has the burden of pleading and proving specific facts that demonstrate: (a) Good cause for the petitioner's failure to present the claim or for presenting the claim again; and (b) Actual prejudice to the petitioner. Commenting on this statute, this court, in Phelps v. Director, Prisons, 104 Nev. 656, 764 P.2d 1303 (1988), stated: Once [the affirmative defenses of waiver or abuse of the writ are] made by the state, the burden then falls upon the petitioner to show: (1) that good cause exists for his failure to raise any grounds in an earlier petition and that he will suffer actual prejudice if the grounds are not considered; or (2) if no new grounds for relief are asserted, that the previous petition was not decided on its merits. Should petitioner fail to meet this burden, the district court may then dismiss the petition without further proceedings. Id. at 659, 764 P.2d at 1305 (citations omitted). We have also held that "[t]o establish good cause to excuse a procedural default, a defendant must demonstrate that some impediment external to the defense prevented him from complying with the procedural rule that has been violated." Lozada v. State, 110 Nev. 349, 353, 871 P.2d 944, 946 (1994). Ford claims that the district court's interpretation of this court's broad language in Ford, barring on the merits every possible issue arising from the case, whether or not considered by this court, leaves her without any corrective options, violates her rights to due process and equal protection, and otherwise destroys her counsel's ability to secure her constitutional rights. Ford also contends that there is no evidence that she ever knowingly and understandingly waived claims for relief, and that a knowing and understanding waiver of claims is an implied requisite of good cause. Therefore, because the State failed to demonstrate such a waiver, Ford concludes that she is relieved of her burden to demonstrate good cause. Ford also argues that courts have an obligation to review habeas corpus petitions on the merits, thereby diminishing, if not eliminating, the use and effect of procedural bars such as cause and prejudice by district and appellate courts. Alternatively, Ford urges the proposition that judicial interference with her counsel's efforts to adequately prepare her initial petition for habeas corpus is sufficient cause. We conclude that the district court did not err in finding that Ford's claims were either previously adjudicated or waived. Contrary to Ford's position, the State does not have the burden to prove that a petitioner knowingly and understandingly waives grounds for relief as a prerequisite to the petitioner's burden to show good cause. Neither current legislation (NRS 34.810) nor past legislation (NRS 177.385) requires such a burden of the State. NRS 177.385, which was repealed January 1, 1993, referred to a knowing and understanding waiver of claims, but such a waiver was assumed if the petitioner did not demonstrate good cause justifying his or her failure to raise asserted grounds in a prior petition. See Rogers v. Warden, 86 Nev. 359, 363, 468 P.2d 993, 995 (quoting Commonwealth v. Black, 433 Pa. 128 150, 249 A.2d 561, 562 (1969)).[3] This reasoning is consistent with NRS 34.810, which justly places on petitioners the burden to show good cause and prejudice in order to avoid the effects of an abuse of the writ. For these reasons, we reject Ford's attempt to negate or circumvent Nevada's statutory requirements. In our review for good cause and prejudice, we discovered that none of Ford's pleadings or appellate briefs has reflected specific facts demonstrating that Ford would suffer actual prejudice. Regarding good cause, Ford argues that judicially-imposed time restrictions stymied her counsel's efforts to prepare, brief, and present her case both at trial and on appeal. As previously noted, Ford also argues as good cause that she was unable to assist in her defense because of her state of mind. We conclude that Ford's reasons do not adequately demonstrate good cause for failing to raise her present issues in a prior petition. In Ford's previous appeal from the district court's denial of her petition for post-conviction relief, Ford argued in her opening brief as follows: [p]ost-conviction counsel would only submit that the limitations imposed by the Court [instructing the expert attorney to review only pertinent parts of the record] were again born out of the unreasonable urge to rush the matter through the judicial system despite the need for extended time frames due to the length of the record and complexity of the issues. Ford contended that meaningful review of the record was precluded because of the district court's unreasonable limitations on the expert attorney. Ford urged this court to remand the matter to the district court for an unrestricted review of the record to document instances of ineffective counsel. This court, in Ford, 105 Nev. 854, 784 P.2d 951 (1989), responded as follows: Ford claims that the post-conviction court unreasonably limited the use of an attorney hired to serve as an expert witness because it did not give him all volumes of the record on appeal. This argument is without merit. A review of the record shows that the expert witness was supplied with all pertinent parts of the record. We are satisfied that the expert witness had an adequate record to work with. We conclude that Ford's remaining contentions lack merit and that the district court correctly rejected them. Id. at 854, 784 P.2d at 953. We are not persuaded that our prior ruling was in error. Ford has failed to demonstrate any valid reason why we should now more fully consider the claim of an unreasonable rush to justice by the court system. Despite her allegations, she has presented no specific evidence that the time restrictions imposed were unreasonable. Notably, Ford had access to an appointed attorney and an expert witness who was given relevant portions of the record. No showing has been made that these attorneys were ineffective or that the grounds now complained of were not ascertainable from the records they reviewed. We therefore again reject Ford's argument that the judicial system has rushed her case to justice. Ford's second justification for good cause her inability to assist in her defense was similarly lacking in specific evidence indicating Ford's inability to assist in her defense due to her mental state at the time of her petition for post-conviction relief. The burden of proving these impairments as support for good cause is on the petitioner. We conclude that Ford has failed to meet her burden. Furthermore, we note that the grounds that Ford asserts in her petition are legal in nature and were, more likely than not, gathered from reading the trial proceedings and the appellate record. They are not closely related to facts that required the assistance of Ford. Thus, Ford has failed to demonstrate how her inability to assist in her defense is related to her failure to assert the grounds raised in this successive petition. For these reasons, we conclude that Ford failed to meet her burden to show good cause and prejudice and that the district court properly dismissed Ford's petition without 129 further proceedings. See Phelps, 104 Nev. at 659, 764 P.2d at 1305. Absence of a Complete Record Ford contends that because the district court did not have access to the full record, her case must be remanded to the district court for a thorough and valid evaluation of her claims based upon the complete record. Ford notes that the United States Supreme Court has emphasized the importance of assuring that capital sentences are reviewed on a complete record. Dobbs v. Zant, ___ U.S. ___, ___, 113 S.Ct. 835, 836, 122 L.Ed.2d 103 (1993); see Richmond v. Ricketts, 774 F.2d 957, 961 (9th Cir.1985) (quoting Turner v. Chavez, 586 F.2d 111, 112 (9th Cir.1978) ("`The very nature of the habeas corpus action demands an independent review [of the record]'")). Ford insists that the district court's decision, which was based on cause and prejudice, procedural bars, and a comparison of the merits of her case with the Dawson case, required reference to the record. She asserts that the district court's actions violated the Eighth and Fourteenth Amendments to the United States Constitution and similar provisions in the Nevada Constitution. Ford claims that her motion to have the State underwrite the expense of producing renumbered volumes of the entire record constituted a reasonable attempt to present the record before the district court. We disagree. The burden of production lies with the petitioner in petitions for writ of habeas corpus. NRS 34.370(4) provides in part: "Affidavits, records or other evidence supporting the allegations in the petition must be attached unless the petition recites the cause for failure to attach these materials." Contrary to Ford's assertions, her motion to have the State cover the expense of copying the record was nothing more than a motion to copy the record; it cannot be construed as a request to retrieve and transport the existing record from Las Vegas to Carson City. In addition, we conclude, for the reasons stated above, that the petition failed on its face; therefore, it was not necessary to review the entire record prior to dismissing Ford's petition. Unlike initial petitions which certainly require a careful review of the record, successive petitions may be dismissed based solely on the face of the petition. See NRS 34.810; Phelps, 104 Nev. at 659, 764 P.2d at 1305. Competency Hearing Ford maintains that the district court, or the State, had an obligation to inquire about her competence. See Griffin v. Lockhart, 935 F.2d 926, 929 (8th Cir.1991). Ford underscores her documented vacillation between competency and incompetency throughout these proceedings,[4] arguing that this evidence was sufficient to invoke the court's obligation to establish, through a hearing or finding, her competence to proceed. We conclude that the district court did not err in not holding a hearing to determine whether Ford was competent to proceed. "Due process requires that a hearing be held whenever evidence raises a sufficient doubt about the mental competency of an accused to stand trial." Id. Ford's petition never addressed the issue of her competency except to state, as a reason for not raising the asserted post-conviction issues previously, that Ford was incapable of contributing to the isolation and development of legal issues. Likewise, no evidence was presented to the district court to raise a sufficient doubt as to Ford's competency to proceed. We therefore conclude that the district court did not err in failing to provide a competency hearing sua sponte. See id. at 930; see also Hillis v. State, 103 Nev. 531, 533, 746 P.2d 1092, 1093 (1987) (a defense not raised below 130 will be deemed waived and will not be considered on appeal). Denial of Motion to Appoint Counsel NRS 34.750(1) provides: A petition may allege that the petitioner is unable to pay the costs of the proceedings or to employ counsel. If the court is satisfied that the allegation of indigence is true and the petition is not dismissed summarily, the court may appoint counsel to represent the petitioner. In making its determination, the court may consider whether: (a) The issues presented are difficult; (b) The petitioner is unable to comprehend the proceedings; or (c) Counsel is necessary to proceed with discovery. (Emphasis added.) Although Ford's case certainly implicates elements cited in the latter half of NRS 34.750(1), we conclude, for the reasons stated above, that the district court's summary dismissal of Ford's petition was proper. Consequently, the district court did not err in dismissing Ford's petition without appointing counsel. See NRS 34.750(1). Dawson Claim Recently, in Dawson v. Delaware, 503 U.S. 159, 112 S.Ct. 1093, 117 L.Ed.2d 309 (1992), the United States Supreme Court held that evidence of a defendant's abstract beliefs, if irrelevant to the proceedings, could not be introduced at the sentencing proceeding. Id. at 165-67, 112 S.Ct. at 1097-99. In Dawson, a stipulated statement was admitted during the sentencing phase indicating that Dawson was a member of a prison gang known as the Aryan Brotherhood. Id. The short statement did not discuss why his gang membership was relevant to his crime or sentence. Id. The Supreme Court held that although relevant evidence as to a defendant's beliefs could be admitted, the statement at issue was irrelevant and was erroneously admitted by the trial court at the sentencing hearing. Id. Prefatorily, Ford contends that without an adequate record, the district court could not have properly compared Dawson's analysis to the circumstances which occurred at her trial. As to the merits of the district court's decision, Ford argues that the stage of trial at which the evidence was admitted is not an important distinction. Ford alleges that the jury was instructed during the penalty phase that it could consider all evidence presented at the guilt phase. Ford argues that her controversial opinions were irrelevant to her sentencing and that the jury, under Dawson, could not constitutionally consider such opinions in determining her sentence. In addition, Ford argues that an issue remains as to whether her trial counsel was ineffective in eliciting abstract views from her and in failing to object to their consideration in the penalty phase. Finally, Ford claims that the trial court's refusal to exclude her beliefs from the trial phase, despite her counsel's objections, was error, considering the irrelevancy of the beliefs and the highly inflammatory nature of the subjects. Initially, we note that in this petition for writ of habeas corpus, Ford never presented to the district court the issue of whether the jury improperly considered Ford's beliefs in determining her sentence. Ford mentioned Dawson in a supplemental statement to support her petition's claim that her trial counsel unreasonably failed to seek a pretrial suppression of materials and writings containing Ford's beliefs. Dawson has little relevance to this claim, and the district court did not err in determining without the record that Dawson was distinguishable from the instant case. Only on appeal to this court does Ford present the theory that the jury may have erroneously considered these materials in the penalty phase of her trial. Ford cannot change her theory underlying an assignment of error on appeal. McCall v. State, 97 Nev. 514, 516, 634 P.2d 1210, 1212 (1981). Even if we were to consider the merits of Ford's position on the unwarranted assumption that she demonstrated good cause for not raising this issue previously, we would conclude that the admitted material to which Ford objects was not totally irrelevant to the proceedings, and that consequently, Dawson 131 is distinguishable from the instant case. Ford's petition notes: A small portion of this material [Ford's books and writings] was relevant to the defense of insanity as demonstrating loose association of thought which is a symptom of schizophrenia. By far the bulk of Petitioner's writings had no relevance to the charges or the defense and were private musings, never intended for publication, expressing unpopular attitudes on highly controversial topics. It also states: Trial counsel unreasonably examined Petitioner and elicited from her a virtual autobiography of her travels and travail from the time of her first employment to the date of the Thanksgiving Day event. This prejudiced Petitioner by "opening the door" to extensive cross-examination by Prosecutor Dunlap in which he: (i) examined Petitioner on virtually all her major writings, her collection of books and her attitudes to Jews, Mormons, Hitler, American Indians, use of marijuana, sadomasochism, witchcraft and the occult, and established religion... . The foregoing material from Ford's petition indicates that Ford's beliefs and attitudes were properly admitted during the guilt phase as a result of defense counsel "opening the door." The effort by defense counsel to delve into Ford's past was an apparent tactical decision to prove Ford's only valid defense, that of insanity. See Ford, 102 Nev. at 130, 134-35, 138 n. 8, 717 P.2d at 30, 32-33, 34-35 (discussing Ford's defense, her testimony and her turbulent life). "Tactical decisions are virtually unchallengeable absent extraordinary circumstances." Ford, 105 Nev. at 853, 784 P.2d at 953 (citing Strickland v. Washington, 466 U.S. 668, 691, 104 s.Ct. 2052, 2066, 80 L.Ed.2d 674 (1984)). These extraordinary circumstances have not been shown. The excerpts above also indicate that at least certain of Ford's beliefs were relevant in providing insight as to why Ford sought to kill so many people who were unknown to her. The issue presented on appeal is whether the alleged jury instruction given during the penalty phase permitting the jury to consider evidence presented during the guilt phase so tainted the sentencing as to require reversal based on Dawson. We perceive no reasonable grounds to support such a conclusion. The Dawson Court stated: We think that it [the First Amendment] similarly prevents Delaware here from employing evidence of a defendant's abstract beliefs at a sentencing hearing when those beliefs have no bearing on the issue being tried. Dawson, 503 U.S. at 168, 112 S.Ct. at 1099 (emphasis added). The Dawson Court precluded evidence of Dawson's membership in the Aryan Brotherhood only because the evidence was "totally without relevance to Dawson's sentencing proceeding." Id. at 165, 112 S.Ct. at 1097 (emphasis added). The Dawson Court noted: We have previously upheld the consideration, in a capital sentencing proceeding, of evidence of racial intolerance and subversive advocacy where such evidence was relevant to the issues involved. In Barclay v. Florida, 463 U.S. 939, 103 S.Ct. 3418, 77 L.Ed.2d 1134 (1983), for example, we held that a sentencing judge in a capital case might properly take into consideration "the elements of racial hatred" in Barclay's crime as well as "Barclay's desire to start a race war." See id. at 949, 103 S.Ct., at 3424 (plurality opinion); id., at 970, and n. 18, 103 S.Ct. at 3435, and n. 18 (STEVENS, J., concurring in judgment). Id. at 164, 112 s.Ct. at 1097. Similarly, in the instant case, declarations and admissions by Ford at the time of the Thanksgiving Day tragedy indicate elements of racial hatred. See Ford, 102 Nev. at 130-31 n. 4, 717 P.2d at 30. Unlike the facts in Dawson, evidence of Ford's intolerances were not totally irrelevant to the sentencing proceedings. We therefore conclude that the district court did not err in distinguishing Dawson based solely on the evidence in the record before it. *132 Modifying Ford's Sentence. Finally, Ford requests this court to revisit its power to evaluate the evidence in her case and, in light of her mental fluctuations between competency and incompetency, modify Ford's sentence to one of life imprisonment without possibility of parole. Ford notes this court's remark that a "just" and "better course" would have been to secure "the defendant's permanent sequestration." Ford, 102 Nev. at 138 n. 8, 717 P.2d at 34-35. Ford refers to this court's recognition that the State will continually incur the expenses associated with finding "the point at which Mrs. Ford will be competent to receive her decreed punishment." Moreover, Ford asserts that "[t]his process will continue as long as the death sentence in this case exists." We acknowledge our recognition that this case was not "among the brightest stars in the judicial firmament." Id. We nevertheless concluded, as we do now, "that defendant's sentence of death is not excessive or disproportionate to the penalty imposed in similar cases in this State, considering both the crime and the defendant ... [and that] it is not for this Court to diminish her punishment because of a conflict in the evidence regarding defendant's mental deficiencies." Id. at 137, 717 P.2d at 34-35 (footnote omitted). We perceive no basis for reconsidering our previous holding. Therefore, we deny Ford's request for a reduction in her imposed sentence.[5] We have considered all other arguments raised in the parties' briefs and during oral argument, and conclude that they are without merit.[6] CONCLUSION For the reasons discussed above, we affirm the district court's dismissal of Ford's petition for a writ of habeas corpus.[7] NOTES [1] Ford initially sought writ relief in the form of prohibition or mandamus concerning a forced regimen of psychotropic medication. Ford v. District Court, 97 Nev. 578, 635 P.2d 578 (1981). We concluded that since Ford was determined to be competent to stand trial, she should not be forced to take psychotropic medication. Id. at 579, 635 P.2d at 579. On direct appeal from Ford's judgment of conviction and sentence of death, we affirmed. Specifically, we ruled that (1) the district court did not abuse its discretion in denying a motion for a change of venue; (2) the district court did not err in denying Ford's challenges for cause or in denying Ford's request for additional peremptory challenges; (3) the district court did not abuse its discretion in not ordering the psychiatric examination of Ford during trial; (4) the trial court did not err in submitting the issue of Ford's competency to the jury; (5) there was substantial evidence in the record to support the jury's findings, the two aggravating circumstances and the sentence of death; and (6) Ford's death sentence was not excessive or disproportionate. Ford v. State, 102 Nev. 126, 717 P.2d 27 (1986). Finally, on Ford's appeal following a denial of post-conviction relief under NRS 177, we concluded that neither trial nor appellate counsel were ineffective. Ford v. State, 105 Nev. 850, 784 P.2d 951 (1989). Ford recently sought federal post-conviction relief in the United States District Court, and that matter has been stayed pending the resolution of the issues now before this court. [2] Ford disagreed with the State's assertion that this court found Ford to be competent during trial, stressing that it was never properly decided whether Ford, resisting the advice of her attorney, was competent to represent herself. Ford notes that this court found her competent due to the psychotropic drugs, but that after she prevailed in requesting the cessation of drug therapy, her competency was never addressed. [3] Rogers relied on former NRS 177.385, which was significantly amended in 1973 and repealed January 1, 1993. See 1991 Nev. Stat., ch. 44, § 31 at 92. [4] Ford's counsel also attached to the appellate brief a personal affidavit which expressed his opinion that Ford is not capable of rationally assisting him with these proceedings. NRS 178.400(2) provides: "incompetenc[y]" means that the person is not of sufficient mentality to be able to understand the nature of the criminal charges against him, and because of that insufficiency, is not able to aid and assist his counsel in the defense interposed upon the trial or against the pronouncement of the judgment thereafter. [5] We note, parenthetically, that this case does not present, in the least degree, a factual question of guilt or innocence. The fact that Ford was the perpetrator of the crimes for which she was convicted was demonstrated beyond all doubt. It is thus seen that all of Ford's attempts to elude her decreed punishment are based on factors other than the possibility that another committed the crimes for which she was sentenced. The fact that this court may see her crimes, however heinous, in a light that does not fit traditional notions of death-worthiness affords no legitimate basis for disturbing the punishment fixed by a jury of her peers. [6] On October 3, 1994, Ford filed a motion with this court for leave to file supplemental authorities that accompanied the motion. The State has filed its opposition. We grant her motion and instruct the clerk of this court to file Ford's supplemental authorities. We have reviewed these authorities in resolving the instant appeal. [7] THE HONORABLE CHARLES E. SPRINGER, Justice, voluntarily recused himself from participation in the decision of this appeal.	{ "pile_set_name": "FreeLaw" }
410 Pa. Superior Ct. 607 (1992) 600 A.2d 619 In re ESTATE OF Lloyd F. LONG. Appeal of Elva Marie KENNEDY. Superior Court of Pennsylvania. Argued October 23, 1991. Filed January 2, 1992. 609 Christopher C. Houston, Carlisle, for appellant. Gary E. French, Harrisburg, for participating party Long. Before WIEAND, MONTEMURO and KELLY, JJ. MONTEMURO, Judge: This is an appeal from an order dismissing the objection of appellant to the First and Final Account of the Estate of Lloyd F. Long. The appellant challenges the constitutionality of 20 Pa.C.S.A. § 2507(3)[1] on the basis that the statute violates the Equal Protection and Due Process Clauses of the United States Constitution. The Court of Common Pleas of Cumberland County upheld the constitutionality of the statute, and we affirm. The relevant facts are not in dispute and are as follows: Lloyd F. Long, decedent, executed a will on January 12, 1983. The decedent provided for his entire estate to be distributed equally among three individuals; Mary Long (decedent's wife at the time the will was drafted), Paul 610 Miller (decedent's stepfather and executor of the will), and Elva Kennedy (decedent's aunt and appellant in this action). The decedent subsequently divorced Mary Long on November 29, 1983, and married Teresa Long on August 16, 1987. On November 5, 1987, the decedent died leaving neither issue nor parents. Pursuant to 20 Pa.C.S.A. § 2507(3), Teresa Long elected to receive her intestate share which equals 100% of the probate estate.[2] Appellant claims that § 2507(3) violates the Equal Protection clause of the Fourteenth Amendment because it irrationally creates two classifications of surviving spouses; one where the testator married the surviving spouse after executing a will ("after-married spouse"), and one where the testator married the surviving spouse prior to executing a will. An after-married spouse is entitled to receive an intestate share of the estate, which can operate, as in the present case, to totally invalidate the gifts to the named beneficiaries in decedent's will. Initially, we note that the Commonwealth "has the power to enact all manner of legislation with respect to wills and trusts subject, of course, to the rights and limitations ordained in the Constitution of the United States and the Constitution of Pennsylvania." In re Estate of Scott, 418 Pa. 332, 336, 211 A.2d 429, 431 (1965). Furthermore, there is a strong presumption that statutes enacted by the legislature are constitutional. Therefore, appellant "bears the burden of demonstrating that the statute `clearly, palpably and plainly' violates the Constitution. Doubts are to be resolved in favor of sustaining the legislation." Estate of Cox, 327 Pa.Super. 479, 485, 476 A.2d 367, 370-71 (1984) (quoting Hayes v. Erie Insurance Exchange, 493 Pa. 150, 154, 425 A.2d 419, 421 (1981)). The equal protection clause does not deny the legislature the power to treat different classes of persons in 611 different ways, rather it requires that the classification meet the appropriate degree of constitutional scrutiny. Cox, 327 Pa.Superior Ct. at 486, 476 A.2d at 371. Where the challenged statute impinges upon a fundamental right or liberty or concerns a `suspect class', the court is to undertake a `strict scrutiny' of the law. An intermediate standard of review ... is employed when the questioned state affects a `quasi suspect' classification. Finally, where the statutory classification concerns neither a suspect nor quasi suspect category nor fundamental rights or liberties, a minimal standard of review is to be employed. Id. Appellant concedes that the minimal standard or rational basis test is applicable. Thus, our review is limited to determining whether § 2507(3) is rationally related to a legitimate state purpose. Dandridge v. Williams, 397 U.S. 471, 90 S.Ct. 1153, 25 L.Ed.2d 491 (1970); In re Estate of Cavill, 459 Pa. 411, 329 A.2d 503 (1974) (employing the rational basis test to determine the constitutionality of Mortmain statute). "This deferential standard mandates only that the statutory classification be `reasonable' and `rest upon a difference having a fair and substantial relation to the object of the legislation.'" Estate of Cox, 327 Pa.Super. at 487, 476 A.2d at 371 (quoting Snider v. Thornburg, 496 Pa. 159, 166, 436 A.2d 593, 596 (1981); F.S. Royster Guano Company v. Virginia, 253 U.S. 412, 415, 40 S.Ct. 560, 561, 64 L.Ed. 989 (1920)). There is little doubt that the Commonwealth has a legitimate state interest in protecting an after-married spouse. As the trial court noted: The most obvious purpose behind § 2507(3) is to protect a surviving spouse from the negligence of the decedent in failing to update his will after marriage. The statute makes a presumption that had the decedent thought about it, or had a chance, he would have provided for his current spouse. It is clear that this is a legitimate purpose. 612 (T.C.O. at 10). Furthermore, this goal is well within the legislature's power to enact legislation limiting the right to inherit property. Estate of Cox, 327 Pa.Super. at 487, 476 A.2d at 371 (1984). Thus, if the means employed in § 2507(3) are rationally related to protecting the surviving spouse from an unintentional omission, then the statute withstands constitutional scrutiny. The means employed in § 2507(3) are to give the surviving spouse the share of the estate that he would have received had the testator died intestate, unless the will gives him a greater share. Id. Since this is a rational means to protect an after-married spouse, the statute does not violate the equal protection clause. Appellant argues that because the legislature has provided a spouse with an elective share, the after-married spouse is already protected from unintentional disinheritance, and therefore § 2507 serves no rational purpose. Since appellant does not challenge the legislature's ability to provide an elective share, her only objection is that § 2507 affords a surviving spouse too much protection. This argument is essentially that the means selected by the legislature for protecting an after-married spouse work too well. As the 1956 Official Comment to § 2507(3) states: The Model Probate Code makes no provision for the after-married spouse because it is considered that his right to take against the will is a full protection. Pennsylvania places the after-married in the more gracious position of receiving a full intestate share, including the spouse's allowance (Shestack's Estate, 267 Pa. 115 [110 A. 166], without requiring that there be an election to take against the will. Id. "Our scope of review is limited to questions of law. We may not sit as a super-legislature empowered to re-write legislation as we see fit nor is it within our province to judge the wisdom of the authors of challenged legislative enactments." Lehigh Foundations v. Workmans Comp. Appeal Board, 39 Pa.Commw. 416, 395 A.2d 576, 579 613 (1978). Furthermore, "[i]t is beyond our scope of review to ascertain whether an alternative means would have more appropriately served the sovereign's purpose." Estate of Cox, 327 Pa.Super. at 489, 476 A.2d at 373. By questioning the amount of protection afforded an after-married spouse, appellant is asking this Court to pass on the wisdom of protecting the surviving spouse to the possible exclusion of the named beneficiaries. This we will not do. As such, we reject appellant's equal protection argument. Appellant's second issue is that § 2507(3) violates the Due Process clause of the United States Constitution. Specifically, appellant argues that § 2507(3) creates an irrebuttable presumption that the testator would have revised his will after marriage to include his surviving spouse to a share at least equal to her intestate share, and that this presumption denies the named beneficiaries a property right without due process of law. The flaw in appellant's argument, however, is that the named beneficiary to a will does not have a property interest protected by the fourteenth amendment. In re Estate of Cavill, 459 Pa. 411, 329 A.2d 503 (1974) (Pomeroy, J. dissenting). While it is true that the concept of property includes more than "the ownership of real estate, chattels, or money," it does not encompass a mere expectation. Board of Regents v. Roth, 408 U.S. 564, 571-72, 92 S.Ct. 2701, 2705-06, 33 L.Ed.2d 548 (1972). Rather for the due process protections to attach, appellant must have a legitimate claim of entitlement. Id. As the trial court correctly explained, appellant only had a tenuous interest in receiving any property. Aside from the application of § 2507(3), a number of unpredictable events could occur to defeat the right of appellant to receive any of the testator's estate. For example, the decedent could change his will, or the objector could have predeceased the decedent. Furthermore, there is no claim of entitlement. "There is no natural right to receive property through a will. Any 614 inheritance is accomplished through the legislature granting a person the power to will his property to another. In fact, it is even possible for the state to declare an escheat of all a decedent's property." (T.C.O. at 6) (citing Cavill, 459 Pa. 411, 329 A.2d 503 (1974) (Pomeroy, J. dissenting); Tack's Estate, 325 Pa. 545, 191 A. 155 (1937). Thus, appellant does not have a property right protected by the fourteenth amendment. Accordingly, we affirm the trial court, and hold that 20 Pa.C.S.A. § 2507(3) does not violate either the Equal Protection or Due Process Clauses of the United States Constitution. Order affirmed. NOTES [1] Section 2507(3) provides: (3) Marriage. If the testator marries after making a will, the surviving spouse shall receive the share of the estate to which he would have been entitled had the testator died intestate unless the will shall give him a greater share. Id. [2] The intestate share is calculated by applying 20 Pa.C.S.A. § 2102(1). The intestate share of a decedent's surviving spouse is: (1) If there is no surviving issue or parent of the decedent, the entire intestate estate. Id.	{ "pile_set_name": "FreeLaw" }
344 F.3d 55 UNITED STATES of America, Appellee,v.Wanjiku Thiongo, Defendant, Appellant. No. 02-2452. United States Court of Appeals, First Circuit. Heard July 30, 2003. Decided September 15, 2003. COPYRIGHT MATERIAL OMITTED Robert L. Sheketoff for appellant. Mark E. Howard, Assistant United States Attorney, with whom Thomas Colantuono, United States Attorney, was on brief for appellee. Before Selya, Circuit Judge, Stapleton,* Senior Circuit Judge, and Baldock,** Senior Circuit Judge. BALDOCK, Senior Circuit Judge. 1 A jury convicted Defendant Wanjiku Thiongo of various charges related to a two-year conspiracy to gain illegal admission into the United States for Kenyan nationals. Specifically, the jury convicted Defendant of conspiracy to commit visa fraud, in violation of 18 U.S.C. §§ 371 and 1546(a); conspiracy to encourage or induce an alien to enter, or reside, in the United States, in violation of 18 U.S.C. § 371 and 8 U.S.C. §§ 1324(a)(1)(A)(iv) and (v)(I); and eight counts of obtaining visas for entry into the United States through fraud, in violation of 18 U.S.C. § 1546(a). After adjusting the base offense level for Defendant's aggravating role in the conspiracy, the district court sentenced Defendant to 51 months' imprisonment. We have jurisdiction pursuant to 28 U.S.C. § 1291. We affirm Defendant's convictions, but remand for resentencing. I. 2 The jury found Defendant procured, or caused to be procured, B1/B2 tourist visas for seventy-seven Kenyan nationals. The Kenyans' visa applications gave as the reason for travel various cultural or agricultural programs. The Kenyan nationals did not intend to attend the programs. Instead, each Kenyan intended to enter the United States and stay. Defendant charged the Kenyans between one thousand and four thousand dollars plus airfare for her assistance in obtaining entry into the United States. 3 Aliens may enter the United States lawfully under various types of visas tailored to the type of stay. B1/B2 non-immigrant visas are designed to permit a short term stay (usually between 30 and 60 days) for business or tourist purposes. To obtain a B1/B2 visa, an applicant must establish that he or she has a legitimate reason for travel, that the stay is temporary in nature, that the applicant has sufficient means to finance the proposed trip, and that the applicant has sufficient business or family ties in the home country to assure the United States Consular Officer of his or her intent to return. 4 To demonstrate a legitimate reason for travel, an applicant must provide supporting documentation. For example, an individual seeking to travel on business must provide evidence of the planned business activities such as an agenda or the names and addresses of the people with whom the applicant will be meeting. A personal interview usually is required, but may be waived if the applicant is traveling with a group for a specific purpose. In third-world countries such as Kenya, the visa denial rate is well over fifty percent because these countries historically have had a high percentage of visa recipients fail to return from the United States following entry. 5 The evidence at trial established that Defendant fraudulently obtained letters indicating she was planning various cultural or agricultural programs. The Kenyan nationals sought B1/B2 non-immigrant visas, giving these events as the reason for travel and providing copies of the letters as documentation. 6 In September 1997, seventeen Kenyan nationals obtained B1/B2 visas from the U.S. embassy in Nairobi, Kenya to attend a twenty-one-day agricultural program at McIntosh College. Robert Decolfmaker, the President of McIntosh College, testified that he provided Defendant a letter in which he agreed to assist her in organizing an agricultural tour through the college. According to Decolfmaker, he never heard from Defendant after providing the letter, Defendant never organized an agricultural tour through the college, and no Kenyan national stayed at the college. Several of the Kenyan nationals testified that they paid several thousand dollars for a B1/B2 visa to attend the agricultural program and that they were told upon arrival that the agricultural program did not exist. 7 In October 1998, seventeen Kenyan nationals obtained B1/B2 visas from the U.S. embassy in Harare, Zimbabwe to attend the Boston International Festival, a one-week international exchange program for artists. Defendant obtained the visas during a visit to Zimbabwe. Five of the Kenyan nationals testified at trial that they had not completed a visa application, but had paid Defendant several thousand dollars to obtain a visa on his or her behalf. They also testified that they were not artists, and that none of the travelers intended to attend or attended the festival. Upon their arrival in the United States, the Kenyan nationals were transported not to Boston, but to Defendant's house in Milford, Connecticut. 8 Also in October 1998, sixteen Kenyan nationals received B1/B2 visas from the U.S. embassy in Stockholm, Sweden to participate in a student exchange program at Price Farm School in New Hampshire. Defendant obtained the visas during a visit to Sweden. Jane Miller, the owner of the Price Farm School, testified that she provided Defendant with paperwork inviting Kenyan students to travel to the United States on a three-week cultural exchange program. After providing the paperwork, Ms. Miller did not hear from Defendant again. Defendant used the paperwork to solicit a letter of support for the visa applications from New Hampshire Congressman Charles Bass. No Kenyan national attended the Price Farm School. Several of the Kenyan nationals testified that they were not aware they were to visit the Price Farm School, that they paid Defendant several thousand dollars to obtain a visa on their behalf, and that they intended to enter the United States to stay, several joining family members that had previously entered through Defendant's assistance. 9 Finally, in April 1999, twenty-seven Kenyan nationals obtained B1/B2 visas from the U.S. embassy in Lusaka, Zambia to attend a multi-week dairy tour in New Hampshire and Vermont. Defendant obtained the visas during a visit to Zambia in March. Three Kenyan nationals testified that they did not fill out visa applications, but had paid Defendant several thousand dollars to obtain visas on their behalf. They also testified that they were not dairy farmers, and that they did not visit any dairy farms in the United States. 10 Defendant testified in her own defense at trial. On appeal, she asserts the district court abused its discretion in admitting evidence of Defendant's prior bad acts under Fed.R.Evid. 608(b) and in permitting the prosecutor to repeatedly ask Defendant to comment on the accuracy of other witnesses' testimony. Defendant also asserts the court erred in adjusting her offense level based on her aggravated role in the offense. II. 11 Defendant first contends the district court abused its discretion in permitting the prosecutor to inquire about prior bad acts. The court admitted the evidence as impeachment material pursuant to Federal Rule of Evidence 608(b). Rule 608(b) permits a party to introduce on cross-examination specific instances of conduct for the purpose of attacking the witness' credibility if the evidence is "probative of truthfulness or untruthfulness." See Fed.R.Evid. 608(b). The admissibility of such evidence is determined by weighing several factors including whether the instances of prior conduct bear some similarity to the conduct at issue, whether they were recent or remote in time, and whether the evidence is cumulative of other evidence. See United States v. Simonelli, 237 F.3d 19, 23 (1st Cir.2001). Whether to admit specific instances of conduct to impeach the credibility of a witness is a decision left to the sound discretion of the district court. See United States v. Mateos-Sanchez, 864 F.2d 232, 236-37 (1st Cir.1988). We review the court's decision for an abuse of discretion. Id. 12 The prosecutor began by asking Defendant questions designed to establish that Defendant's current husband fathered her first child just a few months before she served as a legal witness in his marriage to an American citizen. The prosecutor's questions also elicited the fact that Defendant had been married to another man when she gave birth to the child. In response to defense counsel's objection, the prosecutor explained that she was attempting to establish that Defendant signed a legal document attesting to the authenticity of a marriage she knew was entered into solely for the purpose of evading immigration laws. The prosecutor asserted that Defendant had placed her credibility at issue by commenting on the testimony of other witnesses and that evidence of her willingness to assist others in evading immigration laws clearly was probative of her truthfulness. The district court agreed. 13 As 608(b) evidence, Defendant's willingness to serve as a legal witness to a sham marriage designed to avoid immigration laws is fairly probative of Defendant's truthfulness. The evidence indicated Defendant willingly participated in the marriage ceremony of her current husband and another woman, a marriage her husband entered into solely to obtain a green card and eventually his citizenship.1 The evidence further revealed Defendant obtained her own green card by later marrying the same man. Her willingness to engage in these acts shows Defendant was willing to engage in deceptive practices to avoid immigration laws. The evidence was especially relevant as it bore significant similarities to the conduct at issue in the trial.2 The district court did not abuse its discretion in admitting this evidence. 14 Evidence Defendant bore the man's child while married to another does not appear to be relevant or probative of Defendant's truthfulness or untruthfulness. The district court arguably erred in admitting this evidence.3 But we need not determine whether the district court abused its discretion because any error in admitting this evidence was harmless. The weight of the remaining evidence against Defendant was substantial and it is extremely unlikely the verdict would have been any different absent evidence of Defendant's marital infidelity. III. 15 Defendant next asserts the prosecutor improperly asked Defendant to comment on the accuracy of other witnesses' testimony. During cross-examination, the prosecutor twice asked Defendant whether two Government witnesses were lying. Defendant did not object to the first question, but did object the second time. The district court sustained the objection, instructing the prosecutor that she could ask whether Defendant disputed the testimony, but not whether a witness was lying. The prosecutor complied with this instruction, asking Defendant only whether she disputed the testimony or felt a witness was "mistaken." Defendant argues the district court erred in instructing the prosecutor she could continue asking Defendant to comment on the credibility of Government witnesses. Defendant did not object to this instruction at trial. Accordingly, the panel reviews this claim only for plain error. Gaines, 170 F.3d at 82. 16 This Court has held it is improper for an attorney to ask a witness whether another witness lied on the stand. Id. at 81-82 (citing United States v. Fernandez, 145 F.3d 59, 64 (1st Cir.1998)). Underlying this rule is the concept that credibility judgments are for the jury, not witnesses, to make. Id. Accordingly, the district court properly sustained Defendant's objection to the prosecutor's first questions. But this Court also has clarified that asking whether a witness was "wrong" or "mistaken" is proper because the witness is "not required to choose between conceding the point or branding another witness as a liar." Id. ("Asking a witness whether a previous witness who gave conflicting testimony is `mistaken' highlights the objective conflict without requiring the witness to condemn the prior witness as a purveyor of deliberate falsehood, i.e., a `liar.'"). Thus, the prosecutor's remaining questions were permissible and Defendant's claim is without merit. Defendant also makes no attempt to explain how the alleged error was prejudicial as required to establish plain error. IV. 17 Finally, Defendant asserts the district court erred in enhancing her sentence pursuant to U.S.S.G. § 3B1.1 based on her aggravated role in the criminal activity.4 U.S.S.G. § 3B1.1(a) provides for a four-point offense level enhancement if the sentencing court determines a defendant "was an organizer or leader of a criminal activity that involved five or more participants or was otherwise extensive." To properly apply § 3B1.1, "a district court must make both a status determination-a finding that the defendant acted as a leader or organizer of the criminal activity-and a scope determination-a finding that the criminal activity met either the numerosity or the extensiveness benchmarks established by the guidelines." United States v. Tejada-Beltran, 50 F.3d 105, 110 (1st Cir.1995). Assessing a defendant's role in the offense generally is a fact-specific task. Id. We review the district court's factual findings in support of the enhancement for clear error. Id. We review de novo the district court's legal interpretations of the relevant sentencing guidelines. United States v. Nedd, 262 F.3d 85, 93 (1st Cir.2001). 18 During sentencing the district court expressly adopted the factual findings and legal conclusions contained in the Presentence Investigation Report. In doing so, the district court applied the § 3B1.1 aggravating role adjustment to both the conspiracy to induce count and the conspiracy to commit visa fraud count.5 But it appears from the sentencing transcript that the district court did not intend to apply the aggravating role adjustment to the conspiracy to induce count; rather, it intended to apply the adjustment only to the conspiracy to commit visa fraud count.6 19 Application of the aggravating role adjustment to the conspiracy to commit visa fraud count was proper based on the district court's determination that Defendant organized a scheme that was otherwise extensive. The court determined that the criminal activity in which Defendant engaged was extensive in light of the "breadth of activities, when measured in terms of duration, number of clients, or geographic reach." The court also properly concluded that the aliens were criminally liable for their participation in the visa fraud and thus could be considered organized "participants" in the conspiracy. Thus, the district court properly determined that, with respect to the conspiracy to commit visa fraud count, Defendant met both the status and scope prongs necessary to apply a four-point enhancement under § 3B1.1. See Tejada-Beltran, 50 F.3d at 110-112. 20 But the court erred in adopting the sentencing report's recommendation to apply the aggravating role adjustment to the conspiracy to induce count. This count is governed by U.S.S.G. § 2L1.1. The application notes to this guideline section provide: "For the purposes of § 3B1.1 (Aggravating Role), the aliens smuggled, transported, or harbored are not considered participants unless they actively assisted in the smuggling, transporting or harboring of others."7 See U.S.S.G. § 2L1.1, comment. (n.2). Applying the guideline, this Court has ruled that "in the absence of any evidence that [a defendant] exercised control over other persons or was otherwise responsible for organizing them in the commission of an offense," the mere fact that the defendant was involved in an extensive criminal activity does not support a finding the defendant was an organizer or leader under § 3B1.1. See Tejada-Beltran, 50 F.3d at 111 (quoting United States v. Fuller, 897 F.2d 1217, 1221 (1st Cir.1990)). More succinctly, "Section 3B1.1 does not apply to a defendant who merely organizes or supervises a criminal activity that is executed without the aid of others." Id. (quoting Fuller, 897 F.2d at 1221) (emphasis in the original, internal quotations omitted). 21 At the sentencing hearing, the court found Defendant executed the criminal activities largely on her own. The court expressly declined to apply the enhancement based on the involvement of other non-aliens in the criminal conspiracy.8 Based on this factual finding, Defendant did not meet the status prong and did not qualify for an organizer or leader enhancement pursuant to § 3B1.1 on the conspiracy to induce count. See Tejada-Beltran, 50 F.3d at 110-112. The sentence report found Defendant to be an organizer based on the involvement of non-alien individuals. In adopting the sentence report, the district court adopted factual findings in direct conflict with its prior express findings. The court's express factual findings also conflict with its decision to impose the § 3B1.1 enhancement on the conspiracy to induce count. For these reasons, we remand to the district court for resentencing.9 V. 22 For the reasons stated, we AFFIRM Defendant's convictions. We REMAND for resentencing in accordance with this opinion. Notes: * Of the Third Circuit, sitting by designation ** Of the Tenth Circuit, sitting by designation 1 At oral argument, Defendant noted for the first time that the prosecutor failed to ask Defendant whether she signed the marriage license. Defendant argued that her mere participation in the marriage ceremony, absent evidence she signed the license as a legal witness, was not probative of her truthfulness. Defendant's argument challenges the prosecutor's evidence in support of her proffer rather than the district court's ruling. Defendant did not raise the matter before the district court, an act which would have permitted the Government to introduce the required evidence. Defendant also did not raise this argument in her briefs. Accordingly, we will not entertain the argument on appealSee Sandstrom v. ChemLawn Corp., 904 F.2d 83, 86 (1st Cir.1990) (arguments not made before the district court and not raised in appellant's opening brief are waived). 2 On appeal, Defendant asserts the prior conduct was too remote to be relevant. The marriage occurred in 1981 while the conduct at issue in the trial occurred in 1998-1999. Defendant did not raise this issue before the trial court. Thus the panel would review the remoteness claim only for plain errorUnited States v. Gaines, 170 F.3d 72, 82 (1st Cir.1999). As remoteness is but one factor to be considered, the district court did not plainly err in admitting the evidence despite the length of time between the prior conduct and the conduct at issue. 3 The district court also arguably sustained Defendant's objection as to this evidence. At sidebar, the prosecutor stated she had not intended to elicit information about Defendant's marriage to another man at the time she gave birth. The district court agreed that the prosecutor "probably did not realize that she would elicit a response that [Defendant] was married to someone else." After the district court made his admissibility finding, the prosecutor did not refer again to Defendant's marital infidelity. Defendant did not request a limiting instruction 4 Specifically, Defendant argues the district court erred in finding Defendant organized or lead the Kenyans for whom she arranged to procure visas. Although not well articulated, Defendant basically asserts the applicable guidelines do not permit the sentencing court to consider the aliens involved in determining whether to apply the enhancement. Defendant developed this argument more fully before the district court in her written objections to the sentencing report and during the sentencing hearing. The district court expressly addressed the issue during sentencing, and despite Defendant's failure to articulate her claim with precision, the Government's brief on appeal responds fully to her argument 5 The sentencing report calculated a total offense level of 24. In calculating Defendant's sentence, the report first grouped together the count involving conspiracy to commit visa fraud and the counts involving obtaining a non-immigrant visa by means of a false claim or statement. The report correctly used U.S.S.G. § 2L2.1 to apply a base level offense of 11. It then enhanced the sentence by 6 because the offense involved more than 25 but less than 99 documentsSee U.S.S.G. § 2L2.1(b)(2). The report then added 4 points because it found Defendant organized a criminal activity that was otherwise extensive pursuant to U.S.S.G. § 3B1.1(a). Finally, it added 2 points for obstruction of justice. This resulted in a total offense level of 23. The report then calculated the offense level for the count involving conspiracy to induce an alien to come to, enter, or reside in the United States. The report correctly used § 2L1.1 to calculate a base offense level of 12. It then added 6 points because the offense involved more than 25 but less than 99 aliens. The report added 4 points pursuant to U.S.S.G. § 3B1.1 after finding Defendant organized a criminal activity that was otherwise extensive. Finally, it added 2 points for obstruction of justice. This resulted in an offense level of 24. Pursuant to § 3D1.2(b), the sentencing report then grouped together the two calculations. Under U.S.S.G. § 3D1.3(a), the court is to calculate the total offense level as the highest offense level of grouped counts under § 3D1.2(a)-(c). Application Note 1 of that section states that "[t]he offense level for a count refers to the offense level from Chapter Two after all adjustments from Parts A, B, and C of Chapter Three." Therefore, the offense level for each offense must take into account the aggravating role adjustment under § 3B1.1, separately, before the counts are grouped. After calculating the total offense level after adjustments for each count, the sentencing court sentences the defendant based on the count that produced the highest total offense level. Pursuant to § 3D1.3(a), the report used the highest offense level to determine the sentence, in this case 24. 6 The district court discussed in detail the applicability of the enhancement as to both counts during the sentencing hearingSee Sentence Hearing Transcript at 3-24. The court repeatedly distinguished between the conspiracy to commit visa fraud count and the conspiracy to induce count. 7 This application note applies only to the sentencing guideline applicable to the conspiracy to induce count. The conspiracy to commit visa fraud count, calculated under 2L2.1, contains no such instruction 8 The Government argues that Defendant occupied a leadership role over numerous individuals including individuals named "Johanna" and "Wanderi." The district court expressly rejected this as a basis for applying the § 3B1.1 enhancement, noting that Defendant employed these individuals only to a "limited extent" and would have committed the same crimes in essentially the same way absent the assistance of these individuals. Specifically, the court stated: "I would not consider [Defendant] to be an organizer or leader of Wanderi or Johanna in the sense contemplated by this guideline.... four levels is a very significant increase in someone's criminal culpability, and her use of Wanderi and Johanna by itself doesn't warrant that big an increase in her criminal culpability." Sentence Hearing Transcript at 17-18. The district court's finding that the involvement of non-aliens in Defendant's criminal activity did not warrant a four-level enhancement pursuant to § 3B1.1 was not clearly erroneous 9 We recognize Defendant's current sentence falls within the sentence range applicable upon remand. But the district court during sentencing expressed its view that a lower sentence would be appropriate. We remand to give the court an opportunity, at its discretion, to sentence Defendant as it deems just	{ "pile_set_name": "FreeLaw" }
972 So.2d 782 (2007) Ex parte Timothy Lamar TRAWICK. (In re Timothy Lamar Trawick v. State of Alabama). 1051563. Supreme Court of Alabama. March 2, 2007. Rehearing Denied May 18, 2007. Timothy Lamar Trawick, pro se. Troy King, atty. gen., and Kevin C. Newsom, deputy atty. gen., and Stephanie N. Morman and Jean A. Therkelsen, asst. attys. gen., for respondent. LYONS, Justice. Timothy Lamar Trawick petitions for certiorari review of the affirmance by the Court of Criminal Appeals of the trial court's dismissal of his Rule 32, Ala. R.Crim. P., petition. Trawick alleged in his Rule 32 petition that his sentence had been illegally enhanced under the Habitual Felony Offender Act, § 13A-5-9, Ala.Code 1975 ("the HFOA"). We affirm. Trawick was convicted in 1986 of two counts of rape in the first degree and two counts of sodomy in the first degree. He was sentenced to life imprisonment under the HFOA based on three prior felony convictions in 1976 for the sale of controlled substances. In July 1987, the Court of Criminal Appeals affirmed Trawick's convictions and sentences, Trawick v. State, 512 So.2d 818 (Ala.Crim.App.1987), and issued a certificate of judgment. In October 1987, April 1988, and March 2001, Trawick filed petitions for postconviction relief under Rule 32, Ala. R.Crim. P. All three petitions were denied by the trial court; those denials that Trawick appealed were affirmed by the Court of Criminal Appeals. In November 2001, Trawick filed a fourth Rule 32 petition, alleging, among other things, that his enhanced sentence under the HFOA was illegal because, he argued, prior drug-related felonies could not be used to enhance the sentence for a non-drug-related offense. The trial court denied the petition, and the Court of Criminal Appeals affirmed its judgment in an unpublished memorandum on the basis that the claim was precluded under Rule 32.2(a)(4), 32.2(b), and 32.2(c), Ala. R.Crim. P. Trawick v. State (No. CR-05-1095, June 23, 2006), ___ So.2d ___ (Ala.Crim. App.2006) (table). Trawick petitions this Court for a writ of certiorari on the grounds that the denial of his fourth Rule 32 petition conflicted with prior caselaw 783 and that the Rule 32 petition presented an issue of first impression. Before we consider the merits of Trawick's position, we must first determine whether the Court of Criminals correctly held that the issue raised in the Rule 32 petition was precluded. If so, our inquiry need go no further. The State's brief in this proceeding, which Trawick has not contradicted, states that Trawick raised this same issuethat under the HFOA a felony conviction for a drug-related offense could not be used to enhance a sentence for a non-drug-related offensein his Rule 32 petition filed in March 2001 ("the third petition"). In its brief the State contends that in the third petition, "Trawick argued that his 1986 convictions of sodomy and rape were due to be set aside on grounds of a defective indictment and excessive sentence." The trial court denied Trawick's third petition, in part, on the basis that "prior felony drug offenses may be used to enhance a sentence under the [HFOA] following a conviction for a felony that was not drug related. Judo v. State, 568 So.2d 312 ([Ala.Crim.App.] 1990); Powell v. State, 624 So.2d 220 ([Ala.Crim. App.] 1993)." When the trial court dismissed the third petition, Trawick appealed, and the Court of Criminal Appeals affirmed the trial court's dismissal. Trawick did not file an application for rehearing in the Court of Criminal Appeals; thus, he did not file a petition for certiorari review with this Court in response to the decision of the Court of Criminal Appeals affirming the dismissal of his third petition. Rule 32.2(b), Ala. R.Crim. P., generally precludes a trial court from granting relief in response to a successive Rule 32 petition. Rule 32.2(b) defines a "successive petition" as follows: "If a petitioner has previously filed a petition that challenges any judgment, all subsequent petitions by that petitioner challenging any judgment arising out of the same trial or guilty-plea proceeding shall be treated as successive petitions under this rule." Rule 32.2(b) creates a two-pronged approach to addressing successive petitions. The first inquiry, under Rule 32.2(b), is whether the grounds raised in the successive petition are duplicative, that is, have the same grounds been raised in a prior petition. Under Rule 32.2(b), "[t]he Court shall not grant relief on a successive petition on the same or similar grounds on behalf of the petitioner." The second prong of Rule 32.2(b) states that "[a] successive petition on different grounds shall be denied" unless one of two exceptions apply. (Emphasis added.) The exception that Trawick attempts to invoke in this case allows the trial court to consider a successive petition when "the petitioner is entitled to relief on the ground that the court was without jurisdiction to render a judgment or to impose sentence." Rule 32.2(b), Ala. R.Crim. P. Trawick's claim that his sentence is illegal under the HFOA presents a jurisdictional claim. See, e.g., Ex parte Robey, 920 So.2d 1069, 1071-72 (Ala.2004) (holding that because multiple punishments for the same offense constitute a sentence that exceeds the maximum allowed by law and an illegal sentence affects the trial court's jurisdiction, "Robey is not barred from asserting in this successive Rule 32 petition the violation of his double jeopardy rights"); Ex parte Sanders, 792 So.2d 1087, 1091 (Ala. 2001) ("`[w]hether a sentence is excessive . . . is a jurisdictional issue' that is not precluded by the limitations period of Rule 32, by the rule against successive petitions, or by Rule 32.2(a)(3)"). However, Trawick's fourth Rule 32 petition asserts a ground Trawick has previously asserted, even if it is a jurisdictional issue. Therefore, the second prong of Rule 32.2(b), which is limited to successive petitions on different grounds, does not apply. 784 The first prong of Rule 32.2(b) precludes Trawick from reasserting a jurisdictional claim "on the same or similar grounds." Because Trawick's jurisdictional claim is duplicative, the issue having already been raised and adjudicated on its merits by the trial court in his third petition, we do not reach the second prong of Rule 32 containing the jurisdictional exception. Compare Grady v. State, 831 So.2d 646, 648-49 (Ala. Crim.App.2001) ("[A]lthough this is a successive petition . . . jurisdictional claims are not `precluded by the limitations period or by the rule against successive petitions.' . . . Moreover, from the record before us, Grady did not claim that his sentence was illegal in his first Rule 32 petition." (emphasis added)). Although our cases have previously stated that jurisdictional claims cannot be precluded as "successive," that exception to Rule 32.2(b) applies only to jurisdictional claims not previously raised and adjudicated on the merits. Because the trial court adjudicated Trawick's jurisdictional claim on the merits in a prior petition, Trawick is precluded from reasserting that jurisdictional claim in a successive petition. Accordingly, the Court of Criminal Appeals properly found that his claim that he had been illegally sentenced under the HFOA was precluded, and that judgment is due to be affirmed. AFFIRMED. SEE, WOODALL, STUART, SMITH, BOLIN, PARKER, and MURDOCK, JJ., concur. COBB, C.J., recuses herself.	{ "pile_set_name": "FreeLaw" }
IN THE COURT OF CRIMINAL APPEALS OF TENNESSEE AT JACKSON Assigned on Briefs August 7, 2012 STATE OF TENNESSEE v. ANTONIO STARKS Direct Appeal from the Criminal Court for Shelby County No. 10-01052 John T. Fowlkes, Jr., Judge No. W2011-02038-CCA-R3-CD - Filed January 30, 2013 A Shelby County Criminal Court Jury convicted the appellant, Antonio Starks, of first degree felony murder and aggravated child abuse, and the trial court sentenced him to concurrent sentences of life and fifteen years, respectively. On appeal, the appellant contends that (1) the evidence is insufficient to support the convictions; (2) the trial court erred by allowing witnesses to testify about his previous abuse of the victim; (3) the trial court erred by refusing to allow him to question the victim’s mother about a prior conviction; (4) the trial court should have granted a mistrial when a police officer testified that the victim had been sexually abused; (5) the trial court should have given a curative instruction when the State made an improper comment during closing arguments; and (6) the trial court should have granted a new trial because the State failed to disclose that the victim’s mother received favorable treatment in return for her testimony. Based upon the record and the parties’ briefs, we affirm the judgments of the trial court. Tenn. R. App. P. 3 Appeal as of Right; Judgments of the Criminal Court are Affirmed. N ORMA M CG EE O GLE, J., delivered the opinion of the Court, in which T HOMAS T. W OODALL, and R OGER A. P AGE, JJ., joined. Edwin C. Lenow, Memphis, Tennessee, for the appellant, Antonio Starks. Robert E. Cooper, Jr., Attorney General and Reporter; J. Ross Dyer, Assistant Attorney General; Amy P. Weirich, District Attorney General; and Jennifer Nichols and Carrie Shelton, Assistant District Attorneys General, for the appellee, State of Tennessee. OPINION I. Factual Background In January 2010, the Shelby County Grand Jury indicted the appellant for first degree felony murder in the perpetration of aggravated child abuse and aggravated child abuse. The victim was his girlfriend’s three-year-old daughter, Amilyia Oliver. At trial, Linda Henry testified that she was a registered nurse at Delta Medical Center in Memphis. On May 30, 2009, a Saturday, Henry was working as a nurse house supervisor. Shortly after 12:00 p.m., Henry went to the Emergency Department in response to a “code blue,” meaning a child’s heart had stopped. Henry entered the trauma room and saw a nurse and a doctor working on the victim. She said she noticed that the victim had what looked like “a new injury off of her nose.” Henry left the room and went to the nurse’s station to find someone who could tell her the victim’s name. The appellant got a card with the victim’s name on it out of his wallet and gave it to Henry; his hand was shaking. Henry said that she returned to the trauma room, that the victim’s clothes were off, and that the victim appeared to have “some old type injuries to her body and some new type injuries to her body.” Due to the injuries, Henry telephoned the police. She said that the hospital staff used medication and a defibrillator to try to resuscitate the victim and that they worked on the victim for about fifty minutes. The victim was declared dead at 1:10 p.m. On cross- examination, Henry testified that it was not unusual for someone to be trembling after bringing an ill person to the hospital. Dr. Miguel LaBoy, an assistant medical examiner for Shelby County, testified as an expert in forensic pathology that he performed the victim’s autopsy on May 31, 2009. The victim was forty inches tall and weighed thirty-one pounds. Dr. LaBoy conducted an external examination and found seven bruises on the victim’s head. Specifically, he found bruises on the left and right side of her forehead, on her left cheek, on the left side of her chin, and inside her upper lip. He also found ten abrasions on the victim’s head. Specifically, he found abrasions on her forehead, left eyelid, left cheek, both nostrils, and inside her bottom lip. Dr. LaBoy testified that a bruise extended from the victim’s right shoulder to her right arm and covered the sides, front, and back of her arm. She also had two abrasions on the front of her right arm, an abrasion on the back of her right index finger, and an abrasion on her right middle finger. The victim had a bruise from her left shoulder onto her left arm, an abrasion on the back of her left shoulder, an abrasion on the back of her left arm, two abrasions on the inside of her left arm, a u-shaped bruise on the front of her left forearm, and a u-shaped bruise on the back of her left forearm. A bruise was near the center of the victim’s chest, and she had bruises on the left and right sides of her chest. She also had an abrasion on the right side of her chest and on the right side of her lower abdomen. Dr. LaBoy found two abrasions on the right side of the victim’s upper back, a bruise on her back, and two abrasions on the upper part of her right buttock. He found a u-shaped bruise on her right -2- thigh; a u-shaped bruise on the back of her right knee; two abrasions on her right calf; and two abrasions on her left thigh, close to her left buttock. A bruise was on the back of her left knee, and an abrasion with a scab was on the front of her left leg. The victim had multiple scars on her thighs. Dr. LaBoy x-rayed the body but saw no obvious fractures. Dr. LaBoy testified that he also conducted an internal examination of the victim. The victim had multiple contusions throughout the front of her scalp that matched the bruises on her forehead. She had a bruise in the top of her scalp and a bruise in her right temporal scalp with hemorrhaging of the right temporalis muscle, meaning the impact was more severe than merely causing bruising to the skin. The victim’s skull was not fractured. However, she had a lethal subdural hematoma on the left side of her brain and a “patchy” subarachnoid hemorrhage on her brain’s right hemisphere. An accumulation of fluid, also known as edema, was on the outer surface of her brain. He said an area on the right side of her brain had a yellow discoloration, meaning the area had hemorrhaged previously but had “resolved.” The victim also had hemorrhaging in the area around one of her optic nerves and throughout the retina of her eye. Dr. LaBoy stated that her injuries indicated blunt trauma to the head. Dr. LaBoy testified that he did not find any trauma to the victim’s neck, chest, or abdomen. He also did not find any evidence of sexual abuse. He said the victim had bruising on the “back aspect of her lungs,” which could have been caused by an impact to the area. The victim had skeletal hemorrhaging on her shoulders, upper extremities, back, and lower extremities. He stated that the victim’s cause of death was multiple blunt force injuries and that her manner of death was homicide. On cross-examination, Dr. LaBoy testified that all of the victim’s abrasions, except for the one with the scab, were recent injuries and that the bruise on the victim’s chest was not consistent with CPR having been performed on the victim. He stated that any one of the victim’s injuries could have been caused by a fall. However, all of the victim’s injuries together could not be explained by a fall. The victim’s u-shaped injuries were consistent with having been caused by a loop or the end of a loop. He stated that the yellow discoloration on the right side of her brain was a chronic or “past” injury; however, the injury on the left side of her brain was acute or recent, meaning within twelve hours of her death. He said that some of the injuries on the victim’s back were “chronic” and that some were recent. Officer Diana Dickerson of the Memphis Police Department (MPD) testified that on May 30, 2009, she responded to a call at Delta Medical Center and went into the victim’s trauma room. The hospital staff was working on the victim. After the doctor pronounced the victim dead, Officer Dickerson began trying to find the victim’s family. She met the -3- victim’s mother, put the victim’s mother into her patrol car, and began filling out paperwork. Officer Robert Halliburton of the MPD testified that he responded to a call at Delta Medical Center on May 30, 2009, and put the appellant into the back of his patrol car. He stated that the appellant was calm but that the appellant said “something about worrying about going to jail.” Officer Halliburton did not read the appellant his rights because the officer was just “watching over” the appellant and was not interrogating him. He stated that while they were sitting in the patrol car, the appellant said “something about picking up the child from the babysitter’s.” Officer Halliburton transported the appellant to the police department. Gizelle Gagne, the Assistant Manager for LEDIC Management Group, testified that her employer managed the Somerset Apartments. On May 30, 2009, MPD officers questioned Gagne about 3639 Parkwin Drive, apartment number 4. The apartment was vacant at that time and had been vacant since March 24. An individual named Erica Parker lived in 3639 Parkwin Drive, apartment number 3. Gagne did not know anyone named Alecia or Chris who lived in either apartment. On cross-examination, Gagne testified that she did not recognize the appellant’s name. She acknowledged that she did not always know who lived with renters. Officer Jeffrey Allen Garry of the MPD testified that he went to Delta Medical Center on the afternoon of May 30, 2009, photographed the victim’s body, and collected evidence. He said that the victim had “multiple bruisings about her body” and that she had bruising and scarring on her lower body. A red substance, thought to be blood, was in the crotch area and along the left hip and buttock areas of her underwear. Officer Garry collected the victim’s clothes. About 5:00 p.m., he went to a vacant apartment on Parkwin Drive and photographed the interior of the apartment. There was no evidence that anyone lived there. About 9:00 p.m., Officer Garry went to 481 Walker Street, apartment number 4; photographed the interior of the apartment; and collected evidence. The apartment had two bedrooms. One bedroom was the master bedroom, and the other was a child’s bedroom with a twin bed. Officer Garry found two belts on the floor of the master bedroom. He said that one was a green plastic belt and that the other was black “with holes stamped.” He found a black braided belt on the floor in the child’s bedroom. Officer Garry took numerous photographs at all three locations and turned in the photo card containing the photographs to the police department’s photo laboratory. On cross-examination, Officer Garry testified that he used a swab to collect evidence off a wall in the apartment on Walker Street. He acknowledged that he did not know what substance was on the victim’s panties. -4- Richard Brashier, the civilian supervisor for the MPD’s photo laboratory, testified that Officer Garry photographed three scenes in this case and that a photo lab employee logged-in the photographs. One month before trial, the laboratory was asked to retrieve the photos. However, Brashier was only able to find the photographs Officer Garry took at the hospital. William Tate testified that he and the victim’s mother, Nekela Oliver, were working at Mimio.com on May 30, 2009. Oliver’s shift ended at 12:00 p.m., and she left at that time. Later that day, police officers arrived at Mimio.com and spoke with Tate. Nekela Oliver, the victim’s mother, testified that she and the appellant met in 2008 while they were working at Mimio.com. She said that they had an intimate relationship and that their relationship was good at first. About two months after they met, they began living together in a duplex on Jasmine Cove. The victim and her brother, who was six years old, lived with them. Later, they moved into an apartment on Walker Street. Oliver continued to work at Mimio.com, but the appellant no longer worked there and looked after the children while Oliver worked. Oliver said that before she met the appellant, a babysitter named Alecia looked after the victim. Alecia had a boyfriend or a brother named Chris. Oliver testified that about two weeks before the victim’s death, she started sending the victim to daycare “because of the bruises that [she] was seeing.” Oliver saw knots on the victim’s head, carpet burns on her nose, and bruises on her arm. Oliver said that one time, the victim’s lips were “puffy.” She asked the appellant about the victim’s injuries. Oliver also asked the victim, and the victim told Oliver that the appellant had whipped her. Oliver testified that she whipped the victim’s legs with switches from trees and that the switches left welts on the victim. Oliver also whipped the victim with a belt; however, she used the belt over the victim’s clothes. At the time of the victim’s death, Oliver had not whipped the victim since she started daycare two weeks earlier. Oliver said she sometimes whipped the victim because the victim urinated on herself. Oliver never punched or kicked the victim and never made her run in the apartment. She said she saw the appellant force her son and the victim to run laps one time. She said that she asked him why and that he told her, “‘Both of them just get on my nerves.’” She said she got upset and told the appellant not to put his hands on the children anymore. Oliver testified that on the night of May 29, 2009, the victim fell asleep with her clothes on, and Oliver put her to bed. There were no marks on the victim’s head, shoulders, back, arms, or legs. The next morning, Oliver had to be at Mimio.com at 6:00 a.m. Daycare was closed, so the appellant was supposed to look after the children. The appellant drove Oliver to work in Oliver’s truck while the children remained sleeping in the apartment. About 10:00 a.m., Oliver telephoned the appellant. He told her that the victim was asleep and that -5- her son was playing a game. Oliver’s shift ended at noon, but the appellant did not pick her up on time. She said that about 12:15 p.m., the appellant “came storming down the street.” When Oliver got into the truck, she saw the victim lying across the appellant’s lap. The victim had a knot on her head, carpet burns on her face, and bruises on her arms. The side of her face also was bruised. Oliver said she picked up the victim and asked the appellant, “‘What happened?’” She said he told her that the victim had “‘peed’” on him and that “‘I didn’t mean to do it. I’m sorry.’” Oliver told the appellant to drive to the hospital. The appellant drove to Delta Medical Center, and Oliver rushed the victim inside. Oliver testified that someone cut the victim’s shirt open, that she saw bruises on the victim’s chest, and that she began “hollering.” The appellant came inside and kept telling Oliver that he was sorry, that the victim had urinated on him, and that he had whipped her. Oliver said the appellant told her that “‘I’m going to go to jail for life’” and that “‘[w]e could tell them [the children] went to Alecia’s[.]’” When the police arrived at the hospital, they separated Oliver from the appellant, and she did not see him again. Oliver testified that she told the police her children had been to Alecia’s house that day. She gave the police Alecia’s address, which was apartment number 4 in Somerset Apartments. She said she lied to the police because she was “just stupid” and “didn’t want to lose nobody at the time.” The police took Oliver to the police department and interrogated her. At some point, Oliver admitted to them that the victim had not been to Alecia’s home. She said that she was indicted for being an accessory after the fact, that the State had not offered her anything in exchange for her testimony, and that she was testifying for her “baby.” On cross-examination, Oliver testified that she did not remember telling the interrogating officer that she whipped the victim with a switch, causing the victim’s legs to bleed, one week before the victim died. She said she told the officer that she whipped the victim two weeks before the victim died. Oliver denied taking off the victim’s clothes; whipping her, causing her to bleed; and putting her in the bathtub. She also denied shutting the door to the victim’s bedroom so that her son could not see her whip the victim. She acknowledged that she used belts to whip her son and the victim. Oliver never saw the appellant whip the victim, causing the victim to bleed. She said that the tile floor in the victim’s bedroom was hard. She said she had not made a “deal” with the State. Nine-year-old Martavion Oliver, the victim’s older brother, testified that he currently lived with his father and grandmother. He said that the appellant used to be his mother’s boyfriend and that he called the appellant “Uncle.” At the time of the victim’s death, -6- Martavion1 was living with his mother, Nekela Oliver; the appellant; and the victim in an apartment on Walker Street. Martavion shared a bedroom with the victim, and the appellant shared a bedroom with Oliver. Martavion was in the second grade and attended elementary school, and the victim went to daycare. Before Oliver began dating the appellant, the victim stayed with a babysitter while Oliver worked. Martavion acknowledged that the babysitter’s name was Alecia. Martavion testified that while he lived with the appellant, he saw the appellant hurt the victim. The appellant would hit the victim on her head and arm with a wooden brush. He also hit her with an extension cord and belts. One of the belts he used was Oliver’s green plastic belt. Martavion said the appellant would punish the victim because she “used to frown up.” He made a face to the jury, demonstrating what he meant by “frown up.” He said that the victim’s making the face angered the appellant and that the appellant whipped her. The appellant also made the victim run in the apartment. He said that the victim had to run down the hallway and “make a loop in the den” and that she had to run until her mother got home. The State asked if the appellant made the victim run for a long time or a short time, and Martavion answered, “Halfway long.” Martavion also saw the appellant punch the victim’s arm and thump her in her mouth and saw Oliver whip the victim with a switch or a belt. He said he never saw anyone punch the victim in the mouth or kick her. Martavion testified that on May 30, 2009, he and the victim were with the appellant while his mother was at work. The appellant hit the victim with the brush, a belt, and the extension cord. Martavion said that the appellant punished the victim because she “[f]rowned up” and that the victim wet her pants while the appellant was holding her. The State asked if the appellant made the victim run that day, and Martavion said, “I don’t think so.” However, shortly thereafter, the State asked him, “[D]id she wet herself before or after she had to run?” He answered, “Before. No, after, when she had to run[.]” Martavion ate a hotdog in the kitchen while the victim was running. He said that he heard the victim crying and that she had to keep running or the appellant would whip her. At some point, the victim stopped running because she was tired. Martavion said he knew she was tired because he heard her breathing hard. Martavion testified that after the victim wet herself, the appellant put her on her bed and changed her clothes. He said that the appellant told the victim to “fold [the] cover” on her bed and that the victim looked at the cover but wanted to sleep. The appellant allowed the victim to go to sleep. While the victim was sleeping, two children came to the apartment, and the appellant cut their hair. Later, the appellant told Martavion to check on the victim. 1 Because the witness and his mother share a surname, we will refer to him by his first name for clarity. -7- Martavion said that he felt for her heartbeat but that her heart was not beating. The appellant tried to give her water, but she coughed it up. The appellant picked up the victim and carried her outside to Oliver’s truck. Martavion said that he got into the backseat, that the appellant put the victim into the backseat, and that the appellant drove to the “[c]orner store.” The appellant went inside and came out with a white bottle of rubbing alcohol. The appellant rubbed the alcohol around the victim’s mouth to try to wake her. The victim did not wake up, so the appellant drove to Mimio.com to pick up Oliver. When Oliver got into the truck, she started crying. The appellant drove to the hospital, and Oliver carried the victim inside. The State asked Martavion what the victim had been doing the last time he saw her awake, and he said, “She was still running.” On cross-examination, Martavion acknowledged that Oliver would take off the victim’s clothes and whip her. Sometimes, Martavion saw blood running down the victim’s legs. He acknowledged that Oliver whipped the victim, drawing blood, a few days before the victim died. Martavion also saw Oliver use her hand to hit the victim, and he acknowledged that he saw Oliver hit the victim a couple of days before her death. He acknowledged that Oliver whipped the victim regularly, that Oliver used a switch and a belt with holes in it, and that the victim cried. He acknowledged that one of the reasons the appellant made the victim run was so she would get tired and want to go to sleep. Martavion acknowledged that after the victim stopped running on May 30, the appellant put her on the bed he shared with Oliver and told her to go to sleep. Martavion said that when he checked on the victim, her heart was not beating. He acknowledged that he gave a statement to Pat Lewis on June 2, 2009, and that he told Lewis the victim’s heart was beating when he put his hands on her chest. He said he told Lewis the truth. He also acknowledged that he told Lewis the victim was acting “funny” on the morning of May 30 and that the victim fell and hit her head on the floor while she was running. The appellant picked up the victim, carried her to his bedroom, and put her on the bed. The appellant told Martavion to put some clothes on the victim, so Martavion put clothes on her. Shortly before they left to pick up Oliver, the appellant tried to give the victim water, but she coughed it up. He acknowledged that he and the State had gone over his testimony before trial. On redirect examination, Martavion testified that the victim started acting “funny” after the appellant made her run. Sergeant William Dwayne Merritt of the MPD testified that the appellant arrived at the police department about 3:00 p.m. on May 30, 2009. Sergeant Merritt advised the appellant of his Miranda rights and interviewed the appellant. The appellant told him the following: That morning, the appellant woke about 6:00 a.m., drove Nekela Oliver to work, and returned to the apartment where he had left Martavion and the victim. The appellant was a self-employed barber and was expecting people to come to the apartment for haircuts, so -8- he drove the children to an apartment complex to drop off the victim with her babysitter, Alecia. The appellant left the victim with Alecia, and he and Martavion returned home. About 11:00 a.m., the appellant received a telephone call from Alecia’s boyfriend, Chris. Chris told the appellant, “‘You need to come over here. Something’s wrong with your baby.’” The appellant and Martavion went to the apartment complex, and the appellant saw Chris carrying the victim out of apartment number 3. The appellant took the victim into his arms and carried her to Oliver’s truck. He noticed she had some foam in her mouth and wiped it away. The appellant returned to apartment number 3 and saw Alecia’s and Chris’s three-year-old daughter standing in the apartment. The appellant said that the apartment looked “lived-in” and that he returned to the truck. At some point, the appellant performed CPR on the victim. He put rubbing alcohol on her face, but she was not breathing. The appellant picked up Oliver from work, and they went to the hospital. Sergeant Merritt testified that he stopped the interview and located a driver’s license photograph of Alecia. Her address was listed as 3639 Parkwin Drive, apartment number 3. Sergeant Merritt showed the photograph to Oliver, who was in a separate interview room. He also showed the photograph to the appellant. Sergeant Merritt said the appellant “wouldn’t come out and say that was her, but he looked at it, and he -- ‘Well, that looks like her,’ was his response.” About 5:00 p.m., Sergeant Merritt, another officer, and the appellant went to 3639 Parkwin Drive. The officers went to apartment number 3 and spoke with the people who lived there, but they did not know the appellant and had never babysat the victim. The appellant told the officers that Alecia and Chris lived in apartment number 4, so the officers went to that apartment. It was vacant. Sergeant Merritt testified that he and the appellant returned to the police department and that he spoke with Oliver. Sergeant Merritt talked with the appellant again and told him that his story was inconsistent with Oliver’s story. The appellant admitted that he had lied about Alecia. He told Sergeant Merritt that he had whipped the victim with a green belt three times that day and that he had made her run around the apartment. Sergeant Merritt recalled, “I think there was some of the whipping, and then she was made to run, and then I think there was some more whipping later on in the day.” After the last whipping, the appellant put the victim to bed. He cut hair for two people, checked on the victim, and found her in distress. The appellant picked her up, put her in the truck, picked up Oliver, and drove to the hospital. The appellant told Sergeant Merritt that it was Oliver’s idea to blame Alecia and Chris for the victim’s injuries. On June 1, 2009, Sergeant Merritt searched Oliver’s truck, a Chevrolet Tahoe, pursuant to a search warrant and found a bottle of rubbing alcohol. Sergeant Merritt read the appellant’s transcribed statement into evidence. According to the statement, the appellant whipped the victim three times on May 30 because “she peed, she would not take a bath, and she would not change her clothes.” The appellant “made her -9- start running back and forth in the hallway so that [he] would not spank her [anymore].” When customers arrived for their haircuts, he told the victim to lie down on the bed. The victim kept crying, and the appellant “thought that was her normal crying because she got a whipping.” The victim went to sleep. The appellant said that he lied about Alecia because he was scared and that “I am sorry this happened. I did not mean for it to happen.” On cross-examination, Sergeant Merritt testified that the appellant arrived at the police department about 3:00 p.m. but did not give his statement until 8:00 p.m. Sergeant Merritt did not question the appellant continuously during that five-hour period. The appellant would have been offered food and drink during that time. At the conclusion of Sergeant Merritt’s testimony, the State rested its case. The jury convicted the appellant of first degree premeditated murder perpetrated during aggravated child abuse and aggravated child abuse, a Class A felony. After a sentencing hearing, the appellant received concurrent sentences of life for the murder conviction and fifteen years for the aggravated child abuse conviction. II. Analysis A. Sufficiency of the Evidence The appellant contends that the evidence is insufficient to support the convictions because although he intended to punish the victim on May 30, 2009, nothing shows that he inflicted the punishment to cause her death or that he premeditated the killing. The State argues that the evidence is sufficient. We agree with the State. When an appellant challenges the sufficiency of the convicting evidence, the standard for review by an appellate court is “whether, after viewing the evidence in the light most favorable to the prosecution, any rational trier of fact could have found the essential elements of the crime beyond a reasonable doubt.” Jackson v. Virginia, 443 U.S. 307, 319 (1979); Tenn. R. App. P. 13(e). The State is entitled to the strongest legitimate view of the evidence and all reasonable or legitimate inferences which may be drawn therefrom. State v. Cabbage, 571 S.W.2d 832, 835 (Tenn. 1978). Questions concerning the credibility of witnesses and the weight and value to be afforded the evidence, as well as all factual issues raised by the evidence, are resolved by the trier of fact. State v. Bland, 958 S.W.2d 651, 659 (Tenn. 1997). This court will not reweigh or reevaluate the evidence, nor will this court substitute its inferences drawn from the circumstantial evidence for those inferences drawn by the jury. Id. Because a jury conviction removes the presumption of innocence with which a defendant is initially cloaked at trial and replaces it on appeal with one of guilt, a convicted defendant -10- has the burden of demonstrating to this court that the evidence is insufficient. State v. Tuggle, 639 S.W.2d 913, 914 (Tenn. 1982). First degree felony murder is not a premeditated killing. Instead, it is defined as the “killing of another committed in the perpetration of or attempt to perpetrate any . . . aggravated child abuse.” Tenn. Code. Ann. § 39-13-202(a)(2). “No culpable mental state is required for conviction . . . except the intent to commit the [underlying felony].” Tenn. Code Ann. § 39-13-202(b). A defendant is guilty of aggravated child abuse when the defendant commits the offense of child abuse and the conduct results in serious bodily injury to the child. Tenn. Code Ann. § 39-15-402(a)(1). Child abuse occurs when a person “knowingly, other than by accidental means, treats a child under eighteen (18) years of age in such a manner as to inflict injury.” Tenn. Code Ann. § 39-15-401(a). “A person acts knowingly with respect to a result of the person’s conduct when the person is aware that the conduct is reasonably certain to cause the result.” Tenn. Code Ann. § 39-11-302(b). Bodily injury “includes a cut, abrasion, bruise, burn or disfigurement, and physical pain or temporary illness or impairment of the function of a bodily member, organ, or mental faculty[.]” Tenn. Code Ann. § 39-11-106(a)(2). At the time of the victim’s death, serious bodily injury was defined as bodily injury that involved (A) a substantial risk of death; (B) Protracted unconsciousness; (C) Extreme physical pain; (D) Protracted or obvious disfigurement; or (E) Protracted loss or substantial impairment of a function of a bodily member, organ or mental faculty. Tenn. Code Ann. § 39-11-106(a)(34)(A)-(E). Taken in the light most favorable to the state, the evidence is sufficient to support the convictions. Nekela Oliver testified that she left the victim in the appellant’s care while she worked on May 30, 2009. Oliver’s son, Martavion, testified that the appellant hit the victim with a brush, an extension cord, and a belt and that he made her run. When the victim was so tired that she could not run anymore, the appellant put her to bed. Later, he discovered that he could not wake her. He tried to give her some water, but she coughed it up. The appellant put the victim in the truck and picked up Oliver from work. Oliver said the victim was lying across the appellant’s lap, unresponsive. They took the victim to the hospital, but -11- she was not breathing and could not be resuscitated. Dr. LaBoy testified that he found recent injuries to the victim’s brain, including a lethal subdural hematoma, that were caused by blunt force trauma and recent bruises and abrasions all over her body. The victim’s injuries could not be explained by a fall. Although the evidence established that Oliver physically abused the victim, nothing indicates that she inflicted the type of injuries that caused the victim’s death. The appellant told Sergeant Merritt that he whipped the victim three times that day and made her run, and he does not dispute that he was the victim’s sole caregiver at the time of her death. The evidence is more than sufficient to support the appellant’s convictions. B. Appellant’s Prior Bad Acts The appellant claims that the trial court erred by allowing witnesses to testify about his physically abusing the victim before May 30, 2009, because the testimony was inadmissible propensity evidence and was highly prejudicial. The State argues that the trial court properly allowed the witnesses to testify. We agree with the State. On the morning of trial, the State filed a motion pursuant to Rule 404(b), Tennessee Rules of Evidence, notifying the appellant of its intent to introduce testimony about the appellant’s abusing the victim prior to the day of her death. Before opening statements, the trial court held a hearing on the motion. During the hearing, the State advised the court that the appellant told Sergeant Merritt he punished the victim on May 30 for urinating on herself, refusing to change her clothes, and refusing to take a bath. The State argued that Nekela Oliver and Martavion should be allowed to testify about the appellant’s prior abuse of the victim in order to show that the appellant intended to physically abuse the victim on May 30 and to provide a “contextual background” for the jury about the victim’s injuries. The State also argued that the probative value of the evidence far outweighed the danger of unfair prejudice. Martavion Oliver testified at the hearing that “the truth” means “[d]on’t lie” and that he promised to tell the truth. He said that while he lived with the appellant, the appellant hurt him by hitting him with his mother’s green belt. The appellant also hit Martavion’s lip with the appellant’s fist and made him run in the apartment until his mother got home from work. He said that when he got tired, the appellant “would just push” him, causing his head to hit the carpet. The appellant also hurt the victim, hitting her with a brush, an extension cord, and a green belt. The appellant used the “wood part” of the brush to hit the victim on her head, and he used the belt to hit the victim on her leg. Martavion said that his mother whipped him and the victim but that she never punched them or made them run. On the day of the victim’s death, the appellant hit the victim with the brush. He also made her run because she “frowned up.” Martavion said that the appellant told the victim to fold up her clothes but that -12- the victim “didn’t know how to do it.” He said the appellant “beat” the victim and told her to go to sleep. On cross-examination, Martavion testified that the appellant would hit the victim on her head and on her arm with the brush. He also would spank her leg. Martavion acknowledged that the appellant always said he did not want to hurt the victim. Martavion said that on the day of the victim’s death, the victim “was just running, and then she got real tired. She couldn’t talk, and she was constantly crying.” He said that she fell, got up, kept running, and did not fall again.” However, he later acknowledged that the victim fell “a lot of times” that day. Defense counsel asked Martavion who put “marks” on his face and arms, and he said, “My mama and Antonio.” Nekela Oliver testified that prior to May 30, 2009, she saw bruises on the victim’s arm and knots on the victim’s head. She also said that the victim’s hands were swollen and that the victim had bruises on her legs, a carpet burn on her nose, and “like a green bruise on the side of her face one time.” Oliver said that she would use her hand to hit the victim or a switch to whip the victim’s leg “every now and then” but that she did not cause the injuries she saw on the victim. One time, the victim’s lips were swollen. Oliver said she asked the appellant, “What’s wrong with her lips[?]” She said the appellant told her, “‘She’s frowning at me, and I hit her in the mouth.’” Oliver said the appellant told her three or four times that the victim was “frowning at him.” She said that she asked the victim about the injuries “a couple of times” and that the victim said the appellant hit her. About two weeks before the victim’s death, Oliver got tired of seeing bruises on her. The appellant said he could not watch the victim anymore, so Oliver put the victim in daycare. On May 30, 2009, Oliver was concerned about leaving the victim with the appellant. On cross-examination, Oliver testified that she would whip the victim with two thin switches plaited together. She also whipped the victim with a belt on top of the victim’s clothes. Oliver denied that her whipping the victim caused the victim to bleed. At the time of the victim’s death, Oliver had not whipped her for two weeks. On redirect examination, Oliver stated that after the appellant said he could not look after the victim anymore, Oliver put her in daycare the next day. The State asked her, “What made you move so quickly?” Oliver answered, “Because he was mad, very angry, and he . . . stated, ‘I saw myself hurting her[.]’” At the conclusion of the testimony, the State maintained that the evidence was admissible to show the appellant intended to physically abuse the victim on the day of her death. The defense argued that the probative value of the evidence was outweighed by its prejudicial effect. The trial court withheld ruling on the issue, stating that it would take the -13- matter under advisement. Before Nekela Oliver and Martavion testified at trial, the trial court announced its ruling. The trial court noted that the medical examiner had testified about the victim’s “old injuries” and that the defense had cross-examined him extensively about them. The trial court held that, in light of the testimony about the victim’s previous injuries, Oliver and Martavion should be allowed to testify about the appellant’s prior abuse of the victim in order to avoid creating “a chronological or conceptual void in the State’s case.” The trial court also held that not allowing them to testify would result in jury confusion. Finally, the trial court determined that the probative value of the evidence was “tremendous” and that the probative value was not outweighed by the danger of unfair prejudice. Tennessee Rule of Evidence 404 provides as follows: (b) Other Crimes, Wrongs, or Acts. - Evidence of other crimes, wrongs, or acts is not admissible to prove the character of a person in order to show action in conformity with the character trait. It may, however, be admissible for other purposes. The conditions which must be satisfied before allowing such evidence are: (1) The court upon request must hold a hearing outside the jury’s presence; (2) The court must determine that a material issue exists other than conduct conforming with a character trait and must upon request state on the record the material issue, the ruling, and the reasons for admitting the evidence; (3) The court must find proof of the other crime, wrong, or act to be clear and convincing; and (4) The court must exclude the evidence if its probative value is outweighed by the danger of unfair prejudice. See also State v. Thacker, 164 S.W.3d 208, 240 (Tenn. 2005), State v. Parton, 694 S.W.2d 299, 302 (Tenn. 1985). A trial court’s decision regarding the admission of Rule 404(b) -14- evidence will be reviewed under an abuse of discretion standard; however, “the decision of the trial court should be afforded no deference unless there has been substantial compliance with the procedural requirements of the Rule.” State v. DuBose, 953 S.W.2d 649, 652 (Tenn. 1997). In making its decision regarding the admissibility of the testimony, the trial court must first determine if the offered testimony is relevant to prove something other than the appellant’s character. If the evidence is relevant, then, upon request, the court will proceed to a Rule 404(b) hearing. Generally, “[o]nly in an exceptional case will another crime, wrong, or bad act be relevant to an issue other than the accused’s character. Such exceptional cases include identity, intent, motive, opportunity, or rebuttal of mistake or accident.” State v. Luellen, 867 S.W.2d 736, 740 (Tenn. Crim. App. 1992). In making its decision regarding the admissibility of the testimony, the trial court must first determine if the offered testimony is relevant to prove something other than the appellant’s character. In this case, the trial court found that testimony about the appellant’s prior physical abuse of the victim was relevant to provide a contextual background for the jury. In State v. Gilliland, 22 S.W.3d 266, 271-72 (Tenn. 2000), our supreme court held that “contextual background evidence, which contains proof of other crimes, wrongs, or acts, may be offered as an ‘other purpose’ under Rule 404(b) when exclusion of that evidence would create a chronological or conceptual void in the presentation of the case and that void would likely result in significant jury confusion concerning the material issues or evidence in the case.” Id. at 272. The court explained that when the state seeks to offer evidence of other crimes, wrongs, or acts that is relevant only to provide a contextual background for the case, the state must establish, and the trial court must find, that (1) the absence of the evidence would create a chronological or conceptual void in the state’s presentation of its case; (2) the void created by the absence of the evidence would likely result in significant jury confusion as to the material issues or evidence in the case; and (3) the probative value of the evidence is not outweighed by the danger of unfair prejudice. Id. Turning to the instant case, the crux of the State’s proof was that the victim died of the injuries she received on May 30, 2009, while the appellant was her sole caregiver. Ordinarily, under those circumstances, we would agree with the appellant that the absence of testimony about his previous abuse of the victim would not create a chronological or -15- conceptual void in the State’s case and that Oliver’s and Martavion’s testimony about the appellant’s previous abuse of the victim was inadmissible. However, the appellant tried to insinuate through his cross-examination of the State’s witnesses, particularly Dr. LaBoy, that the victim’s mother caused the injuries that ultimately killed the victim. Moreover, during closing arguments, defense counsel argued to the jury that the past injuries inflicted by Oliver could have resulted in the victim’s death and that the appellant did not “knowingly and intentionally [inflict] the harm on this child knowing the consequences.” This court has stated, In the event the defendant claims that the injury was accidentally inflicted, inflicted by someone else, or the defendant lacked the intent to harm the victim, proof that the defendant was responsible for prior acts of abuse may be probative of the defendant’s intent to harm the child or to show that the act of abuse was not accidental. State v. Brian Larice Cureton, No. M2002-00835-CCA-R3-CD, 2003 Tenn. Crim. App. LEXIS 848, at *46-47 (Nashville, Oct. 8, 2003) (citing State v. Dubose, 953 S.W.2d 649, 546 (Tenn. 1997)). Therefore, we conclude that the testimony was admissible to show that the appellant caused the blunt force trauma to the victim’s head, that he did so intentionally, and that the victim’s injuries were not the result of a mistake or accident. Additionally, the testimony was highly relevant, and we conclude that the probative value of the evidence was not outweighed by the danger of unfair prejudice. Therefore, the appellant is not entitled to relief. C. Prior Conviction Next, the appellant contends that the trial court erred by refusing to allow him to question Nekela Oliver about a prior misdemeanor conviction. The State argues that the trial court properly excluded the evidence. We agree with the State. The record reflects that on June 6, 2009, Oliver was arrested and charged with felony child abuse or neglect. The victim was her son, Martavion. Oliver pled guilty to misdemeanor child neglect and was granted judicial diversion. She successfully completed diversion on January 15, 2011, three months before the appellant’s trial, and the conviction was expunged. On the morning of the appellant’s trial, Oliver’s attorneys filed a motion requesting that the trial court prohibit the appellant from questioning her about the child neglect conviction because the conviction had been expunged. Counsel also argued that the appellant could not ask Oliver about the conviction because the crime was a misdemeanor and did not involve “moral turpitude.” The trial court expressed concern about counsel’s -16- standing to file the motion. Nevertheless, the court held that the appellant could not ask Oliver about the prior misdemeanor conviction. As noted by the State, Rule 609, Tennessee Rules of Evidence, provides for the use of prior convictions to impeach witnesses. However, one of the requirements of the Rule is that the “crime must be punishable by death or imprisonment in excess of one year under the law under which the witness was convicted or, if not so punishable, the crime must have involved dishonesty or false statement.” Tenn. R. Evid. 609(a)(2). Given that the crime was a misdemeanor and did not involve dishonesty or false statement, the trial court correctly held that the appellant could not cross-examine Oliver about it. We note that the appellant also contends that the trial court erred by granting the motion because “the only person objecting was [Oliver’s] attorney not the District Attorney General.” However, the appellant has failed to cite to any authority in support of his argument as required by Rule 27(a)(7), Tennessee Rules of Appellate Procedure. Therefore, the issue is waived. See Tenn. Ct. Crim. App. R. 10(b). D. Mistrial The appellant claims that the trial court erred by failing to grant his motion for a mistrial when Sergeant Merritt “testified about sexual abuse upon [the victim] after the Court granted a Motion in Limine barring such testimony.” The State argues that the trial court properly denied the motion for a mistrial. We agree with the State. The appellant filed a pretrial motion to prohibit any evidence that the victim was sexually abused. At a hearing on the motion, the State advised the court that no one had been indicted for sexually abusing the victim and that “[w]e did not intend to put that evidence out.” The trial court granted the appellant’s motion and asked the State, “Your witnesses will be instructed accordingly?” The State answered, “Yes, sir.” At trial, Dr. LaBoy testified that he found no evidence of sexual abuse to the victim. When Sergeant Merritt took the stand, the State asked him how he became involved in the case, and he testified that he was asked to investigate the victim’s death. He also stated, “She had passed away and she had some evidence of physical and sexual abuse.” Defense counsel objected, and the parties approached the bench. The State acknowledged, “I did not advise him. . . . This is . . . my fault.” Defense counsel asked for a mistrial, but the trial court denied the motion, stating, “It was just one little comment that was made.” Moreover, the trial court instructed the jury as follows: Ladies and gentlemen, with regard to the comment about sexual -17- abuse, you’re to disregard that, that testimony. The examination that was done, and there’s no evidence of sexual abuse, so that statement, please disregard it. You can use it for no reason. A mistrial should be declared in criminal cases only in the event that a manifest necessity requires such action. State v. Millbrooks, 819 S.W.2d 441, 443 (Tenn. Crim. App. 1991). In other words, a mistrial is an appropriate remedy when a trial cannot continue or a miscarriage of justice would result if it did. State v. McPherson, 882 S.W.2d 365, 370 (Tenn. Crim. App. 1994). The decision to grant a mistrial lies within the sound discretion of the trial court, and this court will not interfere with the exercise of that discretion absent clear abuse appearing on the face of the record. See State v. Hall, 976 S.W.2d 121, 147 (Tenn. 1998). Additionally, the burden of establishing the necessity for mistrial lies with the party seeking it. State v. Williams, 929 S.W.2d 385, 388 (Tenn. Crim. App. 1996). In this case, Dr. LaBoy had already informed the jury that he conducted an internal and external examination of the victim and found no evidence of sexual abuse. Moreover, after Sergeant Merritt’s improper comment, the trial court immediately instructed the jury to disregard it because no evidence of sexual abuse existed. Ordinarily, juries are presumed to follow the instructions given by a trial court. State v. Young, 196 S.W.3d 85, 111 (Tenn. 2006). Therefore, we conclude that the trial court did not err by denying the appellant’s motion for a mistrial. E. Closing Arguments The appellant claims that the trial court erred by failing to give a curative instruction when the State argued facts outside the record during closing arguments. The State argues that the appellant has waived the issue because he failed to request a curative instruction. We conclude that the appellant is not entitled to relief. While Martavion was testifying during the Rule 404(b) hearing, the State asked him, “When [the appellant] was hitting you, did he ever tell you what you should do, how you should take it?” Martavion said the appellant told him, “‘Take it like a man.’” During the State’s rebuttal closing argument, the prosecutor said, “And then after Nekela Oliver came off her story and that house of cards tumbled, then what did he do? Did he man up like he told Martavion to do when he took his whippings? What did he do? He didn’t man up.” Defense counsel interrupted and objected, stating, “That’s not in evidence.” The trial court answered, “I’ll allow it. It’s basically based on the testimony. I’ll allow it. It’s argument.” It is well-established that closing argument is an important tool for both parties during a trial and, therefore, that counsel is generally given wide latitude during closing argument. -18- See State v. Carruthers, 35 S.W.3d 516, 577-78 (Tenn. 2000) (appendix). Nevertheless, “arguments must be temperate, based upon the evidence introduced at trial, relevant to the issues being tried, and not otherwise improper under the facts or law.” State v. Goltz, 111 S.W.3d 1, 5 (Tenn. Crim. App. 2003). “In determining whether statements made in closing argument constitute reversible error, it is necessary to determine whether the statements were improper and, if so, whether the impropriety affected the verdict.” State v. Pulliam, 950 S.W.2d 360, 367 (Tenn. Crim. App. 1996). In connection with this issue, we must examine the following factors: “(1) the conduct complained of viewed in context and in light of the facts and circumstances of the case[;] (2) the curative measures undertaken by the court and the prosecution[;] (3) the intent of the prosecutor in making the statement[;] (4) the cumulative effect of the improper conduct and any other errors in the record[; and] (5) the relative strength or weakness of the case.” Id. (quoting Judge v. State, 539 S.W.2d 340, 344 (Tenn. Crim. App. 1976)). In Goltz, 111 S.W.3d at 6, this court outlined “five general areas of prosecutorial misconduct” that can occur during closing argument: (1) intentionally misleading or misstating the evidence; (2) expressing a personal belief or opinion as to the truth or falsity of the evidence or defendant’s guilt; (3) making statements calculated to inflame the passions or prejudices of the jury; (4) injecting broader issues than the guilt or innocence of the accused; and (5) intentionally referring to or arguing facts outside the record that are not matters of common public knowledge. Moreover, “[t]he prosecution is not permitted to reflect unfavorably upon defense counsel or the trial tactics employed during the course of the trial.” State v. Gann, 251 S.W.3d 446, 460 (Tenn. Crim. App. 2007). Turning to the instant case, Martavion did not testify at trial that the appellant told him to “take it like a man.” Therefore, the prosecutor’s argument was not based on evidence introduced at trial and was improper. No curative measures were taken. However, the prosecutor’s statement was brief, and there is no evidence she intended to unduly prejudice the appellant by her remarks. Moreover, we have found no other errors in the record, and the -19- State’s case was strong. Therefore, we conclude that the appellant is not entitled to relief. F. Oliver’s Favorable Treatment Finally, the appellant claims that the trial court erred by refusing to grant his motion for a new trial when the State failed to disclose that Oliver received favorable treatment in exchange for her testimony. The State claims that the appellant is not entitled to relief. We agree with the State. On direct examination, Oliver testified that as a result of the victim’s death, the State indicted her for being an accessory after the fact. The State asked, “Are you here today testifying because we have offered you any type of deal?” Oliver answered, “No, ma’am.” The State asked, “Matter of fact, you have no idea what’s going to happen with that case, do you?” Oliver stated, “No, ma’am.” On cross-examination, the following exchange occurred: Q. And you’re expecting if you -- for your testimony to receive some favorable treatment, aren’t you? A. No, sir. Q. You’re not expecting any? A. What [do] you mean? A deal or something? Q. Some sort of deal? A. No, sir. Q. You haven’t been told by your lawyer that for your testimony that you’re not going to get some consideration for your testimony today against [the appellant]? A. No, sir. Q. Nothing at all? A. No, sir. Q. Are you just supposed to wait and see what happens? -20- A. Wait and see what happens. Less than two months after the jury convicted the appellant, the State nolle prosequied the charge against Oliver. In his amended motion for new trial, the appellant claimed that he was entitled to a new trial because the State failed to disclose that Oliver was going to receive favorable treatment for her testimony. At the motion for new trial hearing, the State advised the trial court, “What I can tell you unequivocally is that there was no deal.” However, the State also told the court, “The agreement was that [Oliver] wanted to testify because we felt like she would help our case against [the appellant], that if she testified truthfully after she testified we would decide what we wanted to do with her case.” The State advised the court that it had informed defense counsel before trial of the “agreement” and that defense counsel’s cross-examination of Oliver reflected that the State had informed defense counsel. Martha Jackson testified for the State that she was the Court Reporter Administrator for the criminal courts. At the State’s request, Jackson played an audio recording of part of defense counsel’s cross-examination of Oliver. During the portion played, Oliver stated that she was going to “[w]ait and see what happens” to her pending charge of being an accessory after the fact. Jennifer Nichols and Carrie Shelton, the assistant district attorneys general who represented the State at the appellant’s trial and at the motion for new trial hearing, also testified. Nichols stated that she informed defense counsel before trial that Oliver had been granted judicial diversion for the misdemeanor committed against Martavion. Nichols said she also informed defense counsel that Oliver would be testifying against the appellant, that the State had not made a “deal” with Oliver, and that Oliver “was supposed to give truthful testimony and that after that was over we would decide [what to do about her charge for being an accessory after the fact].” Nichols acknowledged that she did not inform defense counsel before the appellant’s trial that the charge would be nolle prosequied. She said she did not inform him because “[we] did not know what we were going to do with the case.” Shelton testified that she had never prosecuted a case for accessory after the fact. After the appellant’s sentencing hearing, Shelton was concerned about the State’s ability to prove its case against Oliver. Shelton also realized that Oliver “finally understood . . . that she had one-hundred percent failed her child.” Shelton said that after she read the victim impact statement Oliver prepared, she “felt that it would not have served justice at this point to prosecute her.” Therefore, Shelton decided not to pursue the case against Oliver. As this court has stated, -21- It is a fundamental principle of law that an accused has the right to cross-examine prosecution witnesses to impeach the credibility or establish the motive or prejudice of the witness. This includes the right to cross-examine a prosecution witness regarding any promises of leniency, promises to help the witness, or any other favorable treatment offered to the witness. State v. Spurlock, 874 S.W.2d 602, 617 (Tenn. Crim. App. 1993). When the State enters into an agreement with a witness in exchange for the witness’ cooperation, basic fairness dictates that all of the compromise is open for scrutiny and inquiry. State v. Ingram, 638 S.W.2d 428, 430 (Tenn. Crim. App. 1982). The trial court found that the State had an agreement with Oliver “for everyone to sit down afterwards and maybe the lawyers would be able to convince the prosecutors and the prosecutors [would] either dismiss, agree to probation, whatever.” However, in a written order, the trial court ruled that the appellant was not entitled to relief because “an intentional failure to communicate to the defendant details of the agreement between the State and Oliver did not occur.” The trial court also held that, regardless, any error was harmless due to the strength of the State’s case. We agree with the trial court that the appellant is not entitled to relief on this issue. In Asata Lowe v. State, No. E2006-02028-CCA-MR3-PC, 2008 Tenn. Crim. App. LEXIS 176, at 75 (Knoxville, Mar. 10, 2008), this court held that an “arrangement,” like the one in this case, between the State and a testifying witness “is simply too vague to be an ‘offer’ of favorable treatment and does not have to be disclosed to a defendant.” In any event, Nichols informed defense counsel that the State would decide what to do about Oliver’s case after she testified truthfully against the appellant, and defense counsel questioned Oliver about “hav[ing] to wait and see what happens.” Therefore, the trial court properly denied the appellant’s motion for a new trial. III. Conclusion Based upon the record and the parties’ briefs, we affirm the judgments of the trial court. _________________________________ NORMA McGEE OGLE, JUDGE -22-	{ "pile_set_name": "FreeLaw" }
37 F.3d 423 Jennifer JONES, Appellant,v.RYOBI, LTD; A.B. Dick Corporation, Appellees. No. 93-2719. United States Court of Appeals,Eighth Circuit. Submitted Feb. 14, 1994.Decided Oct. 12, 1994.Rehearing Denied Nov. 21, 1994. Heaney, Senior Circuit Judge, filed dissenting opinion. Fritz Faerber, Belleville, IL, argued (Fritz G. Faerber and Charles R. Scanlon, on the brief), for appellant. James W. Reeves, St. Louis, MO, argued, for appellee A.B. Dick. John Galvin III, St. Louis, MO, argued (G. Keith Phoenix, John E. Galvin and Mark A. Smith, on the brief), for appellee Ryobi, Ltd. Before FAGG, Circuit Judge, HEANEY, Senior Circuit Judge, and LOKEN, Circuit Judge. FAGG, Circuit Judge. 1 Jennifer Jones was employed at Business Cards Tomorrow (BCT) as the operator of a small printing press known as an offset duplicator. Jones seriously injured her left hand when she caught it in the moving parts of the press. Alleging negligence and strict product liability for defective design, Jones brought this diversity lawsuit against Ryobi, Ltd. (the manufacturer) and A.B. Dick Corporation (the distributor). At trial, Jones dropped her negligence claims but she later moved to amend her complaint to reassert her negligence claim against the distributor. The district court denied Jones's motion to amend. At the close of Jones's case, the manufacturer and the distributor moved for judgment as a matter of law (JAML). The district court granted the manufacturer's and the distributor's motions for JAML. Jones appeals and we affirm. 2 The press involved in Jones's injury operates by passing blank paper through several moving parts, imprinting an image on the paper, and dispensing the printed paper through upper and lower "eject wheels." To avoid streaking the freshly printed image, on each job the operator must adjust the eject wheels to ensure the wheels do not touch the freshly printed area. The press was manufactured and sold to BCT equipped with both a plastic guard that prevented the operator from reaching into the moving parts to adjust the eject wheels, and an electric interlock switch that automatically shut off the press if the guard was opened. Sometime after the press was manufactured and delivered to BCT, the guard was removed and the interlock switch was disabled to allow the press to run without the guard. Because this modification increased production by saving the few seconds required to stop and to restart the press when the operator adjusted the eject wheels, the modification was a common practice in the printing industry. 3 Jones learned to operate the press by watching other BCT employees. Jones testified she knew the guard was missing and knew it was dangerous to have her hands near the unguarded moving parts, but her supervisor pressured her to save time by adjusting the eject wheels while the press was running. Jones feared she would be fired if she took the time to stop the press. While Jones was adjusting the eject wheels on the running press, a noise startled her. Jones jumped and her left hand was caught in the press's moving parts and crushed. 4 In granting the manufacturer's and the distributor's motions for JAML, the district court relied on the open and obvious nature of the asserted danger. See Restatement (Second) of Torts Sec. 402A cmt. i (1965) (consumer expectation test). The district court did not reach the manufacturer's and the distributor's other grounds for JAML. We review the district court's grant of JAML de novo; thus, we may affirm on another ground. See McAnally v. Gildersleeve, 16 F.3d 1493, 1496 (8th Cir.1994); B.B. v. Continental Ins. Co., 8 F.3d 1288, 1291 (8th Cir.1993). Because we conclude the district court's grant of JAML was proper on an alternate ground, we need not consider the ground relied on by the district court. 5 To recover on a theory of strict liability for defective design under Missouri law, Jones must prove she was injured as a direct result of a defect that existed when the press was sold. Jasinski v. Ford Motor Co., 824 S.W.2d 454, 455 (Mo.Ct.App.1992) (explaining elements of defective design claim). Jones had the burden to show the press had not been modified to create a defect that could have proximately caused her injury. Id. Jones failed to meet this burden because her evidence showed the press had been substantially modified by removing the safety guard and disabling the interlock switch, and showed the modification caused her injury. When a third party's modification makes a safe product unsafe, the seller is relieved of liability even if the modification is foreseeable. Gomez v. Clark Equip. Co., 743 S.W.2d 429, 432 (Mo.Ct.App.1987). Jones did not show who modified the press, but her evidence clearly showed that a third party, not the manufacturer or the distributor, was responsible for the modification. 6 Although the manufacturer provided tools for general maintenance of the press that could also be used to remove the guard, we do not believe this made the manufacturer responsible for the guard's removal. Jones produced no evidence that any representative of the manufacturer or the distributor removed the guard or instructed BCT to remove the guard from the press involved in Jones's injury. Indeed, the distributor's service representative testified he told BCT's owner several times the guard should be replaced, but BCT's owner shrugged off the suggestion. Because BCT knew the guard was missing and the interlock switch was disabled, but did not follow the distributor's advice to repair the disabled safety features, the distributor's service work on the press did not extend the distributor's liability to defects that were not present when the press was sold. See Winters v. Sears, Roebuck & Co., 554 S.W.2d 565, 572-73 (Mo.Ct.App.1977) (seller's servicing of product has effect of redelivery only if plaintiff produces evidence no third party altered product to create defect causing injury). 7 Jones argues the modification rule does not apply because the press was not safe even before the modification. We disagree. The press was safe before the modification because the press would not run without the safety guard covering the moving parts. The fact BCT encouraged Jones to operate the press without the safety features to increase production does not show the press was sold "in a defective condition [and thus] was unreasonably dangerous when put to a reasonably anticipated use." Jasinski, 824 S.W.2d at 455. Although several witnesses testified the press operated more efficiently without the safety guard and interlock switch, other witnesses testified similar presses operated satisfactorily with the designed safety features intact. The press could be operated safely without removing the guard because the eject wheels did not have to be adjusted while the press was running. Jones's expert witness opined the press was unsafe as designed, but the expert based his view on the printing industry's tendency to disable the press's safety features to achieve greater production. Thus, the expert's testimony does not show the press was unreasonably dangerous when used in the same condition as when it was sold. See id. 8 Because Jones's evidence showed a third party's modification, not a defect existing when the press was sold, was the sole cause of her injury, her strict product liability claim for defective design fails as a matter of law. See Gomez, 743 S.W.2d at 433. The district court thus properly granted the manufacturer's and the distributor's JAML motions. 9 Finally, Jones contends the district court committed error in refusing to allow her to amend her complaint to reassert her negligence claim against the distributor. We disagree. The district court did not abuse its discretion to deny the amendment because the evidence presented did not show colorable grounds for Jones's negligence theory. See Williams v. Little Rock Mun. Water Works, 21 F.3d 218, 224 (8th Cir.1994). 10 Accordingly, we affirm. 11 HEANEY, Senior Circuit Judge, dissenting. 12 Viewing the evidence in the light most favorable to Jones, as we must, I cannot subscribe to the majority's opinion that the offset duplicator was safe as originally manufactured. 13 The rule to which Missouri adheres, as correctly stated by the majority, is that a manufacturer is not liable where a modification is foreseeable, but the modification renders a safe product unsafe. Gomez v. Clark Equip. Co., 743 S.W.2d 429, 432 (Mo.Ct.App.1987). Representatives of ITEK Corp., the former distributor of the duplicator, testified that the guard was removed by customers or others a "vast majority" of the time, trial tr. at 57, 138, and that ITEK knew that the guard was "routinely removed." Id. at 82. Thus, the modification of the duplicator was entirely foreseeable. 14 The question that arises is whether the modification rendered an otherwise safe product unsafe. There is no dispute that the duplicator, as modified, was unsafe. The critical question, thus, is whether the duplicator as manufactured was unreasonably dangerous. 15 The testimony of Dr. Creighton, Jones's expert witness, is alone sufficient to support the inference that the offset duplicator was not safe as originally designed. Dr. Creighton testified that the electric interlock device was wired backwards and was not "fail-safe." Id. at 249-50, 52. He testified that the duplicator's guard, in addition to not being fail-safe, id. at 250, was made of material "that will break ... readily," id., did not allow for proper ventilation of the internal components of the machine, id., and invited removal. Id. at 253. He further testified that the design of the eject wheels, which essentially requires operators to make manual adjustments while the offset duplicator is running, was "absolutely not safe," id. at 242, indeed "the worst of situations from a human factors standpoint." Id. at 256. The duplicator could have been equipped, he noted, with external adjustment handles to enable operators to make adjustments to the eject wheels without placing their hands in close proximity to the moving parts of the machine. Id. at 251. 16 Further, although not direct proof that the duplicator was defectively designed, the fact that an overwhelming majority of machines had their guards removed after their delivery is evidence that the duplicator was incapable of operating efficiently according to industry standards. According to ITEK representative Brad Gruenewald, nearly ninety-eight percent of all machines he came into contact with had their safety covers removed. Id. at 138. Indeed, Gruenewald testified that he told duplicator operators in effect to remove the guard in order to alleviate problems with ink emulsification that occurred as a result of humidity which frequently became trapped inside the plastic shield. Id. at 62. 17 The majority does not address (nor need it, given the focus of its opinion) the open-and-obvious defense on which the district court relied in granting the defendants' motion for judgment as a matter of law. I touch on it briefly because, even assuming Ryobi is not relieved of liability under the substantial modification theory, the question still remains whether it can prevail based on the alleged open and obvious danger of the unguarded duplicator. 18 We have held that the obviousness of a defect or danger is material to the issue of whether a product is unreasonably dangerous. Linegar v. Armour of Am., Inc., 909 F.2d 1150, 1154 (8th Cir.1990). It does not, however, alone constitute a defense to a submissible case of strict liability under section 402A of the Restatement (Second) of Torts. McGowne v. Challenge-Cook Bros., Inc., 672 F.2d 652, 663 (8th Cir.1982). The issue under Missouri law, as we have construed it, "is not whether a jury can conclude that [the] danger is obvious or apparent, but ... whether the jury can conclude that the danger is obvious and apparent to the extent that the product was not 'unreasonably dangerous.' " Id. Stated otherwise, the question is not simply whether the danger was open and obvious, but whether the product was unreasonably dangerous taking into account the obviousness of the danger. 19 There is no question in my mind that there was sufficient evidence from which a jury, taking into account the obviousness of the conceded danger, could conclude that the offset duplicator was unreasonably dangerous. The district court relied on our holdings in Pree v. Brunswick Corp., 983 F.2d 863, 867 (8th Cir.), cert. denied, --- U.S. ----, 114 S.Ct. 65, 126 L.Ed.2d 35 (1993), and Linegar, 909 F.2d at 1154--cases which are analogous in precious few ways to the instant case--in holding that the open-and-obvious nature of the unguarded duplicator "was readily observable by everyone," trial tr. at 440, and therefore barred recovery by Jones. In Pree we held that an unguarded outboard motor on a boat was not unreasonably dangerous because no device existed that would provide protection from a propeller without rendering the motor more dangerous. 983 F.2d at 866. In Linegar we held that a bullet-proof vest that did not cover all parts of the body was not inherently dangerous because "[a]n otherwise completely effective protective vest cannot be regarded as dangerous, much less unreasonably so, simply because it leaves some parts of the body obviously exposed." 909 F.2d at 1154. In both cases we relied on the open-and-obvious nature of the alleged danger in holding that the products were not unreasonably dangerous and thus were not defectively designed. 20 In my judgment there was sufficient evidence to support the inference that the offset duplicator was unreasonably dangerous and thus was defectively designed. This case should have met its fate in the hands of the jury members, not the district court's and not now ours.	{ "pile_set_name": "FreeLaw" }
111 F.3d 653 65 USLW 2666, 1997-1 Trade Cases P 71,769,97 Cal. Daily Op. Serv. 2636,97 Daily Journal D.A.R. 4630 CHROMA LIGHTING, a California corporation; and Charles T.Von Der Ahe, an individual, Plaintiffs-Appellees,v.GTE PRODUCTS CORPORATION, a Delaware corporation, et al., Defendants,andSylvania Lighting Services Corporation, a Delawarecorporation, Defendant-Appellant. No. 94-55581. United States Court of Appeals,Ninth Circuit. Submitted Aug. 8, 1995.Decided April 10, 1997. M. Laurence Popofsky, Heller, Ehrman, White & McAuliffe, San Francisco, CA, for defendant-appellant. Barry R. Laubscher, Grant & Laubscher, Irvine, CA, for plaintiffs-appellees. Appeal from the United States District Court for the Central District of California, William D. Keller, District Judge, Presiding. D.C. No. CV-91-6424-WDK. Before: BROWNING, NORRIS, and REINHARDT, Circuit Judges. WILLIAM A. NORRIS, Circuit Judge. 1 Plaintiff Charles Von Der Ahe, d/b/a Chroma Lighting, was a distributor of Osram Sylvania lighting products. After going out of business, Von Der Ahe sued Sylvania for price discrimination in violation of § 2(a) of the Clayton Act, as amended by the Robinson-Patman Antidiscrimination Act of 1936, 15 U.S.C. § 13(a), and for recovery under California tort law. On the Robinson-Patman claim, Von Der Ahe alleged that Sylvania had given discounts to Von Der Ahe's larger competitors, without offering the same discounts to Von Der Ahe, and that Von Der Ahe had been injured by Sylvania's discriminatory practices. The jury found for Von Der Ahe on all counts and awarded treble damages of $3,525,000. ER at 719-20. After trial, Sylvania moved for judgment as a matter of law, alleging, inter alia, that there was insufficient evidence to support a finding of injury to competition on the Robinson-Patman claim. ER at 438-40. The district court denied the motion. Sylvania appeals from the denial of its post-trial motion and from the judgment. On appeal, Sylvania claims that the evidence at trial was insufficient as a matter of law to support the jury's finding of injury to competition.1 2 In FTC v. Morton Salt, 334 U.S. 37, 68 S.Ct. 822, 92 L.Ed. 1196 (1948), the Court held that competitive injury in a secondary-line2 Robinson-Patman case may be inferred from evidence of injury to an individual competitor. More specifically, Morton Salt permits a factfinder to infer injury to competition from evidence of a substantial price difference over time, because such a price difference may harm the competitive opportunities of individual merchants, and thus create a "reasonable possibility" that competition itself may be harmed. Id. at 46-47, 68 S.Ct. at 828-29. The question presented by Sylvania's appeal is whether the inference of competitive injury that arises from a showing of harm to an individual competitor in a secondary-line price discrimination case may be overcome by a showing that competition in the relevant market remains healthy. This question was left open by Morton Salt, and the circuits are divided on the issue. The D.C. Circuit, for example, has held that the inference of competitive injury may be rebutted by a showing of no actual harm to competition because the Robinson-Patman Act must be construed in light of the pro-competitive purpose of all other antitrust legislation. Boise Cascade Corp. v. FTC, 837 F.2d 1127, 1144 (D.C.Cir.1988). The Third Circuit, on the other hand, has held that the inference of competitive injury may not be overcome by evidence of no harm to competition because the Robinson-Patman Act was designed specifically to protect individual competitors rather than competition in general. J.F. Feeser, Inc. v. Serv-A-Portion, Inc., 909 F.2d 1524, 1532-33 (3d Cir.1990), cert. denied, 499 U.S. 921, 111 S.Ct. 1313, 113 L.Ed.2d 246 (1991). 3 Appellant Sylvania argues that we should follow Boise. Like Boise, Sylvania reasons that the Robinson-Patman Act condemns price discrimination only to the extent that the discrimination threatens to injure competition, and that the Act should be construed consistently with the broader policies of the antitrust laws to protect competition, not individual competitors. Appellee Von Der Ahe argues that injury to competition in a secondary-line Robinson-Patman case is conclusively established by proof of injury to a competitor, and that the inference of competitive injury that arises from proof of injury to a competitor may not be rebutted by evidence that competition was not adversely affected. We agree with Von Der Ahe and the Third Circuit, and affirm the jury verdict for Von Der Ahe on the Robinson-Patman claim. 4 * The Robinson-Patman Act reads in relevant part: 5 It shall be unlawful for any person engaged in commerce ... to discriminate in price between different purchasers of commodities of like grade and quality, ... where the effect of such discrimination may be substantially to lessen competition or tend to create a monopoly in any line of commerce, or to injure, destroy, or prevent competition with any person who either grants or knowingly receives the benefits of such discrimination, or with customers of either of them ... 6 15 U.S.C. § 13(a). In Boise, the D.C. Circuit held that the language of the Robinson-Patman Act, which prohibits price discriminations that tend "to injure, destroy, or prevent competition," indicates that Congress was concerned about the preservation of competition, and not the protection of individual competitors. Boise, 837 F.2d at 1143. In making this argument, the D.C. Circuit attempted to reconcile Robinson-Patman with other antitrust laws, whose purpose is to promote "pro-competitive efficiency and maximization of consumer welfare." Id. at 1138. Asserting that harm to competition is "the name of the Robinson-Patman game," id. at 1143, the D.C. Circuit reasoned that it would "def[y] both logic and the import of Morton Salt" to hold that an inference of competitive injury derived from evidence of harm to individual competitors may not be overcome when there is no actual harm to competition. Id. at 1144. 7 In dissent, Judge Mikva criticized the majority in Boise for following its own economic philosophy rather than interpreting the specific language and legislative history of the Robinson-Patman Act. Id. at 1152-53 (Mikva, J., dissenting). First, Judge Mikva accused the majority of overlooking the statutory language, which expressly proscribes price differentials that tend "to injure, destroy, or prevent competition with any person " who enjoys the benefits of the differential. Id. at 1157. This language, in Judge Mikva's view, shifts the focus of the statute from protecting competition to protecting individual disfavored buyers from the loss of business to favored buyers. 8 Judge Mikva cited Morton Salt 's language that "Congress intended to protect a merchant from competitive injury attributable to discriminatory prices." Id. (quoting Morton Salt, 334 U.S. at 49, 68 S.Ct. at 829-30). In his view, this intent to protect individual merchants explains why Morton Salt permits a finding of injury to competition based on a showing of injury to an individual competitor victimized by the discrimination. Id. (citing Morton Salt, 334 U.S. at 49, 68 S.Ct. at 829-30). Judge Mikva argued that this language in Morton Salt shows that the Court interpreted Robinson-Patman as dispensing with the need to show injury to competition. Id. at 1154. Finally, Judge Mikva noted that the Supreme Court had once addressed the issue of how to rebut the Morton Salt inference by creating a "specific type of rebuttal evidence"--"evidence breaking the causal connection between a price differential and [an individual competitor's] lost sales or profits"--and thus implicitly rejecting other methods for overcoming the inference. Id. (quoting Falls City Indus., Inc. v. Vanco Beverage, Inc., 460 U.S. 428, 435, 103 S.Ct. 1282, 1288-89, 75 L.Ed.2d 174 (1983)). 9 Judge Mikva found support for his position in the legislative history: 10 The existing law has in practice been too restrictive in requiring a showing of general injury to competitive conditions ... whereas the more immediately important concern is in injury to the competitor victimized by the discrimination. Only through such injury in fact can the larger, general injury result. Through this broadening of the jurisdiction of the act, a more effective suppression of such injuries is possible and the more effective protection of the public interest at the same time is achieved. 11 Id. at 1158 (quoting H.R.Rep. No. 2287, 74th Cong., 2d Sess. 8 (1936)). Judge Mikva chastised the majority for interpreting Robinson-Patman according to its own version of antitrust policy, when the statutory language and the legislative history both show that Congress has already adopted its own policy of protecting individual merchants as a means of protecting competition. Id. at 1153. 12 In Feeser, the Third Circuit agreed with Judge Mikva that the Robinson-Patman Act proscribes secondary-line price discrimination that injures individual competitors. Feeser, 909 F.2d at 1533. The Third Circuit pointed out that the language "may be substantially to lessen competition or tend to create a monopoly," which had been part of the 1914 version of the Clayton Act, refers generally to broad impacts on competition, while the Robinson-Patman Act added the language "to injure, destroy, or prevent competition with any person who either grants or knowingly receives the benefits of such discrimination" specifically to protect the ability of individual companies to compete. Id. at 1532. 13 The Third Circuit also found support in the legislative history. First, the Third Circuit cited the Senate Report to show that Congress had intended to target injury to individual competitors as an appropriate means to protect competition in the long run, i.e. "to catch the weed in the seed." Id. at 1533 (quoting S.Rep. No. 1502, 74th Cong., 2d Sess. 4 (1936)). Second, the floor statement of a congressman in charge of the Conference Report for the Robinson-Patman Act shows that the language "to injure, destroy, or prevent competition with any person" was added to prohibit injury to the "immediate competition with the grantor or grantee" of a price discrimination. Id. (quoting 80 Cong.Rec. H9417 (1936) (statement by Rep. Utterback)). Thus, the Third Circuit's reading of the legislative history is in accord with Judge Mikva's reading that Congress amended the Clayton Act to expand its protection to individual competitors. 14 The Third Circuit also relied on Morton Salt in stating that it is "self-evident" that when sellers sell their goods to some customers substantially cheaper than they sell like goods to the competitors of these customers, there is a reasonable possibility that competition may be harmed. Id. (citing Morton Salt, 334 U.S. at 50-51, 68 S.Ct. at 830-31). It also cited dictum from Monahan's Marine, Inc. v. Boston Whaler, Inc., 866 F.2d 525, 529 (1st Cir.1989) (Breyer, J.), that a Robinson-Patman claim differs in nature from a Sherman Act claim because the Sherman Act protects competition, while the Robinson-Patman Act protects "those who compete with a favored seller, not just the overall competitive practice." Id. at 1535 (quoting Monahan's Marine, 866 F.2d at 529).3II 15 We agree with Judge Mikva and the Third Circuit. We are persuaded that the language that the Robinson-Patman Act added to § 2(a) of the Clayton Act--"to injure, destroy, or prevent competition"--expresses Congressional intent to protect individual competitors, not just market competition, from the effects of price discrimination. As we said in Rebel Oil Co. v. Atlantic Richfield Co., 51 F.3d 1421, 1446 n. 18 (9th Cir.1995) (dicta), "[t]he purpose of this passage was to relieve secondary-line plaintiffs--small retailers who are disfavored by discriminating suppliers--from having to prove harm to competition marketwide, allowing them instead to impose liability simply by proving effects to individual competitors." See also 3 Earl W. Kintner & Joseph P. Bauer, Federal Antitrust Law §§ 19.2, 22.4 (1983) (addition of phrase "to injure, destroy, or prevent competition with any person" was to expand protection of original Clayton Act to individual competitors). 16 We also agree with the Third Circuit and Judge Mikva that the legislative history confirms that Congress amended the Clayton Act specifically to extend its protection to individual competitors. Congress passed the Robinson-Patman Act primarily out of concern for small retailers who could not compete with large chain-store purchasers because they could not buy in quantity. See Falls City, 460 U.S. at 436, 103 S.Ct. at 1289-90; FTC v. Morton Salt Co., 334 U.S. at 49, 68 S.Ct. at 829-30. The House Report shows that the Act was animated by concern for "the survival of independent merchants, manufacturers, and other businessmen." H.R.Rep. No. 2287, 74th Cong., 2d Sess. 3 (1936); see also Lawrence Anthony Sullivan, Handbook of the Law of Antitrust § 225(a) (finding support in legislative history for construing Robinson-Patman Act to protect individual small competitors irrespective of efficiency concerns). III 17 Sylvania also relies upon Foremost Pro Color, Inc. v. Eastman Kodak Co., 703 F.2d 534, 548 (9th Cir.1983), cert. denied, 465 U.S. 1038, 104 S.Ct. 1315, 79 L.Ed.2d 712 (1984), a secondary-line case which stated that the Robinson-Patman Act, like other antitrust laws, must be construed to protect competition, not individual competitors.4 Foremost Pro held that to survive a Rule 12(b)(6) motion, a plaintiff must allege injury to competition generally, not just injury to a specific competitor, because "[i]njury to a specific competitor is not enough from which a court may infer that an alleged price discrimination may 'substantially' injure competition." Id. Although Foremost Pro had no occasion to address the issue presented in this appeal--whether an inference of competitive injury may be overcome by a showing of no actual harm to competition--its sweeping statement that the Robinson-Patman Act must be construed to protect competition, not competitors, lends support to Sylvania's position that a defendant in a secondary-line price discrimination case must be permitted to make a showing of no harm to competition. 18 We believe, however, that Foremost Pro is no longer the law of this circuit because it was overruled, sub silentio, by Hasbrouck v. Texaco, Inc., 842 F.2d 1034, 1041 (9th Cir.1987), aff'd, 496 U.S. 543, 110 S.Ct. 2535, 110 L.Ed.2d 492 (1990). Without discussing Foremost Pro, Hasbrouck held that harm to competition in a secondary-line Robinson-Patman case may be inferred from evidence of harm to an individual competitor. Id. In so holding, Hasbrouck relied on Falls City, 460 U.S. at 435-36, 103 S.Ct. at 1288-90, a case decided after Foremost Pro. Falls City held that injury to competition may be inferred from proof of a substantial price discrimination between competing purchasers over time. Id. at 435, 103 S.Ct. at 1288-89. By relying on Falls City rather than on Foremost Pro, Hasbrouck appears to have interpreted Falls City as undermining the holding of Foremost Pro. See Landreth v. Internal Revenue Service, 859 F.2d 643, 648 (9th Cir.1988) (three judge panel may reconsider Ninth Circuit precedent if intervening Supreme Court decision undermines that precedent). We note in addition that Hasbrouck's holding is consistent with Morton Salt's reasoning that the Robinson-Patman Act "was intended to justify a finding of injury to competition by a showing of 'injury to the competitor victimized by the discrimination.' " Morton Salt, 334 U.S. at 49, 68 S.Ct. at 830 (quoting S. Rep. No. 1502, 74th Cong., 2d Sess. 4 (1936)). Because we are no longer bound by the reasoning of Foremost Pro, we are free to decide the question left open by Morton Salt, Falls City, and Hasbrouck, i.e. whether proof of harm to an individual competitor gives rise to an irrebuttable presumption of competitive injury in a secondary-line price discrimination case. IV 19 Finally, Sylvania relies on Brooke Group Ltd. v. Brown & Williamson Tobacco Corp., 509 U.S. 209, 113 S.Ct. 2578, 125 L.Ed.2d 168 (1993). Brooke Group, a primary-line price discrimination case, reasons that "[b]y its terms, the Robinson-Patman Act condemns price discrimination only to the extent it threatens to injure competition," and therefore holds that the Act must be construed consistently with the broader policies of the antitrust laws to protect competition, not competitors. Id. at 219-21, 113 S.Ct. at 2586. Sylvania claims that the Brooke Group reasoning applies with equal force to secondary-line price discrimination claims. 20 We decline to extend the reasoning of Brooke Group to secondary-line cases because of the significant differences between primary- and secondary-line claims. First and foremost, Congress' concern for the fate of individual competitors, as expressed in the legislative history of the Robinson-Patman Act, focussed on secondary-line, not primary-line competition. Coastal Fuels of Puerto Rico, Inc. v. Caribbean Petroleum Corp., 79 F.3d 182, 191-92 (1st Cir.), cert. denied, --- U.S. ----, 117 S.Ct. 294, 136 L.Ed.2d 214 (1996); Henry v. Chloride, 809 F.2d 1334, 1339 (8th Cir.1987); 3 Phillip Areeda & Donald F. Turner, Antitrust Law p 720c (1978). Since the original Clayton Act addressed only primary-line injury, Congress passed the Robinson-Patman Act to add protection against secondary-line injury, more specifically against injury to small retailers. Coastal Fuels, 79 F.3d at 192. Thus, the language added to the Clayton Act by the Robinson-Patman Act, and the legislative history that expresses Congress' solicitude for individual buyers, are still applicable in secondary-line cases, even though they are not applicable in primary-line cases after Brooke Group. See id. at 191-93 (Morton Salt's inference of competitive injury still good law after Brooke Group because Brooke Group applies only to primary-line injury cases). Second, Brooke Group said that Robinson-Patman protects competition, not competitors, in the context of analogizing primary-line price discrimination claims to Sherman Act predatory pricing claims. The same analogy may not be made to secondary-line price discrimination claims. Id. at 193. Conclusion 21 We hold that in a secondary-line Robinson-Patman case, the Morton Salt inference that competitive injury to individual buyers harms competition generally may not be overcome by proof of no harm to competition. 22 We AFFIRM the judgment on the Robinson-Patman claim. 1 All other issues raised by Sylvania's appeal are disposed of in a memorandum disposition filed herewith 2 Secondary-line price discrimination affects competition between buyers of a discriminating seller's goods, while primary-line discrimination affects competition between a discriminating seller and others who sell the same goods 3 Several other circuits have addressed this issue, though without the same depth of analysis found in Boise and Feeser. Compare Alan's of Atlanta, Inc. v. Minolta Corp., 903 F.2d 1414, 1418 n. 6, 1426 (11th Cir.1990) (Robinson-Patman Act focuses on injury to competitors, not to competition), with Richard Short Oil Co. v. Texaco, Inc., 799 F.2d 415, 420 (8th Cir.1986) (alternative holding) (Robinson-Patman Act focuses on injury to competition, not to competitors), and Motive Parts Warehouse v. Facet Enterprises, 774 F.2d 380, 395 (10th Cir.1985) (same) 4 Foremost Pro was later cited with approval by the D.C. Circuit in Boise, 837 F.2d at 1143	{ "pile_set_name": "FreeLaw" }
Filed 5/20/14 P. v. Villa CA2/4 NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115. IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA SECOND APPELLATE DISTRICT DIVISION FOUR THE PEOPLE, B252469 Plaintiff and Respondent, (Los Angeles County Super. Ct. No. MA047883) v. MARCELINO VILLA, Defendant and Appellant. APPEAL from an order of the Superior Court of Los Angeles County, Christopher G. Estes, Judge. Affirmed. California Appellate Project, Jonathan B. Steiner, Executive Director, and Richard B. Lennon, under appointment by the Court of Appeal, for Defendant and Appellant. No appearance for Plaintiff and Respondent. On March 2, 2010, defendant Marcelino Villa entered into a negotiated disposition in which he pleaded no contest to a felony violation of Penal Code section 4573.61 (unauthorized possession of a controlled substance in prison) and admitted a prior felony strike conviction. In return, defendant received a four-year state prison sentence. On April 4, 2013, defendant filed a handwritten “petition for a sentence reduction,” claiming he was “not familiar with the proceedings enough to understand, at that time, that the ‘plea’ was actually NOT the same as what attorney Hovsepyan had earlier declared [sic] with me.” Defendant also argued that he was entitled to a reduction of his sentence under the Three Strikes Reform Act, added by Proposition 36. (§ 1170.126.)2 On September 19, 2013, the trial court denied defendant’s “petition for modification of sentence.” With regard to the March 2, 2010 negotiated disposition, the trial court stated in its September 19, 2013 order that, pursuant to the parties’ agreement, it “approved the negotiated plea bargain and the defendant was sentenced to four years in state prison. [¶] The court has read and considered the transcript of the March 2, 2010 proceedings wherein the court discussed the negotiated disposition, the constitutional 1 All further statutory references are to the Penal Code. 2 “On November 6, 2012, voters approved Proposition 36, the Three Strikes Reform Act of 2012 (the Act). Under the three strikes law (Pen. Code, §§ 667, subds. (b)-(i), 1170.12) as it existed prior to Proposition 36, a defendant convicted of two prior serious or violent felonies would be subject to a sentence of 25 years to life upon conviction of a third felony. Under the Act, however, a defendant convicted of two prior serious or violent felonies is subject to the 25-year-to-life sentence only if the third felony is itself a serious or violent felony. If the third felony is not a serious or violent felony, the defendant will receive a sentence as though the defendant had only one prior serious or violent felony conviction, and is therefore a second strike, rather than a third strike, offender. The Act also provides a means whereby prisoners currently serving sentences of 25 years to life for a third felony conviction which was not a serious or violent felony may seek court review of their indeterminate sentences and, under certain circumstances, obtain resentencing as if they had only one prior serious or violent felony conviction. According to the specific language of the Act, however, a current inmate is not entitled to resentencing if it would pose an unreasonable risk of danger to public safety.” (People v. Superior Court (Kaulick) (2013) 215 Cal.App.4th 1279, 1285-1286, fn. omitted.) 2 rights and consequences with the defendant. The defendant acknowledged that he understood his rights and the consequences of his plea and admission. [¶] The court finds no legal basis to grant the relief requested. Therefore, the petition for modification of sentence is denied.” On October 21, 2013, defendant filed a notice of appeal from the September 19, 2013 order denying his petition for modification of sentence.3 On December 12, 2013, we appointed counsel to represent defendant. On December 13, 2013, we filed an order stating that the appeal was “limited to non- certificate issues.” (See § 1237.5; People v. Johnson (2009) 47 Cal.4th 668, 677-678 [no certificate of probable cause is required where the defendant is challenging errors that occurred after his plea was entered as to the penalty to be imposed].) After reviewing the record, counsel filed an opening brief requesting this court to independently review the record pursuant to the holding of People v. Wende (1979) 25 Cal.3d 436, 441. On 3 The question whether an appeal may be taken from the order denying a petition to recall a sentence pursuant to section 1170.126 is pending before the Supreme Court in: (1) Teal v. Superior Court (2013) 217 Cal.App.4th 308, review granted July 31, 2013, S211708 (Second Dist., Div. Seven; order denying § 1170.126 petition is not appealable, but appellate court may treat the appeal as a petition for writ of mandate or habeas corpus); (2) People v. Hurtado (2013) 216 Cal.App.4th 941, review granted July 31, 2013, S212017 (Second Dist., Div. One; denial is appealable because Act confers substantial right); (3) People v. Leggett (2013) 219 Cal.App.4th 846, review granted December 18, 2013, S214264 (Third Dist.; order denying § 1170.126 petition is not appealable if petition was erroneously filed by individual whose sentence is based on conviction for serious or violent felony, but is appealable in all other instances); and (4) People v. Wortham (2013) 220 Cal.App.4th 1018, review granted January 15, 2014, S214844 (First Dist., Div. Four; order denying a § 1170.126 petition is appealable). Most recently, in In re Martinez (2014) 223 Cal.App.4th 610, 614, 615, review granted May 14, 2014, S216922, the Fourth District, Division One, acknowledged this split of authority and exercised its discretion to treat the defendant’s appeal as a writ of habeas corpus. In People v. Haynes (Apr. 24, 2014, F067275) ___ Cal.App.4th ___ [2014 Cal. App. LEXIS 358], the Fifth District held that a denial of a request for resentencing under section 1170.126 is appealable. Rather than add to the appealability debate while the matter is pending before our Supreme Court, we conclude that because the order is reviewable, whether by appeal or writ petition, it is appropriate to address the merits. 3 February 3, 2014, we directed counsel to send the record on this appeal and a copy of the opening brief to defendant. On that date, we also notified defendant that he had 30 days within which to personally submit any contentions or issues that he wished us to consider. We have received no response from him. We have examined the entire record and determined that defendant, who received a four-year prison sentence rather than an indeterminate sentence that falls under the provisions of section 1170.126, is not eligible for a reduction of his sentence under that statute. (See § 1170.126, subds. (b) & (e)(1).) We are satisfied that defendant’s attorneys have fully complied with their responsibilities and that no arguable appellate issue exists. (Smith v. Robbins (2000) 528 U.S. 259, 278; People v. Kelly (2006) 40 Cal.4th 106, 110.) DISPOSITION The order is affirmed. NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS EDMON, J.* We concur: EPSTEIN, P. J. MANELLA, J. *Judge of the Los Angeles Superior Court, assigned by the Chief Justice pursuant to article VI, section 6 of the California Constitution. 4	{ "pile_set_name": "FreeLaw" }
615 S.W.2d 831 (1981) CITY OF HOUSTON, Appellant, v. R. W. WALKER, Appellee. No. 17788. Court of Civil Appeals of Texas, Houston (1st Dist.). February 12, 1981. Rehearing Denied March 12, 1981. 832 Dale M. Tingleaf, Sr. Asst. City Atty., Adolph R. Guerra, Jr., Asst. City Atty., Houston, for appellant. Kirklin, Boudreaux & Joseph, Charles B. Kirklin, Houston, for appellee. Before COLEMAN, C. J., and PEDEN and SMITH, JJ. COLEMAN, Chief Justice. This is a suit for damages arising under Title 42, § 1983, United States Code. Judgment was entered on a jury verdict for both actual and exemplary damages. In 1972, appellee purchased lots 211 and 212 in block 7 of Colonial Gardens, an addition in Harris County, according to the map or plat thereof recorded in Volume 13, Page 4 of the Map Records of Harris County, Texas from Howard H. Maughn and wife, Lurline M. Maughn. The deed provided that the conveyance was made subject to the restrictions, conditions, easements and covenants, if any, applicable to and enforceable against the above described property as reflected in the records of the County Clerk of Harris County, Texas. Mr. Walker purchased this land as a building site for a commercial building and had already made arrangements for the sale of the lots together with the building to be erected thereon. Mr. Walker owned some 86% of the stock of a corporation through which he engaged in construction of metal buildings. This corporation submitted plans and specifications to the City's Planning Commission for the commercial building to be erected on the lots which he had just purchased. The corporation was granted a permit and proceeded to prepare the lots for construction. The Corporation was in the process of preparing the foundation when served with a "stop order" on January 22, 1972. Article 974a-2, V.A.T.S., provides in § 3(a), thereof that a person who desires a commercial building permit shall file with his application a certified copy of any instrument which contains a restriction on the use of or construction on the property described in the application, together with a certified copy of any amendment, judgment or other document effecting the use of the property. Paragraph (b) of Section 3 provides that when an applicant has complied with this act and local ordinances relating to commercial building permits, the department shall issue a permit for construction or repair which conforms with all restrictions relating to the use of the property described in the application. Section 5(c) provides that any commercial permit obtained without full compliance with the Act is void. Section 7 of the Act provides that an administrative refusal to issue a commercial permit on the grounds of violation of restrictions contained in a deed or other instrument shall be reviewable by a court of appropriate jurisdiction and that in the event of changed conditions within a subdivision or any other legally sufficient 833 reason that restrictions should be modified, a person refused a commercial building permit can petition a court of appropriate jurisdiction to alter the restrictions to better conform with present conditions. Section 10-3 of Article 1, Chapter 10, of the Code of Ordinances of the City of Houston, Texas, provides that no building permit shall be issued until an affidavit containing designated language has been submitted to the building official. The affidavit states that the proposed construction, alteration or repair described in the application and the use to which the improvement will be put will not violate any deed restriction or restrictive covenants running with the land, which restriction concerns the health, safety or general welfare of the citizens of the City of Houston. The affidavit must also contain a statement that should such construction or such use be in violation of any deed restriction or restrictive covenant running with the land to which the property is subject, that the building permit shall automatically become void and have no effect, without the necessity of any action on the part of the City of Houston, Texas, or any property owner in any subdivision in which such land is located. Section 3 of Article 974a-2, V.A.T.S., places the burden on the person desiring the building permit to ascertain whether or not there are one or more written instruments filed in the office of either the District or County Clerks which contains a restriction on the use of the property. The statute does not exempt from this requirement instruments which have been held ineffective by a court of law. On the contrary it requires that a copy of such a judgment also be filed. The copies of the instruments required to be filed must be certified copies of recorded instruments. If the applicant fails to comply with these requirements the permit issued to him is void. There is no evidence that an instrument containing restrictions on the use of all of the lots contained in the Colonial Gardens Subdivision was filed for record by the subdivider. A map or plat of the subdivision was filed and recorded in Volume 13, p. 4 of the Map Records of Harris County, Texas. Several deeds executed by Allen C. Hutcheson conveyed lots out of that subdivision. Printed on these deeds were identical "residence building restrictions." The deeds offered into evidence state that a conveyance is made subject to the following restrictions and reservations: "Residence building restrictions: All lots except lots nos. (1), (42), (43), (44), (119), (120), (180), (181) are designated as residence lots and restricted for residence purposes only." A deed dated October 26, 1937, by which Allen C. Hutcheson conveyed lots 211 and 212, lot no. 7, Colonial Gardens, "as shown by plat" to Austin Copeland contained these restrictions and is recorded in Volume 2694 at page 561 of the Deed Records of Harris County, Texas. In plaintiff's original petition, which was filed on March 9, 1973, Mr. Walker alleged under oath: Your Plaintiff would further show that property owned by him on which he is erecting commercial improvements is within a subdivision affected by changing conditions which physically alter, amend and change, modify and exempt same from the original restrictions placed upon said subdivision when platted and, therefore, falls within Article 948a subsection 7 of V.A.T.S. In his prayer he asks that the restrictions "recorded" in Volume 2694, Page 561 of the Deed Records be set aside; that same may affect the plaintiff's property and be determined invalid and unenforceable. In the seventh amended original petition, filed after the case was called for trial, the plaintiff alleged: [T]he property owned by him upon which he was erecting commercial improvements was and is within a subdivision, affected by changing conditions which physically alter, amend and change, modify and exempt same from the original restrictions placed upon said subdivision when platted and, therefore, these deed restrictions were and are unenforceable and invalid. 834 At the trial Mr. Walker introduced into evidence a plat of the Colonial Gardens subdivision on which he had marked all lots which he contended were being used for business purposes. He prepared this exhibit within two or three weeks after the stop order was issued. He used a recorded instrument to determine the deed restrictions. The restrictions in this instrument were the same as those found in the conveyance from Hutcheson to Copeland. Mr. Walker testified that the restrictions found in this deed were the same for all the lots in the subdivision. He testified that he made a business judgment at the time he purchased the lot that the deed restrictions would be held null and void. He further testified that he knew that if he erected a building in violation of valid business restrictions there was the possibility that he might be required to tear the building down. He stated that in this case he was prepared to take the risk. The deed conveying lots 211 and 212 to Mr. Walker recited that the conveyance was subject to the restrictions "if any" on record. The restrictions were not set out in the deed. The City did not introduce a chain of title from Allen C. Hutcheson to Mr. Walker. However, the City did prove that at the time Mr. Walker applied for a commercial building permit in the City of Houston there was on file in the District Clerk's office an instrument which contained a restriction on the use of the property described in his application. The issue is not whether the restrictions placed on the property by the instrument were valid at the time the application was made, but whether there was an instrument containing restrictions. Both of the building permits for lots 211 and 212 obtained by Mr. Walker were obtained without full compliance with Article 974a-2, V.A.C.S., and were void. Mr. Walker contends that the City does not have the power to issue "stop orders" or even to deny building permits on the basis of a determination by the City that the relevant property is subject to enforceable deed restrictions, because the statute that the City relies on for such authority, § 974a-2, Tex.Rev.Civ.Stat., violates the Texas Constitution by purporting to confer judicial powers on executive officials in violation of Article 2, § 1 of the Constitution of the State of Texas. This act provides that the department shall issue a permit for construction which conforms with all restrictions relating to the use of the property described in the application. The implication is that should the application be for construction or repair which does not conform with the restrictions relating to the use of the property the City would be authorized by the act to deny the application. The act provides that an administrative refusal to issue a commercial permit on the grounds of violation of restrictions contained in a deed or other instrument shall be reviewable by a court of appropriate jurisdiction. Rather than conferring judicial powers on executive officials, this act specifically denies the City officials the right to determine whether or not deed restrictions are enforceable. They must assume that they are enforceable until they are supplied with a court judgment to the contrary. The evidence establishes that the agency of the City of Houston which has the authority and responsibility for issuing commercial building permits was never furnished a certified copy of the instrument which contained the restrictions on the use of the property owned by Mr. Walker. The two permits which were issued on the basis of the information furnished to the department were void. The department properly notified Mr. Walker that the permits were no longer considered good by the department. Mr. Walker should not be heard to complain of the issuance of the stop order by the City officials. On receipt of this order Mr. Walker stopped further building and within a few weeks instituted this suit which then had as its purpose a determination of whether or not the restrictions were valid. Mr. Walker was charged with notice of the statute authorizing the City to deny a commercial building permit in an area restricted to residential uses. At the time 835 he purchased this property he was charged with notice of the fact that he was required to file certified copies of all instruments containing a restriction on the use of the property and that unless he complied with the act any permit which he received would be void. It cannot be seriously contended at this late date that covenants restricting the use of a tract of land for the benefit of another tract owned by the same person are illegal or unenforceable in the courts. Article 974a-1, V.A.T.S., merely authorizes incorporated cities, towns or villages to assist in the enforcement of these restrictive covenants. The act is a regulation of the right to build commercial buildings on city property. The burden placed on the property by the act did not cause a disproportionate diminution in economic value and certainly not a total destruction of the value. In enacting this law the State was acting as a neutral governmental arbitrator to resolve conflicts between its citizens. It provides a method for the orderly settlement of potential disputes between its citizens by court action. It constitutes a valid exercise of governmental power. City of Austin v. Teague, 570 S.W.2d 389 (Tex.1978). The determination of whether or not restrictive covenants on the use of land are valid and enforceable is a proper subject for judicial action. City of Houston v. Emmanuel United Pentecostal Church, Inc., 433 S.W.2d 680 (Tex.1968). The statute is not void as being violative of § 1, Art. 2 of the Constitution of the State of Texas providing for the division of the power of government into three departments: Legislative, Executive, and Judicial. Gulf Refining Co. v. City of Dallas, 10 S.W.2d 151 (Tex.Civ. App.-Dallas, 1928, writ dism'd). The statute is not unconstitutional as authorizing the taking, damaging, and destroying of property without due process or as denying equal protection of the law. Lombardo v. City of Dallas, 124 Tex. 1, 73 S.W.2d 475 (1934). An applicant for a commercial building permit in the City of Houston is under the burden of showing that there are no restrictions on the property prohibiting a commercial use. Section 10-3, Article 1, Chapter 10, Code of Ordinances of the City of Houston, Texas provides: No building permit shall be issued until an affidavit has been submitted to the building official stating that construction, alteration or repair for which the building permit is sought, and the use to which the improvement is to be put will not violate any deed restrictions or restrictive covenants running with the land to which the property may be subject.... The ordinance does not authorize the building official to make a determination as to whether deed restrictions or restrictive covenants running with the land are valid. We are cited to no ordinance authorizing an administrative decision as to the validity of a restriction on the use of property. The ordinance contemplates that the validity of use restrictions on property be determined by court action. The City ordinances are not invalid as denying procedural due process or authorizing an arbitrary and capricious use of power. Neither does the ordinance provide a method for depriving a property owner of his property without due process of law. This case was submitted to a jury on special issues. In answer to special issue no. 1 the jury found that the "residence purposes only" deed restrictions as to the Colonial Gardens Subdivision was not enforceable in January of 1973 and in April of 1978. The evidence shows that stop work orders were issued during those months. In answer to special issue no. 2 the jury found that the issuance of the stop work orders was arbitrary and capricious. The jury further found that the issuance of the stop work orders was the proximate cause of damage to Mr. Walker and found the amount of the damage. The jury found that two members of the City Legal Department acted willfully, intentionally and maliciously in issuing the stop orders, and awarded Mr. Walker exemplary damages. It appears that the judgment rests on the finding that the deed restrictions were unenforceable, and thus, the issuance of the *836 stop work order was arbitrary and capricious. In effect this places the burden on the City of making an administrative decision as to the validity of the deed restrictions. In entering a judgment based on these special issues the court failed to give effect to the provision of Article 974a-2, V.A.T.S., declaring void a commercial permit obtained without full compliance with the act. The issuance of a stop work order to one proceeding with construction under a void permit is not an arbitrary and capricious action. The plaintiff did not allege a cause of action based upon any fault on the part of the City of Houston in failing or refusing to issue to him a commercial building permit. No issues were requested or submitted on such a cause of action. The plaintiff alleged in general terms a cause of action under Title 42 U.S.C. § 1983, which provides: Every person who, under color of any statute, ordinance, regulation, custom, or usage of any state or territory, subjects, or causes to be subjected, any citizen of the United States or other person within the jurisdiction thereof to the deprivation of any rights, privileges, or immunity secured by the Constitution and laws shall be liable to the party injured in an action at law, suit in equity, or other proper proceeding for redress. Mr. Walker has no right or privilege protected by the Constitution of the United States to proceed under a commercial building permit declared void by a valid law of the State of Texas for failure to furnish required information to the agency authorized to issue the permit. In order to prevail against a political subdivision on a § 1983 cause of action the plaintiff must prove that the action complained of must constitute a custom or policy of the local government which violated a constitutional right enjoyed by the plaintiff. Issues were not submitted to establish that the City officials alleged to have issued the stop orders were authorized to do by written law or by custom or usage. A local government may not be sued under § 1983 for an injury inflicted solely by its employees or agents. In enacting § 1983 Congress did not intend municipalities to be held liable unless action pursuant to official municipal policy of some nature caused a constitutional tort. A city may not be held liable solely because an employee commits an actionable tort. It is when execution of a government's policy or custom, whether made by its lawmakers or by those whose edicts or acts may fairly be said to represent official policy, inflicts injury that the government as an entity is responsible under § 1983. Monell v. Dept. of Social Services of City of New York, 436 U.S. 658, 98 S.Ct. 2018, 56 L.Ed.2d 611 (1978); Familias Unidas v. Briscoe, 619 F.2d 391 (5th Cir. 1980). While it is not entirely clear there is support in the record for a finding that the "stop work" order was issued by the public works department at the suggestion of an Assistant City Attorney. There is no evidence to support a finding that the lawyers in the City Attorney's office had authority to make policy or that similar action was so widespread as to establish custom. Under the facts of this case, the issuance of the stop orders did not amount to a compensable taking under Article 1, § 17 of the Texas Constitution, as interpreted in City of Austin v. Teague, 570 S.W.2d 389 (Tex.1978). The plaintiff's cause of action was not based upon an arbitrary refusal to issue a building permit. In addition the evidence shows that he failed to submit a proper application for such building permit. Building permits obtained by plaintiff Walker were void upon issuance due to his failure to comply with Article 974a-2, V.A. T.S., hence, the City, as a matter of law, cannot be liable in damages for stopping work which was proceeding under a void permit. The City's points of error 1 through 4 are sustained. The judgment of the trial court is reversed and judgment is here rendered that the plaintiff take nothing.	{ "pile_set_name": "FreeLaw" }
96 Cal.App.2d 112 (1950) MARY JENSEN, Petitioner, v. SUPERIOR COURT OF LOS ANGELES COUNTY, Respondent. Civ. No. 17375. California Court of Appeals. Second Dist., Div. Three. Feb. 17, 1950. Lane & McGinnis for Petitioner. William E. Simpson, District Attorney, and Jere J. Sullivan, Deputy District Attorney, for Respondent. SHINN, P. J. Petitioner Mary Jensen was named as one of four defendants joined in an indictment charging the abortion and murder of a 17-year-old girl whom we shall refer to as Miss B. She made a motion under section 995, Penal Code, to quash the indictment and the same having been denied, she has applied for prohibition upon the ground that the indictment is void as to her because of the absence of any evidence before the grand jury to connect her with the charged offenses. The salient facts are stated in the companion case of Bunker v. Superior Court, ante, p. 107 [214 P.2d 825], this day decided, and are referred to as supplementing the facts to be hereinafter stated. [1a] The evidence before the grand jury, insofar as it relates in any manner to petitioner, consists of testimony as to the following facts: Petitioner was a nurse employed by Dr. Frank Bunker at his office at 4230 South Figueroa Street in Los Angeles; Mrs. B, mother of deceased, testified that about 6 or 7 o'clock in the evening of May 20th, she received a telephone call from someone who did not identify himself, but whom she believed to be Dr. Eisoff, telling her to have her daughter at 4230 South Figueroa at 7:30 the next morning. The caller also stated, "When you get there, say you are Dr. Arons' patient." These instructions were followed. Upon arrival at the stated address, they were met by Mary Jensen and Dr. Leonard Arons. Mary told them to get Miss B undressed, which they did, putting a hospital nightgown on her. Dr. Arons came in and felt the girl's stomach. At his direction, Mary also felt her stomach. As she did so, Dr. Arons said, "Here, feel here. Oh, nothing to it. That's just liquid." The parents were then taken to a separate room where the proposed abortion was discussed, and where the father paid Dr. Arons $500. Mary Jensen was not present when the money was paid, but as they were leaving this room, Dr. Arons asked Mary, "Did you give her a capsule?" The parents went home. About 10 a. m., Mrs. B received a phone call from Mary: "She said, 'Oh, Mrs. [name], I think you better come down.' She said, 'The doctor decided we needed surgery. ... They're going to take her to the South Hoover 114 Hospital, and doctor is over there now,' she said, 'making arrangements for surgery.' And she said, 'When they take her over there she will go in as an acute appendectomy.' I said, 'Mary, tell me first, is there anything wrong?' She said, 'No, don't worry, just come down.' And she did say that when [name] came out of the ether to tell her that if the nurses asked her anything to say it was appendicitis." The parents went back to Dr. Arons' office. Mary met them, and said "nothing was wrong," but "the doctor decided she better be taken to the hospital." The ambulance came, and Mary said to lay her down flat, for "it's an acute appendectomy." The patient was taken away. At Mary's request the parents signed a statement releasing Dr. Bunker from liability in connection with the case. Later, at the hospital, when the girl came out of the ether, she said, "Where is Mary? Mother, Mary is awfully nice." Mr. B, the father, testified that late in the afternoon of May 20th they received a phone call from an unidentified person who stated that an appointment had been arranged for Miss B for 7:30 the next morning "at a clinic at 42nd and Figueroa," and that they were to "ask for Mary" and say that they had "come to see Dr. Arons." They followed these instructions. He did not learn that the address to which they took their daughter was that of Dr. Bunker's offices until after the attempted abortion took place. When Dr. Arons entered the office to speak to them, Mary left the room. Dr. Arons said he would "pack" the patient and it would not be dangerous at all. He then asked for the money, and was paid $500 in cash. Dr. Bluechel: At about 9:45 a. m., May 21st, he received a phone call from Mary, the nurse at Dr. Bunker's office. Mary "stated that Dr. Arons, who was working in Dr. Bunker's office, had a surgical case, acute appendicitis, and wanted to know if I would operate." She did not mention the name of the patient, nor any treatment that Dr. Arons might have given the patient. Officer Jokisch: He and his partner arrested Mary on May 30th. As they were admitted to her apartment the phone rang. It was an attorney. Mary spoke to him, and then stated that "she had been advised not to give us a statement or not to talk to us regarding this case." She was hysterical and crying, and, except for giving her name and occupation, refused to answer any questions without the advice of her attorney. [2] The law is clear that in this type of proceeding the courts may not inquire into the sufficiency of evidence to support an indictment, provided there is some evidence to support 115 it; but an indictment is void, and confers no jurisdiction upon a trial court to proceed with trial, where there is no evidence to connect the accused with the crime charged. (Greenberg v. Superior Court, 19 Cal.2d 319 [121 P.2d 713].) In determining whether there is such evidence to support the indictment of Mary Jensen, we may assume that the uncorroborated testimony of the parents, who were accomplices (People v. Wilson, 25 Cal.2d 341, 346 [153 P.2d 720]; People v. Stone, 89 Cal.App.2d 853, 870 [202 P.2d 333]; People v. Powell, 34 Cal.2d 196, 201, 203 [208 P.2d 974]), would be sufficient to support the indictment if it supplied some evidence of guilt, although such testimony would not by itself justify a conviction. (See Greenberg v. Superior Court, supra, 19 Cal.2d at p. 322, commenting upon In re Kennedy, 144 Cal. 634 [78 P. 34, 103 Am.St.Rep. 117, 1 Ann.Cas. 840, 67 L.R.A. 406]; Stern v. Superior Court, 78 Cal.App.2d 9, 17 [177 P.2d 308]; Abbott v. Superior Court, 78 Cal.App.2d 19, 21 [177 P.2d 317].) Our inquiry is thus confined to the sole question whether the testimony heretofore related, including that of the parents, when considered in relation to the record as a whole, discloses a rational basis for an assumption of Mary Jensen's guilt. It is perhaps trite to observe that the legal, as well as practical, consequences of otherwise identical facts frequently vary as the accompanying context and environment vary. And where the evidence touching the accused is purely circumstantial, as it is here, the weight to be given to each circumstance must be relative to its influence upon the complete picture. These truisms are peculiarly important here in view of the unusual situation which was thrust upon petitioner. Accordingly, in viewing the evidence, it must be constantly remembered that Mary Jensen was Dr. Bunker's nurse, and not Dr. Arons' nurse. There is no evidence whatsoever that she was employed by Dr. Arons, that she was paid by him, nor as to the extent of her services for him. So far as appears, her services, such as they were, might have been included in the arrangement between the two physicians. There was no evidence that she was aware of the nature or details of Dr. Arons' practice, nor evidence as to the nature of the services she was supposed to render him. We have this day held that Dr. Bunker was not shown to have been implicated in the abortion in the slightest degree. There was no evidence that he had any suspicion of illegal practices on the part of Dr. Arons. 116 It must be presumed that his own practices, as well as the services which petitioner was accustomed to render to him, were in all respects lawful and ethical. [1b] With these facts in mind, it becomes exceedingly plain that no evidence was presented to the grand jury from which it might be rationally inferred that Mary Jensen was connected with the offense of which she was charged. As Dr. Bunker's nurse, who remained in his offices while Dr. Arons was using them, it would naturally be her duty under the circumstances to meet Dr. Arons' patients, assist them when requested, make telephone calls at the direction of Dr. Arons, and otherwise carry out his instructions. There is no evidence whatsoever that she knew an abortion was to take place, or that she even knew Miss B was pregnant, except insofar as she might have surmised as much from feeling her body. In connection with the latter testimony, however, we think it of the utmost significance that Dr. Arons said, when he directed Mary to place her hands upon the patient's abdomen. "That's just liquid." Since the mother, the only other person present, was fully aware that her daughter was pregnant, and had come to Dr. Arons to alleviate that condition, the only rational explanation of his remark is that it was designed to deceive and allay any suspicions of petitioner. This testimony, together with the evidence that Arons was careful not to discuss the proposed abortion or permit the money to be paid in the presence of petitioner, and the complete lack of any evidence that petitioner assisted Dr. Arons in any manner other than as stated, leads irresistibly to the conclusion that Dr. Arons surreptitiously attempted to procure the abortion without the knowledge or assistance of Mary Jensen. Every circumstance in evidence which bears upon the question of petitioner's knowledge of Dr. Arons' unlawful acts tends to prove that he concealed their character from her. It is only reasonable to assume that Mary's telephone calls to Dr. Bluechel and the parents were made pursuant to Dr. Arons' instructions. It is difficult to imagine that petitioner spoke of the patient's condition otherwise than as specifically directed by Dr. Arons. Since the representations that the patient had acute appendicitis clearly derived from Arons, and were no doubt made to arrange for surgery and hospitalization, their falsity in no way reflects upon petitioner's innocence. [3] We find no evidence in the record tending to prove that petitioner had knowledge of their falsity. In any event, even if it were permissible (which we 117 do not concede to be the case) to infer knowledge that an abortion had been committed from the equivocal statement of petitioner to the mother that the daughter would enter the hospital "as an acute appendectomy," and the request that she caution her "to say it was appendicitis," such knowledge and ensuing conduct was subsequent to the offense, and accordingly could not provide a basis for holding petitioner to answer for the offense charged. (People v. Viets, 79 Cal.App. 576, 591 [250 P. 588]; People v. King, 30 Cal.App.2d 185, 196 [85 P.2d 928].) In oral argument, the People placed considerable reliance upon petitioner's refusal to answer questions put to her by the arresting officer. It is argued that an inference of guilt arises from failure to deny accusatory statements. The obvious answer is that none of the questions was in any manner accusatory. In any event, the evidence is clear that just prior to her arrest, in the presence of the arresting officers, petitioner was advised by her attorney over the telephone not to speak about the case. In People v. Simmons, 28 Cal.2d 699, 715 [172 P.2d 18], it was said that advice of counsel is one out of many forms of restraint which may bar a free response to accusatory statements. One who has been placed under arrest is under no duty to engage in a general discussion of his conduct with the arresting officer. No legitimate inference of guilt consciousness could possibly be derived from petitioner's silence under the circumstances of the present case. [4] Where the evidence is wholly circumstantial and in every aspect is reasonably consistent with innocence, the mere fact that the circumstances may also be reconciled with guilt will not justify an indictment. The grand jury may not resolve all implications in favor of guilt by substituting a presumption of guilt for one of innocence. [1c] Upon thorough consideration of the record before us, we are compelled to conclude that there is a complete lack of any evidence to support the indictment as to petitioner. The most that can be said for the testimony relied upon by the district attorney is that it may create a suspicion of guilt. Our conclusion has been influenced somewhat by the fact that the grand jury upon the same evidence also returned an indictment against Dr. Bunker. If there had been evidence which justified an indictment of Dr. Bunker we would entertain a different view of the evidence as applied to Mary Jensen who was his employee, and not the employee of Dr. *118 Arons. Our conclusion in the case of Dr. Bunker was that he had no knowledge that Dr. Arons was using his office facilities for illegal purposes. We find no evidence that Dr. Arons did not maintain the same secrecy with respect to Mary Jensen. As we have seen, the only statement he made to her concerning the patient's condition before the operation was calculated to mislead her. It is our opinion that the unwarranted assumption by the grand jury that Dr. Bunker was a participant in the illegal acts of Dr. Arons led to the indictment of Mary Jensen and that she would not have been indicted had Dr. Bunker been exonerated. It is possible, of course, to suspect complicity with Dr. Arons upon the part of both Dr. Bunker and petitioner, but the only view of the evidence which appeals to us as reasonable is that both were the victims of circumstances brought about by the machinations of Dr. Arons. There was insufficient evidence to overcome "the right of a person to be free from prosecution for crime unless there is some rational ground for assuming the possibility that he is guilty." (Greenberg v. Superior Court, supra, 19 Cal.2d at p. 322.) We are convinced that it would be a grave injustice to petitioner if she were required to undergo the ordeal, ignominy, and expense of a trial under the circumstances. It is a proper case for the issuance of a writ of prohibition. Let the peremptory writ issue. Vallee, J., concurred. WOOD, J. I concur in the judgment. I do not approve the statements that an indictment against Bunker was not justified.	{ "pile_set_name": "FreeLaw" }
131 Ga. App. 162 (1974) 205 S.E.2d 450 JERNIGAN v. COLLIER. 48778. Court of Appeals of Georgia. Argued November 7, 1973. Decided March 6, 1974. Albert B. Wallace, William R. L. Latson, for appellant. Long, Weinberg, Ansley & Wheeler, Arnold Wright, Jr., for appellee. HALL, Presiding Judge. On December 18, 1970, Shirley Jernigan filed suit against Lena B. Collier for damages arising out of their March 1, 1969 automobile collision. After answering the suit, Lena B. Collier died on January 14, 1972. Pursuant to Code Ann. § 81A-125 (a)(1), on July 11, 1972 her former counsel suggested her death upon the record. One hundred and eighty days thereafter, no proper defendant had been substituted as allowed by the statute. However, no motion was made nor order taken dismissing the suit. Thereafter, on April 13, 1973 well over a year following the death of the original defendant plaintiff Jernigan paid the costs in the first action and brought a new suit, substantially like the original suit, against Frank S. Collier as executor under the will of Lena B. Collier, deceased. The defendant answered, pleading estoppel, laches, failure to state a claim, the statute of limitation, and asserting that the action was barred because brought after the expiration of the time allowed by the statute for the substitution of parties, and no substitution having been made, the first suit automatically stood dismissed upon the merits. The defendant then moved for judgment on the pleadings and plaintiff moved to strike certain defenses. The trial court, by order dated August 11, 1973 overruled the plaintiff's motion and granted defendant's motion for judgment on the pleadings. Plaintiff appeals from both orders. The sole question here is the proper construction of Code Ann. § 81A-125 (a) (1).[1] The defendant contends 163 that where no substitution is made within 180 days after service of a suggestion of death the action automatically stands dismissed and the dismissal is on the merits. The plaintiff agrees that an automatic dismissal occurred, but contends that the dismissal is not on the merits, citing decisions interpreting former Code Ann. § 3-512 and Code Ann. § 81A-141 (e) (providing for automatic dismissal of cases after five years where no written order is taken.) Both positions are in error to the extent to which they assume that an automatic dismissal occurred. For reasons detailed below, in the absence of an order dismissing the original suit, it is still pending. The Clerk of the Superior Court of Henry County in response to our inquiry has certified that no order of dismissal has been entered in the original suit filed by Shirley Jernigan against Lena B. Collier. It follows therefore that the original action is pending, and the defendant was not entitled to a judgment on his theory of res judicata, although an affirmative defense on the ground of the pendency of the original suit would require that the second suit be dismissed. Code § 3-601. Code Ann. § 81A-125 (a) (1) is practically identical to Federal Rule 25 except for the fact that the period is 90 days under the federal rule whereas it is 180 days under the CPA. Under the federal rule, "If there is no motion for substitution made within the 90 day period, the action may be dismissed. Dismissal is not mandatory, despite the use of the word `shall' in the amended rule, even under these circumstances." 7A Wright & Miller, Federal Practice and Procedure: Civil, p. 659, § 1955. Therefore, dismissal is not automatic. Any dismissal which is not automatic but which may be obtained, necessarily 164 requires, to effect a dismissal, the entry of an order of dismissal. Should such an order be sought and granted, and a dismissal effected, the next question is the effect of the dismissal. "Does a dismissal for failure to make substitution in a timely fashion under present Rule 25 (a) (1) operate as a dismissal upon the merits, which precludes another suit on the same cause of action? What little authority there was under original Rule 25 (a) (1) was in conflict, mainly because of the confused status of the original rule. We believe that a dismissal under present Rule 25 (a) (1) for failure to make timely substitution should operate as a dismissal on the merits. Present Rule 25 (a) (1), unlike original Rule 25 (a) (1), operates to give notice to all interested persons of the fact of the death of a party, and there is no time limit upon substitution until such notice has been given. And even this time limit is now subject to enlargement for good cause shown in the discretion of the court. Thus we think it fair to require that substitution be made in accordance with Rule 25 (a) (1) at pain of a judgment on the merits for failure to comply. This is consistent with other situations where a judgment upon the merits can ensure for failure to comply with one of the Federal Rules." 3B Moore's Federal Practice (2d Ed.) 25-278, § 25.06[3]. Under Code Ann. § 81A-125 (a) (1), therefore, there is no dismissal until the entry of an order to that effect, and the dismissal is an adjudication on the merits. A dismissal under this section is different in both respects from dismissal under Code Ann. § 81A-141 (e), which is automatically obtained and does not operate as an adjudication on the merits. Kalin v. Pfarner, 124 Ga. App. 816 (186 SE2d 365). However, if no notice of substitution is made within a period of 180 days after service of suggestion of death, and a defendant moves for a dismissal on this ground giving notice to the plaintiff (City of Cedartown v. Pickett, 194 Ga. 508, 512 (22 SE2d 318)), and the trial judge after a hearing dismisses the petition under Code Ann. § 81A-141 without specifying that it is "without prejudice," the dismissal would be a bar to any subsequent suit. See Cranford v. Carver, 124 Ga. App. 767 (186 SE2d 150). 165 But it should be noted that an order of dismissal for failure to make timely substitution need not necessarily be granted. Under the federal rule, "the court may extend the period for substitution if a request is made before the expiration of 90-day period. The court also may allow substitution on motion made after the expiration of the 90-day period on a showing that the failure to act earlier was the result of excusable neglect." 7A Wright & Miller, 659, supra. There being no order of dismissal in the previous action, the trial court was in error in its reasons for granting defendant's motion for a judgment on the pleadings; however, a judgment right for any reason will be affirmed by the appellate courts (Hill v. Willis, 224 Ga. 263, 267 (161 SE2d 281)). Because the original suit is still pending, its pendency provides grounds for granting defendant's motion and the trial court's order so granting it, being right for this reason, will be affirmed. Affirmance leaves the parties in the original suit to seek such belated substitution or dismissals as their interests may direct. The dismissal here (of the second suit) is, of course, without prejudice to the pending case and cannot be considered an adjudication on the merits. Because we reach the result that the second suit must be dismissed, plaintiff's appeal from the denial of her motion to strike certain defenses in the second suit has been mooted and we need not consider it. Judgment affirmed in part without prejudice to the rights of the parties in pending Case No. 5240, Henry County Superior Court. Bell, C. J., Eberhardt, P. J., Quillian and Stolz, JJ., concur. Pannell, J., concurs in the judgment. Deen, Evans and Clark, JJ., dissent. EVANS, Judge., dissenting. On December 18, 1970, Shirley Jernigan brought an 166 action for personal injuries and damage arising out of a collision of automobiles on March 1, 1969, driven by plaintiff and by defendant, Lena B. Collier. Service was accomplished on December 19, 1970, and an answer was filed on January 1, 1971. The defendant died on January 14, 1972, and on July 11, 1972, her death was suggested of record by counsel who had represented the deceased. No substitution of party was made, and by terms of the statute (Code Ann. § 81A-125 (a) (1)), at the expiration of 180 days the suit was dismissed. On April 13, 1973, the costs were paid in the first action, and another suit, in substantially the same form and substance, was brought against Frank S. Collier as executor under the will of Lena B. Collier, deceased. The defendant answered, and pleaded estoppel, laches, the mandatory dismissal of the former suit, and passage of more than two years since the time of the collision, all as a bar to this action. Plaintiff moved to strike these affirmative defenses. Defendant moved for judgment on the pleadings because no substitution of parties was ever made in the former suit as is provided for in Code Ann. § 81A-125 (a) (1). The present action has been brought after the expiration of the time allowed by law and is therefore barred. Plaintiff's motion to strike the affirmative defenses was denied, and defendant's motion for judgment on the pleadings was granted. Plaintiff appeals. 1. Defendant contends that under Code Ann. § 81A-125 (a) (1) a judgment in his favor, dismissing the action, was not only authorized but was demanded. To reach this conclusion said statute must be construed to mean that unless a motion for substitution of a new party is made not later than 180 days after death is suggested upon the record, the action shall be dismissed, and said dismissal shall be construed as a dismissal "on the merits," or "with prejudice." albeit the statute is silent respecting the words "on the merits" and "with prejudice." Of course, a dismissal "on the merits" or "with prejudice" is conclusive, and the plaintiff is not thereafter entitled to renew or re-file the action. (See Code Ann. § 81A-141.) 167 2. But why does the dismissal take place at all? Because after death of the defendant the suit can no longer proceed until his legal representative is substituted as a party defendant. In other words, the suit is dismissed because it lacks an "indispensable party." Our law especially provides that where a suit is dismissed because of want of an "indispensable party," said dismissal is not within the class of those where an adjudication on the merits is inherent in the dismissal. See the last sentence in Code Ann. § 81A-141 (b) as follows: "Unless the court in its order for dismissal otherwise specifies, a dismissal under this subdivision, and any dismissal not provided for in this section, other than a dismissal for lack of jurisdiction, or for improper venue, or for lack of an indispensable party, operates as an adjudication upon the merits." (Emphasis supplied.) This language clearly means that all cases that are dismissed, as was the one here, for lack of an indispensable party, are not within that category where the dismissal operates as an adjudication on the merits. 3. The statute here may be compared with Code Ann. § 3-512 (also Code Ann. § 81A-141 (e)), authorizing an automatic dismissal of cases after five years during which time no written order is taken. These statutes do not say whether or not the merits are thereby adjudicated; do not say whether or not the dismissal is with or without prejudice, but our appellate courts have consistently held that the dismissed action may be refiled. See City of Chamblee v. Village of North Atlanta, 217 Ga. 517, 523 (123 SE2d 663); Covil v. Stansell, 113 Ga. App. 179 (2) (147 SE2d 479); and Kalin v. Pfarner, 124 Ga. App. 816 (186 SE2d 365). 4. If the construction contended for by defendant were allowed, that would mean that the statute in question provides for a forfeiture of rights, or a penalty. Forfeitures and penalty are not favored, and if a statute may be construed as imposing or withholding a penalty, the latter construction will be adopted. Renfroe v. Colquitt, 74 Ga. 618 (2a); Roby v. Newton, 121 Ga. 679, 682 (49 SE 694). If it is intended to penalize those who did not strictly comply with this statute, the penalty should have been spelled out. It is not permissible to imply a 168 penalty, when the language used is silent as to such penalty. 5. Where a case is not dismissed on the merits, the plaintiff may re-file the same action within six months under Code Ann. § 3-808. See Rountree v. Fey, 71 Ga. 214; Atlanta, K. &c. R. Co. v. Wilson, 119 Ga. 781 (5) (47 SE 366); Clark v. Newsome, 180 Ga. 97 (178 SE 386). 6. Accordingly, there has been no affirmative dismissal of the original complaint with prejudice nor with an adjudication on the merits; and with the payment of the costs, the plaintiff was authorized to re-file the same action within six months. 7. The majority opinion argues that as there was no order dismissing in the first action, that the first action is therefore still pending. This is a completely untenable premise. The statute involved here, Code Ann. § 81A-125 (a) (1) provides that: "Unless the motion for substitution is made not later than 180 days after the death is suggested upon the record by service of a statement of the fact of the death as provided herein for the service of the motion, the action shall be dismissed as to the deceased party." Thus, the plaintiff does not have to enter an order of dismissal; the dismissal is automatic under the explicit language of the statute. As to whether the dismissal is with prejudice is an entirely different matter. Further, even if the majority were correct in its contention that plaintiff should have entered an order of dismissal (and we maintain it is completely erroneous in this respect), still the only way advantage could be taken of such failure would be through the defendant's filing a defense based on this ground. Rozetta v. Rozetta, 181 Ga. 494 (3) (182 SE 847). This he did nor do, expressly or impliedly, and neither the lower court nor this court can defend for him nor supply his deficiency in failing to plead in this respect. The majority opinion seeks to make much of 7A Wright & Miller, Federal Practice and Procedure, p. 659, § 1955, and 3B Moore's Federal Practice (2d Ed.), p. 25-278, § 25.06 (3); and argues therefore that an order of dismissal is required in order to effect a dismissal. I have studied these works carefully and find no reference to an *169 order of dismissal by plaintiff or his counsel as a requirement for dismissal. If I am in error, I ask the author of the majority to correct me, and point to chapter and verse. And let it be noted that in discussing the federal rule, Moore does not make any authoritative statement but hedges his language with "it is felt" and "it is believed." This is a far cry from an authority that may be cited to support a mooted question of law. This court has as much right to its opinion on matters of first impression as has Moore when he is reduced to "it is felt" and "it is believed," especially as we are a state court, dealing with state statutes, and he is exclusively dealing with federal rules and federal decisions, which are not binding on us. But, if the federal authorities were felt binding to any extent whatever, we point to Gertler v. United States (SD NY 1955) 18 FRD 307, wherein it is plainly shown that a dismissal under Federal Rule 25 (a) (1) does not preclude the right to bring a new action. The majority opinion cites City of Cedartown v. Pickett, 194 Ga. 508, 512 (22 SE2d 318), as to the question of notice of substitution within 180 days from service of suggestion of death, and a dismissal thereafter "without prejudice." I have studied this case very carefully and can find absolutely no mention of the above subject in it. 8. The lower court erred in overruling the motion to strike the affirmative defenses of laches, estoppel, and bar by statute of limitation, and in granting defendant's motion for judgment on the pleadings. I therefore dissent. I am authorized to state that Judges Deen and Clark join me in this dissent. NOTES [1] If a party dies and the claim is not thereby extinguished, the court may order substitution of the proper parties. The motion for substitution may be made by any party or by the successors or representative of the deceased party and, together with the notice of the hearing, shall be served on the parties as provided in section 81A-105 and upon persons not parties in the manner provided in section 81A-104 for the service of a summons. Unless the motion for substitution is made not later than 180 days after the death is suggested upon the record by service of a statement of the fact of the death as provided herein for the service of the motion, the action shall be dismissed as to the deceased party."	{ "pile_set_name": "FreeLaw" }
678 S.E.2d 238 (2009) EVERGREEN CONSTRUCTION COMPANY, INC. v. CITY OF KINSTON, a North Carolina municipality, and the City of Kinston City Council. No. 33P09. Supreme Court of North Carolina. June 17, 2009. James P. Cauley, Wilson, for City of Kinston. *239 Robert Hornik, Chapel Hill, for Evergreen Construction. ORDER Upon consideration of the petition filed on the 20th of January 2009 by Respondent in this matter for discretionary review of the decision of the North Carolina Court of Appeals pursuant to G.S. 7A-31, the following order was entered and is hereby certified to the North Carolina Court of Appeals: Denied by order of the Court in conference, this the 17th of June 2009.	{ "pile_set_name": "FreeLaw" }
174 F.3d 987 99 Cal. Daily Op. Serv. 2515, 1999 DailyJournal D.A.R. 3282Christian Weaver TWORIVERS, Plaintiff-Appellant,v.Samuel A. LEWIS; Velasquez, Lt.; Fernandez, Sgt.; CSOKern; Kevin Scott Lewis; Ratliff, RN; RaulRodriguez-Bores, Dr.; Barbara Major, Nurse; B. Goodman,RN; S. Walters, NA, Defendants-Appellees. No. 97-15844. United States Court of Appeals,Ninth Circuit. Submitted Dec. 8, 1998.Decided April 6, 1999. Christian Weaver TwoRivers, Winslow, Arizona, in pro se for plaintiff-appellant. Wanda E. Hofmann and Bruce E. Skolnik, Assistant Attorneys General, Tucson, Arizona, for defendants-appellees. Appeal from the United States District Court for the District of Arizona; Richard M. Bilby, Chief District Judge, Presiding. D.C. No. CV-96-00598-RMB. Before: BRIGHT,* FLETCHER and THOMPSON, Circuit Judges. BRIGHT, Circuit Judge: 1 Plaintiff Appellant Christian Weaver TwoRivers, an Arizona prisoner, appeals the district court's dismissal of his 42 U.S.C. § 1983 claim under Rule 12(b)(6) of the Federal Rules of Civil Procedure, on grounds that he failed to file suit within the applicable two year statute of limitations. TwoRivers' claim is time barred unless he can obtain the benefit of a provision under Arizona law which tolled the two year limitations for Arizona prisoners until after discovery of the prisoner's right to sue. Such statutory grace existed at the time TwoRivers discovered his right to bring his § 1983 action. However, before TwoRivers filed suit, Arizona amended its law deleting this grace period and requiring prisoners to bring their action within two years from the date of accrual. We conclude that the amended statute does not apply retroactively to bar TwoRivers' suit, and, therefore, we reverse and remand. I. FACTS AND PROCEDURAL BACKGROUND 2 TwoRivers' § 1983 claim arose from alleged deliberate indifference to his serious medical needs by Arizona Department of Corrections ("ADOC") employees after TwoRivers underwent a surgical procedure to remove a cancerous growth while incarcerated at the Tucson prison complex. We briefly review the factual background of TwoRivers' claim.1 3 On July 20, 1994, appellee Dr. Kevin Scott Lewis removed a cancerous growth from TwoRivers' back. Suffering from severe infection, ADOC transferred TwoRivers from the Tucson prison complex to St. Mary's Hospital where doctors treated his infection with intravenous antibiotics and bleach baths. ADOC subsequently transferred TwoRivers to another prison facility, the Central Unit at Florence, where he continued to undergo bleach baths, this time in bath tubs allegedly encrusted in fecal matter and what appeared to be scabs from other patients. These incidents form the basis for his claim. The incidents occurred prior to September 14, 1994, the date of TwoRivers' transfer back to the Tucson complex after he had received post-operative medical care.2 4 At the time of these events, the former § 12-502 of the Arizona Revised Statutes (A.R.S.) tolled the statute of limitations for prisoners until a prisoner discovered the right to bring the action or should have discovered that right with the exercise of reasonable diligence.3 See Vega v. Morris, 184 Ariz. 461, 464, 910 P.2d 6, 9 (1996) (en banc) (explaining that under former A.R.S. § 12-502, awareness of the legal right to assert a claim ends the disability provided to prisoners, not cognizance of the facts giving rise to the claim). Prior to the time TwoRivers filed suit but after he had discovered his right to bring a § 1983 claim, the Arizona legislature amended former A.R.S. § 12-502, deleting the special tolling provision for prisoners. The amended statute became effective on July 20, 1996.4 5 On October 8, 1996, TwoRivers filed suit in federal district court asserting a claim under § 1983.5 TwoRivers alleged that the named defendants had been deliberately indifferent to his serious medical needs in violation of the Eighth Amendment of the United States Constitution. TwoRivers further alleged that he had first learned of his right to file suit on October 26, 1994 (less than two years earlier), when his attorney at the time advised him of that right. The ADOC defendants challenged TwoRivers' claim on a motion to dismiss pursuant to Fed.R.Civ.P. 12(b)(6). The district court granted the defendants' motion, dismissing TwoRivers' amended complaint with prejudice. It reasoned that under the amended A.R.S. § 12-502, TwoRivers had failed to file his § 1983 claim in a timely manner. TwoRivers had filed suit over two years and three weeks after September 14, 1994, the date of TwoRivers' transfer back to the Tucson complex after receiving the alleged improper medical care. TwoRivers now appeals this order of dismissal. II. STANDARD OF REVIEW 6 We review de novo a dismissal under Fed.R.Civ.P. 12(b)(6) for failure to state a claim. Steckman v. Hart Brewing, Inc., 143 F.3d 1293, 1295 (9th Cir.1998). In such a case, we must accept all factual allegations of the complaint as true and draw all reasonable inferences in favor of the nonmoving party. See Usher v. City of Los Angeles, 828 F.2d 556, 561 (9th Cir.1987). Dismissal on statute of limitations grounds can be granted pursuant to Fed.R.Civ.P. 12(b)(6) "only if the assertions of the complaint, read with the required liberality, would not permit the plaintiff to prove that the statute was tolled." Vaughan v. Grijalva, 927 F.2d 476, 478 (9th Cir.1991) (quoting Jablon v. Dean Witter & Co., 614 F.2d 677, 682 (9th Cir.1980)). III. DISCUSSION 7 On appeal, TwoRivers claims that the district court erred by applying the amended A.R.S. § 12-502 and dismissing his § 1983 claim. In support of this contention, TwoRivers asserts that his claim accrued prior to the amendment of that statute. Therefore, according to TwoRivers, the district court should have applied the former A.R.S. § 12-502 and tolled commencement of the statute of limitations until October 26, 1994, the date his attorney apprised TwoRivers of his right to file suit. TwoRivers further argues that since he filed suit on October 8, 1996, less than two years after he learned of that right on October 26, 1994, proper application of the former A.R.S. § 12-502 would have precluded the district court from dismissing his claim on statute of limitations grounds. Before examining TwoRivers' argument on its merits, the court first turns to the time limitations governing § 1983 claims.6 A. 8 Section 1983 does not contain its own statute of limitations. Without a federal limitations period, the federal courts borrow the statute of limitations for § 1983 claims applicable to personal injury claims in the forum state. See Wilson v. Garcia, 471 U.S. 261, 279-80, 105 S.Ct. 1938, 85 L.Ed.2d 254 (1985). In Arizona, the courts apply a two-year statute of limitations to § 1983 claims. See Marks v. Parra, 785 F.2d 1419, 1420 (9th Cir.1986) (citing A.R.S. § 12-542). But in borrowing a state statute of limitations for a federal cause of action, "we borrow no more than necessary." West v. Conrail, 481 U.S. 35, 39-40, 107 S.Ct. 1538, 95 L.Ed.2d 32 (1987). Consistent with this maxim, federal, not state, law determines when a civil rights claim accrues. See Elliott v. City of Union City, 25 F.3d 800, 801-802 (9th Cir.1994). Under federal law, a claim accrues when the plaintiff knows or has reason to know of the injury which is the basis of the action. See Kimes v. Stone, 84 F.3d 1121, 1128 (9th Cir.1996). Here, TwoRivers knew or had reason to know of the ADOC employees' deliberate indifference to his medical needs by September 14, 1994, the date of TwoRivers' transfer back to the Tucson complex after receiving the alleged improper medical care. TwoRivers filed suit on October 8, 1996, more than two years after TwoRivers' § 1983 claim had accrued. Therefore, as we have observed, the two-year statute of limitations would bar the present action unless TwoRivers' incarceration tolled the limitations period sufficiently to permit him to proceed with this suit. 9 In actions like this one, where the federal courts borrow the state statute of limitations, we also borrow the forum state's tolling rules. See Hardin v. Straub, 490 U.S. 536, 539, 109 S.Ct. 1998, 104 L.Ed.2d 582 (1989); Board of Regents of the Univ. of New York v. Tomanio, 446 U.S. 478, 483-84, 100 S.Ct. 1790, 64 L.Ed.2d 440 (1980). Under former § 12-502, prisoners whose claims accrued while incarcerated were entitled to tolling until the prisoner knew or had reason to know that he or she had a right to file suit. By contrast, the amended § 12-502 deletes this provision for prisoners and subjects them to the same rules as most other § 1983 plaintiffs. Applying the tolling provision in the former A.R.S. § 12-502, TwoRivers filed suit within two years of October 26, 1994, the date that he learned of his right to bring suit, and thus within the statute of limitations for § 1983 actions filed in Arizona. But under the amended A.R.S. § 12-502, the clock began to run on September 14, 1994, the date of his transfer back to the Tucson complex after receiving post-operative care and when his cause of action accrued under the analysis of the district court. In short, the choice of the applicable limitations statute dictates the result in this case. The issue before us is whether the amended § 12-502 should be applied retroactively to bar this plaintiff's claim. B. 10 At the outset, we observe that neither the district court, nor the parties on appeal, addressed the threshold issue of whether a federal court borrowing a state statute of limitations also borrows the state retroactivity law. The district court applied the current Arizona law in ascertaining the appropriate limitation period and the related tolling provisions. The district court, however, did not discuss its decision to apply Arizona retroactivity law. Generally, where Congress does not create a federal statute of limitations, we look to state law for limitations provisions, see Johnson v. Railway Express Agency, Inc., 421 U.S. 454, 463-64, 95 S.Ct. 1716, 44 L.Ed.2d 295 (1975), because "the creation of a statute of limitations is not considered a suitable judicial task." Hemmings v. Barian, 822 F.2d 688, 689 (7th Cir.1987). We also reference corresponding state law tolling provisions under these circumstances, recognizing that "the chronological length of the limitation period is interrelated with provisions regarding tolling, revival, and questions of application." Tomanio, 446 U.S. at 485-86. "Since 'the actual length of time within which suit must be brought ... depends on the generosity of the tolling provisions as well as on the period of years, to borrow the latter without the former could distort the state's determination regarding that length of time.' " Mouradian v. John Hancock Cos., 930 F.2d 972, 974 (1st Cir.1991) (quoting Hemmings, 822 F.2d at 691). 11 But our reliance on state law in this context is not unlimited. The Supreme Court has admonished us to "borrow no more [state law] than necessary" when using a state statute of limitations and its related tolling provisions to implement federal statutory law. West, 481 U.S. at 39-40. The Supreme Court also has stated that "[i]n borrowing statutes of limitations for other federal claims, this court has generally recognized that the problem of characterization 'is ultimately a question of federal law.' " Wilson, 471 U.S. at 269-270 (citation omitted). Thus, where a court applies a state statute of limitations in construing a federal substantive claim, federal common law should fill the gaps in applying federal statutory law, except in very limited circumstances. See id. at 268-69 ("Only the length of the limitations period, and closely related questions of tolling and application, are to be governed by state law."); see also Vaughan, 927 F.2d at 480 (holding that federal law determines when a cause of action under § 1983 accrues and the statute of limitations begins to run). Moreover, when a federal court uses a state limitations period in connection with a federal statute without its own statute of limitations, the court is applying federal, not state law. See Hemmings, 822 F.2d at 689. In addition, the rationale underpinning the use of state tolling periods when borrowing a state limitations period--to respect the "[s]tate's wisdom in setting a limit, and exceptions thereto," Johnson, 421 U.S. at 464; accord Tomanio, 446 U.S. at 485-86,--does not hold for state retroactivity rules. Failure to borrow retroactivity rules, unlike tolling periods, does not give rise to the risks associated with selective borrowing of tolling rules. 12 Thus, in view of the principles set forth in West, Wilson, and Vaughan, we apply federal law, not state law, in deciding whether to apply the amended § 12-502 retroactively. See West, 481 U.S. at 39; Wilson, 471 U.S. at 269; Vaughan, 927 F.2d at 480; see also Hemmings, 822 F.2d at 691 (borrowing state limitations period and tolling rules but declining to borrow state retroactivity rules in construing federal RICO statute, which is also without a statutory period). C. 13 We examine the contours of federal retroactivity law. Absent clear legislative intent to the contrary, a presumption exists against retroactive application of new statutes. See Landgraf v. USI Film Products, 511 U.S. 244, 265, 114 S.Ct. 1483, 128 L.Ed.2d 229 (1994) (stating that "the presumption against retroactive legislation is deeply rooted in our jurisprudence"); Bowen v. Georgetown Univ. Hosp., 488 U.S. 204, 208, 109 S.Ct. 468, 102 L.Ed.2d 493 (1988) ("Retroactivity is not favored in the law."). Although "prospectivity remains the appropriate default rule," Landgraf, 511 U.S. at 272, "deciding when a statute operates 'retroactively' is not always a simple or mechanical task." Id. at 268. 14 The three stage analysis set forth in Landgraf assists the courts in this inquiry. See Jeffries v. Wood, 114 F.3d 1484, 1494 (9th Cir.1997) (citing Landgraf, supra, 511 U.S. 244, 114 S.Ct. 1483, 128 L.Ed.2d 229). We first determine whether the legislative body expressly stated its intent to apply the new statute retroactively or prospectively. Landgraf, 511 U.S. at 280. Without clear language directing that we apply the new statute retroactively, the court next discerns whether the new statute would have retroactive effect. Id. Three factors inform our decision in this regard: whether the statute "would impair rights a party possessed when he acted, increase a party's liability for past conduct, or impose new duties with respect to a transaction already completed." Id.; Hughes Aircraft Co. v. United States ex rel. Schumer, 520 U.S. 939, 947, 117 S.Ct. 1871, 138 L.Ed.2d 135 (1997) (stating that the three factors qualify as a "sufficient, rather than a necessary, condition for invoking presumption against retroactivity.") (emphasis in original). Ultimately, in this second inquiry, we must apply "ordinary judicial principles" and rely upon our "sound instincts" to determine whether "the new provision attaches new legal consequences to events completed before its enactment." Landgraf, 511 U.S. at 269-70. Third and finally, if the court determines that the statute operates retroactively, the traditional presumption in favor of prospectivity precludes application of the new statute "absent clear congressional intent favoring such a result." Id. at 280. 15 A plain reading of the existing A.R.S. § 12-502 and its legislative history evidence no legislative intent that this statute should operate retroactively so as to shorten the time of a claim that had already accrued. With the statute and its legislative history silent on this question, we turn to the second stage of this analysis in which the court examines whether the newly enacted statute has retroactive effect. To assist us in this inquiry, Landgraf identified three types of laws which generally do not have retroactive effect: those authorizing prospective relief, those conferring or removing jurisdiction, and those statutes properly characterized as procedural. See id. at 273-74. Thus, in contrast to statutes affecting settled contract and property rights, Covey v. Hollydale Mobilehome Estates, 116 F.3d 830, 835, amended by, 125 F.3d 1281 (9th Cir.1997), procedural statutes generally may be applied retrospectively without giving rise to concerns about retroactivity. See Landgraf, 511 U.S. at 285 n. 37 ("We have sometimes said that ... new 'procedural' [rules] should presumptively apply to pending cases."). 16 But the concerns underlying the presumption against retroactivity are not limited to substantive statutes. As acknowledged by Landgraf, "the mere fact a new rule is procedural does not mean that it applies to every pending case." Id.; see also Chenault v. U.S. Postal Serv., 37 F.3d 535, 539 (9th Cir.1994) ("Regardless of whether a statute is 'substantive' or 'procedural', it may not apply to cases pending at the time of enactment if the new statute would prejudice the rights of one of the parties."); Landgraf, 511 U.S. at 275 n. 29 ("[W]e do not restrict the presumption against statutory retroactivity to cases involving 'vested rights'.... Nor do we suggest that concerns about retroactivity have no application to procedural rules."). In short, "[c]ourts must look to the nature and posture of an individual case" to determine whether the statute has retroactive effect. Jeffries, 114 F.3d at 1498. 17 In Chenault, this court considered whether to apply retroactively an amended provision of the Civil Rights Act of 1964, which extended the filing period from thirty to ninety days in employment discrimination cases. Chenault, 37 F.3d at 537. Applying the principles set forth in Landgraf, we concluded that the provision could not be applied retroactively to revive a claim otherwise barred under the old statutory scheme, despite our determination that the statute of limitations provision was procedural. Id. at 538 (citing Gonzalez v. Aloha Airlines, Inc., 940 F.2d 1312, 1316 (9th Cir.1991)). We declined to rely exclusively on the substantive/procedural dichotomy, reasoning that characterization of a statute into one of these categories is not dispositive of whether retroactive application of a statute is appropriate. See Chenault, 37 F.3d at 539; see also Landgraf, 511 U.S. at 275 n. 29. 18 Likewise, although both the former and amended A.R.S. § 12-502, like other tolling statutes, are generally considered procedural, see Chenault, 37 F.3d at 539, that label does not preclude us from examining whether the amended § 12-502 has retroactive effect and whether it should be applied retroactively. This court has consistently rejected the retroactive application of procedural statutes which result in manifest injustice. Id. In addition, as recognized in Landgraf and Jeffries, certain statutes implicate both substantive and procedural issues. See Landgraf, 511 U.S. at 280-81; see also Jeffries, 114 F.3d at 1498. Thus, we decline to classify the amended § 12-502 as per se falling within that category of statutes without retroactive effect. See Jeffries, 114 F.3d at 1498. Instead, we look beyond the narrow categorization of statutes as procedural or substantive and incorporate other judicial principles into our analysis to determine whether to apply this statute retroactively. 19 The Supreme Court instructed that we focus our inquiry in the second part of this analysis on whether the newly enacted statute altered the legal consequences of the events giving rise to the claimant's suit. See Landgraf, 511 U.S. at 269-70. As a practical consequence, application of amended A.R.S. § 12-502 to this case bars TwoRivers from bringing suit while under former A.R.S. § 12-502, TwoRivers' October 1996 filing is timely. By foreclosing a cause of action which existed prior to the amendment, retroactive application of amended § 12-502 deprives TwoRivers of his right to file suit embodied in former § 12-502, which existed less than three months prior to the date he filed suit. Cf. Chenault, 37 F.3d at 539 ("[A] newly enacted ... statute of limitations may not be applied retroactively to revive a plaintiff's claim that was otherwise barred ... because to do so would 'alter the substantive rights' of a party ....") (emphasis added). We need not go so far as to hold that TwoRivers has a "vested right" in his tolled two-year statute of limitations. See Chase Secs. Corp. v. Donaldson, 325 U.S. 304, 311-14, 65 S.Ct. 1137, 89 L.Ed. 1628 (1945) (holding that the lapse of a limitations period does not provide a party defendant with a vested right in immunity from suit). It is enough to conclude that retroactive operation of the new statute results in "manifest injustice" and therefore its application here is inappropriate. See Chenault, 37 F.3d at 539 ("A newly enacted statute that shortens the applicable statute of limitations may not be applied retroactively to bar a plaintiff's claim that might otherwise be brought under the old statutory scheme because to do so would be manifestly unjust."); see also Usher, 828 F.2d at 560 (rejecting retroactive application of Wilson v. Garcia, 471 U.S. 261, 105 S.Ct. 1938, 85 L.Ed.2d 254 (1985), where such application would shorten the limitations period for § 1983 actions in California). 20 Relying on our "sound instincts," as instructed by Landgraf, it is apparent that application of the amended A.R.S. § 12-502 would not only be manifestly unjust, but would have genuine retroactive effect. See Calderon v. United States Dist. Court, 128 F.3d 1283, 1286-87 (9th Cir.1997), cert. denied, --- U.S. ----, 118 S.Ct. 899, 139 L.Ed.2d 884 (1998) (applying Antiterrorism and Effective Death Penalty Act's ("AEDPA") newly-enacted one-year limitation period from effective date of AEDPA "would impermissibly 'attach[ ] new legal consequences to events completed before its enactment' "), overruled on other grounds, Calderon, 163 F.3d 530 (9th Cir.1998) (en banc); see also United States v. Simmonds, 111 F.3d 737, 745-46 (10th Cir.1997) ("we hold application of the [AEDPA's] new time period to [petitioner's] § 2255 motion without first affording him a reasonable time to bring his claim impermissibly retroactive."); United States v. Craycraft, 167 F.3d 451, 455 (8th Cir.1999) ("a presumption against retroactive legislation applies whenever a claim depends upon a statute which was enacted after the events which gave rise to the claim"); Burns v. Morton, 134 F.3d 109, 111 (3d Cir.1998) (same). 21 Since Wilson, § 1983 plaintiffs in Arizona have received two years to file their § 1983 claims. See Wilson, 471 U.S. at 275-76. Prisoners under disability were entitled to the same period from the date they knew or had reason to know of their right to file suit. TwoRivers filed suit on October 8, 1996, less than two years after his attorney advised him of his right to bring an action under the circumstances of his case. Although TwoRivers could have brought his claim at an earlier time, Arizona law imposed no obligation on him to do so until July 20, 1996, the effective date of the amended statute, less than three months prior to the date he filed suit. See Landgraf, 511 U.S. at 265 ("Elementary considerations of fairness dictate that individuals should have an opportunity to know what the law is and conform their conduct accordingly"); see, e.g., General Motors Corp. v. Romein, 503 U.S. 181, 191, 112 S.Ct. 1105, 117 L.Ed.2d 328 (1992). 22 To apply the amended § 12-502 retroactively, as proposed by Arizona, would cut off TwoRivers' claims when, without the amendment, TwoRivers still could sue at any time during the following three months. Such application would foreclose TwoRivers' remedy prematurely, without providing him with a reasonable time to file suit after the amendment. See Ochoa v. Hernandez y Morales, 230 U.S. 139, 161-162, 33 S.Ct. 1033, 57 L.Ed. 1427 (1913) ( "[S]tatutes of limitations ... may be modified by shortening the time prescribed, but only if ... a reasonable time still remains for the commencement of an action before the bar takes effect."); see, e.g. Block v. North Dakota ex rel. Bd. of University and School Lands, 461 U.S. 273, 286 n. 23, 103 S.Ct. 1811, 75 L.Ed.2d 840 (1983). We hold that a time period of less than three months does not constitute a reasonable time for a prisoner to file suit.7 Accordingly, without clear legislative guidance urging retroactive application of the amended statute, we apply the former § 12-502 to this case, and we conclude that TwoRivers filed his suit in a timely manner. D. 23 We recognize that DeLuna v. Farris, 841 F.2d 312 (9th Cir.1988) reached a contrary result in construing a prior amendment to A.R.S. § 12-502. In DeLuna, we applied a prior amendment to A.R.S. § 12-502 retroactively to time bar the plaintiff DeLuna's § 1983 claim. DeLuna's claim, like that in this case, had accrued prior to the effective date of the amendment but had been filed subsequent to that date. Although this court acknowledges the factual likeness of this case to DeLuna, we, nevertheless, are not bound to follow the holding in that case for two reasons. First, DeLuna applied Arizona retroactivity law in reaching its conclusion without discussing whether federal or state retroactivity principles should govern the result in that case. Second, the Arizona Court of Appeals subsequently rejected DeLuna 's decision to apply the amended § 12-502 retroactively, holding that Arizona law dictated that the amendment be applied prospectively, not retroactively. See Vaughan, 927 F.2d at 479 n. 3 (citing Zuck v. State, 159 Ariz. 37, 41, 764 P.2d 772, 776 (App.1988)).8 24 Assuming arguendo, therefore, that we were to apply Arizona retroactivity law to this case, this court would be bound by the Zuck decision, not DeLuna, on an issue of Arizona state law. See Vaughan, 927 F.2d at 480 ("Where an intermediate appellate court has decided an issue of state law, that decision is not to be disregarded by a federal court unless it is convinced ... that the highest court of the state would decide otherwise.") (citation omitted). Taking this point to its logical conclusion, under the principles enunciated in Zuck, "plaintiff was obligated to file his civil rights [claim] ... within the two-year period of A.R.S. § 12-542(1) ..., from the time after the effective date of the amendment that he discovered or with reasonable diligence should have discovered his right to bring th[at] claim[ ]." Zuck, 159 Ariz. at 40, 764 P.2d at 775. TwoRivers filed suit on October 8, 1996, within two years from the date that he discovered his right to file suit. Therefore, we conclude that even under Arizona law TwoRivers would have filed his § 1983 claim in a timely manner.IV. CONCLUSION 25 The district court erred by applying the amended A.R.S. § 12-502 to this case and dismissing TwoRivers' claims as time-barred. TwoRivers filed suit within the two-year limitations period for § 1983 claims in Arizona. Accordingly, we REVERSE and REMAND to the district court for further proceedings on the merits of TwoRivers' § 1983 claim. We further award TwoRivers his costs on appeal. * The panel unanimously finds this case suitable for decision without oral argument. Fed.R.App. 34-4(a2) ** The Honorable Myron H. Bright, Senior United States Circuit Judge for the Eighth Circuit, sitting by designation 1 TwoRivers named the following in his amended complaint as defendants: Samuel A. Lewis, former director of the ADOC; Dr. Kevin Lewis, his treating physician at the Tucson prison complex; Lieutenant Velasquez; Sergeant Fernandez; C.S.O. Kern; Nurse Major; Nurse Ratliff; Nurse Goodman; NA Walters; Dr. Raoul Rodriguez-Bores at the Cimarron Unit; and L.P.N. Bottineau 2 In this proceeding, all parties assume that TwoRivers' right to bring his action accrued prior to September 14, 1994 3 Former A.R.S. § 12-502 provided in relevant part: § 12-502. Effect of minority, insanity or imprisonment. B. If a person entitled to bring an action other than those set forth in article 2 of this chapter is at the time the cause of action accrues imprisoned, the period of such disability shall exist only until such time as the person imprisoned discovers the right to bring the action or with the exercise of reasonable diligence should have discovered the right to bring the action, whichever occurs first, and such person shall have the same time after the disability ceases to exist which is allowed to others. A.R.S. § 12-502 (1992), amended by, A.R.S. § 12-502 (West Supp.1998). 4 A.R.S. § 12-502 now provides: § 12-502. Effect of minority or insanity If a person entitled to bring an action other than those set forth in article 2 of this chapter is at the time the cause of action accrues either under eighteen years of age or of unsound mind, the period of such disability shall not be deemed a portion of the period limited for commencement of the action. Such person shall have the same time after removal of the disability which is allowed to others. A.R.S. § 12-502 (West Supp.1998). 5 TwoRivers subsequently filed an amended complaint after the district court dismissed TwoRivers' original complaint for failure to allege exhaustion of his administrative remedies under the ADOC grievance procedure. The initial filing date controls the instant proceedings 6 In light of our holding in this case, we decline to address other arguments advanced by TwoRivers on appeal 7 Our conclusion is consistent with the courts' treatment of the recently enacted one-year limitations period under AEDPA. Rather than applying AEDPA's one-year limitations period to cut off prisoners' rights to file for habeas relief, this court, along with our sister circuits, have uniformly provided petitioners with a one-year grace period, commencing on the effective date of AEDPA, to file a first § 2254 petition or a § 2255 motion. See, e.g., Craycraft, 167 F.3d at 455; Ross v. Artuz, 150 F.3d 97, 100-03 (2d Cir.1998); United States v. Flores, 135 F.3d 1000, 1006 (5th Cir.1998); Burns, 134 F.3d at 111; Calderon, 128 F.3d at 1283, 1286-87; Simmonds, 111 F.3d at 745-46; Lindh v. Murphy, 96 F.3d 856, 866 (7th Cir.1996) (en banc), rev'd on other grounds, 521 U.S. 320, 117 S.Ct. 2059, 138 L.Ed.2d 481 (1997) 8 Zuck held, in part, that amended statutes under Arizona law were to be given prospective effect to extend the limitations period on claims existing at the time the amendment became effective. See Zuck, 159 Ariz. at 41, 764 P.2d at 776	{ "pile_set_name": "FreeLaw" }
United States Court of Appeals Fifth Circuit F I L E D IN THE UNITED STATES COURT OF APPEALS June 23, 2005 FOR THE FIFTH CIRCUIT _____________________ Charles R. Fulbruge III Clerk No. 05-10040 _____________________ UNITED STATES OF AMERICA Plaintiff - Appellee v. ADAN RODRIGUEZ Defendant - Appellant --------------------- Appeal from the United States District Court for the Northern District of Texas, Dallas --------------------- Before JONES, BARKSDALE, and PRADO, Circuit Judges. PER CURIAM:1 IT IS ORDERED that Appellee’s unopposed motion to vacate the sentence is GRANTED. IT IS FURTHER ORDERED that Appellee’s unopposed motion to remand the case to the Northern District of Texas, Dallas Division for resentencing is GRANTED. 1 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. 47.5.4. MOT-21	{ "pile_set_name": "FreeLaw" }
854 F.2d 1328 Unpublished DispositionNOTICE: Federal Circuit Local Rule 47.8(b) states that opinions and orders which are designated as not citable as precedent shall not be employed or cited as precedent. This does not preclude assertion of issues of claim preclusion, issue preclusion, judicial estoppel, law of the case or the like based on a decision of the Court rendered in a nonprecedential opinion or order.CHEMCAST CORPORATION, Plaintiff/Appellant,v.ARCO INDUSTRIES CORPORATION, Defendant/Cross-Appellant. Nos. 87-1537, 87-1538. United States Court of Appeals, Federal Circuit. July 22, 1988. E.D.Mich. AFFIRMED IN PART, REVERSED IN PART, VACATED IN PART AND REMANDED. Before EDWARD S. SMITH, BISSELL and ARCHER, Circuit Judges. EDWARD S. SMITH, Circuit Judge. DECISION 1 Chemcast Corporation (Chemcast) appeals that portion of the judgment of the United States District Court for the Eastern District of Michigan in Chemcast Corp. v. Arco Industries, Civil Action No. 82-70902 (E.D.Mich. July 30, 1987) (Freeman, J.), providing that claim 6 of United States patent No. 4,081,879 (the '879 patent) is invalid under 35 U.S.C. Sec. 112 and, on that basis, that Chemcast is not entitled to recover on its claim of infringement of claim 6. Arco Industries (Arco) cross-appeals paragraphs 1, and 3-7 of that judgment. We affirm in part, reverse in part, vacate in part, and remand. OPINION 2 The district court determined that, if valid, claim 6 of the '879 patent is infringed by Arco's grommet. However, because the district court concluded that claim 6 of the '879 patent is "invalid for failure to disclose the best mode contemplated by the inventor of carrying out his invention and for failure to particularly point out and distinctly claim the subject matter of the invention" disclosed by the '879 patent, Chemcast is not entitled to recover on its claim for infringement. In addition, the district court adjudicated numerous other counterclaims raised by Arco and reached the following conclusions: (1) the '879 patent is not invalid under either the written description requirement or the enablement requirements of section 112, first paragraph; (2) claim 6 is not invalid as obvious under section 103; (3) claim 6 is not invalid under section 132 for failure to comply with the prohibition against the introduction of new matter, by amendment, to the disclosure of the invention; and (4) if valid, the '879 patent is not unenforceable on the grounds of inequitable conduct. After a careful review of the record, and in view of the arguments presented to us by the parties, (1) we reverse the district court's decision under section 112, second paragraph, on the issue of claim particularity, (2) we vacate the district court's decision under section 112, first paragraph, on the best mode issue, and (3) we affirm all other issues contested by the parties on appeal. In view of our disposition of the best mode issue, we remand this proceeding to the district court for further action on that issue not inconsistent with this opinion. A. Best Mode: Section 112, First Paragraph 3 The district court based its best mode determination on its finding that the making and using of the grommet claimed by the '879 patent involves the use of products claimed as trade secrets by the producer of those products, Renosol. Because the district court found that Renosol is a custom formulator and does not reveal the composition of the products it sells and because the district court found that there were "at least eight other" producers who could have formulated satisfactory products, the district court concluded that the '879 patent must be found invalid for failure to meet the best mode requirement. We vacate the district court's decision on this issue because that court erred by failing to apply the proper legal standard for best mode. 4 Failure to comply with the best mode requirement amounts to concealing the preferred mode contemplated by the applicant at the time of filing. See Hybritech Inc. v. Monoclonal Antibodies, Inc., 802 F.2d 1367, 1384-85, 231 USPQ 81, 94 (Fed.Cir.1986), cert. denied, 107 S.Ct. 1606 (1987). In order for a district court to conclude that the best mode requirement is not satisfied, the focus must be, and the district court must determine, that the inventor knew of, i.e., "contemplated," and concealed a better mode than he disclosed. Id., 231 USPQ at 94. The focus for a best mode analysis is not simply on whether the patent discloses the most suitable material for carrying out the claimed invention. 5 Here, the district court did focus its best mode analysis on whether the '879 patent disclosed "the most suitable material" available at the time the application was filed. There is no requirement that the inventor know the most suitable material for carrying out his invention; rather, the only requirement of the best mode test is that the specification "set forth the best mode contemplated by the inventor of carrying out his invention." 35 U.S.C. Sec. 112 (emphasis supplied). Because compliance with the best mode requirement is a question of fact, we vacate the district court's decision and remand the proceeding to the district court to make this factual determination using the correct legal standard. 6 B. Enablement: Section 112, First Paragraph 7 Arco argues to us that the district court erred in reaching its decision on enablement in view of the district court's conclusions supporting its decision on claim particularity under section 112, second paragraph. Arco contends that the district court's conclusions underlying its decision on claim particularity necessarily support a conclusion that the '879 patent is invalid for failing to meet the enablement requirement of section 112, first paragraph. We disagree. 8 Enablement under section 112, first paragraph, and claim particularity under section 112, second paragraph, are separate requirements for patent validity even though both are contained in section 112. See Standard Oil Co. v. American Cyanamid Co., 774 F.2d 448, 452, 227 USPQ 293, 296 (Fed.Cir.1985). Enablement goes to the adequacy of the language of the specification whereas particularity goes to the adequacy of the claim language. A conclusion supporting a determination that the specification is enabling under section 112, first paragraph, may not support a determination that a claim meets the particularity requirement under section 112, second paragraph. Although we can conceive of situations wherein the same conclusion that is dispositive on the issue of enablement also will be dispositive on whether the claims comply with the claim particularity requirement, we find Arco's arguments along this line unpersuasive. Accordingly, we affirm the district court's conclusion on enablement. 9 C. Particularity: Section 112, Second Paragraph 10 The district court concluded that claim 6 is invalid for failure to particularly point out and distinctly claim the subject matter of the invention. As grounds for its conclusion, the district court stated that "given the wide range of hardnesses covered by the claim, a large amount of experimenting would be required to even figure out what specific hardness would be suitable to make a functional grommet." The district court reasoned: 11 Thus, a reasonable amount of experimentation is tolerated to formulate a material of a specific hardness if that hardness is disclosed to the experimentor, but an undue amount of experimentation would be required to actually make a grommet capable of sealing a hole in which it is inserted when there are no limits placed on the range of hardnesses for operative grommets. 12 We disagree. 13 Compliance with the claim particularity, or definiteness, requirement of section 112, second paragraph, is generally a question of law, which question is freely reviewable by us. See Shatterproof Glass Corp. v. Libbey-Owens Ford Co., 758 F.2d 613, 624, 225 USPQ 634, 641 (Fed.Cir.), cert. dismissed, 474 U.S. 976 (1985). The issue is whether, in light of the teachings of the prior art and of the particular invention, the claims set out and circumscribe a particular area with a reasonable degree of precision and particularity. See In re Moore, 439 F.2d 1232, 1235, 169 USPQ 236, 238 (CCPA 1971). 14 The amount of detail required to be included in claims depends on the particular invention and the prior art, and is not to be viewed in the abstract but in conjunction with whether the specification is in compliance with the first paragraph of section 112: "If the claims, read in the light of the specifications, reasonably apprise those skilled in the art both of the utilization and scope of the invention, and if the language is as precise as the subject matter permits, the courts can demand no more." Georgia-Pacific Corp. v. United States Plywood Corp., 258 F.2d 124, 136, 118 USPQ 122, 132 (2d Cir.), cert. denied, 358 U.S. 884 * * * (1958). 15 Shatterproof Glass, 758 F.2d at 624, 225 USPQ at 641. 16 We hold that the district court committed reversible error by concluding that claim 6 failed to meet the claim particularity requirement under section 112, second paragraph. Contrary to the district court's decision, patent claims are not required to set forth design parameters specific to every conceivable situation involving the claimed invention. Here, Chemcast's grommets are not restricted to a particular use, e.g., in an automobile firewall, and the district court specifically found that one skilled in the art would know how to "correct any deficiencies in function of the grommet by varying hole size or hardness of the grommet." (Emphasis supplied.) It is beyond reason that the claims of the '879 patent be required to set forth a specific hardness for each and every conceivable situation involving the claimed grommet. In view of both the particular invention involved and the prior art, we conclude that claim 6 is as precise as the subject matter requires and, accordingly, we reverse the district court's decision on this issue and hold that claim 6 meets the particularity requirements of section 112, second paragraph. D. Other Issues 17 Arco appeals the district court's judgment with respect to the issues of obviousness, inequitable conduct, and infringement of claim 6. After a thorough consideration of the parties' arguments and in view of the record, we conclude that the district court's determinations on these issues should stand. E. Costs 18 Each party shall bear its own costs on appeal.	{ "pile_set_name": "FreeLaw" }
USCA1 Opinion May 24, 1995 [NOT FOR PUBLICATION] UNITED STATES COURT OF APPEALS FOR THE FIRST CIRCUIT ____________________ No. 94-2242 EDWARD V. ZOLOTAREVSKY, Plaintiff, Appellant, v. CITY OF WORCESTER, ET AL., Defendants, Appellees. ____________________ [Hon. Nathaniel M. Gorton U.S. District Judge] ___________________ APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MASSACHUSETTS ____________________ Before Cyr, Boudin and Stahl, Circuit Judges. ______________ ____________________ Edward V. Zolotarevsky on brief pro se. ______________________ David M. Moore, City Solicitor, and Diana H. Horan, Assistant _______________ _______________ City Solicitor, on brief for defendants-appellees, City of Worcester, Massachusetts and Worcester Police Department. Joseph T. Black, Black & McCue on brief for defendant-appellee, ________________ ______________ Worcester Polytechnic Institute's Security Department. ____________________ ____________________ Per Curiam. We have carefully reviewed the parties' ___________ briefs and the record on appeal. We affirm the district court judgment of November 14, 1994, essentially for the reasons stated in the magistrate judge's report and recommendation, dated August 30, 1994. We add only the following. Contrary to plaintiff's suggestion, the Americans with Disabilities Act of 1990, Pub. L. No. 101-336 (codified at 42 U.S.C. 12101, et seq.) ("ADA") does not entitle him to a free lawyer in a civil case. Indeed, the ADA is not directed at the federal government at all. See, e.g., Title II of the ___ ____ ADA, 42 U.S.C. 12131 et seq., (prohibiting disability discrimination by instrumentalities of state and local governments). In any event, the district court did not abuse its broad discretion in denying plaintiff's motion to appoint counsel in this civil case. Although plaintiff is legally blind, he was aided by his father in the drafting of the submitted papers. Plaintiff's request for appointed counsel was based on the not uncommon plea that, as a lay person, he is unschooled in the intricacies of the law. Nonetheless, the papers demonstrated an ability to research and argue the merits of his cause. His impaired vision did not adversely impact his ability to represent himself. In addition, the merits of the case and the relatively non-complex nature of the legal issues did not present the exceptional circumstances which would warrant the appointment of counsel. See DesRosiers v. Moran, 949 F.2d 15, 23-24 (1st Cir. 1991) ___ __________ _____ (outlining the considerations underlying the decision to appoint counsel in civil cases). Affirmed. _________ -3-	{ "pile_set_name": "FreeLaw" }
543 U.S. 932 HARSHMANv.PENNSYLVANIA. No. 04-5736. Supreme Court of United States. October 12, 2004. 1 Super. Ct. Pa. Certiorari denied. Reported below: 815 A. 2d 1126.	{ "pile_set_name": "FreeLaw" }
644 F.Supp. 1033 (1986) Joanne BIMBO, Plaintiff, v. BURDETTE TOMLIN MEMORIAL HOSPITAL, Defendant. Civ. A. No. 83-0793. United States District Court, D. New Jersey. October 2, 1986. 1034 Schwartz & Fioretti by Stacey L. Schwartz, Cherry Hill, N.J. and Kohn, Savett, Marion & Graf, P.C. by David H. Weinstein, William Lytton, Philadelphia, Pa., for plaintiff. Horn, Kaplan, Goldberg, Gorny & Daniels, P.C. by William M. Honan, Atlantic City, N.J., and Valore, McAllister, Westmoreland, Gould, Vesper & Schwartz by Nina Chase, Northfield, N.J., for defendant. COHEN, Senior District Judge: Plaintiff, Joanne Bimbo, a registered nurse, instituted this civil rights action pursuant to Title VII of the 1964 Civil Rights Act, 42 U.S.C. § 2000e et seq, alleging retaliatory treatment by her former employer, Burdette Tomlin Memorial Hospital, Cape May Court House, New Jersey, ("BTMH" or "the Hospital") for her opposition to practices she perceived to be unlawful discrimination. In addition, plaintiff asserts pendant state law claims, alleging breach of contract and wrongful discharge.[1] She seeks compensatory damages, back pay, and reinstatement. 1035 The record in the case was supplemented, by stipulation of counsel, see transcript of July 31, 1986 at pp. 10-11, with the record of the nine-week jury trial in Nanavati v. Burdette Tomlin Memorial Hospital, et al, Civil Action Nos. 83-0794 & 84-1790 (hereinafter "Nanavati trial"), in which Ms. Bimbo testified on behalf of Dr. Suketu Nanavati. In lieu of specific findings of fact and conclusions of law, we issue this opinion pursuant to Federal Rule of Civil Procedure 52(a). Plaintiff was employed by BTMH in its nursing department from July, 1972 until March 18, 1982. She served as Head Nurse of the hospital's intensive care unit ("ICU") for five years, from February 1, 1977 until February 18, 1982, at which time she was demoted from ICU Head Nurse to staff nurse. Plaintiff was informed, at the time of her demotion, that she could not serve as a staff nurse in the ICU but that she could do so in any other department in the Hospital. Immediately thereafter, plaintiff left BTMH on a previously-planned vacation. While on vacation, she tendered her resignation, informing Ms. Teresa Karter, BTMH's Directress of Nursing at that time, that she would not be returning to BTMH because her demotion made such a return untenable. Exhibit 5014. On June 8, 1982, plaintiff filed a charge of discrimination with the Equal Employment Opportunity Commission ("EEOC"), alleging that she had been demoted in retaliation for her support of a minority physician, Dr. Suketu H. Nanavati. See plaintiff's Exhibit 6016. Dr. Nanavati, a board-certified cardiologist and a native of Ahmedabad, India, became a member of the BTMH Medical Staff in March, 1979. Shortly thereafter, a personal and professional feud erupted a feud ignited by Dr. Nanavati's reference to Dr. Sorenson, in the presence of the entire BTMH Medical Staff, as "inferiorily qualified"between Dr. Nanavati and Dr. Robert J. Sorenson, the Chief of Cardiology at BTMH.[2] At a fairly early stage in this feud, see transcript of Nanavati trial, May 22, 1986 at pp. 49-50, Dr. Sorenson orally accused plaintiff and other nurses present in the ICU of being "Indian lovers," an outburst for which he subsequently apologized to only one of the nurses, which apology, it may be assumed, was related to the other nurses. At some point thereafter, plaintiff, having received, apparently by virtue of her position as Head Nurse of the ICU, as did other Head Nurses and Departmental heads, copies of correspondence from various persons, including Dr. Sorenson, complaining about Dr. Nanavati, wrote a letter to Dr. Marvin Podolnick, the Chief of the hospital's Medical Staff. That letter, dated January 9, 1982 but which was apparently not actually mailed until approximately the third week of January, see transcript of Nanavati trial, May 22, 1982 at p. 56, reads as follows: This letter is written in response to several letters I have received copies of over the past months. They concern an incident involving Dr. Suketu H. Nanavati and a Monitor Bed Unit staff member. First, let me say that in 9 years of employment at Burdette Tomlin Hospital I've never found myself involved in something so unprofessional. Secondly, I don't feel I should have received copies of these letters frankly, it was none of my business. However, an issue does concern me very much it seems to me that emotions are taking precedent over our actual purpose, that is to provide the highest quality of patient care possible to the people of Cape May County. The ICU staff recently held our monthly "staff" meeting where this issue was discussed. We discussed the main issue of the prior mentioned letters. The differences Dr. Nanavati may have with some of the MBU staff is again, frankly, none of our business. I must add a 1036 personal note here. I have known Dr. Nanavati since he came to Burdette Tomlin about 3 years ago. I have always felt I have an excellent working relationship with all members of the medical staff, here at Burdette. Dr. Nanavati has been no exception. Intensive care usually provides an environment of constant stress, emergencies, grief and grieving, and the need for a vast array of knowledge for quick problem solving for a staff member there. Dr. Nanavati has always been supportive of the ICU staff. He is always eager to teach and answer questions (sic) we may have regarding care of our patients. In my opinion, his patients get the most optimum medical care. I have gone on ambulance runs with his critical patients to other institutions where his diagnosis and care of the patient while at Burdette was met with the highest regard by the physicians there. I nor any of my staff members in ICU have ever been chastised nor ridiculed by Dr. Nanavati. I feel this is important to write since there seems to be so much negativism about Dr. Nanavati lately. I sincerely hope my feelings will be respected. May I add that the rest of my staff feels this way also. Lastly, I sincerely hope a professional and healthy solution comes of all this for everyones' well-being. Within a month of sending this letter, plaintiff was informed, at her annual performance evaluation, that she was being removed from her position as Head Nurse of ICU. See transcript of Nanavati trial, May 22, 1986 at pp. 59-67. The reasons given to plaintiff for her demotion included: excessive lateness, failure to attend Head Nurse Workshops or tardiness in attendance, failure to expedite transfers of patients to and from the ICU, failure to attend staff scheduling workshops, and failure to timely submit nursing staff schedules. Plaintiff asserts, in her present action, that these reasons were merely a pretext for demoting her. She maintains that the true reason for the Hospital's decision to demote her was her support of Dr. Nanavati, as evidenced by her January 9, 1982 letter and her sustained cooperative working relationship with him. See plaintiff's reply summation at p. 4. She further contends that the decision to demote her, and the repercussions of that decision, amounted to a constructive discharge because such decision rendered working conditions at BTMH so intolerable that a reasonable employee would have been forced to resign. Such a discharge, plaintiff argues, was either in retaliation for her support of Dr. Nanavati, as a minority, in violation of Title VII of the 1964 Civil Rights Act, or for her support of Dr. Nanavati as a person against whom the Hospital was committing allegedly illegal or improper acts, in contravention of state law. Finally, plaintiff urges that the procedures employed in effectuating her demotion, irrespective of the true reasons therefor, ran afoul of an implied employment contract she held with the Hospital. We shall consider each of plaintiff's contentions in turn. Retaliatory Treatment for Opposition to Unlawful Discrimination Plaintiff's federal claim is one for protection against retaliation for opposition to unlawful discrimination, pursuant to § 704(a) of the Civil Rights Act of 1964, 42 U.S.C. § 2000e-3(a). This statute provides, in pertinent part: It shall be an unlawful employment practice for an employer to discriminate against any of his employees ... because he has opposed any practice made an unlawful employment practice by this subchapter, or because he has made a charge, testified, assisted or participated in any manner in an investigation, proceeding or hearing under this subchapter. In order to prevail on an action pursuant to this section, the plaintiff must establish three elements. First, she must show that she engaged in some statutorily protected opposition to discrimination; second, that there was some adverse employment action; 1037 and finally, that there was a causal connection between her opposition and the adverse employment action. E.g., Grant v. Bethlehem Steel Corp., 622 F.2d 43, 46 (2d Cir.1980). See generally B. Schlei & P. Grossman, Employment Discrimination Law 533, 534 (2d ed. 1983). Because we find that there was no causal connection between plaintiff's opposition to whatever practices or actions she perceived as discriminatory and her demotion, we shall enter judgment in favor of the defendant, BTMH, on plaintiff's Title VII claim.[3] The sole item of proof supporting plaintiff's allegation that her demotion was caused by her opposition to unlawful discrimination is the timing of the letter she wrote to Dr. Podolnick in relation to the date of her discharge. Although, of course, a preliminary inference of causation can be drawn from the fact that Ms. Bimbo's demotion occurred shortly after she sent the January 9 letter, this inference was unequivocally overcome in this case by the defendant's proof of a legitimate non-discriminatory reason for its action. The submitted proofs included highly credible testimony by both the former Directress of Nursing, who had actually made the decision to demote plaintiff, Ms. Karter, and the Associate Directress of Nursing at BTMH, Ms. Doris Baker. These witnesses testified, inter alia, that the reasons given to plaintiff for her demotion were in fact problems perceived well in advance of her letter to Dr. Podolnick and that numerous conversations with plaintiff were held over a considerable period of time apprising her of the perceived need for improvement with respect to these elements of her job performance. The evidence further showed that plaintiff was, in fact, late for work at least 104 times in the calendar year immediately preceding her demotion,[4] a figure greater than twice the number of times plaintiff had been late in previous years. After careful consideration of all of the evidence, we are convinced that the Hospital's decision to demote plaintiff was based entirely on legitimate business reasons. The Hospital has demonstrated, as a factual matter, plaintiff's repeated failure to report to work on time, despite numerous attempts by the Hospital to accomodate the scheduling demands of plaintiff's personal concerns. Such a record of tardiness, particularly when displayed by the Head Nurse of an Intensive Care Unit which requires some overlap in nursing personnel in order to convey essential information regarding patient care, was understandably intolerable to the employer hospital. We find that there was no retaliatory motive on the part of the defendant in its demotion of plaintiff, and we find no causal connection 1038 between plaintiff's demotion and her actions with respect to Dr. Nanavati. Accordingly, we shall enter judgment in favor of the defendant, BTMH, on plaintiff's Title VII claim. Wrongful Discharge Plaintiff maintains that her demotion, which she argues amounted to a constructive discharge, was in violation of public policy as reflected in Title VII of the Civil Rights Act of 1964 and the Sherman Antitrust Act, 15 U.S.C. § 1 et seq. Accordingly, plaintiff urges, her demotion was a "wrongful discharge" entitling her to relief without regard to the existence, or lack thereof, of an employment contract. In Pierce v. Ortho Pharmaceutical Corp., 84 N.J. 58, 417 A.2d 505 (1980), the New Jersey Supreme Court adopted a public policy exception to the common law rule known as the "at will doctrine." This doctrine provides that, in the absence of an employment contract, employers are free to terminate an employment relationship without cause. The Pierce court, balancing the interests of the employer, his employees, and the public, recognized a cause of action, in tort or contract or both, id. at 72, 417 A.2d 505, to provide a remedy for employees who are wrongfully discharged. The court held that an employee has such a cause of action when the discharge is contrary to a clear mandate of public policy. Id. Accepting, arguendo, plaintiff's contentions that her demotion amounted to constructive discharge, we nonetheless do not find that plaintiff is entitled to prevail on her wrongful discharge claim. The evidence in this case simply does not support a finding that plaintiff's "discharge" was contrary to public policy. Plaintiff urges this Court to find that her "discharge" was contrary to public policy because it was motivated by a desire to punish her for her support of Dr. Nanavati, against whom, she maintains, the Hospital was either discriminating or was committing an antitrust violation.[5] Assuming, without deciding, that some unlawful actions were taken by the Hospital against Dr. Nanavati, we are still without proof that such actions, or plaintiff's reactions thereto, were related, in any way, to plaintiff's "discharge." The evidence in this case clearly demonstrates that plaintiff was demoted for legitimate business reasons, and not by reason of some desire to penalize her. There is no evidence to support her claim that her demotion was, in any respect, violative of a public policy. There was no constructive discharge here. The Hospital had valid reasons for relieving her of her administrative duties. No problem was found with her ability as a nurse. Every opportunity was afforded her to continue her relationship with the Hospital as a staff nurse in any department of her choice. She was not discharged. She resigned. Accordingly, we shall enter judgment in favor of defendant, BTMH, on plaintiff's pendant wrongful discharge claim. Breach of Contract Plaintiff's final contention is that BTMH, by the manner in which it demoted her, materially breached its employment contract with her. In so arguing, plaintiff relies not on an individual written employment contract, but upon BTMH's "Personnel Policies and Administrative Practices" brochure, ("personnel policy manual"), Exhibit 6000, and recent New Jersey case law which recognizes the existence of a cause of action for breach of contract based upon implied promises in an employment manual. The BTMH policy manual states, in pertinent part: COUNSELLING AND PROGRESSIVE DISCIPLINE PROCEDURE If an employee violates hospital policy that is not considered a cause for immediate 1039 dismissal, it is the procedure of the hospital to counsel that employee through the progressive discipline system as follows: First Offense The Department Head or Supervisor will discuss the policy infraction with the employee on a verbal basis. Second Offense Will be documented in writing, reviewed and acknowledged by the employee's signature on the employee counselling form. This will be filed in the personnel jacket. Third Offense Will be documented in writing, reviewed and acknowledged by the employee's signature on the employee counselling form. The third offense could result in probation; suspension; (both); or termination. A written warning will be removed and destroyed providing there were no other policy infractions within two years from the date of the warning. Plaintiff, contending without rebuttal that she was not provided with any written documentation of her infraction of the Hospital's policy regarding excessive and repeated tardiness, prior to her demotion, urges that a material breach of these provisions occurred upon her demotion. This, she argues, constituted a breach of contract, entitling her to relief. Plaintiff's contention that the policy manual constituted an employment contract rests upon an application of Woolley v. Hoffmann-La Roche, Inc., 99 N.J. 284, 491 A.2d 1257 (1985), in which the New Jersey Supreme Court held that "absent a clear and prominent disclaimer, an implied promise contained in an employment manual that an employee will be fired only for cause may be enforceable against the employer even when the employment is for an indefinite term and would otherwise be terminable at will." Id. at 285-86, 491 A.2d 1257. Because we hold that the Woolley decision is not applicable to the case at bar,[6] we shall enter judgment in favor of defendant, BTMH, on plaintiff's breach of contract claim. In its 1985 Woolley decision, the New Jersey Supreme Court held that the legal effect of the dissemination of a personnel policy manual by a company with a substantial number of employees should be determined by traditional contract doctrine. 99 N.J. 284, 289. In so holding, the Woolley Court, to the extent it went beyond ruling only that fundamental principles of basic fairness must be adhered to in employment relationships, id. at 309, 491 A.2d 1257, see also Pierce v. Ortho Pharmaceutical Corp., 84 N.J. 58, 417 A.2d 505 (1980), clearly broke new ground in New Jersey employment law. As such, the Woolley decision, in our opinion, should not be applied retroactively. E.G., Spiewak v. Rutherford Board of Education, 90 N.J. 63, 447 A.2d 140 (1982). To apply such a significant change in the law retroactively would be distinctly unfair to those effected thereby who had previously acted in reliance upon the prior state of the law. See, e.g., Buono v. Board of Trustees of Teachers Pension and Annuity Fund, 188 N.J. Super. 488, 457 A.2d 1214 (App.Div.1983). In the present case, the operative facts giving rise to plaintiff's complaint her demotion in February of 1982 occurred more than three years before the New Jersey Supreme Court's decision in Woolley. Accordingly, in light of our holding that Woolley is not to be applied retroactively, *1040 plaintiff herein, in the absence of an individual employment contract, has no cause of action for breach of contract. We shall therefore enter judgment in favor of defendant BTMH on plaintiff's breach of contract claim. NOTES [1] Plaintiff's complaint was deemed amended to include the pendant breach of contract claim by a ruling of this Court. See slip op. of April 28, 1986 at p. 12. [2] The precise nature of and reasons for this feud, and the legal ramifications thereof, are the subject of lawsuits between these doctors and the hospital. These actions, Civil Action Nos. 83-0794 & 84-1790, were consolidated and tried before a jury for nine weeks in the case previously referred to herein as the Nanavati trial. [3] Our finding that no causal connection existed between plaintiff's demotion and her alleged opposition to discrimination obviates the need for rulings on two significant points of contention between the parties herein. The first of these issues is the question whether the practice opposed by the person aggrieved by the alleged § 704(a) violation must be in fact and in law a violation of Title VII. This issue arises in relation to the first element of plaintiff's case by virtue of the fact that the individual whom plaintiff asserts she was defending was held not to have a viable Title VII claim, as a matter of law. See Nanavati v. Burdette Tomlin Memorial Hospital, et al, C.A. Nos. 83-0794 & 84-1790 slip op. at 3-10 (D.N.J. June 23, 1986). The second issue, the question whether plaintiff's demotion amounted to a constructive discharge, bears upon the type of relief to which plaintiff might be entitled. The standard to be applied in determining whether an employer's acts of discrimination constitute a constructive discharge for Title VII purposes was recently discussed by the Third Circuit. In Goss v. Exxon Office Systems Co., 747 F.2d 885 (3d Cir.1984), the court held that no finding of specific intent by the employer to bring about a discharge was required to invoke the constructive discharge doctrine, but that a court "need merely find that the employer knowingly permitted conditions of discrimination in employment so intolerable that a reasonable person subject to them would resign." Id. at 888. [4] This figure was based on BTMH's payroll policy regarding lateness, which provides for a 12-minute grace period a 12-minute time span after the commencement of an employee's scheduled shift before an employee is considered late. According to BTMH's "nursing policy" with respect to tardiness, which grants no grace period, plaintiff was late for work 171 times in 1981. See tr. of August 4, 1986 at pp. 66-68. The latter figure represents 67% of the total number of plaintiff's paid work days for that year. Id. [5] The jury in the Nanavati case, Civil Action Nos. 83-0794 & 84-1790, found that the Hospital had not engaged in racial discrimination against Dr. Nanavati, but had participated in a contract, combination or conspiracy in restraint of interstate commerce which harmed him. [6] If the Woolley decision were to be applied retroactively to the instant case, significant issues would be presented with respect to whether plaintiff, who was a managerial employee, and who was demoted from an administrative position rather than discharged from employment, would be entitled to the procedural safeguards set out in the manual. Moreover, a substantial question would arise regarding whether Woolley was intended to be limited to the factual situation where an employee receives no actual notice of poor job performance. In this case, the facts clearly illustrate that the purpose of the notice requirement to allow the employee the opportunity to improve performance was satisfied by the Hospital's repeated attempts to solve the problems with Ms. Bimbo's administrative failings.	{ "pile_set_name": "FreeLaw" }
[DO NOT PUBLISH] IN THE UNITED STATES COURT OF APPEALS FOR THE ELEVENTH CIRCUIT ________________________ FILED U.S. COURT OF APPEALS No. 09-15215 ELEVENTH CIRCUIT MAY 6, 2010 Non-Argument Calendar JOHN LEY ________________________ CLERK Agency Nos. A095-894-831, A095-886-866 ANA DE TORRES HERNANDEZ, OLGA YURANY TORRES, LOUREN TATHIANA GAITAN, Petitioners, versus U.S. ATTORNEY GENERAL, Respondent. ________________________ Petition for Review of a Decision of the Board of Immigration Appeals _________________________ (May 6, 2010) Before EDMONDSON, BIRCH and CARNES, Circuit Judges. PER CURIAM: Ana de Torres Hernandez, along with her daughter and granddaughter, filed a petition for review with this Court on October 16, 2009.1 The petition states that Torres Hernandez seeks review of the BIA’s September 16, 2009 decision, which denied her motion for reconsideration. Torres Hernandez’s brief, however, challenges the BIA’s February 24, 2009 decision dismissing her appeal from the Immigration Judge’s decision denying her claims for withholding of removal and relief under the Convention Against Torture. Torres Hernandez’s brief fails to present any arguments about the BIA’s September decision denying her motion for reconsideration. I. “We review de novo our subject-matter jurisdiction.” Sanchez Jimenez v. United States Att’y Gen., 492 F.3d 1223, 1231 (11th Cir. 2007). A petition for review challenging an order of removal must be filed within 30 days of the date of the final order of removal. 8 U.S.C. § 1252(b)(1). The 30-day time period is “mandatory and jurisdictional” and is not subject to equitable tolling. Dakane v. United States Att’y Gen., 399 F.3d 1269, 1272 n.3 (11th Cir. 2005) (quotation marks omitted). Furthermore, filing a motion to reconsider will not stop the 30- day time-to-appeal clock from running. See Stone v. I.N.S., 514 U.S. 386, 405, 1 Torres Hernandez’s daughter, Olga Yurany Torres, is a co-petitioner, and her granddaughter, Louren Tathiana Gaitan, is a derivative petitioner. This opinion will refer to all three petitioners collectively as “Torres Hernandez.” 2 115 S.Ct. 1537, 1549 (1995) (“[A] deportation order is final, and reviewable, when issued. Its finality is not affected by the subsequent filing of a motion to reconsider.”). We lack jurisdiction to consider Torres Hernandez’s challenge to the BIA’s February 2009 decision dismissing her appeal. The petition for review was not filed until October 2009, which was long past the 30-day deadline, and the filing of the motion for reconsider did not stop that deadline from passing. We must dismiss the petition for lack of jurisdiction in this respect. II. As for Torres Hernandez’s challenge to the BIA’s decision denying her motion to reconsider, her initial brief presented no arguments at all on the subject. “When an appellant fails to offer argument on an issue, that issue is abandoned.” Sepulveda v. United States Att’y Gen., 401 F.3d 1226, 1228 n.2 (11th Cir. 2005). Similarly, “[t]his court has a well-established rule that issues and contentions not timely raised in the initial brief are deemed waived or abandoned.” United States v. Day, 405 F.3d 1293, 1294 n.1 (11th Cir. 2005). Although Torres Hernandez filed a timely petition for review of the BIA’s September 2009 decision, her initial brief does not address the standard of review, legal requirements, or factual arguments pertaining to the denial of her motion for 3 reconsideration. Accordingly, any argument on that issue is abandoned.2 DISMISSED IN PART, DENIED IN PART. 2 Torres Hernandez has also filed a motion for leave to file an amended brief, submitting an amended brief along with that motion. The amended brief addresses the BIA’s denial of her motion for reconsideration. The motion for leave to file an amended brief is DENIED. We do not consider issues that are not timely raised in the initial brief, nor do we permit supplemental briefs that seek to raise new issues on appeal. See United States v. Levy, 379 F.3d 1241, 1242 (11th Cir. 2004). 4	{ "pile_set_name": "FreeLaw" }
IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE THE HONORABLE KAREN WELDIN ) STEWART, CIR-ML, INSURANCE ) COMMISSIONER OF THE STATE OF ) DELAWARE, IN HER CAPACITY AS ) THE RECEIVER OF SECURITY PACIFIC ) INSURANCE COMPANY, INC. IN ) LIQUIDATION, SPI-202, INC. IN ) LIQUIDATION, SPI-203, INC. IN ) C.A. No. 9306-VCP LIQUIDATION, and SPI-204, INC. IN ) LIQUIDATION, ) ) Plaintiff, ) ) v. ) ) WILMINGTON TRUST SP SERVICES, ) INC., JOHNSON LAMBERT & CO., LLP, ) JOHNSON LAMBERT, LLP, McSOLEY ) McCOY & CO., JAMES M. JACKSON, ) PAUL D. KING, KEVIN R. DAVIS, and ) STEPHEN D. KANTNER, ) ) Defendants. ) OPINION Date Submitted: November 20, 2014 Date Decided: March 26, 2015 Diane J. Bartels, Esq., Wilmington, Delaware; Jeffrey B. Miceli, Esq., BLACK & GERNGROSS, P.C., Philadelphia, Pennsylvania; Attorneys for Plaintiff The Honorable Karen Weldin Stewart, CIR-ML, Insurance Commissioner of the State of Delaware, in her Capacity as the Receiver of Security Pacific Insurance Company, Inc. in Liquidation, SPI-202, Inc. in Liquidation, SPI-203, Inc. in Liquidation, and SPI-204, Inc. in Liquidation. C. Malcolm Cochran, IV, Esq., Chad M. Shandler, Esq., Blake Rohrbacher, Esq., RICHARDS, LAYTON & FINGER, P.A., Wilmington, Delaware; Attorneys for Defendants Wilmington Trust SP Services, Inc. and Stephen D. Kantner. Kevin A. Guerke, Esq., SEITZ VAN OGTROP & GREEN P.A., Wilmington, Delaware; Kevin M. Murphy, Esq., Alexander M. Gormley, Esq., CARR MALONEY P.C., Washington, D.C.; Attorneys for Defendants Johnson Lambert & Co. LLP and Johnson Lambert LLP. John D. McLaughlin, Jr., Esq., CIARDI CIARDI & ASTIN, LLC, Wilmington, Delaware; Jonathan S. Ziss, Esq., Seth L. Laver, Esq., GOLDBERG SEGALLA LLP, Philadelphia, Pennsylvania; Attorneys for Defendant McSoley McCoy & Co. PARSONS, Vice Chancellor. The key issue in this Opinion is when, under Delaware law, a corporation may state claims against third parties, like auditors, who are implicated in the alleged misconduct of the corporation‘s directors and officers. The plaintiffs here are four Delaware-domiciled captive insurance companies, with the Insurance Commissioner of the State of Delaware prosecuting their claims as their receiver in liquidation. The complaint alleges an array of fraudulent conduct on the part of the four companies‘ president, CEO, and sole stockholder. The other directors of the corporations also are alleged to have breached their fiduciary duties by either assisting or failing to catch and report those fraudulent acts. As relevant here, the complaint also includes claims against the companies‘ auditors and their administrative management company for breaches of fiduciary duty, breach of contract, negligence, and aiding and abetting breaches of fiduciary duty. Those defendants moved to dismiss, contending that the wrongdoing of the companies‘ officers and directors is imputed to each of the corporations themselves, and that the doctrine of in pari delicto bars the court from intervening to adjudicate claims between wrongdoers. In addition, the moving defendants seek dismissal of the claims against them based on the defense of laches and for failure to allege the necessary elements of certain of the putative causes of action. The receiver disputes the applicability of these defenses and denies that in pari delicto should bar her claims for several different reasons. I first conclude that Delaware law governs the entirety of the pending motions. Next, I reject the moving defendants‘ laches defense as without merit in the circumstances of this case. After that, I briefly address the motions of the auditors, the 1 administrative management company, and its defendant-employee to dismiss the various claims for breach of fiduciary duties. I grant this aspect of the motions as to those defendants, except the defendant-employee who was a director of the plaintiff insurance companies. I then take up the issue of whether in pari delicto requires dismissal of the remaining claims. For the reasons stated in this Opinion, I conclude that in pari delicto does apply in this case, and that it effectively would bar the relevant claims against the moving defendants, unless I found applicable one of the exceptions urged by the receiver. In the circumstances of this case, the well-known ―adverse interest‖ exception does not apply. The receiver also contends that the Court should set aside the in pari delicto doctrine on public policy grounds tied to the specific concerns involved in the insurance receivership context. But, I conclude that the facts of this case do not support such a result. Finally, I address the argument that Delaware law should recognize an ―auditor exception‖ to the in pari delicto rule, as some states have done. Because I do not read the applicable Delaware cases as supporting the conclusion the receiver urges, and I am not convinced that Delaware public policy would be well-served by a broad auditor exception, I reject that argument as it relates to the claims for breach of contract and negligence and dismiss those claims on grounds of in pari delicto. I decline to dismiss the claims for aiding and abetting a breach of fiduciary duty on that basis, however, because I conclude, based on Delaware case law and the relevant policy concerns, that the well-established ―fiduciary duty‖ exception to in pari delicto would cover those claims. 2 Finally, I examine the aiding and abetting claims against each of the auditors and the administrative management company. Based on the allegations in the Complaint, I deny the motions to dismiss those claims, except as they relate to the auditor that was retained second. I. BACKGROUND1 A. The Parties This case concerns Security Pacific Insurance Company, Inc. (―Security Pacific‖), SPI-202, Inc. (―SPI-202‖), SPI-203, Inc. (―SPI-203‖), and SPI-204, Inc. (―SPI-204,‖ and collectively, the ―SPI Entities‖). All of the SPI Entities are Delaware corporations. From December 31, 2007, to June 15, 2011, they operated as Delaware-domiciled special purpose captive insurance companies. On June 15, 2011, this Court entered an order in a related action placing the SPI Entities into liquidation pursuant to 18 Del. C. § 5906 (the ―Liquidation Action‖).2 Plaintiff in this action is the Honorable Karen Weldin Stewart, the Insurance Commissioner of the State of Delaware, who brings this action as Receiver of the SPI Entities in liquidation. The Complaint initially named eleven Defendants: Wilmington Trust SP Services, Inc. (―Wilmington Trust‖); Johnson Lambert & Co., LLP; Johnson 1 All facts recited herein are drawn from the well-pled allegations of Plaintiff‘s Verified Complaint (the ―Complaint‖). 2 In re Liquid. of Sec. Pac. Ins. Co., C.A. No. 6317-VCP, at 17 (Del. Ch. June 15, 2011) (ORDER) (the ―Liquidation Order‖); see also In re Liquid. of Sec. Pac. Ins. Co., C.A. No. 6317-VCP (Del. Ch. June 28, 2011) (the ―Motion for Liquidation Transcript‖). 3 Lambert, LLP; McSoley McCoy & Co. (―McSoley McCoy‖); Ryan Building Group, Inc. (―Ryan Building Group‖); Kevin R. Davis; James M. Jackson; James L. Jackson; Stephen D. Kantner; Paul D. King; and Anthony P. Muñoz.3 As relevant to this Opinion, Wilmington Trust, a Delaware corporation with its principal place of business in Wilmington, Delaware, provided management and administrative services to the SPI Entities. Defendant Kantner, an individual residing in Delaware, was an employee of Wilmington Trust and also a member of the boards of directors of the four SPI Entities. Johnson Lambert & Co., LLP, is a South Carolina limited liability partnership based in South Carolina, and Johnson Lambert, LLP, is a Virginia limited liability partnership based in North Carolina (together, ―Johnson Lambert‖).4 As discussed in further detail below, Johnson Lambert and McSoley McCoy, a Vermont corporation with its principal place of business in Vermont, each provided certified public accountant and independent auditor services to the SPI Entities. Currently before the Court are motions to dismiss filed by Johnson Lambert and McSoley 3 The Receiver voluntarily dismissed the claims against Ryan Building Group on April 10, 2014. As noted infra in Section I.C, I dismissed the Complaint as it relates to James L. Jackson and Anthony Muñoz on August 12, 2014. 4 The Receiver alleges that Johnson Lambert & Co., LLP‘s rights, duties, and liabilities were assumed by Johnson Lambert, LLP in 2012. Compl. ¶ 14. Johnson Lambert asserts that the underlying company always has been the same; it simply changed its name from the former to the latter. Because this point is immaterial to the pending motions, I refer only to ―Johnson Lambert‖ for the remainder of this Opinion. 4 McCoy (together, the ―Auditor Defendants‖), and by Wilmington Trust and Kantner (collectively, the ―Moving Defendants‖). B. Facts 1. The SPI Entities In 2005, Defendant James M. Jackson formed Security Pacific Insurance Company, Inc., as a captive insurance company incorporated in the District of Columbia (―SPIC-DC‖). In general terms, a ―captive insurance company‖ is a business entity formed as a subsidiary of a non-insurance parent company for the purpose of insuring the parent‘s business risk, or the risk of the parent‘s affiliates or customers. It is a self- insurance mechanism in which the insurer is wholly owned by the insured. In the State of Delaware, captive insurance companies, like all commercial insurers, are subject to extensive regulatory oversight and requirements, ranging from licensure and reporting to minimum capital and reserve thresholds.5 Jackson,6 through a wholly owned holding company, was the sole owner of SPIC- DC. He also owned an insurance brokerage company, nonparty J. Mading Financial and Insurance Services, Inc. (―J. Mading‖), which, in collaboration with SPIC-DC, designed and marketed insurance solutions using captive insurance companies. For example, Ryan Building Group, a client of J. Mading‘s, was insured by a subsidiary of SPIC-DC, and nonparty OOM, LLC was insured by another. Those two clients, which engaged in 5 See generally 18 Del. C. §§ 6901 to 6983. 6 Because Defendant James L. Jackson has been dismissed from this action, the use of the name ―Jackson‖ in this Opinion refers to Defendant James M. Jackson. 5 residential construction, apparently entered into participation agreements by which SPIC- DC and its ―cells,‖ or subsidiary captives, would provide warranty reimbursement, general liability, property, excess, and environmental liability insurance coverage. Beginning in July 2007, Jackson sought to re-domicile SPIC-DC and its subsidiary cells to Delaware. According to Jackson‘s plan, SPIC-DC would merge into Security Pacific, the Delaware corporation at issue in this case, and SPIC-DC‘s cells would merge into the newly incorporated SPI-202 and SPI-203 entities. SPI-204 would be created to insure the risk of Alexa Holding Company, LLC, another entity solely owned by Jackson. Pursuant to the relevant statutory provisions, Jackson submitted an application for authorization to the Delaware Department of Insurance (―DDOI‖). In the application documents, Jackson represented that the SPI Entities would hold initial capital amounts, in the aggregate, of roughly $2.7 million, with some additional reserves in the form of letters of credit.7 Included in these application documents were SPIC-DC‘s audited financial statements covering the time period from its inception in 2005 to December 31, 2006, which reported that SPIC-DC had total assets of roughly $4.8 million.8 Those audited financial statements were prepared and certified by Johnson Lambert. In October 2007, SPIC-DC entered into a Management Services Agreement (the ―MSA‖) with Wilmington Trust, whereby Wilmington Trust agreed to serve as Security 7 According to the application documents, Jackson represented that Security Pacific, SPI-202, SPI-203, and SPI-204 would hold initial capital amounts, respectively, of $962,792; $639,051; $349,356; and $698,968. Compl. ¶¶ 63-67. 8 Compl. ¶¶ 68-69; id. Ex. B. 6 Pacific‘s ―captive manager‖ in Delaware by providing administrative, compliance, and other related services.9 Wilmington Trust also would ensure that the SPI Entities conformed with certain statutory requirements, by, for example, providing a ―place of business‖ in Delaware, and retaining all of the SPI Entities‘ original documentation and books and records here.10 Consistent with the legal requirements, Defendant Kantner, who was employed as an Accounting Supervisor at Wilmington Trust, served as a ―resident‖ director on the boards of each of the SPI Entities.11 As relevant here, the captive management services provided by Wilmington Trust included bookkeeping, financial account reconciliation and review, and preparation of unaudited financial statements. In this regard, Wilmington Trust regularly reviewed information regarding the SPI Entities‘ bank accounts. The Complaint alleges that Jackson provided monthly financial statements for the relevant accounts via an online data link run through J. Mading.12 The Complaint also avers that Jackson‘s position as the intermediary between Wilmington Trust and Bank of America, Wells Fargo, and Wachovia—the banks housing the SPI Entities‘ financial accounts—was critical to his fraudulent scheme.13 9 Id. ¶¶ 71-80; id. Ex. C. 10 18 Del. C. §§ 6903(b), 6923. 11 Compl. ¶¶ 74, 88. 12 Id. ¶¶ 81-82. 13 Id. ¶¶ 83-85. 7 In November 2007, SPIC-DC engaged Johnson Lambert to prepare audited financial statements for the calendar year ending December 31, 2007 (the ―2007 Audited Financial Statements‖).14 On December 31, 2007, the DDOI approved the SPI Entities‘ application for a certificate of authorization, contingent on satisfactory receipt of the 2007 Audited Financial Statements, and Security Pacific, SPI-202, SPI-203, and SPI-204 were incorporated in Delaware as special purpose captive insurance companies. 2. The 2007 Audited Financial Statements are prepared and approved amidst irregularities The allegations relating to the 2007 Audited Financial Statements span 120 paragraphs and over 40 pages of the Complaint. They describe in remarkable detail a process in which Wilmington Trust and Johnson Lambert, from February to December 2008, struggled to obtain the necessary confirmations to complete the audit. In the interests of brevity and clarity, I recount the well-pled facts relating only to the most significant areas of irregularity in this process. The first such area involved confirming the cash surrender value of a ―key man‖ life insurance policy issued by Hartford Life and Annuity Insurance Company (―Hartford Life‖) in December 2005, which insured the life of Jackson for a face value amount of about $23.5 million (the ―Key Man Policy‖). 15 That policy was owned by SPIC-DC, and its purported cash value comprised the bulk of the assets Security Pacific claimed in its application to the DDOI. The 2005 and 2006 14 Id. ¶ 89; id. Ex. D [hereinafter the ―2007 Johnson Lambert Engagement Letter‖]. 15 Id. ¶¶ 64, 100, 103. 8 audited financial statements of SPIC-DC, prepared by Johnson Lambert, certified that the Key Man Policy had a cash value of $628,783 as of December 31, 2006. As discussed below, the audited financial statements for 2007, 2008, and 2009 continued to ―confirm‖ the policy‘s cash value. In reality, the policy had lapsed in May 2006 and was worthless. A second area in which Wilmington Trust and Johnson Lambert encountered difficulty in producing audited financial statements for the SPI Entities was confirming the cash and cash equivalents held in the several accounts they maintained at Bank of America, Wachovia Bank, Wachovia Securities, and Wells Fargo. As with the Key Man Policy, Johnson Lambert had confirmed the balances in these accounts in connection with the 2005 and 2006 audits of SPIC-DC.16 By the time the Receiver took control of the SPI Entities in 2011, however, several of the bank accounts were basically empty, even though the 2007, 2008, and 2009 audits had ―confirmed‖ that they had held several million dollars in the aggregate in those years. a. The Key Man Policy The interactions between Jackson, Wilmington Trust, and Johnson Lambert in connection with the confirmation of the Key Man Policy exemplify the larger pattern of delay tactics, deception, and otherwise questionable conduct that the Receiver ascribes to Jackson. In February 2008, Johnson Lambert asked Allan Drost of Wilmington Trust to obtain from Jackson a full, signed copy of the Key Man Policy. Drost emailed Jackson, who responded that he would assemble the necessary documents later that same day. 16 Id. ¶¶ 100-101. 9 Several months passed, however, without any follow-up from Jackson.17 In early June 2008, Drost sent a series of confirmation forms to Jackson for him to sign and submit to Johnson Lambert. Around the same time, Drost advised Thomas Bolton of Johnson Lambert that Wilmington Trust intended to send a letter to the DDOI, advising it that the SPI Entities‘ audited financials were delayed, but would be provided by the end of July. Bolton agreed that that timeframe was not a problem.18 On July 23, 2008, Justine Holeman of Johnson Lambert received a letter from Hartford Life informing Johnson Lambert that, because the confirmation inquiry they had submitted to Hartford Life was not signed by Jackson, they had forwarded the requested information to Jackson rather than to Johnson Lambert directly.19 On the same day, Hartford Life sent Jackson a letter informing him that the Key Man Policy lapsed on May 21, 2006, and ―does not have any value or coverage at this time.‖20 A week later, Colleen Handy of Johnson Lambert emailed Jackson to ask if there was ―any resolution‖ on the Key Man Policy confirmation and request that ―someone from your office forward it on to us,‖ because Hartford Life told Johnson Lambert that they sent it to Jackson.21 17 Id. ¶¶ 106-108. 18 Id. ¶¶ 110-114. 19 Id. ¶¶ 127-128. 20 Id. ¶ 130. 21 Id. ¶ 132. 10 The Receiver alleges that Johnson Lambert knew, or should have known, that it was a breach of its internal policies and generally accepted auditing standards for it to seek the requested confirmation from Jackson, instead of directly from Hartford Life.22 In any event, ten weeks went by without Jackson providing Johnson Lambert any confirmation regarding the Key Man Policy. Handy again emailed Jackson on September 29, 2008. He still did not respond.23 Unbeknownst to Handy, that same day Jackson faxed another confirmation request to Hartford Life. By letter dated October 10, 2008, Hartford Life responded, again informing Jackson that the Key Man Policy was no longer active. The Receiver alleges that this second request from Jackson was a ruse, and that he sent it simply to obtain the name and title of a different Hartford Life employee, which he got in the October 10 letter.24 According to the Complaint, Jackson used this information to alter the original confirmation inquiry form Johnson Lambert had sent to Hartford Life in July 2008. On October 24, 2008, nearly eight months after her initial request, Handy of Johnson Lambert reported to Drost of Wilmington Trust that she had received confirmation that the Key Man Policy was current and held a cash value of $716,000 as of December 31, 2007.25 This confirmation was a forgery, allegedly sent via facsimile to 22 Id. ¶¶ 129, 133. 23 Id. ¶¶ 167-168. 24 Id. ¶¶ 184-185. 25 Id. ¶ 187. 11 Handy from Jackson, who had disguised the transmission as having come from Hartford Life. The faxed confirmation form stated that the original would be mailed, but no original ever arrived. Yet, Johnson Lambert never inquired further.26 b. The bank account confirmations The alleged irregularities surrounding the SPI Entities‘ bank account confirmations are even more suspicious than the long-delayed and apparently forged Key Man Policy confirmation. The bank confirmation process unfolded during the same time period as that regarding the Key Man Policy, starting in June 2008. As with the Key Man Policy, Jackson delayed or failed to respond to the initial requests from Wilmington Trust. In mid-July, Jackson signed request forms that Handy sent to the banks, with the instruction that the banks should confirm the relevant account balances and return the original confirmation requests, or ―confirms‖ as they were called, by mail directly to Johnson Lambert.27 Six bank account confirms evidently were needed to prepare the 2007 Audited Financial Statements. In late July and August 2008, as Handy at Johnson Lambert was receiving the account confirms from the banks, she was having difficulty matching them up with the account statements that Jackson had given to Wilmington Trust. 28 In addition, one of the larger accounts, a Wachovia Securities money market account, could 26 Id. ¶¶ 189-191. 27 Id. ¶¶ 121-123. 28 Id. ¶¶ 135-137. 12 not be confirmed because, according to Wachovia, Jackson had not paid the nominal confirmation processing fee.29 As August drew to a close, Drost emailed Jackson a list of issues that were preventing Johnson Lambert from completing its audit. The issues included that: (1) Johnson Lambert needed to contact Jackson‘s person at Wachovia to expedite the confirms on several of the banking accounts; (2) a Wachovia Securities account confirm showed a balance that was $300,000 less than the corresponding bank statement Jackson provided; (3) the confirm for a Wells Fargo money market account owned by SPI-203 reflected a balance of only $104, while the corresponding statement submitted by Jackson showed a balance of $2,361,706; (4) another Wells Fargo account was apparently closed, while Jackson‘s statement showed it open and holding a $10,000 balance; and (5) there were discrepancies with three Bank of America confirms, but the bank would not discuss them with Johnson Lambert.30 One would think that item (3), at least, screamed for attention. Patrick Theriault of Wilmington Trust emailed Jackson, saying that these issues were ―puzzling to say the least,‖ and that the ―significant variances . . . do not appear to make sense.‖31 On September 4, Handy emailed Drost of Wilmington Trust to say that she still had not received a signed request form from Jackson. Although Jackson told her that he tried to send it, but it ―got bounced back to him,‖ Handy considered that odd 29 Id. ¶¶ 138-141. 30 Id. ¶ 147. 31 Id. ¶ 145. 13 because Jackson had emailed her that day, and he ―does have the right email address.‖32 Around the same time period, Drost and Theriault told Jackson that these ―logistical difficulties‖ could be avoided if Wilmington Trust had direct access to the bank accounts. Jackson allegedly ignored the request, and never took steps to give Wilmington Trust such access.33 As the process dragged on, the Wells Fargo, Wachovia Bank, and Wachovia Securities accounts proved the most difficult for Johnson Lambert to confirm and reconcile. In September 2008, Jackson instructed Wilmington Trust and Johnson Lambert that, instead of going through the audit departments at the banks, they should speak directly with Jackson‘s contacts—Joe Lobe or his assistant Pamela Goyette at Wells Fargo, and ―Alpesh‖ or his assistant ―Rachel‖ at Wachovia. 34 The Receiver avers that an Alpesh Patel was employed during this time by Wachovia Securities, but that the ―Alpesh‖ and ―Rachel‖ to whom Jackson referred were in fact ―accomplices of [Jackson], if they existed at all.‖35 Jackson apparently never provided the last name of ―Alpesh.‖ Moreover, the Complaint alleges that ―a simple internet search‖ at that time would have revealed that the phone number Jackson provided for ―Alpesh‖ was not a Wachovia 32 Id. ¶ 149. 33 Id. ¶¶ 152-153. 34 Id. ¶ 156. 35 Id. ¶ 157. 14 number.36 Instead, it appears that Jackson‘s own J. Mading used that phone number. Indeed, J. Mading had included it on its website and in other publications.37 On September 29, 2008, Handy notified Drost that the Wells Fargo and Wachovia account confirms were ―rec‘d and tied,‖ without any further explanation. The Wachovia confirms allegedly were provided by ―Rachel,‖ the purported assistant of ―Alpesh.‖38 A day later, Handy told Drost and Theriault that she had attempted unsuccessfully to call ―Alpesh‖ and Lobe multiple times. In response, Drost asked whether ―the Wachovia contact [was] a different person for the Wachovia Securities confirm, or is this a contact for the regular retail banking accounts?‖ He also indicated that they should be ―curious‖ about the Wells Fargo and Wachovia Securities confirmations, because of their ―sudden resolution.‖39 When Handy confirmed that ―Alpesh‖ was the contact Jackson had given for both Wachovia Bank and Wachovia Securities, Drost observed that, ―This is a little odd as Wachovia Securities is on the Trust side of the Wachovia structure,‖ and that in his experience, ―Most banks . . . have definitive separation . . . between their retail banking side of the business and the trust (investment) side.‖40 Drost concluded that it ―maybe, and hopefully is, OK,‖ but that he would ―try to contact both of them as well, to 36 Id. ¶¶ 160, 162. 37 Id. ¶ 162. 38 Id. ¶¶ 165-166. 39 Id. ¶¶ 171-172. 40 Id. ¶ 174. 15 confirm if there was any specific reasons why suddenly now they are able to satisfy all the confirmations.‖41 Nearly a month later, as of late October, Handy still had not heard from either ―Alpesh‖ or Lobe despite having left messages and asked Jackson several times to instruct them to call her, or to set up a conference call for all of them. The discrepancies between the statements provided by Jackson and the confirms received from Wachovia— which allegedly had exceeded $2,000,000—were the only things preventing the 2007 Audited Financial Statements from being completed. Through an email to Jackson, Drost joined in Handy‘s pleas. Their efforts persisted through November and most of December. It was not until December 29, 2008, however, that Bolton of Johnson Lambert received a call from a person identifying himself as ―Alpesh.‖ The caller explained that the bank confirmation discrepancies purportedly appeared because ―they sold ars [sic] securities before year end that took a while to clear.‖42 Bolton attempted to verify this information with Drost, but Drost could not find any trades that might fit Alpesh‘s description. In a communication to Drost, Bolton stated that he thought ―maybe they were sold from another account [and] then deposited into this one? At any rate does this 41 Id. ¶ 175. 42 Id. ¶ 204. 16 make sense to you? He caught me at a bad time and the reception was not good, so it was hard to hear him.‖43 Drost, admitting that he was ―being optimistic,‖ thought that the explanation given by ―Alpesh‖ potentially could be chalked up to internal errors at the bank, and the lengthy delays and inconsistencies to the bank wanting to ―save face.‖ In any event, based on the new documents provided by ―Rachel‖ and ―Alpesh,‖ Drost considered the bank confirmation to have been completed satisfactorily. According to the Receiver, in preparing the final 2007 Audited Financial Statement, Johnson Lambert used the fraudulent bank account balances from the documents that Jackson provided and ―Alpesh‖ confirmed, rather than the different and significantly lesser amounts reflected in the written confirmations that it obtained directly from the banks.44 As a result, the 2007 Audited Financial Statement, which was completed at the end of December 2008, reported that SPIC-DC held about $7.1 million in assets as of December 31, 2007. c. The SPI Entities’ Boards approve the 2007 Audited Financial Statements Special meetings of the boards of directors of Security Pacific, SPI-202, SPI-203, and SPI-204 were held at the Delaware offices of Wilmington Trust on February 3, 2009 (the ―February 2009 Meetings‖). The boards of the SPI Entities were identical; they consisted of Jackson, James L. Jackson, King, Davis, and Kantner. Drost and Theriault 43 Id. ¶ 206. 44 Id. ¶ 209. 17 allegedly attended the February 2009 Meetings in person or by teleconference, and one of them served as secretary and recorded the meeting minutes. Notably, the audited financials were accompanied by a letter addressed to the SPI Entities‘ boards from Johnson Lambert (the ―Significant Matters Letter‖). 45 The Letter discussed the significant delay in completing the audit, and noted that six of the seven bank account confirmations diverged from the relevant account statements by ―significant amounts ($2,361,602 in one case)‖ and that several follow-up inquiries were needed to resolve the discrepancies.46 Johnson Lambert also addressed a letter to Jackson, as President and Chairman of Security Pacific, outlining several recommendations for improving operations (the ―Jackson Letter‖). The Jackson Letter, which was provided to the entire Board, indicated that the identified issues were ―not considered to be material weaknesses.‖47 The minutes allegedly indicate that the directors reviewed the 2007 Audited Financial Statements and approved them with ―no substantive discussions or debate.‖ 48 3. The 2008 Audited Financial Statements are prepared and approved Wilmington Trust‘s MSA automatically renewed at the end of 2008, and it therefore remained the captive manager for the SPI Entities. Johnson Lambert again was 45 Id. Ex. F [hereinafter ―Significant Matters Letter‖]. 46 Id. ¶ 217. 47 Id. ¶ 218; id. Ex. G [hereinafter ―Jackson Letter‖]. 48 Id. ¶ 216. 18 retained to serve as the SPI Entities‘ certified public accountant and independent auditor for the preparation of the audited financial statements for the calendar year ending December 31, 2008 (the ―2008 Audited Financial Statement‖).49 Wilmington Trust and Johnson Lambert began the process of preparing that statement early in 2009. The Receiver‘s allegations with respect to the 2008 Audited Financial Statement are substantially similar to those relating to the 2007 Audited Financial Statement. In particular, the Complaint alleges that Jackson engaged in delay tactics and obfuscation in his dealings with Wilmington Trust and Johnson Lambert.50 On June 23, 2009, Jackson allegedly delivered to Johnson Lambert another fraudulent confirmation for the Key Man Policy, after he had corresponded again with Hartford Life and received a second indication that the Key Man Policy lapsed in October 2006 and was worthless.51 After receiving the fraudulent facsimile confirmation of the Key Man Policy from Jackson, Johnson Lambert never obtained the original or otherwise followed up with Hartford Life. 49 Id. ¶¶ 223-224. 50 Id. ¶¶ 227-238. 51 Id. ¶¶ 239-253. In this regard, I also note that Johnson Lambert received a letter from Hartford Life in June 2009, indicating that Johnson Lambert‘s confirmation form could not be processed because it was not signed by the policy owner. According to the Receiver, this was another red flag because Johnson Lambert had not sent a confirmation form to Hartford Life; rather, it is alleged that Jackson had emailed Hartford Life a form that was intended for Handy of Johnson Lambert to submit to Hartford Life. Id. ¶¶ 243-244. 19 Also in June of 2009, Wilmington Trust and Johnson Lambert received allegedly fraudulent bank account confirmations from Jackson or his accomplice ―Alpesh.‖ Using that information, Johnson Lambert completed the 2008 Audited Financial Statement. As of September 2009, however, Johnson Lambert allegedly still was waiting for bank statements and other items from Jackson so that it could perform the confirmations needed for the ―subsequent events‖ aspect of the audit.52 The boards of the SPI Entities held their annual meetings on October 8, 2009, at Wilmington Trust‘s Delaware office (the ―October 2009 Meetings‖). As of that date, the composition of the boards had changed. The directors for each of the SPI Entities in October 2009 consisted of Jackson, Muñoz, King, Davis, and Kantner. Drost and Theriault also attended the October 2009 Meetings.53 At those meetings, the boards approved the 2008 Audited Financial Statement, again with little or no discussion. Notably, there is no indication that Johnson Lambert ever followed up on the Significant Matters Letter or the Jackson Letter. As discussed above, those letters were provided to the Board in connection with the previous audit. They recommended that the SPI Entities change their procedures to conduct bank reconciliations on a monthly basis, and confirm accounts with the banks on a quarterly basis, in light of the ―numerous differences‖ experienced in the 2007 Audited Financial Statements.54 In a similar vein, 52 Id. ¶ 269. 53 Id. ¶¶ 270-272. 54 Jackson Letter 2. 20 Wilmington Trust had requested during the preparation of the 2007 Audited Financial Statements to have direct access to the bank accounts. The Complaint suggests that none of those recommended changes were made in the months between the February 2009 Meetings and the October 2009 Meetings. Indeed, it appears that neither Johnson Lambert, nor Wilmington Trust, nor any of the SPI Entities‘ directors inquired at the October 2009 Meetings as to the status of either of those previously reported deficiencies or suggested procedural improvements.55 In any event, the recommended changes were never made. 4. The 2009 Audited Financial Statements are prepared and approved At the October 2009 Meetings, Jackson notified the SPI Entities‘ boards that he did not intend to re-engage Johnson Lambert for the companies‘ next audit. Wilmington Trust‘s contract automatically renewed and in its continuing role as the captive manager, it assisted in seeking a new accounting and audit firm. Pursuant to an agreement dated April 23, 2010, McSoley McCoy was engaged to perform the SPI Entities‘ audit for the year ending December 31, 2009 (the ―2009 Audited Financial Statement‖).56 In May 2010, Drost forwarded to Nicholae Lungu of McSoley McCoy the bank and Key Man Policy confirmations used in connection with the prior year‘s audit. In his email to Lungu, Drost explained that, ―In previous years, all of the Wachovia and Wachovia Securities confirmations were additionally faxed to a representative there 55 Compl. ¶¶ 274-279. 56 Id. ¶ 282; id. Ex. I. 21 named Alpesh, since he was able to make sure these were responded to right away, and avoided the new $25 audit confirmation response fee that they were initiating.‖57 Drost copied Jackson on the email and asked him to ―please confirm this person‘s full name, and his contact information,‖ saying that he only had a phone number for Alpesh‘s assistant, and was not having ―any success getting through, or even getting an opportunity to leave a message.‖58 About two months later, either Jackson or ―Alpesh‖ complied with Drost‘s request for bank confirmations. The documents provided, however, were fraudulent confirmations as to the bank accounts, and yet another forged Key Man Policy confirmation, which showed the Policy as still effective and having a $700,000 cash value.59 Like Johnson Lambert, McSoley McCoy never obtained the original policy from Hartford Life or otherwise communicated directly with them regarding the Key Man Policy. McSoley McCoy completed the 2009 Audited Financial Statements at the end of July 2010. As with the 2007 and 2008 Audited Financial Statements, this one ―confirmed‖ that the SPI Entities‘ total capitalization was around $7 million. The SPI Entities‘ boards again met at Wilmington Trust on December 15, 2010 (the ―2010 Meetings‖). By the time of that meeting, only Jackson, Davis, and Kantner remained as 57 Id. ¶ 287. 58 Id. 59 Id. ¶ 291. 22 directors of the boards of Security Pacific, SPI-202, SPI-203, and SPI-204.60 The Complaint does not address when, how, or why Muñoz and King left the boards or the reasons for the director turnover between the February 2009 and October 2009 Meetings. As with the previous two meetings, Drost and Theriault attended the 2010 Meetings on behalf of Wilmington Trust. At those Meetings, the boards approved the 2009 Audited Financial Statement with ―no substantive discussions or debates.‖61 5. Wilmington Trust finally blows the whistle In March 2011, for reasons not alleged in the Complaint, Wilmington Trust decided to inform the DDOI that it had noted certain irregularities or discrepancies involving Wachovia bank statements provided by Jackson on behalf of the SPI Entities. On March 15, 2011, Richard Klumpp, President and CEO of Wilmington Trust, sent an email to the DDOI in which he listed several of the SPI Entities‘ Wachovia accounts and compared the balances as reported in their recent statement to the Department (based on figures they had received from Jackson) to those reflected in confirmations they had received directly from Wachovia.62 Jackson‘s figures portrayed the six accounts as holding values ranging from $25,000 to $1.7 million, and totaling $4.6 million in the 60 Id. ¶ 299. 61 Id. ¶ 302. 62 Id. Ex. K. 23 aggregate. In reality, those accounts held a few hundred dollars each, except for one account, which seemed to be closed.63 On March 25, 2011, the DDOI sought and obtained from this Court a ―Confidential Seizure and Injunction Order‖ pursuant to 18 Del. C. § 5943. The Department undertook further investigation, and ultimately obtained the Liquidation Order on June 15, 2011. In her capacity as Receiver of the SPI Entities in liquidation, the Commissioner investigated their financial condition. She concluded that ―the assets of each of these entities is minimal when compared to the assets that were reflected in the entities‘ audited financial statements and fraudulent bank statements‖ that were provided by Jackson.64 The Receiver‘s Complaint focuses on certain fraudulent bank statements Jackson gave to Wilmington Trust around July 2009, but also specifically alleges that Jackson‘s deception ―both pre-existed and post-dated July of 2009.‖65 C. Procedural History As noted above, the Liquidation Action commenced on March 25, 2011. The Receiver filed this action on January 31, 2014, on behalf of the SPI Entities in liquidation. Counts 1 through 3 of the Complaint, respectively, accuse Wilmington Trust of breach of fiduciary duties, breach of contract, and negligence. The same basic charges are leveled against Johnson Lambert (Counts 4–7) and McSoley McCoy (Counts 8–10).66 63 Id. 64 Id. ¶ 311. 65 Id. ¶¶ 312-316. 24 Count 11 includes a claim for breach of fiduciary duties against directors Jackson, Davis, King, and Kantner, and against Wilmington Trust. Finally, Count 12 charges Wilmington Trust, Johnson Lambert, McSoley McCoy, and Kantner with aiding and abetting the directors‘ alleged breaches of fiduciary duty. James L. Jackson, Muñoz, and Ryan Building Group also were named as defendants in relation to the claim in Count 11 for breach of fiduciary duties against the SPI Entities‘ directors. As noted above, Ryan Building Group was dismissed voluntarily. James L. Jackson and Muñoz sought dismissal of the Complaint as it related to them under Court of Chancery Rule 12(b)(6). On August 12, 2014, I granted that motion.67 Currently before me are motions to dismiss filed by Wilmington Trust and Kantner, Johnson Lambert, and McSoley McCoy. Wilmington Trust and Kantner‘s motion was fully briefed and argued September 9, 2014. Because those two Defendants joined in several of the arguments raised by Johnson Lambert and McSoley McCoy in support of their motions, I reserved judgment and determined to decide all three motions 66 As to Johnson Lambert, two separate counts for breach of contract are pled, one each for the 2007 and 2008 engagement agreements. 67 Stewart v. Wilm. Trust SP Servs., Inc., C.A. No. 9306-VCP, at 25-26 (Del. Ch. Aug. 12, 2014) (TRANSCRIPT). In that ruling, I concluded based on the factual allegations in the Complaint that it was not reasonably conceivable that Muñoz or James L. Jackson could be found liable on a Caremark theory of director oversight liability. In part, I based that conclusion on the fact that the boards had retained and received reports from independent auditors, Johnson Lambert and McSoley McCoy. Id. at 16-17, 25. 25 together. The separate motions filed by Johnson Lambert and McSoley McCoy were argued November 20, 2014.68 This Opinion resolves all three of these motions. D. Parties’ Contentions In seeking dismissal, Wilmington Trust, Kantner, Johnson Lambert, and McSoley McCoy raise a slew of arguments that overlap to a significant degree. All of the Moving Defendants assert that the Complaint should be dismissed on grounds of in pari delicto. They also join in arguing that the claims at issue are time-barred. Putting aside those common arguments, each Moving Defendant also seeks dismissal of the various counts in the Complaint against them for failure to state claims upon which relief could be granted. Johnson Lambert asserts that the breach of fiduciary duty, negligence, and aiding and abetting claims against it are barred because, among other reasons, they are precluded by the contractual relationship it has with the SPI Entities. Johnson Lambert challenges the claim for breach of contract for failure to allege causation. McSoley McCoy makes similar arguments. Wilmington Trust similarly contends that the Receiver cannot recover on her fiduciary duty and negligence theories because those allegations sound in breach of contract. It also asserts that the contract claim is defective, because it seeks to impose 68 The briefing on these motions is voluminous, consisting of three separate briefs in both the opening and reply rounds—one each for Wilmington Trust and Kantner, Johnson Lambert, and McSoley McCoy. The Receiver filed two answering briefs, one in response to Wilmington Trust and Kantner, and one combined response to the Auditor Defendants‘ motions. I cite the briefs as, for example, ―Wilm. Trust Opening Br.,‖ ―Receiver‘s Answering Br. to Auditor Defs.,‖ and so on. 26 duties that go beyond the terms of the MSA. Wilmington Trust further argues that the aiding and abetting claim must be dismissed for lack of requisite ―knowing participation.‖ Kantner seeks dismissal of the indirect aiding and abetting claim against him on grounds that any conduct of his as a director of an SPI Entity that would rise to the level of aiding and abetting would, in itself, be a direct breach of fiduciary duty. Kantner also contends that the claim for breach of fiduciary duty against him should be dismissed for failure to state a claim. II. ANALYSIS A. Choice of Law As a threshold matter, I conclude that Delaware law governs my analysis of the pending motions to dismiss. None of the parties strongly contends otherwise,69 but Johnson Lambert suggests that the applicable law arguably could be that of Delaware, South Carolina (the location of Johnson Lambert‘s audit team), California (Jackson‘s principal place of business), or the District of Columbia (the place of incorporation of the SPI Entities‘ predecessors).70 The Receiver seems to argue that Delaware law should apply in this situation, but she hedges by suggesting that material issues of fact may exist as to the correct choice of law.71 69 Wilm. Trust Opening Br. 31; McSoley McCoy Opening Br. 15 n.1. 70 Johnson Lambert Opening Br. 30, 33-37. 71 Receiver‘s Answering Br. to Auditor Defs. 46-47. 27 The causes of action here include claims sounding in breach of fiduciary duty, breach of contract, and tort, which are subject to different considerations for purposes of determining what law applies. Although the parties did not squarely address the question of choice of law, I consider it necessary to decide that issue, because whether and how I apply the doctrines of in pari delicto and laches might differ depending on which state‘s law governs.72 Delaware law applies, however, at a minimum, to the claims for breach of fiduciary duties, because the SPI Entities are Delaware corporations.73 Thus, each of the Moving Defendants is defending against at least one claim that will be governed by Delaware law.74 72 I am mindful that, depending on the law of the states whose law arguably might apply, there may not be a conflict and the choice of law issue would be moot. See Deuley v. DynCorp Int’l, Inc., 8 A.3d 1156, 1161 (Del. 2010) (―As we explain below, the result would be the same under both Delaware and Dubai law. Therefore ‗[a]ccording to conflicts of law principles . . . there is a ‗false conflict,‘ and the Court should avoid the choice-of-law analysis altogether.‘‖). But it is difficult to assess that question on the incomplete briefing record before me. I therefore provide the analysis that follows in the interest of completeness and to facilitate appellate review. 73 See VantagePoint Venture P’rs 1996 v. Examen, Inc., 871 A.2d 1108, 1113 (Del. 2005) (―It is now well established that only the law of the state of incorporation governs and determines issues relating to a corporation‘s internal affairs.‖) (citing CTS Corp. v. Dynamics Corp. of Am., 481 U.S. 69, 89-93 (1987)). 74 Counts 1, 4, 8, and 11 plead claims for breaches of fiduciary duty against Wilmington Trust, Johnson Lambert, McSoley McCoy, and the SPI Entities‘ directors (including Kantner). 28 The internal affairs doctrine, however, does not extend to claims ―where the rights of third parties external to the corporation are at issue.‖75 Hence, the claims for breach of contract and negligence against Wilmington Trust and the Auditor Defendants are subject to the ―most significant relationship test‖ of the Restatement (Second) of Conflicts of Laws.76 For torts, the relevant factors of that test are: ―(a) the place where the injury occurred, (b) the place where the conduct causing the injury occurred, (c) the domicil, residence, nationality, place of incorporation and place of business of the parties, and (d) the place where the relationship, if any, between the parties is centered.‖77 For breach of contract claims, the factors differ slightly. They are: ―(a) the place of contracting, (b) the place of negotiation of the contract, (c) the place of performance, (d) the location of the subject matter of the contract, and (e) the domicil, residence, nationality, place of 75 VantagePoint Venture P’rs 1996, 871 A.2d at 1113 n.14. 76 See Travelers Indem. Co. v. Lake, 594 A.2d 38, 41, 47 (Del. 1991). Although I need not reach the issue, I would expect to apply Delaware law to the aiding and abetting causes of action here. Wilmington Trust and Kantner assert that aiding and abetting liability sounds in tort, and there is support for that proposition. See, e.g., In re Rural/Metro Corp. S’holders Litig., 102 A.3d 205, 220 n.1 (Del. Ch. 2014). Because liability for aiding and abetting a breach of fiduciary duty depends in part on the finding of an underlying fiduciary duty and a breach of that duty— issues that in this case, under the internal affairs doctrine, would turn on Delaware law—it would seem illogical to apply another state‘s law to the ―tort‖ of aiding and abetting such a breach, even if the most significant relationship test pointed to that result. Cf. In re Am. Int’l Gp., Inc. Consol. Deriv. Litig., 965 A.2d 763, 822 (Del. Ch. 2009) [hereinafter ―AIG I‖], aff’d sub nom. Teachers’ Ret. Sys. of La. v. PricewaterhouseCoopers LLP, 11 A.3d 228 (Del. 2011). 77 RESTATEMENT (SECOND) OF CONFLICT OF LAWS § 145 (1971). 29 incorporation and place of business of the parties.‖ 78 Under both the tort and contract analyses, the relevant factors are to be evaluated according to their relative importance with respect to the particular issue involved.79 Having considered the relevant factors of the test applicable in both the contract and tort contexts, I conclude that Delaware law should apply to all of the claims in this action. Admittedly, several alleged facts slightly favor other states. Those facts include that: Jackson allegedly lived and operated his business in California during the relevant time period;80 the SPI Entities‘ predecessors were incorporated in the District of Columbia;81 Theriault and Drost worked out of Wilmington Trust‘s office in Burlington, Vermont;82 several of the relevant Johnson Lambert actors, including Bolton and Handy, worked in the firm‘s South Carolina offices;83 and McSoley McCoy evidently also is based in Vermont.84 It is not clear from the Complaint precisely where the accounting and auditing services actually were performed by Johnson Lambert and McSoley McCoy. At this relatively early stage, I consider it reasonable to infer, however, that it occurred in 78 Id. § 188. 79 TrustCo Bank v. Mathews, 2015 WL 295373, at 9 (Del. Ch. Jan. 22, 2015). 80 Compl. ¶¶ 29, 43-46. 81 Id. ¶ 42. 82 Id. ¶ 87. 83 Id. ¶ 97. 84 Id. Ex. I. 30 other states. Likewise, it fairly may be inferred that Theriault and Drost performed much of their captive services management work for Wilmington Trust in Vermont. In contrast, many of the pertinent factors identified in the Restatement weigh in favor of Delaware, and I find that their cumulative effect eclipses that of factors that weigh in favor of applying California, D.C., South Carolina, or Vermont law. Regarding the negligence claims, I consider the alleged injury to have occurred in Delaware, where certain Defendants are alleged to have fraudulently inflated the SPI Entities‘ financial situation in order to deceive, primarily, the DDOI. As relevant to both the tort and contract analyses, while some of the Defendants may be incorporated in or reside elsewhere, all of the SPI Entities, whose legal and equitable claims the Receiver asserts in liquidation here, are Delaware corporations. Perhaps most persuasively, each of the three meetings of the SPI Entities‘ boards, upon which the Complaint‘s narrative of Defendants‘ alleged wrongdoing focuses, took place at Wilmington Trust‘s office in Delaware. Thus, of the states discussed by the parties, Delaware has the strongest claim to being ―the place where the relationship, if any, between the parties is centered.‖ The subject matter of the relevant contracts, i.e., the provision of audit or management services to Delaware-domiciled captive insurance companies, supports the same conclusion. Consequently, without even delving into the myriad issues related to the nature of captive insurance as a highly regulated industry under Delaware law, or the fact that the Insurance Commissioner has brought this action pursuant to her statutory authority as the receiver of these companies in liquidation, I conclude that Delaware law should govern not only the claims that implicate the internal affairs doctrine, but also the 31 breach of contract and negligence claims as well. It is also true, however, that, ―[i]n applying Delaware law, [this Court may] look, as courts often do, to well-reasoned precedent from federal courts, courts of our sister states, and our Anglo–American jurisprudential tradition.‖85 Accordingly, I will not hesitate to do so. B. Standard of Review A motion to dismiss under Rule 12(b)(6) must be denied ―unless the plaintiff could not recover under any reasonably conceivable set of circumstances susceptible to proof.‖86 In determining whether the Complaint meets this pleading standard, this Court will draw all reasonable inferences in favor of Plaintiffs and ―accept all well-pleaded factual allegations in the Complaint as true.‖87 The Court, however, need not ―accept conclusory allegations unsupported by specific facts or . . . draw unreasonable inferences in favor of the non-moving party.‖88 C. Laches Does Not Bar These Claims All of the Moving Defendants contend that the Complaint is untimely. 89 They focus on the three-year statute of limitations applicable to the claims for breach of contract, negligence, and breach of fiduciary duty, and argue that each of the causes of 85 In re Am. Int’l Gp., Inc., Consol. Deriv. Litig., 976 A.2d 872, 882 (Del. Ch. 2009) [hereinafter ―AIG II‖]. 86 Cent. Mortg. Co. v. Morgan Stanley Mortg. Capital Hldgs. LLC, 27 A.3d 531, 536 (Del. 2011). 87 Id. 88 Price v. E.I. duPont de Nemours & Co., Inc., 26 A.3d 162, 166 (Del. 2011). 32 action accrued more than three years before the Receiver filed her Complaint on January 31, 2014.90 The Receiver does not contest that proposition, but contends that the statute of limitations either should not apply because it would lead to an inequitable result, or did not begin to run until March 25, 2011, when she was appointed as Receiver.91 Because I agree with the first of those arguments, I do not address the second. To determine whether an action was timely filed, this Court adheres to the doctrine of laches, the ―equitable analog of the statute of limitations defense.‖92 While the statute of limitations is not controlling in this Court, a suit in equity generally ―will not be stayed for laches before, and will be stayed after, the time fixed by the analogous statute of limitations at law.‖93 Nevertheless, in cases where ―unusual conditions or extraordinary circumstances make it inequitable to allow the prosecution of a suit after a briefer, or to forbid its maintenance after a longer period than that fixed by the statute,‖ this Court has the power to set aside the statutory limitation period and analyze whether the claim was untimely based on laches principles.94 The Court must consider all the relevant facts in 89 Wilm. Trust Opening Br. 28-30; Johnson Lambert Opening Br. 24-28; McSoley McCoy Opening Br. 21-23. 90 See 10 Del. C. § 8106; Sunrise Ventures, LLC v. Rehoboth Canal Ventures, LLC, 2010 WL 363845, at 6 (Del. Ch. Jan. 27, 2010), aff’d, 7 A.3d 485 (Del. 2010). 91 Receiver‘s Answering Br. to Wilm. Trust 19-26; Receiver‘s Answering Br. to Auditor Defs. 48-56. 92 TrustCo Bank, 2015 WL 295373, at 5. 93 IAC/InterActiveCorp v. O’Brien, 26 A.3d 174, 177 (Del. 2011). 94 Id. at 177-78. 33 this regard, as there is no specific definition of ―unusual or extraordinary circumstances.‖95 Based on the circumstances of this case, I am not inclined to mechanically apply the three-year statute of limitations under the laches rubric. Rather, I must analyze the timeliness of the Complaint based on the principles of laches more generally. To begin with, while this action was not filed until January 2014, the Receiver has been ―pursuing‖ these claims at least since March 2011, when the Liquidation Action was commenced and the SPI Entities were placed into receivership. Notably, in effectuating service of process of the papers in the Liquidation Action on the SPI Entities, the Commissioner served Wilmington Trust as their registered agent.96 Further, from its inception until early 2014, the Liquidation Action involved fairly extensive litigation activity, including, for example: (1) contested motions concerning whether and how the Receiver could pay the ongoing administrative and legal expenses 95 Id. at 178. Factors that guide this analysis include: ―1) whether the plaintiff had been pursuing his claim, through litigation or otherwise, before the statute of limitations expired; 2) whether the delay in filing suit was attributable to a material and unforeseeable change in the parties‘ personal or financial circumstances; 3) whether the delay in filing suit was attributable to a legal determination in another jurisdiction; 4) the extent to which the defendant was aware of, or participated in, any prior proceedings; and 5) whether, at the time this litigation was filed, there was a bona fide dispute as to the validity of the claim.‖ Id. 96 See In re Liquid. of Sec. Pac. Ins. Co., C.A. No. 6317-VCP, Docket Item (―D.I.‖) Nos. 5-8. 34 of the SPI Entities;97 (2) periodic reports as to the financial status of the SPI Entities, some of which were objected to;98 (3) a petition for the Court to set a bar date for claims against the SPI Entities;99 and (4) numerous motions and hearings relating to former Defendant Ryan Building Group‘s claim regarding SPI-202, which ultimately resulted in a settlement shortly before the trial of that claim.100 Unlike a situation in which a plaintiff is injured and then merely waits for years to file her action, the circumstances of this case arguably required the Receiver first to achieve certain successes in the Liquidation Action before completing her efforts to gather and marshal the facts necessary to plead non- conclusory allegations on behalf of the SPI Entities. Much of the Receiver‘s activity in that regard was occasioned by the positions taken by certain parties to this action, most notably Ryan Building Group. Meanwhile, the Receiver engaged in an extensive investigation to uncover the facts relating to the allegedly fraudulent conduct and related breaches of the Moving Defendants. As is evident from the face of the Complaint, the Receiver obtained and reviewed documents from at least some of the Moving Defendants, because the Complaint quotes extensively from emails and other communications that could not 97 Id., D.I. Nos. 44, 70; see also In re Liquid. of Sec. Pac. Ins. Co., C.A. No. 6317- VCP, at 1 (Del. Ch. May 10, 2012). One of the original Defendants in this action, Ryan Building Group, disputed the authority of the Receiver in that regard in the Liquidation Action. 98 E.g., In re Liquid. of Sec. Pac. Ins. Co., C.A. No. 6317-VCP, D.I. Nos. 48-51, 54. 99 Id., D.I. No. 52. 100 Id., D.I. Nos. 107, 114, 144, 145, 158. 35 otherwise have been known.101 This circumstance undermines any element of unfair surprise the Moving Defendants might claim with respect to the timeliness of this action. Indeed, taking into account all of the facts, I conclude that this case exhibits sufficiently ―unusual or extraordinary‖ circumstances, based on the factors the Delaware Supreme Court has considered material in determining whether grounds exist for declining to apply the statutory limitation period.102 Instead, I find it more appropriate to consider whether laches would apply to bar these claims. A laches analysis calls for a context-specific application of the maxim that ―equity aids the vigilant, not those who slumber on their rights.‖103 While there is ―no hard and fast rule as to what constitutes laches,‖ establishing the elements of the defense generally requires: (1) knowledge by the claimant; (2) unreasonable delay in bringing the claim; and (3) resulting prejudice to the defendant.104 The defense of laches is ―not ordinarily well-suited‖ for treatment on a Rule 12(b)(6) motion.‖105 Because there is neither unreasonable delay on the Receiver‘s part, nor prejudice to the Moving Defendants, I conclude that laches does not support dismissal of these claims. 101 E.g., Compl. ¶¶ 171-175, 205-209. 102 See IAC/InterActiveCorp, 26 A.3d at 178. 103 Reid v. Spazio, 970 A.2d 176, 183 (Del. 2009) (quoting 2 JOHN NORTON POMEROY, EQUITY JURISPRUDENCE §§ 418, 419 (5th ed. 1941)). 104 Reid, 970 A.2d at 183. 105 Id. 36 An ―unreasonable delay‖ for purposes of laches can range from one month to many years.106 ―The length of the delay is less important than the reasons for it.‖107 In this case, there are two components of alleged delay. The first is from the time that the DDOI knew or was on inquiry notice that there might be a problem with the SPI Entities until the time the Receiver took action to prosecute these claims. The Moving Defendants contend that no later than the February 2009 Meetings,108 the SPI Entities‘ directors—and, by extension, the Commissioner—were on notice as to the possibility of accounting irregularities based on the Significant Matters Letter. They conclude that because the DDOI was on inquiry notice as of early 2009 at the latest, the filing of the Complaint in January 2014 was unreasonably delayed. I do not consider it appropriate or helpful, however, to look at the period from early 2009 to early 2014, as one undifferentiated time period. In reality, there are two distinct periods: (1) from the time the claims accrued in or around 2009 until the Commissioner placed the SPI Entities into receivership and began the process of stating claims on their behalf; and (2) from the establishment of the receivership until the filing 106 IAC/InterActiveCorp, 26 A.3d at 177. 107 Id. 108 Defendant McSoley McCoy did not provide audit services until 2010 in connection with the 2009 Audited Financial Statements. Because the claims against McSoley McCoy arose significantly later than the claims against Wilmington Trust and Johnson Lambert, but otherwise also are affected by the alleged fraud by Defendant Jackson and wrongdoing by the Moving Defendants, referenced infra, I consider it unnecessary to discuss separately McSoley McCoy‘s laches defense in this regard. 37 of this action. The Moving Defendants‘ argument regarding inquiry notice relates to the former period, beginning in early 2009, and not the latter. In view of the allegations in the Complaint regarding fraud by Defendant Jackson and wrongdoing by the Moving Defendants in connection with the 2007, 2008, and 2009 Audited Financial Statements, I find that it is at least reasonably conceivable the Receiver will be able to show that neither she, as Insurance Commissioner, nor the DDOI engaged in any unreasonable delay before she was appointed Receiver in March 2011.109 The second alleged period of delay is from the appointment of the Receiver in March 2011 until the filing of this action in January 2014. As just discussed, there was a substantial amount of litigation activity in the related Liquidation Action, and it is reasonable to infer at this preliminary stage that the Receiver‘s tardiness in filing this action was caused in large part by that activity. Moreover, as noted, when the Receiver took control of the SPI Entities in March of 2011, she had to begin unraveling a complicated web of facts as to how the SPI Entities ended up in the position they were in. It is reasonable to infer that investigation took a considerable amount of time because of its factual complexity rather than delay on the part of the Receiver. Based on these circumstances, the Receiver‘s good faith prosecution of the related Liquidation Action, the depth and complexity of this factual record, and the specificity and comprehensiveness of the Complaint she ultimately filed, I am not convinced that the Receiver‘s alleged delay, although significant, was unreasonable. 109 In that regard, I note that the DDOI sought appointment of the Receiver less than a month after they were advised by Wilmington Trust that there might be a problem. 38 Additionally, the Moving Defendants suffered little or no prejudice due to the fact that the Receiver filed her Complaint in January 2014. As noted above, Wilmington Trust had actual notice from the very outset of the Liquidation Action that the SPI Entities were entering receivership and that any claims of theirs would be prosecuted by the Receiver. Based on the positions they occupied vis-à-vis the SPI Entities and the incomplete information they allegedly had regarding them, I consider it reasonable to infer that in or around March 2011 Wilmington Trust, Johnson Lambert, and McSoley McCoy all recognized the possibility of future claims against them as to those entities. As mentioned above, one or more of those Defendants probably participated in the Receiver‘s investigation by providing access to documents or other information in their possession, with which the Complaint is replete. I conclude, therefore, that the Moving Defendants could not reasonably have been unaware of the possibility of future claims against them arising out of their dealings with the SPI Entities, and thus were not materially prejudiced when the Receiver waited until January 2014 to file this action. For those reasons, I reject the Moving Defendants‘ argument that the Complaint should be dismissed as untimely, and proceed to consider other aspects of their motions to dismiss. D. Claims for Breach of Fiduciary Duty110 Counts 1, 4, and 8 of the Complaint lodge claims for breach of fiduciary duty against, respectively, Wilmington Trust, Johnson Lambert, and McSoley McCoy. In 110 As discussed below, the in pari delicto defense is not applicable to well-pled claims for breach of fiduciary duty, so I do not address that defense in this section of the Opinion. See infra notes 148-53 and related text. 39 Count 11, the Receiver also pleads breach of fiduciary duty as to the SPI Entities‘ directors, and she includes Kantner and Wilmington Trust in that category.111 Wilmington Trust and the Auditor Defendants seek dismissal of these Counts, contending that they owed no fiduciary duties to the SPI Entities, and that the factual allegations in this regard are duplicative of the claims for breach of contract. Kantner has moved to dismiss Count 11 as it relates to him on grounds that the Complaint does not allege facts sufficient to give rise to a non-exculpated claim for breach of a fiduciary duty. 1. The claims against Wilmington Trust and the Auditor Defendants As to Wilmington Trust and the Auditor Defendants, I conclude that the claims against them for breach of fiduciary duty must be dismissed. To state a claim for breach of a fiduciary duty, the factual allegations in a complaint must be such that they reasonably could support a finding that a fiduciary duty existed and the defendant breached that duty.112 Neither Wilmington Trust nor the Auditor Defendants owed a fiduciary duty to the SPI Entities, however. The Receiver emphasizes that the SPI Entities trusted and relied on the Auditor Defendants‘ specialized experience in auditing generally and with captive insurance clients specifically. Without those services, the SPI Entities could not have functioned or been licensed in Delaware, and for that reason the Receiver asserts a fiduciary 111 Compl. ¶ 371. 112 See In re Mobilactive Media, LLC, 2013 WL 297950, at 21 (Del. Ch. Jan. 25, 2013). 40 relationship existed between those entities and the Auditor Defendants.113 Even accepting those allegations as true and drawing all reasonable inferences in favor of the Receiver, however, the Complaint fails to allege the existence of a fiduciary relationship under Delaware law. The core principle of a fiduciary duty is that ―one who controls property of another may not, without implied or express agreement, intentionally use that property in a way that benefits the holder of the control to the detriment of the property or its beneficial owner.‖114 The duties of care and loyalty flow from that ―central aspect‖ of the fiduciary relationship.115 Inherent in the fiduciary relationship, ―which derives from the law of trusts,‖ is that the fiduciary exercises control over the property of another, and by virtue of that control, is obliged to act with care and loyalty to interests of the beneficial owner.116 In normal circumstances, an auditor‘s interests do not align perfectly with those of the client; in order properly to discharge its ―watchdog‖ function, the auditor must ―maintain total independence from the client at all times.‖117 113 Receiver‘s Answering Br. to Auditor Defs. 64-67. 114 In re USACafes, L.P. Litig., 600 A.2d 43, 48 (Del. Ch. 1991). 115 Id. (―There are, of course, other aspects—a fiduciary may not waste property even if no self interest is involved and must exercise care even when his heart is pure— but the central aspect of the relationship is, undoubtedly, fidelity in the control of property for the benefit of another.‖). 116 Crosse v. BCBSD, Inc., 836 A.2d 492, 495 (Del. 2003); accord USACafes, 600 A.2d at 48-49. 117 United States v. Arthur Young & Co., 465 U.S. 805, 818 (1984). Many courts that have addressed the question have declined to find a fiduciary relationship between auditor and client. See, e.g., Franklin Supply Co. v. Tolman, 454 F.2d 1059, 1065 (9th Cir. 1971); Resolution Trust Corp. v. KPMG Peat Marwick, 844 F. Supp. 431, 41 Moreover, an auditor normally does not exercise any control over the affairs of the corporation. It is not surprising, therefore, that the Complaint is devoid of factual allegations suggesting that there was some extraordinary circumstance here that would have caused the Auditor Defendants to do so with respect to the SPI Entities. The mere provision of audit services does not of itself convert an auditor into a fiduciary of the corporation. ―Our courts have been cautious when evaluating entreaties to expand the number and kinds of relationships that are denominated as ‗fiduciary.‘‖118 Consistent with that approach, I see no basis for finding that the Auditor Defendants had a fiduciary relationship with the SPI Entities, where the pillars of the fiduciary relationship—control over the property of another and alignment of the controller‘s interests with those of the beneficial owner—cannot reasonably be inferred from the well-pled allegations of the Complaint. The situation is no different with Wilmington Trust, despite the Receiver‘s twofold contention otherwise. First, she argues that, as with the Auditor Defendants, because Wilmington Trust marketed itself to the SPI Entities as having special expertise in captive management, and the SPI Entities relied on the management services provided, 436 (N.D. Ill. 1994); Mishkin v. Peat, Marwick, Mitchell & Co., 744 F. Supp. 531, 552 (S.D.N.Y. 1990). The Receiver has not cited any case that reached the opposite conclusion. 118 Bird’s Const. v. Milton Equestrian Ctr., 2001 WL 1528956, at 4 (Del. Ch. Nov. 16, 2001). 42 a fiduciary relationship existed that included duties of care and loyalty. 119 The Complaint alleges that Wilmington Trust provided substantial administrative and ministerial assistance relating to the day-to-day operation of the SPI Entities, especially in terms of their compliance and regulatory obligations. Control of the SPI Entities, however, was in the hands of their officers and boards of directors, who were charged, for example, with causing the SPI Entities to contract with Wilmington Trust for the provision of captive management services, and with reviewing and approving the financial statements that were produced with the assistance of Wilmington Trust. Notwithstanding how fraudulently those managers allegedly acted, the SPI Entities were managed by sophisticated business persons. That factual reality negates the kind of control and interest-alignment between Wilmington Trust and the SPI Entities that our case law requires for the existence of a fiduciary relationship. Instead, the SPI Entities and Wilmington Trust had a contractual relationship, defined by the MSA. The Receiver‘s second argument as to Wilmington Trust—that it was a ―de facto director‖ of the SPI Entities—is similarly unpersuasive.120 The cases cited by the Receiver in which courts have applied that theory have involved claims under the federal securities and antitrust laws. She offered no support for the proposition that, under Delaware common law, this Court should consider a third-party business entity as a ―de 119 Receiver‘s Answering Br. to Wilm. Trust 28-30. 120 Receiver‘s Answering Br. to Wilm. Trust 30-32. 43 facto director‖ because its employee sat on the board of the client corporation.121 The board of directors of a corporation organized under the Delaware General Corporation Law (―DGCL‖) ―shall consist of 1 or more members, each of whom shall be a natural person.‖122 In the absence of any case law or persuasive logic supporting the Receiver‘s position, I reject the notion that a corporate employer of an employee designated to serve as a director of another company could be deemed a de facto director of that other company. 2. The claims against Kantner The only remaining Moving Defendant, Kantner, clearly owed fiduciary duties of care and loyalty to the SPI Entities, because he was a director of each of those entities during the relevant time period.123 Kantner seeks dismissal of the breach of fiduciary duty claim in Count 11 as it relates to him on grounds of exculpation. He argues that each of the SPI Entities‘ charters contains an exculpation provision consistent with 8 Del. C. § 102(b)(7), and the Complaint fails to allege bad faith or any other form of 121 Id. (citing Blau v. Leman, 368 U.S. 403 (1962); U.S. v. Cleveland Trust Co., 392 F. Supp. 699 (N.D. Ohio 1974)). In discussing the Receiver‘s use of the term ―de facto director‖ here, I do not intend any reference to, or to engender any confusion with, the cases in which ―de facto director‖ means ―one who is in possession of and exercising the powers of that office under claim and color of an election, although he is not a director De jure and may be removed by proper proceedings.‖ Prickett v. Am. Steel & Pump Corp., 253 A.2d 86, 88 (Del. Ch. 1969) (emphasis added); see also Hockessin Cmty. Ctr., Inc. v. Swift, 59 A.3d 437, 459-60 (Del. Ch. 2012). The theory the Receiver advances in this regard has nothing to do with the line of cases dealing with disputed elections and contested board seats. 122 8 Del. C. § 141(b). 123 See, e.g., Gantler v. Stephens, 965 A.2d 695, 708-09 (Del. 2009). 44 unexculpated conduct on his part. Kantner further contends that, as a director, he was entitled to rely on the Auditor Defendants and Wilmington Trust, and is therefore protected from liability under Section 141(e).124 Because neither of those contentions is conclusive at this preliminary stage, I deny Kantner‘s motion to dismiss Count 11. The crux of the Complaint‘s allegations against Kantner relate to a claim for failure of oversight, on a Caremark theory of liability.125 Directors can be liable on Caremark grounds for: (1) utterly failing to implement any reporting or information system or controls; or (2) consciously failing to monitor or oversee such a system, thereby disabling themselves from being informed of risks or problems requiring their attention.126 In either situation, oversight liability requires ―a showing that the directors knew that they were not discharging their fiduciary obligations,‖ resulting in a breach of the duty of loyalty for failure to act in good faith.127 Proving liability under the Caremark line of cases ―is possibly the most difficult theory in corporation law upon which a plaintiff might hope to win a judgment.‖128 The Complaint contains sufficient non-conclusory factual allegations for it to be reasonably conceivable that Kantner ultimately may be liable on this theory. Kantner‘s 124 Wilm. Trust Opening Br. 34-39; Wilm. Trust Reply Br. 31-33. 125 Receiver‘s Answering Br. to Wilm. Trust 48-60; see In re Caremark Int’l Inc. Deriv. Litig., 698 A.2d 959 (Del. Ch. 1996). 126 Stone ex rel. AmSouth Bancorp. v. Ritter, 911 A.2d 362, 370 (Del. 2006). 127 Id. 128 In re Caremark, 698 A.2d at 967. 45 tenure as a director of the SPI Entities covered each of the February 2009 Meetings, the October 2009 Meetings, and the 2010 Meetings, at which the entities‘ boards approved the audited financial statements with little or no substantive discussion, despite warnings that significant irregularities occurred and the companies‘ procedures needed to be changed. In terms of oversight, I note first that, based on the allegations in the Complaint regarding those events, I do not consider it reasonably conceivable that Kantner could be liable on grounds that he utterly failed to implement a monitoring or reporting system for the SPI Entities. The boards of the SPI Entities authorized the retention of Wilmington Trust and the Auditor Defendants to provide such a monitoring mechanism. Whether I reasonably can infer from the Complaint that Kantner consciously disregarded a known duty to oversee that monitoring system depends on how I view the Significant Matters Letter, in which Johnson Lambert indicated to the boards that Johnson Lambert met with considerable difficulty in preparing the 2007 Audited Financial Statements, including several extraordinary balance discrepancies in the SPI Entities‘ accounts. The Receiver urges me to conclude that the Letter included ―red flags‖ and that the directors‘ failure to follow up on those concerns reasonably could amount to a conscious disregard of their oversight responsibilities. Kantner, on the other hand, contends that, because the Significant Matters Letter implied that remedial actions had been taken and the Jackson Letter suggested that the problems were ―not considered material,‖ he and the other directors were justified in relying on the Auditor Defendants‘ representations and not inquiring further into the issues. 46 That argument might hold water as to some of the directors, but it reasonably could be inferred from the allegations in the Complaint that Kantner, as an employee of Wilmington Trust, actually knew or constructively knew more about the seriousness of the problems Wilmington Trust and the Auditor Defendants were having with Jackson. The Complaint is replete with allegations that Drost, Theriault, and others at Wilmington Trust had actual notice of the fact that something material was amiss with Jackson and his purported financial information. Their extensive dealings with the mysterious ―Alpesh‖ are just one example of Wilmington Trust‘s awareness of Jackson‘s highly unorthodox business practices. The picture that emerges from the facts alleged is that Jackson‘s conduct did not pass the sniff test. Nevertheless, Wilmington Trust and the Auditor Defendants allegedly held their noses and looked the other way in order to get the audits finished, file the paperwork, collect their fees, and move on. The Complaint further supports an inference that Drost, Theriault, or some other person at Wilmington Trust, consistent with Wilmington Trust‘s internal policies or common sense business practices, shared their misgivings with Kantner. The Complaint conceivably also could support the opposite inference—that that information never made its way to Kantner, because, for example, Drost and Theriault worked in Wilmington Trust‘s Vermont office, while he was in Delaware. I cannot say, however, that such a contrary inference is the only reasonable inference that could be supported by the Receiver‘s allegations. At the motion to dismiss stage, it would be improper to make that leap, as Kantner urges me to do. I therefore conclude that, regardless of whether the Significant Matters Letter and the Jackson Letter would have misled one or more 47 directors into thinking that all was well at the SPI Entities, Kantner was positioned differently than the others by virtue of his position as Accounting Manager at Wilmington Trust and its designated director on the SPI Entities‘ boards.129 The Complaint contains numerous allegations about Kantner‘s colleagues‘ repeated, and largely unsuccessful, attempts to get Jackson to provide information, or sign a form, or set up a call with the elusive ―Alpesh,‖ or provide direct access to the bank accounts. A reasonable inference can be drawn from the Complaint—and at this stage, I am required to draw such inferences—that Kantner was made aware of these problems through communications with Drost or Theriault, discussions made all the more likely because of Kantner‘s position as the statutorily required ―resident director‖ on the SPI Entities‘ boards. Yet, Jackson apparently went about his fraudulent scheme year after year, while the Board unquestioningly approved the annual audited financial statements and failed to follow up on the suggested operating procedure improvements. Kantner allegedly went along without raising a peep. In their reliance on Jackson, Wilmington Trust, the Auditor Defendants, Kantner, and the other directors may have 129 See 18 Del. C. § 6906(f) (―In the case of a captive insurance company . . . [f]ormed as a corporation, at least 1 of the members of the board of directors or other governing body shall be a resident of, or have that member‘s principal place of business in, this State . . .‖); id. § 6903(b) (requiring a Delaware captive insurance company, inter alia, to maintain its principal place of business in this State, and hold at least one board meeting per year here); see also Compl. ¶¶ 7, 74. 48 been overly supine.130 Taking all allegations in the Complaint as true, however, Kantner‘s disengagement conceivably could amount to a conscious disregard of his duties based on what he reasonably may be assumed to have known about the SPI Entities‘ deficiencies. As a result, I consider it reasonably conceivable that Kantner knowingly disregarded his oversight responsibility, and thereby subjected himself to potential liability on a Caremark claim. Thus, I deny his motion to dismiss that aspect of the Complaint. E. Claims for Breach of Contract, Negligence, and Aiding and Abetting Unlike claims for a breach of fiduciary duty, claims for breach of contract, negligence, and aiding and abetting arguably may be subject to the defense of in pari delicto. In this section of the Opinion, I take up the Moving Defendants‘ contention that in pari delicto bars those claims as a matter of law. After reviewing the in pari delicto doctrine under Delaware law and concluding that it may provide a bar, I examine whether any of the exceptions to that doctrine could apply here and enable the relevant claims to go forward. 1. In pari delicto a. Basics of the doctrine In pari delicto is an affirmative defense by which ―‗a party is barred from recovering damages if his losses are substantially caused by activities the law forbade 130 I express no opinion as to the potential Caremark liability of any of the SPI Entities‘ directors other than Kantner, because only Kantner is before me on the pending motions to dismiss. 49 him to engage in.‘‖131 The doctrine provides that rather than adjudicating a suit by one wrongdoer against her counterpart, courts will ―‗leave them where their own acts have placed them.‘‖132 In pari delicto serves at least two important policy goals: deterring wrongful conduct by refusing wrongdoers any legal or equitable relief, and protecting the judicial system from having to use its resources to provide an accounting among wrongdoers.133 Thus, courts have recognized that the rule ―‗is adopted, not for the benefit of either party and not to punish either of them, but for the benefit of the public.‘‖134 Like most American jurisdictions, Delaware embraces this venerable doctrine.135 Although the literal translation is ―in equal fault,‖ courts have eschewed a strict requirement that the party asserting the defense demonstrate that the degree of his fault is the same as or less than that of the party against whom he asserts it. The rule therefore has been held to apply ―to situations more closely analogous to those encompassed by the ‗unclean hands‘ doctrine, where the plaintiff has participated ‗in some of the same sort of 131 AIG II, 976 A.2d at 883 (quoting In re LJM2 Co–Inv., L.P., 866 A.2d 762, 775 (Del. Ch. 2004)). 132 Id. at 882 (quoting AM. JUR. 2d Actions § 40). 133 Id. at 882 n.21; see also, e.g., Bateman Eichler, Hill Richards, Inc. v. Berner, 472 U.S. 299, 306 (1985); Stone v. Freeman, 82 N.E.2d 571, 572 (N.Y. 1948) (―[N]o court should be required to serve as paymaster of the wages of crime, or referee between thieves.‖) 134 AIG II, 976 A.2d at 882 n.21 (quoting Lewis v. Davis, 199 S.W.2d 146, 151 (Tex. 1947)); see also 3 POMEROY, supra note 103, § 940 n.5. 135 AIG II, 976 A.2d at 882. 50 wrongdoing‘ as the defendant.‖136 For that reason, in pari delicto may be raised against a plaintiff wrongdoer even if that plaintiff ―was led into a path of crime by one more culpable.‖137 Moreover, because the main purpose of in pari delicto would be undermined by fact intensive proceedings comparing the culpability of the wrongdoers, the defense may be raised successfully on a motion to dismiss, unless the complaint is devoid of grounds for invoking the rule.138 As relevant here, in pari delicto applies to bar claims between wrongdoers regardless of whether the plaintiff wrongdoer is a natural person or a corporation. A basic tenet of corporate law, derived from principles of agency law, is that the knowledge and actions of the corporation‘s officers and directors, acting within the scope of their 136 Pinter v. Dahl, 486 U.S. 622, 632 (1988). In this regard, I note that the full rendition of the legal maxim, in pari delicto potior est conditio defendentis, has been translated as, ―In a case of equal or mutual fault, the position of the defending party is the better one.‖ Berner, 472 U.S. at 306. It is the mutuality of fault that gives the doctrine its logical force; if emphasis were to be placed on the equality or relative degree of fault, the court probably would have to find facts and engage in a balancing analysis that would defeat the purpose of having the rule in the first place. See AIG II, 976 A.2d at 883-34. ―‗[H]ypertechnical interpretation of the in pari delicto doctrine is outdated‘ as ‗it is not necessary that [the] wrongdoing of plaintiff and defendant be clearly mutual, simultaneous, and relatively equal.‘‖ In re Oakwood Homes Corp., 389 B.R. 357, 371-72 (D. Del. 2008) (quoting Peltz v. SHB Commodities, Inc., 115 F.3d 1082, 1090 (2d Cir. 1997)), aff’d, 356 F. App‘x 622 (3d Cir. 2009)). 137 1 AM. JUR. 2D Actions § 40; see also Kirschner v. KPMG LLP, 938 N.E.2d 941, 950 (N.Y. 2010). 138 See, e.g., AIG II, 976 A.2d at 878; Oakwood Homes Corp., 389 B.R. at 372. 51 authority, are imputed to the corporation itself.139 Delaware law adheres to this general rule of imputation—of holding a corporation liable for the acts and knowledge of its agents—even when the agent acts fraudulently or causes injury to third persons through illegal conduct.140 Though at superficial level it may appear harsh to hold an ―innocent‖ corporation (and, ultimately, its stockholders) to answer for the bad acts of its agents, such ―corporate liability is essential to the continued tolerance of the corporate form, as any other result would lack integrity.‖141 These considerations are central to the in pari delicto doctrine: the practice of imputing officers‘ and directors‘ knowledge to the corporation means that, as a general rule, when those actors engage in wrongdoing, the corporation itself is a wrongdoer.142 As such, the company generally is barred from stating a legal or equitable claim against a third party that participated in the scheme of wrongdoing. b. Exceptions to the rule A principal, however, is not presumed to have knowledge of or be liable for the actions of an agent that abandons the principal‘s interests.143 Likewise, corporations have 139 See, e.g., Teachers’ Ret. Sys. of La. v. Aidinoff, 900 A.2d 654, 671 n.23 (Del. Ch. 2006); Albert v. Alex. Brown Mgmt. Servs., Inc., 2005 WL 2130607, at 11 (Del. Ch. Aug. 26, 2005). 140 See In re Brandywine Volkswagen, Ltd., 306 A.2d 24, 27 (Del. Super.), aff’d sub nom. Brandywine Volkswagen, Ltd. v. State Dep’t of Cmty. Affairs & Econ. Dev., 312 A.2d 632 (Del. 1973). 141 AIG II, 976 A.2d at 893. 142 Id. at 883-84. 52 not been held to the general rule of in pari delicto ―when the corporate agent responsible for the wrongdoing was acting solely to advance his own personal financial interest, rather than that of the corporation itself.‖144 This departure from the general rule of imputation, known as the ―adverse interest exception,‖ is one of three major ways that courts adhering to the traditional in pari delicto rule have avoided application of the doctrine in a specific context. The adverse interest exception, if applied correctly, should cover only the ―unusual‖ case in which the allegations support a reasonable inference of ―the type of total abandonment of the corporation‘s interests‖ that is characteristic of, for example, outright stealing from the corporation.145 Because most instances of fraud or illegal misconduct by corporate actors confer at least some benefit on the corporation, the adverse interest exception may not apply even when the ―benefit‖ enjoyed by the corporation is outweighed by the long-term damage that is done when the agent‘s mischief comes to light.146 Nevertheless, where agents act purely in pursuit of their own interest to the detriment of the principal to whom they owe fiduciary duties, the societal interest in deterring such action is strong enough that the policies underlying the in pari 143 Id. at 891 n.50. 144 Id. at 891 (emphasis added). 145 Id. at 891 (citing In re CBI Hldg. Co., 529 F.3d 432, 453 (2d Cir. 2008)). 146 AIG II, 976 A.2d at 892. 53 delicto doctrine give way and the acts and knowledge of the faithless agent are not imputed to the corporation. Deciding when a countervailing public policy should trump the policies animating in pari delicto often proves difficult. The in pari delicto doctrine has manifest appeal in the classic case of, for example, a thief who is injured in commission of a crime; it would be absurd to allow him to sue a co-felon who stole the injured thief‘s share of the loot, or the burglarized homeowner whose negligent maintenance caused a slip-and-fall.147 When the rule is invoked against a corporation attempting to sue a party that previously joined in or facilitated its wrongdoing, however, the policy rationale of the case can be less clear-cut. A prototypical instance involves ―innocent‖ stockholders bringing suit derivatively on behalf of the corporation to recoup some of the losses caused by the fraudulent actions of its officers and directors, who may well have been removed from the company already. While equitable considerations may not come into play in the case of the plaintiff thief, they might in the case of the corporation-as-derivative-plaintiff—or, as relevant here, the receiver of entities driven to insolvency by faithless fiduciaries— because innocent stockholders or creditors may gain or lose depending on the way the doctrine is applied. That specific concern animates a second carve-out from in pari delicto: the fiduciary duty exception. Under that exception, perhaps the most expansive, the doctrine 147 Cf. Kirschner, 938 N.E.2d at 950. 54 has no force in a suit by a corporation against its own fiduciaries.148 Although various rationales have been advanced as supporting this exception,149 the underlying justification is that parties like receivers, trustees, and stockholder derivative plaintiffs must be able to act on the corporation‘s behalf to hold faithless directors and officers accountable. ―To hold otherwise would be to let fiduciaries immunize themselves through their own wrongful, disloyal acts,‖150 a ―transparently silly‖ result.151 The fiduciary duty exception to the in pari delicto doctrine ensures that stockholders (and, in cases of insolvent entities, creditors) have a remedy for the wrongdoing that caused them harm. That consideration is paramount in a court of equity, such as this Court, which ―will suffer no wrong without a remedy.‖152 The existence of the fiduciary duty exception, therefore, re- frames the fundamental inquiry involved in deciding whether to apply in pari delicto or 148 AIG II, 976 A.2d at 876, 889-95. 149 Id. at 889-90; see also In re HealthSouth Corp. S’holders Litig., 845 A.2d 1096, 1107 (Del. Ch. 2003), aff’d, 847 A.2d 1121 (Del. 2004). 150 AIG II, 976 A.2d at 876. 151 HealthSouth Corp., 845 A.2d at 1107. 152 2 POMEROY, supra note 103, § 363. This maxim ―is the source of the entire equitable jurisdiction, exclusive, concurrent, and auxiliary.‖ Id. at § 423. The doctrine of in pari delicto, of course, implicates another of our first principles— that ―he who comes into equity must come with clean hands.‖ Id. at §§ 363, 397. Cf. Seacord v. Seacord, 33 Del. 485, 139 A. 80, 81 (Del. Super. 1927) (discussing ―the rule of pari delicto or the equitable maxim, ‗He who comes into court must come with clean hands‘‖). 55 set it aside: the issue is ―not whether stockholders can seek relief on the corporation‘s behalf, but from whom stockholders can seek that relief.‖153 A similar rationale underlies a third category of cases in which courts have avoided in pari delicto, even where by its terms it would apply: i.e., the exception that applies ―when another public policy is perceived to trump the policy basis for the doctrine itself.‖154 Cases falling under this seemingly diffuse ―public policy exception‖ are united by fact patterns involving statutory schemes like the federal securities laws that rely in significant part on private causes of action for their enforcement. 155 In such instances where the claim at issue directly furthers an established policy, courts may defer to that policy by setting in pari delicto aside and allowing the action to go forward. c. AIG I and AIG II—the leading Delaware cases on in pari delicto Because it is the central authority on which the parties rely for their statement of the in pari delicto doctrine in Delaware, and because it is perhaps easiest to envision the doctrine‘s application by way of example, I review briefly this Court‘s decisions in In re 153 AIG II, 976 A.2d at 889. 154 Id. at 888. 155 See Perma Life Mufflers, Inc. v. Int’l Parts Corp., 392 U.S. 134, 136 (1968) (reversing lower federal court rulings that ―seemed to threaten the effectiveness of the private action as a vital means for enforcing the antitrust policy of the United States‖); see also Pinter, 486 U.S. at 633 (stating that, in the context of the federal securities laws, courts must ensure that ―judge-made law‖ like in pari delicto ―does not undermine the congressional policy favoring private suits as an important mode of enforcing federal securities statutes‖); Berner, 472 U.S. at 315. 56 American International Group, Inc. Consolidated Derivative Litigation.156 That action arose out of a wide-ranging array of financial misconduct by several high-level officers and directors of American International Group, Inc. (―AIG‖). In particular, it was alleged that AIG‘s Chairman and CEO, Maurice R. Greenberg, and several of his top lieutenants orchestrated a series of transactions designed to inflate AIG‘s perceived financial strength, engaged in illegal schemes to avoid taxes, sold illegal financial products to other companies, and conspired with competitors to rig certain insurance markets.157 When the various schemes were discovered, AIG had to restate years‘ worth of its financials, which ultimately resulted in a reduction of the stockholders‘ equity of $3.5 billion. Additionally, the company was forced to pay nearly $2 billion to resolve various criminal and civil proceedings lodged against it.158 Certain stockholders, derivatively on AIG‘s behalf, brought a litany of claims against various defendants.159 Greenberg, his inner circle of corporate officers, and multiple directors and employees of AIG were sued for, among other things, breaches of fiduciary duty. The derivative complaint also leveled claims for fraud, conspiracy, and 156 AIG I, 965 A.2d 763; AIG II, 976 A.2d 872. 157 See AIG I, 965 A.2d at 782-94. 158 Id. at 793-94. 159 Id. at 775-76. Consistent with the decision of a special litigation committee of the AIG board, AIG itself also became a plaintiff in the litigation to pursue direct claims for breach of fiduciary duty against Greenberg and another officer. See id. Unless otherwise noted, all claims discussed in this section pertain to the derivative aspects of the AIG I and AIG II decisions. 57 aiding and abetting against General Re Corporation (―Gen Re‖), with which AIG had engaged in several illegal transactions designed to misrepresent the strength of AIG‘s insurance reserves.160 In connection with AIG‘s scheme to rig bids in an insurance brokerage market, the derivative complaint further included counts for fraud and conspiracy against Marsh & McLennan Companies, Inc. (―Marsh‖), ACE Limited (―ACE‖), and an ACE executive; Marsh additionally was sued for aiding and abetting a breach of fiduciary duty and for unjust enrichment.161 Finally, the derivative plaintiffs sued PricewaterhouseCoopers LLP (―PwC‖), AIG‘s independent auditor, for breach of contract and malpractice, on the theory that they wrongly had certified AIG‘s financial statements as accurate and GAAP-compliant, when they ultimately had to be restated by billions of dollars.162 In AIG I, Chief Justice Strine, then writing as Vice Chancellor, addressed motions to dismiss filed by the AIG defendants—Greenberg and his inner circle, and several former and current AIG employees—and PwC.163 The Court dismissed the claims against the employee defendants on personal jurisdiction grounds, but largely refused to dismiss the claims against Greenberg and his top lieutenants.164 Although it was not 160 AIG II, 976 A.2d at 879. 161 Id. at 880-81. 162 AIG I, 965 A.2d at 776. 163 Id. 164 Id. at 795-815. 58 discussed in AIG I, a necessary predicate of that aspect of the opinion was the fact that, as corporate officers and directors who owed fiduciary duties to AIG and its stockholders, none of those defendants were able to invoke the in pari delicto defense.165 More pertinent to this Opinion, however, was the treatment in AIG I of PwC‘s motion to dismiss. In that regard, the complaint asserted that PwC committed malpractice and breached its contract with AIG by failing to discover widespread fraud that occurred at the upper levels of AIG management, and that AIG suffered greater losses than it would have if PwC‘s auditing had conformed to generally accepted auditing standards (―GAAS‖). PwC invoked the defense of in pari delicto, arguing that AIG was a wrongdoer in that situation, and because the claim was AIG‘s—even if pursued derivatively on its behalf by various stockholders—the company was barred from stating a claim against a fellow wrongdoer under the law of New York, which PwC claimed governed. The choice of law issue was addressed first. Relying on the most significant relationship test, the Court agreed that New York law governed AIG‘s claims against PwC.166 After reviewing the applicable New York precedent relating to in pari delicto, the Court concluded that, if it were to apply the in pari delicto doctrine as the New York Court of Appeals likely would, AIG‘s derivative claims against PwC would be barred by the rule of imputation. It also determined that the narrow adverse interest exception 165 AIG II, 976 A.2d at 876. 166 AIG I, 965 A.2d at 818-22. 59 could not be invoked because the complaint suggested that the alleged wrongdoing of Greenberg and other AIG officials had not been committed solely for the benefit of the insiders themselves.167 AIG itself had benefitted from the financial machinations of the insiders‘ fraud, even if those benefits turned out to be short-lived once the misconduct came to light.168 Thus, in pari delicto applied, and the claims against PwC were dismissed. In reaching that decision, then-Vice Chancellor Strine expressed discomfort with the result of New York‘s rule, and two aspects of his obiter dictum comments in that regard are particularly relevant to this case. First, he indicated that, if PwC had been accused of aiding and abetting a breach of fiduciary duty, his choice of law determination might have been different.169 Because of Delaware‘s ―paramount‖ interest in policing alleged breaches of fiduciary duties within Delaware corporations, he posited that the gravity of a claim for aiding and abetting such a breach potentially could trump another state‘s interest in adjudicating issues of professional misconduct according to its own laws.170 Second, then-Vice Chancellor Strine stated that, even as to AIG‘s breach of contract and malpractice claims against PwC, if Delaware law were applicable, he 167 Id. at 823-30. 168 Id. 169 Id. at 822. 170 Id. 60 ―would be chary about following the New York approach.‖171 In so doing, he questioned some of the assumptions that appeared to underlie the rationale of New York‘s in pari delicto doctrine as it presumably would apply to corporate advisors like PwC. Two further aspects of the AIG litigation are noteworthy here. After this Court‘s decision in AIG I, the Delaware Supreme Court certified to the New York Court of Appeals (the ―New York Court‖) the issue of whether, under New York law, the in pari delicto defense was effective to bar AIG‘s derivative claims against PwC.172 In Kirschner v. KPMG LLP, the New York Court answered that question and a closely related one arising out of an action in the federal courts of the Second Circuit.173 As to both questions, the Court upheld New York‘s strict in pari delicto rule by refusing to adopt a contrary position advocated by the stockholder derivative plaintiffs in AIG I and the analogous position of a litigation trustee in a bankruptcy action. In so ruling, the New York Court explicitly declined ―to alter our precedent relating to in pari delicto, and imputation and the adverse interest exception, as we would have to do to bring about the expansion of third-party liability sought by plaintiffs here.‖174 Finally, in AIG II, the Court of Chancery addressed motions to dismiss brought by Gen Re, Marsh, and ACE. As discussed above, those defendants were subject to claims 171 Id. at 828 n.246. 172 Teachers’ Ret. Sys. of La. v. PricewaterhouseCoopers, LLP, 998 A.2d 280 (Del. 2010). 173 938 N.E.2d 941, 945 (N.Y. 2010). 174 Id. 61 on behalf of AIG for fraud, conspiracy, and aiding and abetting breaches of fiduciary duty. Notably, in ruling on the motions to dismiss, then-Vice Chancellor Strine applied Delaware law. He concluded that Delaware‘s in pari delicto defense applied to bar AIG from stating claims against any of those three alleged co-conspirators.175 In reaching that decision, the Court rejected two arguments that the derivative plaintiffs advanced to avoid the in pari delicto doctrine. First, as a factual matter, the Court ruled that the allegations in the complaint reasonably could support an inference that AIG was ―in equal fault‖ with the co-conspirators as to the alleged fraudulent transactions.176 Second, the Court held that, as a matter of Delaware law, there was no policy justification for setting aside the in pari delicto doctrine to allow a corporation guilty of wrongdoing to sue its alleged co-conspirators.177 In this regard, it found unpersuasive the derivative plaintiffs‘ argument that because the stockholders themselves had done nothing wrong, it would be unjust to prevent them from recouping some of their losses. The Court observed that accepting that line of reasoning ―would eviscerate the in pari delicto doctrine and contravene the policy judgments upon which that doctrine rests.‖178 The Court noted that the AIG stockholders already had the benefit of the major exception to the in pari delicto rule: the ability to sue corporate insiders, such as directors 175 Id. at 882, 895. 176 Id. at 885-88. 177 Id. at 888. 178 Id. at 889. 62 and officers whose actions precipitated the claimed losses, on behalf of the company. ―The issue,‖ it stated, ―is therefore not whether stockholders can seek relief on the corporation‘s behalf, but from whom stockholders can seek that relief.‖179 Allowing stockholders to expand this exception, however, by suing parties ―outside of the borders of their corporation would not be socially useful.‖180 The important policy considerations animating the in pari delicto doctrine—principally, sparing the court from wasting its resources to provide an accounting among wrongdoers—would be severely undermined by allowing the kind of claims brought by the derivative plaintiffs to go forward. As for the purported benefits of setting aside the rule, the Court observed that companies like Gen Re, Marsh, and ACE needed little added incentive to follow the law, based on ―the potent public enforcement that exists as to many important laws that regulate‖ such businesses.181 2. The question presented here, and the relevant contentions In summary, Delaware law adheres to the doctrine of in pari delicto, and where it applies, the doctrine precludes the court from hearing claims as between wrongdoers unless the wrongdoer-plaintiff against whom it is invoked can avail herself of an exception to the rule. Guided by the foregoing principles, my analysis of this issue as it pertains to the present motions consists of asking: first, should in pari delicto apply to the 179 Id. 180 Id. 181 Id. at 895 n.59. 63 Receiver‘s claims against Wilmington Trust and the Auditor Defendants? And if so, is there an exception that would save those claims from dismissal? In this regard, the Moving Defendants contend that the doctrine applies here, because the alleged misconduct of the SPI Entities‘ fiduciaries—most clearly, Jackson— is imputed to the SPI Entities, making them at least substantially equal in fault to the Moving Defendants. They contend that even though the Receiver has brought this action on behalf of the SPI Entities and their stakeholders, she has only the rights of, and is subject to the same defenses as, the SPI Entities themselves. Finally, the Moving Defendants argue that no exception to the doctrine is available to prevent the dismissal of the SPI Entities‘ claims. The Receiver challenges all three of those contentions. In particular, she asserts that the well-established adverse interest exception applies here. The Receiver also contends that in pari delicto should not apply because this case involves an insurance liquidation receivership action. Thus, for the public policy reasons embodied in Delaware‘s insurance statute and related regulations, she argues that this Court should decline to apply the general rule of imputation by which in pari delicto operates to bar claims. Finally, she maintains that, even if in pari delicto applies and the adverse interest exception is unavailable, Delaware law should not permit an auditor to invoke the doctrine, because of the special role auditors play in informing corporate fiduciaries. I discuss these issues in turn. 64 At the outset, however, I note that, by the Complaint‘s own terms, the SPI Entities bear ―substantially equal responsibility‖182 for the alleged schemes by which money was stolen from the policyholders and the DDOI was misled about the SPI Entities‘ true financial condition. For example, the Complaint accuses James M. Jackson of fraud, and takes issue with the Moving Defendants‘ failure to detect and prevent that fraud. It is clear, however, that the relevant actions in this regard were taken on behalf of the SPI Entities, so that they could obtain the DDOI‘s approval to operate as captive insurers.183 Thus, the general doctrine of in pari delicto applies to bar the SPI Entities‘ claims against the Moving Defendants, unless the Receiver can avail herself of some exception to that doctrine.184 3. Can the Receiver avail herself of the adverse interest exception to the in pari delicto doctrine? The Receiver contends that, even if it applies, in pari delicto does not bar the claims against the Moving Defendants because she may take advantage of the ―adverse interest exception.‖ As discussed above, this exception is derived from the same body of agency law imputation principles that gave rise to the in pari delicto rule itself.185 That 182 See AIG II, 976 A.2d at 883; Berner, 472 U.S. at 310. 183 See, e.g., Compl. ¶¶ 56, 62-70, 78, 94-95, 102, 263-66. 184 The Receiver does not seriously contend that the SPI Entities do not bear fault for their present situation, but rather advances several exceptions that she argues should apply here to preclude the Moving Defendants‘ in pari delicto defense. I address those arguments in the next sections. 185 See supra notes 143-146; see also RESTATEMENT (THIRD) OF AGENCY § 5.03 cmt.b (2006). 65 is, in a case where the agent‘s action is totally adverse to the interests of his principal, the law will not impute knowledge of the bad act to the principal, because it seems nonsensical to presume that a thieving agent would tell his principal about the theft. 186 In the corporate context, and as relevant here, where a corporate fiduciary acts ―solely to advance his own personal financial interest, rather than that of the corporation itself,‖ the adverse interest exception comes into play and permits the corporation to state a claim against the faithless fiduciary‘s co-conspirator.187 This type of total abandonment, such as siphoning corporate funds or other outright theft, is likely to be a ―highly unusual case.‖188 Thus, the adverse interest exception is applied narrowly, lest it be expanded to the point of covering more terrain than the rule itself.189 As a result, the exception will not enable a party to avoid application of in pari delicto if the illegal scheme furthers both the faithless fiduciary‘s interests and those of the corporation itself.190 186 See RESTATEMENT (THIRD) OF AGENCY § 5.04 (―For purposes of determining a principal‘s legal relations with a third party, notice of a fact that an agent knows or has reason to know is not imputed to the principal if the agent acts adversely to the principal in a transaction or matter, intending to act solely for the agent‘s own purposes or those of another person.‖) 187 AIG II, 976 A.2d at 891. 188 Id. 189 Id. at 894. 190 Id. at 892-94 (holding that the traditional, narrow approach to the adverse interest exception was the correct statement of Delaware law); see also Kirschner, 15 N.Y.3d at 466-67, 938 N.E.2d 941, 952 (noting that the traditional, narrow formulation of the adverse interest exception ―avoids ambiguity where there is a benefit to both the insider and the corporation,‖ and therefore is suitable only where the insider‘s misconduct benefits only himself or a third party). 66 On the facts of this case, the adverse interest exception is unlikely to save the Receiver‘s claims. The allegations in the Complaint conceivably could support a reasonable inference that at least Jackson was involved in siphoning money from the SPI Entities‘ bank accounts, which could be the sort of total adversity required to sustain the exception. Another equally plausible reading of the Complaint, however, is that there never was any money in the bank accounts during the relevant time periods, but rather that the entire structure was a sham. Because this action is before me on motions to dismiss, I must draw all reasonable inferences in favor of the Receiver. Accordingly, I assume that at some point during the relevant time period, at least Jackson stole funds from the SPI Entities‘ accounts. While Jackson‘s alleged theft is indicative of an intent to act ―to advance his own personal financial interest,‖ the Complaint also suggests that his activities furthered the SPI Entities‘ interests. The Complaint is replete with allegations that, if not for the misrepresented financial statements, the SPI Entities never would have been authorized as Delaware-domiciled captive insurers. This may have been a temporary benefit, which proved illusory once the fraud came to light, but it is clear from the face of the Complaint that the SPI Entities‘ position was improved, if only for a time, by Jackson‘s machinations.191 191 Cf. Kirschner, 938 N.E.2d at 953 (―Consistent with these principles, any harm from the discovery of the fraud—rather than from the fraud itself—does not bear on whether the adverse interest exception applies. . . . If that harm could be taken into account, a corporation would be able to . . . disclaim virtually every corporate 67 Even if I were to assume that Jackson completely had abandoned the SPI Entities‘ interests and that those entities obtained no benefit from his conduct, however, the Receiver still cannot invoke the adverse interest exception in the circumstances of this case. The reason is because the SPI Entities are subject to an exception to the adverse interest exception—the ―sole actor‖ exception.192 Courts have applied the sole actor exception where the agent committing the fraud was the sole stockholder of the corporation, or otherwise ―dominated‖ the corporation.193 As discussed above, the adverse interest exception is based on the presumption that a completely faithless agent would not communicate his knowledge to his principal, and that the principal would not benefit from the agent‘s adverse action. The sole actor rule overrides the adverse interest exception where the principal and the agent are the same, because it is absurd to presume that the one actor involved and affected somehow could keep secrets from himself, and because the principal, as the same sole owner, benefits from the fraud.194 Thus, in the corporate context, where a high-level officer or fraud—even a fraud undertaken for the corporation‘s benefit—as soon as it was discovered and no longer helping the company.‖). 192 See Official Comm. of Unsecured Creditors v. R.F. Lafferty & Co., 267 F.3d 340, 359 (3d Cir. 2001). 193 Id. at 359-60; see also In re Jack Greenberg, Inc., 212 B.R. 76, 86 (Bankr. E.D. Pa. 1997). 194 See, e.g., In re Mediators, Inc., 105 F.3d 822, 827 (2d Cir. 1997); RESTATEMENT (THIRD) OF AGENCY § 5.04 cmt.d (2006) (―[I]f the agent controls the principal‘s decisionmaking, the principal is charged with notice of the agent‘s wrongdoing. 68 director also solely owns or otherwise dominates the corporation, the principal-agent distinction virtually disappears. In terms of a claim against a third party that dealt with the corporation, therefore, the adverse interest exception will not aid an agent-principal who does wrong by protecting the corporation he controls from the effect of in pari delicto. In this case, Jackson was at all relevant times the President and Chairman of Security Pacific, SPI-202, SPI-203, and SPI-204, and held 100 percent of those companies‘ stock.195 The Receiver does not dispute that Jackson solely owned and dominated the SPI Entities. Rather, she contends that the sole actor rule should not apply here because of the nature of the insurance business, in which policyholders and the public at large have a stake in the solvency of insurers. According to the Receiver, it therefore would be unjust for this Court to presume that there is a ―complete unity of interest between a sole stockholder who loots his own insurance company and the company itself.‖196 Taken to its extreme, this would mean that the existence of policyholders and other innocent creditors in the insurance context should cause the adverse interest exception to apply and avoid the in pari delicto doctrine, because the This rule, often termed the ‗sole actor doctrine,‘ treats principal and agent as one.‖). 195 Compl. ¶¶ 30, 44, 96. See Receiver‘s Answering Br. to Auditor Defs. 2-3, 42. 196 Receiver‘s Answering Br. to Auditor Defs. 43 (quoting Reider v. Arthur Andersen, LLP, 784 A.2d 464, 474 (Conn. Super. Ct. 2001) (refusing to use the sole actor rule to override the adverse interest exception, and allowing the state insurance commissioner to bring claims against liquidated insurer‘s former auditor)). 69 fraudulent corporate insider was acting adversely to the public‘s interests, even if not to those of the corporation‘s owners.197 That reasoning, if accepted, would mean that the in pari delicto defense cannot apply to any case in which the claims are being asserted by an insurance company, either in receivership or as a derivative plaintiff. I cannot square such a result with the decision in AIG II, which involved one of the most systemically important insurance companies in the world.198 For that reason, I reject the Receiver‘s attempt to avoid application of the ―sole actor‖ rule.199 I therefore conclude that the adverse interest exception—even if it 197 Cf. Reider, 784 A.2d at 474-75 (―Therefore, when a sole owner seeks to loot his own insurance company, every person with a legally protected interest in the insurer‘s continuing solvency is not a knowing and willing participant in the owner‘s fraud. Like an innocent minority shareholder whose interests in a corporation are harmed by a conspiracy of the other shareholders . . . the public is an innocent stake holder in the solvency of the insurer.‖). This type of argument was expressly rejected in AIG II because it would make in pari delicto a dead letter. AIG II, 976 A.2d at 893 (―[A]n innocent insider exception, like the plaintiffs‘ personal interest exception, would allow corporations to sue their own co-conspirators for actions that were undertaken, at least in part, for the corporation‘s own interest, giving corporations rights that natural persons do not have.‖) 198 AIG II involved in pari delicto defenses raised by third-party co-conspirators, not auditors, and is there somewhat distinct from the claims against the Moving Defendants in this case. Nevertheless, if Delaware embraced the type of ―innocent stakeholder‖ exception the Receiver urges in this regard, it would gut the in pari delicto defense regardless of who was raising it. I address in the next Section the specific arguments regarding whether auditors should be treated differently than other defendants. 199 In addition to the holding AIG II, at least two other reasons support this conclusion. First, insurance companies are not the only companies that are relied on by their customers and creditors, nor are they unique in being systemically important. Because similar considerations apply to many regulated industries 70 conceivably could apply, which is dubious based on the allegations of the Complaint— cannot be invoked here because of the sole actor rule. 4. Should in pari delicto be set aside on grounds that its application would frustrate an established public policy of this State? As discussed above, while courts generally will refuse to hear claims as between wrongdoers, ―that rule has always been regarded by courts of equity as without controlling force in all cases in which public policy is considered as advanced by allowing either party to sue for relief against the transaction.‖200 The Receiver‘s contention in this regard is twofold: (1) that receivers are not, or should not be, barred by the in pari delicto defense; and (2) that important public policy interests are served by the Receiver here, in the specific context of insurance liquidation. I do not find either contention persuasive. I begin with the suggestion that because the Receiver is innocent of wrongdoing when she ―steps into the shoes‖ of the liquidated entities, she cannot be subject to the defenses to which the entities themselves would be subject. If accepted, this principle would eviscerate in pari delicto. In the typical case in which the doctrine plausibly is (e.g., financial institutions, food and drug companies, utilities, railroads, and aviation, etc.), the purportedly ―unique‖ or narrow carve-out urged here easily could sweep much of the economy within its ambit. Second, I note again that the innocent parties involved here are not without remedy. The issue again is ―not whether [they] can seek relief on the corporation‘s behalf, but from whom [they] can seek that relief.‖ AIG II, 976 A.2d at 889. 200 AIG II, 976 A.2d at 888 n.43 (quoting Seacord v. Seacord, 33 Del. 485, 139 A. 80, 81 (Del. Super. 1927)). 71 invoked, it is because faithless corporate insiders committed misconduct that an innocent party later wished to disavow in order to state a claim on behalf of the corporation. By definition, if the insiders‘ fraud were ongoing, the innocent claimant either would not have discovered the misconduct yet, or the entity in question might not yet have become insolvent. Sometimes, it is stockholder derivative plaintiffs who bring claims in the name of the corporation after an insider‘s wrongdoing is discovered and, often, the bad actor or actors have been removed from their position. In other situations, a receiver or trustee may bring claims on behalf of the delinquent or bankrupt entity. In either case, it is tempting to view the innocent claimant as the true plaintiff and to set aside the in pari delicto doctrine so as to allow the claim to be brought. As a Vice Chancellor, Chief Justice Strine heard essentially identical arguments in AIG II, however, and he rejected them.201 The same reasoning applies with equal force here. I see no cogent reason for sparing the innocent Receiver the effect of in pari delicto while equally innocent stockholders or policyholders would be barred from relief in the derivative context.202 201 AIG II, 976 A.2d at 889 (―According to the plaintiffs, in such situations the traditional rule is unjust because the stockholders themselves did not act wrongfully, and therefore the traditional in pari delicto rules should be set aside so that the corporation can be made whole and thus the economic interests of the innocent stockholders can be protected. But, the exceptions that the plaintiffs request would eviscerate the in pari delicto doctrine and contravene the policy judgments upon which that doctrine rests.‖) 202 I reject as unpersuasive the suggestion that parties like trustees or receivers should be able to avoid in pari delicto and similar defenses merely because they do not ―voluntarily step‖ into the shoes of the defunct entity, but rather are ―thrust into‖ those shoes. See F.D.I.C. v. O’Melveny & Myers, 61 F.3d 17, 19 (9th Cir. 1995). Stockholder derivative plaintiffs are no less ―thrust into‖ a position of having to 72 Nor is the avoidance of in pari delicto supported by the Receiver‘s appeal to the public policy interests extant in the context of insurance company delinquency generally, or that of captive insurance companies in particular. As the Receiver points out, insurance is a heavily regulated industry in Delaware and every other state. An entire title (Title 18) of the Delaware Code governs insurance companies, and an entire chapter therein is devoted to captive insurers.203 Pursuant to the Insurance Code, the State has vested the Insurance Commissioner with significant authority to enforce the relevant law and its corresponding administrative regulations.204 There are strong reasons for creating and maintaining a robust regulatory framework regarding insurance. In general, the ―reach of influence and consequence‖ of insurance companies have long been considered ―beyond and different from that of the bring suit on behalf of an entity betrayed by its fiduciaries. Further, the idea that the party raising in pari delicto ―enjoys a windfall,‖ id., misses the point of the doctrine—sparing the court from becoming entangled in claims between wrongdoers. See 3 POMEROY supra note 103, § 940 n.5. In any case, it is not clear that O’Melveny & Myers stands for a proposition that is helpful to the Receiver. See, e.g., In re Imperial Corp. of Am., 92 F.3d 1503, 1509 (9th Cir. 1996) (clarifying that O’Melveny does not mean that ―equitable defenses can never be asserted against FDIC acting as a receiver‖); In re Bartoni-Corsi Produce, Inc., 130 F.3d 857, 862 (9th Cir. 1997) (clarifying that O’Melveny was focused on ―the question of fiduciary liability,‖ and finding O’Melveny inapposite in the context of determining whether a third party non-fiduciary is liable to a corporation) (emphasis added). 203 See 18 Del. C. §§ 101 to 8412 (the ―Insurance Code‖); id. §§ 6901 to 6983 (relating to captive insurers). 204 See id. §§ 301 to 333. 73 ordinary business.‖205 As relevant to this case, Delaware has a particularly significant interest in regulating insurance companies domiciled here, whose assets purportedly exceed $500 billion in the aggregate, making the Department of Insurance the largest consumer protection agency in the state.206 All these considerations buttress the proposition that the public has an interest in keeping insurers solvent and in overseeing or facilitating the orderly disposition of insolvent or delinquent ones. Accepting the Receiver‘s premise, however, does not lead inexorably to the conclusion she urges. For starters, the claims subject to the pending motions to dismiss are the SPI Entities‘ claims, not the Insurance Commissioner‘s. Moreover, even setting that aside, the expansive and intricate statutory and regulatory framework governing Delaware-domiciled insurance companies arguably cuts against the Receiver‘s position that in pari delicto should not apply, not in favor of it. The essence of her argument is that, if I decline on the basis of public policy to allow Wilmington Trust and the Auditor Defendants to invoke the in pari delicto defense, the State‘s policy goals will be furthered in two ways: (1) the Moving Defendants, if ultimately held liable, can contribute to making the SPI Entities‘ innocent policyholders whole; and, (2) the Commissioner can incentivize better behavior on the part of firms providing management and auditing services to captive insurers. 205 German Alliance Ins. Co. v. Lewis, 233 U.S. 389, 414 (1914). 206 Karen Weldin Stewart – Biography, DEL. DEPT. OF INS. (last accessed Mar. 23 2015), http://www.delawareinsurance.gov/bio.shtml. 74 As discussed above, the proper inquiry in considering whether to apply the ―public policy‖ exception to in pari delicto—which itself serves important public policy objectives—is whether ―preclusion of suit would not significantly interfere with the effective enforcement‖ of a statutory policy scheme.207 In the case of Delaware insurance regulation, however, no private enforcement scheme exists; to the contrary, the DDOI has been given significant authority to achieve the goals of making innocent insurance policyholders whole, and deterring bad conduct on the part of firms providing professional services to insurers.208 The statute does not suggest that the Legislature intended private causes of action to play a part in its enforcement,209 and the Receiver has not cited any case law indicating otherwise. In this regard, I also note that, with respect to captive insurance companies specifically, the Commissioner has even broader authority: in addition to the numerous reporting and minimum capitalization requirements noted in Section I.B supra, captive insurance companies are required to select from among audit firms and ―captive 207 See Berner, 472 U.S. at 311; Pinter, 486 U.S. at 635. 208 See, e.g., 18 Del. C. § 318 (Commissioner may examine any Delaware insurance company in her sole discretion); id. § 319 (same as to insurance agents, brokers, and the like). 209 See, e.g., id. § 313 (granting the Commissioner broad authority to institute proceedings through the Attorney General to enforce ―any order or action‖ of the Commissioner, and to refer criminal violations of the insurance code to the Attorney General). 75 managers‖ that are pre-approved by the Insurance Commissioner.210 In other words, if the misconduct in this case is deemed to be grave enough, the Commissioner presumably could impose some sort of administrative sanction against Wilmington Trust, Johnson Lambert, or McSoley McCoy, or, perhaps, even remove one or more of them from the list of pre-approved service providers. If the Commissioner is unable to achieve what she deems appropriate levels of consumer protection and industry deterrence, she has been delegated the authority to promulgate further regulations consistent with the insurance statute.211 Finally, if the statutory tools thus far granted to the DDOI are insufficient, it is the province of the Delaware General Assembly, not this Court, to provide a tailored solution, in a process open to all relevant stakeholders and capable of balancing the numerous, and sometimes competing, considerations democratically. For all of the foregoing reasons, I am not convinced that public policy would be better served by preventing defendants from relying on the defense of in pari delicto merely because the commercial backdrop is that of insurance. Indeed, because of the highly regulated nature of insurance in this State, I do not consider it appropriate to undermine the policies advanced by the in pari delicto doctrine, when the purported benefits of doing so here appear to be achievable within the robust regulatory framework that already exists. 210 18 Del. Admin. C. §§ 302-2.4, 302-4.2. 211 18 Del. C. § 311. 76 5. Should Delaware law recognize a common law “auditor exception” to in pari delicto? At this point in my analysis, the imputation of Jackson‘s knowledge and actions to the SPI Entities is presumed, and in pari delicto applies to bar the Receiver from asserting the SPI Entities‘ claims, unless I accept the Receiver‘s final argument in favor of a special ―auditor exception‖ to the doctrine. In asking this Court to recognize an ―auditor exception‖ to the in pari delicto doctrine, the Receiver seeks adoption of her interpretation of the dictum in AIG I to the effect that, were he able to address the applicability of in pari delicto to bar AIG‘s claims against PwC under Delaware law, then-Vice Chancellor Strine may not have applied the doctrine. Viewing the dictum in AIG I in context with the rest of Delaware corporate case law, I do not read our precedent as supporting the broad carve-out from in pari delicto that the Receiver urges. I do agree, however, with the sentiment voiced in AIG I and AIG II that auditors are different from genuine third parties when it comes to analyzing whether in pari delicto should apply, and they ought not be afforded the protection of that rule based on a rote application of agency law principles. As those considerations relate to the particular facts of this case, I conclude, for the reasons that follow, that the claims against Wilmington Trust and the Auditor Defendants for breach of contract and negligence must be dismissed. I decline to dismiss, however, the claims against those Defendants for aiding and abetting breaches of fiduciary duty. Before focusing on Delaware law, I note that several states have created specific exceptions from in pari delicto to allow corporations claims‘ against auditors to proceed. 77 For example, in NCP Litigation Trust v. KPMG LLP, the Supreme Court of New Jersey held that a liquidation trustee was not barred from bringing a negligence claim against an auditor whose alleged negligence contributed to the damages caused by the fraud of the liquidated corporation‘s insiders.212 The court placed limitations on the holding in NCP Litigation Trust, however. Specifically, an auditor retains the right to raise the ―imputation defense,‖ as it is called there, against a stockholder who had participated in the fraud, or defendants who by reason of their role in the company should have known about the fraud but did not, or stockholders whose stake in the company was large enough that they should have been able to exercise some oversight over company operations.213 Because the NCP rule is intended to allow ―only ‗innocent‘ shareholders to recover,‖ the court expressly noted that the assessment of relative fault in this regard is a factual question that generally requires development of the factual record through discovery and trial.214 The Supreme Court of Pennsylvania also responded to a fact pattern involving alleged auditor participation in corporate insiders‘ fraud by qualifying its in pari delicto doctrine, although it took a slightly different tack.215 There, the Pennsylvania Court 212 901 A.2d 871, 882-83 (N.J. 2006). 213 Id. at 885-86. 214 Id.; see also id. at 886 n.3. 215 Official Comm. of Unsecured Creditors of Allegheny Health Educ. & Research Found. v. PricewaterhouseCoopers, LLP, 989 A.2d 313 (2010) [hereinafter ―AHERF‖]. 78 based its determination of whether the insiders‘ fraud should be imputed to the corporation to bar claims against co-wrongdoers (including auditors) on a test of good faith. That is, while imputation generally applies under Pennsylvania law, the court precluded reliance on the in pari delicto defense by an auditor that ―has not dealt materially in good faith with the client-principal,‖ with the goal of foreclosing application of the doctrine in ―scenarios involving secretive collusion between officers and auditors to misstate corporate finances to the corporation‘s ultimate detriment.‖216 As noted above, the Court of Appeals of New York in Kirschner strictly adhered to the traditional in pari delicto defense. The discussions and reasoning contained in the NCP Litigation Trust, AHERF, and Kirschner decisions are enlightening on this issue, but none of them are controlling, nor do I consider their logic dispositive of the issue before me. a. Neither the case law nor public policy support a blanket “auditor exception” to in pari delicto The Receiver asks this Court to interpret Delaware‘s formulation of the in pari delicto doctrine as not applying to any claims against auditors. In making that argument, she relies on: (1) AIG I and AIG II; and (2) policy-based reasoning.217 I am not persuaded that either the rationale of the AIG decisions or general policy considerations support such a sweeping exception to in pari delicto. 216 Id. at 339. 217 Receiver‘s Answering Br. to Auditor Defs. 37-41. 79 First, as the Receiver correctly notes, AIG I does suggest that Delaware law should approach on its own terms the question of whether auditors can raise in pari delicto, and not mechanically follow the approach of New York or any other state. When read alongside AIG II, as it must be, however, the rationale of AIG I does not support veering to the opposite extreme by entirely setting aside in pari delicto to allow any and all claims against auditors. The AIG I opinion observes, for example, that ―one can quibble with [the New York approach] while still having doubt about the public policy utility of exposing audit firms to uncapped liability for their negligent failure to detect financial fraud by corporate managers.‖218 In that vein, then-Vice Chancellor Strine briefly noted that ―a more thoughtful tact‖ would not involve simply allowing any and all causes of action against auditor defendants to proceed, but rather would seek responsibly to calibrate the auditors‘ ex post liability through the use of heightened standards of pleading, liability, and proof, and damages caps.219 In that regard, the Court noted in AIG I that ―[a]lthough audit fees are lucrative, they arguably pale in comparison to the potential liability the auditors face,‖ and going too far in the direction of imposing ex post liability can backfire.220 218 AIG I, 965 A.2d at 828 n.246. 219 Id. 220 Id.; see also id. (―The even larger disproportion between independent directors fees and liability inspired § 102(b)(7) as well as the gross negligence standard Delaware corporate law applies in cases when a § 102(b)(7) clause does not apply. One can therefore understand the concern about the need to keep the auditor industry healthy, or to avoid the possibility that audit firms will suffer huge 80 Moreover, in deciding which law applied in AIG I, the Court expressly considered the Delaware public policy interests that could have been furthered by refusing to apply New York law (and possibly precluding PwC from asserting the in pari delicto defense).221 The Court ultimately concluded, however, that those considerations do not trump our choice-of-law principles and the policy goals they protect. To the extent the Receiver relies on AIG I as supporting the proposition that all other policy interests must yield to the benefits that arguably flow from precluding auditors from raising the in pari delicto defense, I find that reliance misplaced. Second, I question the policy arguments the Receiver makes in favor of a broad exception to in pari delicto for any and all claims against auditors. A theme of the Receiver‘s argument in this case, and in decisions like AHERF and NCP, is that allowing in pari delicto to bar claims against auditors essentially would subvert two policy goals in that: (1) innocent stockholders and creditors who were harmed would be deprived of a remedy for that harm; and (2) auditor misconduct, either knowing or negligent, would go unpunished. I consider both of those contentions misguided. With the first, a flawed premise is disguised by noble sentiment. For starters, in pari delicto only acts to bar claims that in fact belong to the corporation, so it would not verdicts by fact-finders desirous of holding anyone they can liable for a fraud- based corporate meltdown or whose judgment about the auditor‘s capability to have detected the fraud through the use of professional diligence is compromised by hindsight bias.‖). 221 Id. at 821-22. 81 preclude a stockholder or creditor who suffered a direct harm from bringing a direct claim to redress it. Even in cases where it might apply, however, in pari delicto will not bar the corporation from suing its faithless fiduciaries, because of the fiduciary duty exception. Thus, the corporation has at least some remedy for wrongs done and a source for recoupment of its losses. Even if concern for innocent stockholders were considered the most important factor, however, making the defense of in pari delicto unavailable to auditor defendants would be problematic. Adopting such a rule would mean that a wrongdoer-corporation gets to sue its auditor and cause the innocent residual claimants of that firm to bear the cost of the lawsuit and any damages, while residual claimants of true third-party co- conspirators (like Gen Re, Marsh, or ACE in AIG II) would enjoy the protection of in pari delicto. The imbalance of such a rule is especially pronounced where the audit firm is allegedly negligent, while the corporation‘s fiduciaries and the agents of the third-party co-conspirators are accused of purposefully engaging in fraud. A second main policy contention proffered by the Receiver—that carving out an auditor exception from in pari delicto would undermine efforts to encourage auditors to do a better job monitoring—takes a blinkered view of the world. It is one thing to accept the premise that our corporate law should not automatically dismiss on in pari delicto grounds all claims against auditors in cases involving serious corporate misconduct. It is a significant leap, however, to conclude from that premise that the best policy answer is to open a floodgate of ex post auditor liability. 82 The independent auditor undoubtedly plays a central role in effectuating important public policies implicated in corporate law, such as investor protection, efficient capital markets, and good corporate governance. Auditors are so central, in fact, that there are numerous governmental and non-governmental bodies currently regulating and otherwise overseeing the audit industry.222 Thus, to the extent it is suggested that the blunt instrument of ex-post liability in contract or tort will cause auditors to do their jobs better, it is questionable whether this Court would have much to add in this already well-covered field. The best-case scenario is that the Court adequately understands and applies the 222 Depending on who their client is, for example, auditors are subject to ―authoritative‖ standard-setting by, among others: the Federal Accounting Standards Advisory Board; the Financial Accounting Standards Board; the Governmental Accounting Standards Board; the Public Company Accounting Oversight Board (―PCAOB‖); the International Accounting Standards Board; and the International Auditing and Assurance Standards Board, in addition to the relevant boards and committees of the American Institute of CPAs, such as the Auditing Standards Board. See Authoritative Standards, AM. INST. OF CERTIFIED PUBLIC ACCOUNTANTS (last accessed Mar. 23, 2015), http://www.aicpa.org/Publications/AuthoritativeStandards/Pages/AuthoritativeSta ndards.aspx. See also 15 U.S.C.A. § 7211(c) (conferring upon the Securities and Exchange Commission (―SEC‖) the power to register and inspect public accounting firms, issue rules governing public company audits, investigate and discipline registered auditors, and otherwise ―enforce compliance‖ with Sarbanes- Oxley, PCAOB rules, professional standards, and the federal securities laws); John C. Coffee, Jr., Gatekeeper Failure and Reform: The Challenge of Fashioning Relevant Reforms, 84 B.U. L. REV. 301, 336-37 (2004). This structure of audit regulation does not disappear as the focus narrows from the national level and public companies to the particular facts of this case. In Delaware, as in presumably most states, the legislature has created a State Board of Accountancy to protect the public from incompetent auditing. 24 Del. C. § 101. That Board has the power to develop standards assuring professional competence, monitor and adjudicate complaints brought against practitioners, promulgate rules and regulations, and impose sanctions where necessary. 83 applicable audit standards and generally accepted accounting principles (―GAAP‖) equally as well as the relevant regulatory body whose core jurisdiction such issues fall under. Even if the Court succeeds at that endeavor, the results—from the perspective of auditor monitoring and deterrence—ideally should be duplicative. Thus, the benefits in terms of auditor deterrence would likely be more limited than the Receiver suggests. For those reasons, I find that the purported benefits (in terms of investor protection and auditor deterrence) of creating an exception to in pari delicto for all claims against auditors are not sufficient to justify undermining the policy principles girded by the doctrine, which protect the Court from accounting among wrongdoers. In addition to the lack of persuasive benefits associated with that kind of sweeping exception, some negative outcomes likely would flow from it. In that regard, one consideration is whether it makes sense for a court of equity to purport to place itself on the level of, for example, the SEC, the PCAOB, the AICPA, or the State Board of Accountancy in terms of evaluating the performance of auditors. With respect to monitoring auditors, the experience and sophistication of those or other relevant audit and accounting regulatory bodies is beyond that of law-trained judges, and their capacity to govern the audit industry is appropriate for the scale of that endeavor. In my view, this Court should avoid entangling itself unnecessarily in time- and resource-consuming inquiries about whether GAAP and relevant audit standards were met, which would be the foreseeable outcome if, for example, in pari delicto did not bar contract and negligence claims in cases like this one. Because regulatory bodies exist for conducting such inquiries, I 84 consider it ill-advised to insert this Court into matters within the core mandate of those bodies. b. Well-pled aiding and abetting claims against defendants like auditors should not be barred by in pari delicto Although the AIG decisions and the public policy considerations just discussed do not point to a sprawling exception from in pari delicto for any and all claims against auditors, they do support a more limited exception grounded in both the nature of the claim asserted and the party likely to raise in pari delicto to bar that claim. As discussed, Delaware law sets aside in pari delicto when a receivership trustee or derivative plaintiff seeks to sue the corporation‘s own fiduciaries for breach of their fiduciary duties. Applying the same reasoning, I conclude that Delaware law should do the same where an auditor or similar defendant is alleged to have aided and abetted such breach. Rather than create an expansive new ―auditor exception‖ to in pari delicto, therefore, I determine that the fiduciary duty exception extends to cover well-pled aiding and abetting claims against defendants like auditors. Thus, in this case, the claims against the Wilmington Trust and the Auditor Defendants for breach of contract and negligence will be barred by in pari delicto, but the claims against them for aiding and abetting breaches of fiduciary duty will not. Both AIG I and AIG II recognize that defendants like auditors should be treated differently than other third parties when it comes to in pari delicto. AIG I also made the nuanced observation that claims against a defendant like PwC for aiding and abetting a breach of fiduciary duty would be materially different from breach of contract or 85 negligence claims against PwC. Then-Vice Chancellor Strine placed ―an important caveat‖ on his decision not to apply Delaware law in AIG I, observing that had the stockholder derivative plaintiffs there stated claims against PwC for aiding and abetting breaches of fiduciary duty, his choice of law analysis might have been ―quite different.‖223 But ―[b]ecause PWC only face[d] claims for malpractice and breach of contract, rather than claims that it consciously aided wrongful managerial misconduct,‖ he applied New York law and ultimately dismissed all claims as New York law required him to.224 I agree that claims for aiding and abetting breaches of fiduciary duty differ materially from contract and negligence claims, because with the former, the corporation‘s internal affairs are the focus of the claim.225 The policy goals advanced by in pari delicto, while important enough to outweigh this Court‘s interest in adjudicating breaches of contract and negligence claims at the periphery of a corporation‘s affairs, 223 AIG I, 965 A.2d at 822. 224 Id. 225 The elements for establishing such a claim are well known: (1) a fiduciary relationship; (2) breach of the fiduciary‘s duty; (3) knowing participation in the breach by the alleged aider-and-abettor; and (4) causation of damages. Malpiede v. Townson, 780 A.2d 1075, 1096 (Del. 2001). In this regard, I note that, because of the significant overlap in their respective elements, much of the evidence for proving an aiding and abetting claim already would be coming in to prove the breach of fiduciary duty claim under the fiduciary duty carve-out to in pari delicto. Claims for breach of an audit contract or for professional negligence involve little or no such salutary overlap, which both reinforces the fundamental difference in the nature of the claims, and adds a practical reason for drawing this distinction. 86 should not outweigh the importance of this Court‘s ability to adjudicate core fiduciary duty claims arising out of entities organized under Delaware law. AIG II gives a further, equally critical insight, however: not all aiding and abetting claims are created equal. Thus, in AIG II, the Court applied Delaware law to dismiss aiding and abetting claims that the stockholder derivative plaintiffs sought to prosecute against the third-party co-conspirators (Gen Re and Marsh). The lack of analogous aiding and abetting claims was notable in AIG I, but that distinction was mentioned only in passing in AIG II.226 The distinction in the AIG cases between third parties like ACE, Gen Re, and Marsh on one hand and PwC on the other comports with the reality that non-fiduciaries like auditors, who occupy a position of trust and materially participate in the traditional insiders‘ discharge of their fiduciary duties, are different from other third parties with whom the corporation may transact business.227 For purposes of the motions currently before me, I need not dilate upon this distinction, because it is evident from the face of the Complaint that both Wilmington Trust and the Auditor Defendants are alleged to 226 AIG II, 976 A.2d at 879 (―[T]he plaintiffs have brought claims for fraud, conspiracy, and aiding and abetting a breach of fiduciary duty against Gen Re.‖); id. at 881 (―[T]he Complaint pleads counts of fraud and conspiracy against Marsh & McLennan, ACE, and Rivera, as well as counts of aiding and abetting a breach of fiduciary duty and unjust enrichment against Marsh.‖). 227 See AIG II, 976 A.2d at 895; see also id. at 895 n.60 (―Suits against corporate agents like outside auditors are best conceived of as also within the confines of a single corporate conspirator and are consistent with the traditional acceptance of derivative suits against corporate insiders.‖). 87 have played a ―gatekeeper‖ role vis-à-vis the SPI Entities. On that basis alone, the aiding and abetting claims against them are fundamentally unlike those that were dismissed in AIG II. I conclude, therefore, that in pari delicto does not provide grounds for dismissing the aiding and abetting claims against Wilmington Trust and the Auditor Defendants. c. The Complaint states claims for aiding and abetting breaches of fiduciary duty against Wilmington Trust and Johnson Lambert, but not McSoley McCoy For the reasons stated in the preceding Sections, the Receiver‘s claims against Wilmington Trust and the Auditor Defendants for breach of contract and negligence are dismissed on grounds of in pari delicto, but the claims for aiding and abetting breaches of fiduciary duty are not. As I next discuss, the Complaint adequately states aiding and abetting claims as to Wilmington Trust and Johnson Lambert, but not as to McSoley McCoy.228 To survive a motion to dismiss, a complaint must allege facts that satisfy the four elements of an aiding and abetting claim: (1) the existence of a fiduciary relationship, (2) 228 The Complaint purports to name Kantner as a Defendant in connection with the aiding and abetting claims in Count 12. Compl. ¶ 381. As discussed above, Kantner owes fiduciary duties to the SPI Entities by reason of his position as a director, and is accused of breaching those duties. Any conduct of Kantner‘s that conceivably might rise to the level of aiding and abetting a breach of fiduciary duty in this regard would simply be a further breach of Kantner‘s own duties. Accordingly, Count 12 is dismissed as to Kantner. See, e.g., Gilbert v. El Paso Co., 490 A.2d 1050, 1057 (Del. Ch. 1984), aff’d, 575 A.2d 1131 (Del. 1990); Penn Mart Realty Co. v. Becker, 298 A.2d 349, 351 (Del. Ch. 1972); see also Higher Educ. Mgmt. Gp., Inc. v. Mathews, 2014 WL 5573325, at 13 (Del. Ch. Nov. 3, 2014). 88 a breach of the fiduciary‘s duty, (3) knowing participation in that breach by the defendants, and (4) damages proximately caused by the breach.229 As to the existence of fiduciary duties, alleged breaches thereof, and resulting damages, the Complaint contains allegations sufficient to support a reasonable inference of two general types of breach, both amply discussed in this Opinion: (1) the purposeful fraud ascribed to James M. Jackson; and (2) the alleged failure on the part of at least the SPI Entities‘ director Kantner to exercise sufficient oversight, in breach of his duty of loyalty. Thus, as with most cases involving aiding and abetting liability, the sufficiency of the claims against the Moving Defendants in this regard ―largely come[s] down to what constitutes ‗knowing participation.‘‖230 Specifically, the relevant inquiry is whether it is reasonably conceivable, based on the non-conclusory allegations in the Complaint and all reasonable inferences drawn from them, that Wilmington Trust, Johnson Lambert, and McSoley McCoy ―knowingly participated‖ in either of the alleged breaches described in items (1) and (2) here. At this preliminary stage of the litigation, I cannot rule out the possibility, based on the allegations in the Complaint, that Wilmington Trust and Johnson Lambert knowingly participated in James M. Jackson‘s fraudulent scheme in breach of his fiduciary duties. I need not decide that question for purposes of the pending motions to 229 Malpiede v. Townson, 780 A.2d 1075, 1096 (Del. 2001). 230 Carlton Invs. v. TLC Beatrice Int’l Hldgs., Inc., 1995 WL 694397, at 15 (Del. Ch. Nov. 21, 1995). 89 dismiss the aiding and abetting claim, however, because it also is reasonably inferable that Wilmington Trust and Johnson Lambert knowingly participated in, at least, the breaches of fiduciary duty allegedly committed by the SPI Entities‘ other directors, in the critical sense that they ―created the unreasonable process and informational gaps that led to the Board‘s breach of duty.‖231 Drost and Theriault of Wilmington Trust worked hand-in-glove with Handy and Bolton of Johnson Lambert to prepare the 2007 and 2008 Audited Financial Statements. Those processes were replete with alleged irregularities, and it is reasonable at this stage to infer that both Wilmington Trust and Johnson Lambert knew something was significantly wrong within the SPI Entities‘ operations. In one of the more glaring episodes detailed in the Complaint, after receiving bank account confirmations from Wachovia and Bank of America that widely diverged from the information provided by Jackson, Handy and Drost followed Jackson‘s instructions to talk to ―Alpesh‖ in order to straighten things out. At one point, Drost and Handy actually discussed how strange it was that their given contact person for Wachovia bank was the same as for Wachovia Securities, in light of the strict separation of those units normally observed within Wachovia‘s structure. Drost knew something was wrong, or at least it is reasonably inferable that he did, when he stated ―maybe, and hopefully [it was] OK‖ that ―Alpesh‖ was the contact person for both. But Drost‘s disbelief was evident in his saying that they should try to contact both sides of the Wachovia structure to figure out why all of the 231 In re Rural Metro, 88 A.3d at 99. 90 huge discrepancies ―suddenly‖ were explained away.232 Lengthy and unexplained delays occurred, but were not challenged by Wilmington Trust or Johnson Lambert in trying to resolve this issue. When, months after he initially inquired, Bolton finally heard from ―Alpesh,‖ the explanation Alpesh gave did not convince either Bolton or Drost. Nevertheless, Drost concocted what he admitted was an ―optimistic‖ re-interpretation of Alpesh‘s story, and on that basis he checked the final boxes and Wilmington Trust and Johnson Lambert marked the 2007 Audited Financial Statements complete, nearly a year after they set out to complete it.233 These alleged facts are only examples, and perhaps they and the numerous other relevant facts alleged in the Complaint conceivably could be explained away as negligence, or perhaps gross negligence, on the part of Wilmington Trust and Johnson Lambert. One instance where they conceivably cross the threshold of ―scienter,‖ however, is in connection with those entities advising the SPI Entities‘ Boards at the meetings in February and October 2009. Drost, Theriault, and (presumably) Kantner of Wilmington Trust were in attendance at those Meetings, at which the Johnson Lambert 232 See Compl. ¶¶ 165-175. 233 Id. ¶¶ 204-209. I note also that when he was briefing McSoley McCoy after they were retained for the 2009 audit, Drost said that in trying to call ―Alpesh,‖ he didn‘t ―seem to have any success getting through, or even getting an opportunity to leave a message.‖ Id. ¶ 287. That was in May 2010. After two full years of communicating with ―Alpesh,‖ Drost still had a hard time getting in touch with him. Drawing all inferences in favor of the Receiver on the pending motions to dismiss, I cannot rule out the possibility that, on the facts alleged, she could show that Wilmington Trust and Johnson Lambert knew that something about this was extremely suspicious. 91 audited financial statements were approved with little or no discussion. In connection with the February 2009 Meeting and the 2007 Audited Financial Statements, Johnson Lambert advised the directors in the Significant Matters Letters that the audit irregularities already had been addressed. The facts alleged in the Complaint, however, suggest that they knew otherwise—as evidenced, at least, by the fact that the same difficulties came up the following year. The Jackson Letter further suggested that certain procedures should be improved in connection with the bank account reconciliations. At a later point, Wilmington Trust advised Jackson that they wanted to have direct access to the bank accounts so that they could confirm balances without going through Jackson. Those suggestions and requests were ignored by Jackson, but neither Wilmington Trust nor Johnson Lambert ever attempted to follow up with the other directors. Though the situation in terms of the audit irregularities apparently did not improve between the February 2009 Meeting and the October 2009 Meeting, Johnson Lambert did not send another Significant Matters Letter or otherwise update the Boards. It is reasonably inferable, therefore, that both Wilmington Trust and Johnson Lambert knew that the directors were not informing themselves and not exercising their oversight responsibility, when those Defendants arguably first presented the ―significant matters‖ as being less of a problem than they actually were, and then allowed the directors to ignore the letters and the suggestions contained within them. This knowing lack of follow-up directly created the ―unreasonable process‖ and ―informational gaps‖ that are alleged to have led to the 92 234 Board‘s breaches of fiduciary duties. Accordingly, I refuse to dismiss the claims asserted by the Receiver against Wilmington Trust and Johnson Lambert for aiding and abetting a breach of fiduciary duty. The situation is materially different with respect to McSoley McCoy. It reasonably might be inferred that they conducted their audit process in a negligent or even grossly negligent manner because, like Johnson Lambert, McSoley McCoy apparently relied on the mysterious Alpesh, and unquestioningly accepted the forged fax copy of the confirmation form regarding the Key Man Policy without following up to obtain the original of that document from Hartford Life. But, McSoley McCoy entered the picture much later than Johnson Lambert, and the Complaint alleges that it largely followed the process that Wilmington Trust laid out as being ―routine‖ for the SPI Entities‘ audits. The critical link in the factual allegations regarding Wilmington Trust and Johnson Lambert was their knowing failure to follow up on the original warnings they provided to the Board in connection with the first audit, despite experiencing very similar irregularities the next year. McSoley McCoy, however, was not around long enough to have engaged in such a dereliction of their responsibilities. Thus, the Complaint fails to allege sufficient facts as to McSoley McCoy to support a reasonable inference that it ―knowingly‖ participated in the Board‘s alleged breaches of fiduciary duty. I therefore dismiss the aiding and abetting claim as it relates to McSoley McCoy. 234 Rural Metro, 88 A.3d at 97-100. 93 III. CONCLUSION For the reasons stated in this Opinion, I dismiss the claims for breach of fiduciary duty against Wilmington Trust and the Auditor Defendants for failure to state a claim. The motion to dismiss the claim for breach of fiduciary duty against Kantner, however, is denied. The claims for negligence and breach of contract as to Wilmington Trust and the Auditor Defendants are dismissed on grounds of in pari delicto. I further conclude that the claims against those Defendants for aiding and abetting a breach of fiduciary duty are not subject to the in pari delicto defense, and that the claims in that regard against Wilmington Trust and Johnson Lambert are well-pled. Accordingly, I deny the motion to dismiss the aiding and abetting claims against Wilmington Trust and Johnson Lambert. I grant the motion of McSoley McCoy, however, to the extent it seeks dismissal of the aiding and abetting claim against it, because in that respect the Complaint fails to state a claim upon which relief could be granted. In summary, I grant the motions to dismiss Counts 1 through 10. Count 11 is dismissed as to Wilmington Trust, but not as to Kantner.235 I grant dismissal of Count 12 as to McSoley McCoy and Kantner, but not as to Wilmington Trust or Johnson Lambert. IT IS SO ORDERED. 235 Count 11 also accuses Defendants James M. Jackson, King, and Davis of breaching their fiduciary duties. As those Defendants are not before me on the pending motions to dismiss, Count 11 is not dismissed as it relates to them. 94	{ "pile_set_name": "FreeLaw" }
986 So.2d 1224 (2007) Richard Keith DUCKER v. STATE of Alabama. CR-06-0436. Court of Criminal Appeals of Alabama. August 31, 2007. 1225 Thomas M. Goggans, Montgomery, for appellant. Troy King, atty. gen., and Marc Bass, asst. atty. gen., for appellee. WELCH, Judge. Richard Keith Ducker pleaded guilty to first-degree theft, a violation of § 13A-8-3, Ala.Code 1975. The trial court adjudicated Ducker guilty and sentenced him to 20 years' imprisonment. The trial court also fined him $5,000 and ordered him to pay an assessment of $2,500 to the crime victims compensation fund. At the plea hearing, Ducker was represented by his attorneys of record, Derek E. Yarbrough and William C. White II. The prosecution stated at the hearing that it expected the evidence to show that Ducker, a Houston County sheriff's deputy, also worked at Southern Outdoor Sports, a retail sporting-goods store, from October 15, 2003, to May 11, 2005. The prosecution alleged that, while working at the store, Ducker stole more than $20,000 worth of sporting goods. Ducker acknowledged that the State's allegations were true. Before Ducker entered his plea, the trial court informed him that he could be sentenced to a prison term of between 2 and 20 years and fined up to $10,000. Ducker indicated that he understood the sentencing range and went forward with his guilty plea. Ducker was sentenced at a separate hearing. Derek Yarbrough accompanied him as his attorney at the sentencing hearing. At the hearing, Yarbrough argued that Ducker's sentence of 20 years' imprisonment was excessive for a first-time offender. After reviewing the victim-impact statements submitted in this case, hearing arguments from the attorneys, and hearing testimony, the trial court sentenced Ducker to 20 years in prison. In doing so, the trial court noted that Ducker had breached the trust placed in him as a law-enforcement officer and that he had shown no remorse for his actions. After sentencing, Ducker, through Yarbrough, filed a motion to withdraw his 1226 guilty plea on the grounds that Ducker's sentence was excessive and that the trial court failed to follow the voluntary sentencing standards, § 12-25-30 et seq., Ala. Code 1975, which became effective October 1, 2006. Again, a separate hearing was held on the motion to withdraw the guilty plea. At the outset of that hearing, William White was allowed to withdraw from the case because of "a conflict in [his] representation of Mr. Ducker." (Sentencing Record, p 4.) Ducker requested a continuance so he could retain counsel; however, that request was denied. Ducker's motion to withdraw his guilty plea was also denied. I. Ducker contends that the trial court's failure to consider the voluntary sentencing standards of the Alabama Sentencing Reform Act of 2003, § 12-25-30 et seq., Ala.Code 1975, ("the Act") constitutes reversible error requiring that Ducker be resentenced. The stated purpose of the Act is "to protect public safety by providing a fair, effective, and efficient criminal justice system" through a variety of means, including the use of "[v]oluntary sentencing standards used to guide judicial decision makers in determining the most appropriate sentence for convicted felony offenders." § 12-25-31(a)(1), Ala.Code 1975. Ducker is correct in saying that the record does not reflect that the trial court considered the voluntary sentencing standards when determining Ducker's sentence. However, the Act specifically provides that "[f]ailure to follow any or all of the provisions of this section [use of voluntary sentencing standards], or failure to follow any or all of the provisions of this section in the prescribed manner, shall not be reviewable on appeal or the basis of any other post-conviction relief." § 12-25-35(f), Ala.Code 1975 (emphasis added). Accordingly, although it appears that the trial court in this case failed to consider the voluntary sentencing standards, that failure does not provide a legal basis for setting aside Ducker's conviction or resentencing him. Ducker's argument to the contrary is without merit. II. Ducker also argues that the trial court violated his right to counsel under the Sixth and Fourteenth Amendments of the United States Constitution by forcing him to proceed on his motion to withdraw his guilty plea without the benefit of counsel even though Ducker had requested a continuance to give him time to obtain counsel for the hearing. As mentioned above, Ducker's attorney William White was granted permission to withdraw from his representation of Ducker at the outset of the hearing on Ducker's motion to withdraw the guilty plea. From the record, it does not appear that Ducker's other attorney, Yarbrough, was present at that hearing, and no explanation is given on the record for his absence. Additionally, the record does not indicate that Yarbrough ever withdrew from his representation of Ducker. After the trial court granted White's motion to withdraw, the following colloquy took place: "THE COURT: Mr. Ducker, are you going to represent yourself this morning? "MR. DUCKER: I'd just ask for a continuance. "THE COURT: It is denied. You've had plenty of time to get an attorney. You've got the money to get an attorney. That is denied. This Court is going ahead. 1227 "Okay. I'll hear you on your motions, since you are representing yourself, sir. "MR. DUCKER: I would like to ask to withdraw my guilty plea or ask for a reduced sentence...." ".... "THE COURT: Okay, I'll hear you. Go ahead. "MR. DUCKER: I'd just like, with the Thanksgiving holidays, I haven't had a chance to get an attorney. And I'd like to withdraw my guilty plea and have the time to get an attorney. "THE COURT: Well, you have got to have reasons for that, you understand, don't you? Have you got any reasons for it? "MR. DUCKER: For "THE COURT: For withdrawing your guilty plea. You got up here and pled guilty before the Court, and the Court went through all your rights. Have you got a reason why you want to "MR. DUCKER: Yes, sir. I think the maximum sentence on a first time offense "THE COURT: Well, I'll hear from the State." (Hearing on Motion to Withdraw Plea, R. 4-6.) No other discussions regarding Ducker's request for an attorney were had during the hearing. This Court recently held that the trial court improperly deprived a defendant of his right to counsel when it denied that defendant's request to be represented by counsel for purposes of his motion to withdraw his guilty plea. Casteel v. State, 976 So.2d 505 (Ala.Crim.App.2007). In reaching that holding, this Court explained its rationale as follows: "`The Sixth Amendment guarantees the right of counsel to the accused in all criminal prosecutions. U.S. Const. Amend. VI. This right to counsel encompasses all federal and state criminal prosecutions that result in imprisonment. Argersinger v. Hamlin, 407 U.S. 25, 92 S.Ct. 2006, 32 L.Ed.2d 530 (1972); Gideon v. Wainwright, 372 U.S. 335, 83 S.Ct. 792, 9 L.Ed.2d 799 (1963). This right is applicable to the states by virtue of the Fourteenth Amendment. Gideon v. Wainwright. The right attaches at the initiation of adversary judicial proceedings, and extends to every critical stage of the proceedings. United States v. Wade, 388 U.S. 218, 87 S.Ct. 1926, 18 L.Ed.2d 1149 (1967). A critical stage is any stage where a substantial right of an accused may be affected, Mempa v. Rhay, 389 U.S. 128, 88 S.Ct. 254, 19 L.Ed.2d 336 (1967), and can arise in pre-trial as well as post-trial proceedings. See Moran v. Burbine, 475 U.S. 412, 106 S.Ct. 1135, 89 L.Ed.2d 410 (1986) (pre-trial right to presence of attorney violated during any interrogation occurring after the first formal charging proceedings, absent a valid waiver); Brewer v. Williams, 430 U.S. 387, 97 S.Ct. 1232, 51 L.Ed.2d 424 (1977) (pre-trial right to counsel violated where judicial proceedings had been initiated and confession obtained without the presence of counsel and in absence of a valid waiver); Johnston v. Mizell, 912 F.2d 172 (7th Cir. 1990), cert. denied, 498 U.S. 1094, 111 S.Ct. 982, 112 L.Ed.2d 1067 (1991) (post-trial motion for new trial critical stage in criminal proceedings); Menefield v. Borg, 881 F.2d 696 (9th Cir.1989) (post-trial motion for new trial critical stage requiring counsel or valid waiver); King v. State, 613 So.2d 888 (Ala.Crim.App. 1993) (post-trial motion for new trial critical stage requiring counsel, absent a valid waiver). Courts have held that a motion to withdraw a guilty plea is a critical stage in a criminal proceeding [ ], requiring effective assistance of counsel. See, e.g., United States v. White, 659 1228 F.2d 231 (D.C.Cir.1981); United States v. Crowley, 529 F.2d 1066 (3rd Cir.1976). In recognizing that a defendant in Alabama has a right to counsel at sentencing and in the first appeal, this court stated in King v. State, 613 So.2d at 891, "It would appear that if an indigent defendant is constitutionally entitled to the assistance of counsel at sentencing and in the first appeal as a matter of right, that defendant would be entitled to the assistance of counsel in the interim period, absent a waiver." "`Based upon the foregoing authorities, we find that a motion to withdraw a guilty plea is a critical stage in a criminal proceeding requiring representation of counsel or a valid waiver of the right to counsel. "`The right to counsel does not depend upon a request by the accused. Brewer v. Williams, 430 U.S. 387, 97 S.Ct. 1232, 51 L.Ed.2d 424 (1977); Kitchens v. Smith, 401 U.S. 847, 91 S.Ct. 1089, 28 L.Ed.2d 519 (1971). "[I]f an accused does not waive counsel and does not retain acceptable counsel, the court must appoint counsel." United States v. Turnbull, 888 F.2d 636, 638 (9th Cir. 1989), cert. denied, 498 U.S. 825, 111 S.Ct. 78, 112 L.Ed.2d 51 (1990). If a defendant in a criminal proceeding is not represented by counsel, the state must prove an intentional relinquishment of that right. Johnson v. Zerbst, 304 U.S. 458, 58 S.Ct. 1019, 82 L.Ed. 1461 (1938). If an accused waives his right to counsel, that waiver must be intelligently and understandingly made and cannot be presumed from a silent record. Carnley v. Cochran, 369 U.S. 506, 82 S.Ct. 884, 8 L.Ed.2d 70 (1962). "`"But it is settled that where the assistance of counsel is a constitutional requisite, the right to be furnished counsel does not depend on a request.... "`".... "`"... Presuming waiver from a silent record is impermissible. The record must show, or there must be an allegation and evidence which show, that an accused was offered counsel but intelligently and understandingly rejected the offer. Anything less is not waiver." "`Id. at 513-16, 82 S.Ct. at 889-90. "`The constitutional "right to counsel, or waiver thereof, is an essential jurisdictional prerequisite to the authority to convict an accused[, and c]onviction without this safeguard is void." People v. Carroll, 140 Cal. App.3d 135, 140, 189 Cal.Rptr. 327, 331 (Cal.App. 2 Dist.), cert. denied, 464 U.S. 820, 104 S.Ct. 83, 78 L.Ed.2d 93 (1983) (citing Johnson v. Zerbst). Unless a defendant has or waives assistance of counsel, the Sixth Amendment is a jurisdictional bar to a valid conviction and sentence. Johnson v. Zerbst; Stokes v. Singletary, 952 F.2d 1567 (11th Cir.1992); Boruff v. United States, 310 F.2d 918 (5th Cir.1962). See also Lancaster v. State, [638 So.2d 1370, 1373] (Ala.Cr.App.1993) ("the appellant's ... right to have counsel appointed on appeal [is a] jurisdictional matter[ ]; Lake v. City of Birmingham, 390 So.2d 36, 38 (Ala.Cr.App. 1980) (a record failing to reveal any of the circumstances surrounding the appellant's self-representation "will not support the trial court's judgment wherein the appellant was sentenced to a loss of liberty").'" "Berry v. State, 630 So.2d 127, 129-30 (Ala.Crim.App.1993) (footnotes omitted)." Casteel, 976 So.2d at 506-08. In this case, one of Ducker's attorneys was allowed to withdraw at the outset of the hearing on Ducker's motion to withdraw 1229 his guilty plea. Although no explanation is provided for the absence from the hearing of Ducker's other attorney of record, Yarbrough, it is clear from the record that Yarbrough was not present. Equally clear from the record is Ducker's unequivocal request to be represented by counsel at the hearing, which the trial court denied. The hearing went forward with Ducker acting pro se. Because a hearing on a motion to withdraw a guilty plea is a critical stage in the proceedings carrying with it the right to be represented by counsel, and because it is clear from the record that Ducker did not waive his right to counsel, the trial court erred in requiring Ducker to proceed with the motion hearing without an attorney. Casteel, supra. Accordingly, this cause is remanded, and the trial court is directed to conduct a new hearing on Ducker's motion to withdraw his guilty plea. At that hearing, Ducker is to be represented by counsel in accordance with the requirements of Rule 6.1, Ala. R.Crim.App., unless he clearly waives the right to such representation on the record. For the reasons set forth above, this cause is remanded for further proceedings consistent with this opinion. The return to remand shall include a transcript of the proceeding. The circuit court shall take all necessary action to ensure that the circuit clerk makes due return to remand at the earliest possible time and no later than 56 days from the date of this opinion. REMANDED WITH DIRECTIONS.[] BASCHAB, P.J., and McMILLAN, SHAW, and WISE, JJ., concur. NOTES [*] Note from the reporter of decisions: On December 14, 2007, on return to remand, the Court of Criminal Appeals affirmed, without opinion.	{ "pile_set_name": "FreeLaw" }
117 F.3d 1417 Central Bank of Houstonv.U.S. NO. 96-20969 United States Court of Appeals,Fifth Circuit. June 05, 1997 Appeal From: S.D.Tex. ,No.CAH954674 1 Affirmed. Local Rule 36 case	{ "pile_set_name": "FreeLaw" }
897 F.Supp. 342 (1990) Rita GREEN, et al., Plaintiffs, v. AIM EXECUTIVE, INC., et al., Defendants. No. 3:90CV7670. United States District Court, N.D. Ohio, Western Division. December 28, 1990. 343 344 Barry W. Fissel, Eastman & Smith, Toledo, OH, for Rita Green and Daryl Dent. Stephen A. Rothschild, Shumaker, Loop & Kendrick, Toledo, OH, for AIM Executive Inc., Jeffrey L. Deperro, and Scott R. Deperro. John J. Siciliano, Fuller & Henry, Toledo, OH, David C. Weiss, Duane, Morris & Heckscher, Wilmington, DE, for Delaware Charter Guarantee and Trust Co. Irwin S. Haiman, McCarthy, Lebit, Crystal & Haiman, Cleveland, OH, for Prudential Securities Inc. James Lee Rogers, Barry W. Fissel, Mark C. Abramson, Eastman & Smith, Toledo, OH, for Martha Dent. MEMORANDUM AND ORDER JOHN W. POTTER, Senior District Judge. This action is before the Court on defendants' motion for partial summary judgment, plaintiffs' opposition and motion for partial summary judgment, defendants' reply and opposition to plaintiffs' motion for partial summary judgment, plaintiffs' first and second supplemental authority, and defendants' response. This is a class action brought under the Employee Retirement Income Security Act of 1974, as amended, 29 U.S.C. § 1001 et seq. (ERISA), by employees to obtain benefits under an employee profit sharing retirement plan maintained by their employer, AIM Executive, Inc. (AIM). The class consists of all present and former non-shareholder employees of defendant AIM who, during their employment by AIM, fulfilled the eligibility and participation requirements of the AIM Executive, Inc. Profit Sharing Plan in one or more plan years between 1983 and 1989. Under the Federal Rules of Civil Procedure, summary judgment is proper only where there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law. Fed. R.Civ.P. 56(c). The Supreme Court has recently stated that the inquiry is "whether the evidence presents a sufficient disagreement to require submission to a jury or whether it is so one-sided that one party must prevail as a matter of law." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 251-252, 106 S.Ct. 2505, 2512, 91 L.Ed.2d 202 (1986).... In reviewing a motion for summary judgment, however, all inferences "`must be viewed in the light most favorable to the party opposing the motion.'" See Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S.Ct. 1348, 1356-57, 89 L.Ed.2d 538 (1986) (quoting United States v. Diebold, Inc., 369 U.S. 654, 655, 82 S.Ct. 993, 994, 8 L.Ed.2d 176 (1962)). Ralph Shrader, Inc. v. Diamond International Corp., 833 F.2d 1210, 1213 (6th Cir. 1987). Matsushita demands only that the nonmoving party's inferences be reasonable in order to reach the jury, a requirement that was not invented, but merely articulated in that decision. If the [nonmoving party's] theory is ... senseless, no reasonable jury could find in its favor, and summary judgment should be granted. Eastman Kodak Co. v. Image Technical Servs., Inc., 504 U.S. 451, 468-469, 112 S.Ct. 2072, 2083, 119 L.Ed.2d 265 (1992) (footnote omitted). The party moving for summary judgment "always bears the initial responsibility of informing the district court of the basis for its motion, and identifying those portions of `the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits if any' which [he] believes demonstrate the absence of a genuine issue of material fact." Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 2553, 91 L.Ed.2d 265 (1986). The substantive law of the case identifies which facts are material. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 2510, 91 L.Ed.2d 202 (1986). Therefore, only disputes of facts affecting the outcome of the suit under the applicable substantive law will preclude the entry of summary judgment. Id. A moving party may discharge its burden "by `showing'that is, pointing out to the district courtthat there is an absence of evidence to support the nonmoving party's case." Celotex, 477 U.S. at 324-325, 106 345 S.Ct. at 2554. Where the moving party has met its initial burden, the adverse party "must set forth specific facts showing that there is a genuine issue for trial." Anderson, 477 U.S. at 250, 106 S.Ct. at 2511. [W]here the nonmoving party will bear the burden of proof at trial on a dispositive issue, a summary judgment motion may properly be made in reliance solely on the "pleadings, depositions, answers to interrogatories, and admissions on file." ... Rule 56(e) therefore requires the nonmoving party to go beyond the pleadings and by her own affidavits, or by the "depositions, answers to interrogatories, and admissions on file," designate "specific facts showing that there is a genuine issue for trial." Celotex, 477 U.S. at 324, 106 S.Ct. at 2553. The focus of the parties' motions is on the remedies plaintiffs may seek under ERISA. Plaintiffs allege, inter alia, that AIM failed to make proper employer contributions to the profit sharing plan. Consequently, on termination of the plan, plaintiffs allege that they did not receive all of the benefits to which they were entitled. Plaintiffs seek to recover, not only the unpaid contributions owed under the plan, but also taxes that will allegedly be owed by the individual plan participants together with lost tax-deferred growth income for each participant's interest in the plan until each participant reaches age 70. The Court will first address defendants' motion for partial summary judgment. Defendants move for a declaratory judgment that, under ERISA, plaintiffs may not recover as damages the value of lost tax-deferred growth income and anticipated tax losses. The civil enforcement remedies codified at 29 U.S.C. § 1132 were intended to be the exclusive remedies in an ERISA action. Warren v. Society Nat'l Bank, 905 F.2d 975, 981 (6th Cir.1990). Section 1132(a) provides in relevant part: A civil action may be brought (1) by a participant or beneficiary * * * * * (B) to recover benefits due to him under the terms of his plan, to enforce his rights under the terms of the plan, or to clarify his rights to future benefits under the terms of the plan; (2) by the Secretary, or by a participant, beneficiary or fiduciary for appropriate relief under section 1109 of this title; (3) by a participant, beneficiary, or fiduciary (A) to enjoin any act or practice which violates any provision of this subchapter or the terms of the plan, or (B) to obtain other appropriate equitable relief (i) to redress such violations or (ii) to enforce any provisions of this subchapter or the terms of the plan. First, Defendants argue that plaintiffs cannot recover as damages the anticipated tax losses and lost tax-deferred growth income for claims arising under § 1132(a)(3)(B). While plaintiffs rely heavily on Warren v. Society Nat'l Bank, 905 F.2d 975 (6th Cir.1990) in arguing that such damages are recoverable under § 1132(a)(3)(B), defendants contend that the Sixth Circuit's reasoning in that opinion was rejected in Mertens v. Hewitt Assoc., ___ U.S. ___, 113 S.Ct. 2063, 124 L.Ed.2d 161 (1993).[1] In Warren, plaintiff brought suit pursuant to § 1132(a)(3)(B) against an ERISA fiduciary for breach of a contractual duty to make a single lump sum distribution of proceeds from his retirement plan. As a result, the plaintiff was unable to roll over the proceeds into a tax deferred IRA account. The injuries alleged by the plaintiff included income tax and tax interest liability, and loss of investment earnings that were the direct result of the fiduciary's breach. Warren, 905 F.2d at 980. In finding that the damages sought by plaintiff constituted "other equitable relief," the Court found Justice Brennan's concurrence in Massachusetts Mutual Life Ins. Co. v. Russell, 473 U.S. 134, 105 S.Ct. 3085, 87 346 L.Ed.2d 96 (1985), to be instructive and stated:[2] We believe Justice Brennan's conclusion is correct that under the law of trusts, a beneficiary is entitled to a remedy that will put him in the position he would have been in if the fiduciary had not committed a breach of trust, and that such a remedy includes monetary damages.... It is the historic purpose of equity to secure complete justice, and courts may adjust their remedies so as to grant the necessary relief. Equitable relief may include monetary damages if necessary to do complete justice. Id. at 982 (internal citations omitted). The Court then concluded that In light of the plain language of the statute, the common law of trusts, and the role of courts in equity, we find that the damages sought by [plaintiff] are recoverable as "other appropriate equitable relief" under section [1132(a)(3)(B)(I)]. Id. The Court found its holding in Warren distinguishable from the holdings of other courts of appeal that have disallowed extracontractual damages under § 1132(a)(3) in that plaintiffs in other cases sought punitive damages or compensatory damages for such clearly consequential injuries as emotional distress. By contrast, in Warren, the plaintiff was deprived of a benefit to which he was entitled under the terms of the plan (i.e. a single lump sum distribution) which directly resulted in plaintiff being subject to tax liability. The focus in Warren, then, was on the role of courts in equity together with the direct nature of the injury resulting from a contractual breach of fiduciary duty. However, in its 1993 decision in Mertens, the Supreme Court specifically addressed the issue of "appropriate equitable relief" under § 1132(a)(3) and, in effect, rejected the reasoning employed by the Sixth Circuit in Warren. The Court noted that, although petitioners maintained that the object of their suit was "appropriate equitable relief," they were not seeking "a remedy traditionally viewed as `equitable,' such as injunction or restitution." Mertens, ___ U.S. at ___, 113 S.Ct. at 2068. Petitioners in Mertens argued that reading "equitable relief" to preclude awards for compensatory damages under § 1132(a)(3) fails to acknowledge ERISA's roots in the common law of trusts and that such relief for breach of duty has traditionally been obtained in courts of equity and, therefore is, by definition, equitable relief. Id. at ___, 113 S.Ct. at 2068. However, the Supreme Court rejected this argument stating that "Equitable relief" can also refer to those categories of relief that were typically available in equity (such as injunction, mandamus, and restitution, but not compensatory damages).... Since all relief available for breach of trust could be obtained from a court of equity, limiting the sort of relief obtainable under [§ 1132(a)(3)] to "equitable relief" in the sense of "whatever relief a common-law court of equity could provide in such a case" would limit the relief not at all. We will not read the statute to render the modifier superfluous. Id. at ___, 113 S.Ct. at 2069 (internal citations omitted). Thus, the Sixth Circuit's reliance 347 on the common law of trusts and the role of courts in equity in finding compensatory damages recoverable in Warren is no longer valid. See Richards v. General Motors Corp., 850 F.Supp. 1325, 1335 (E.D.Mich. 1994) ("To the extent that other courts (including the Sixth Circuit in Warren v. Society Nat'l Bank [citation omitted]) have allowed extracontractual compensatory damages under [1132(a)(3)], they are now overruled by the Supreme Court's holding in Mertens...."). The Sixth Circuit has acknowledged that, "in light of Mertens," the question is whether the relief requested is an equitable or legal remedy. Schwartz v. Gregori, 45 F.3d 1017, 1022 (6th Cir.1995). In Chauffeurs, Teamsters and Helpers Local No. 391 v. Terry, 494 U.S. 558, 110 S.Ct. 1339, 108 L.Ed.2d 519 (1990), the Court discussed generally the attributes which justify the characterization of a money award as equitable in determining whether or not a party is entitled to a jury trial. The Court stated that damages can be characterized as equitable where they are restitutionary or where they are incidental to or intertwined with injunctive relief. However, as indicated earlier, Mertens limited the definition of "equitable" relief in an ERISA context to preclude awards for damages simply because an equity court has the power (i.e. incident to its injunctive power) to award such damages. The Sixth Circuit recognized this limitation in Schwartz. In that case, plaintiff brought an action under § 510 of ERISA, 29 U.S.C. § 1140, alleging retaliatory discharge for filing suit to enforce her rights under an employer's pension plan. The relief sought by plaintiff included both back and front pay. Section 1132(a)(3) governs the relief available for claims brought pursuant to § 1140. Although the parties drew no distinction between back and front pay, the Court assessed each remedy separately. Id. In finding the requested back pay to be restitutionary relief, the court stated: Under Mertens, we cannot characterize relief as equitable solely because a court sitting in equity has the power to award it.... Thus, if Terry had characterized the back pay approved in [Mitchell v. Robert DeMario Jewelry, Inc., 361 U.S. 288, 80 S.Ct. 332, 4 L.Ed.2d 323 (1960)] as equitable simply because it was within the power of a court sitting in equity to award, Mertens would preclude a determination that back pay is equitable in nature and available under [§ 1132(a)(3)]. However, Terry characterized the back pay in Mitchell as restitutionary, a remedy expressly recognized by Mertens as equitable. Schwartz, 45 F.3d at 1022 n. 4. The court also found that front pay was an equitable remedy where the preferred remedy of reinstatement is not appropriate or feasible relying on the court's "historical assessment of the nature of front pay". Id. at 1023. In the case sub judice, the damages at issue include anticipated tax losses and lost tax-deferred growth income. The tax and growth benefits claimed by plaintiffs are not benefits required by the terms of the plan. As plaintiffs are seeking damages for benefits not required by the plan, the Court is unable to characterize such benefits as restitutionary. Rather, these damages are traditional compensatory damages which are not recoverable under § 1132(a)(3). The Court notes that, while the broader remedial view espoused in Justice Brennan's concurrence in Russell and followed in Warren might better serve the ends of justice in the case at bar, such a view is inconsistent with the reasoning of Mertens. See Harsch v. Eisenberg, 956 F.2d 651, 659 (7th Cir.1992). Schwartz and Howe v. Varity Corp., 36 F.3d 746 (8th Cir.1994), cited by plaintiffs, do not persuade the Court otherwise. Plaintiffs argue that, for reasons similar to those stated in Schwartz, the lost tax-deferred growth income being sought by plaintiffs should be considered restitutionary in nature. Specifically, plaintiffs cite language found in the court's discussion of the restitutionary nature of back pay that "a court may restore the plaintiff to the position he formerly occupied `either by the return of something which he formerly had or by receipt of its equivalent in money.'" See Schwartz, 45 F.3d at 1022. However, the Court does not, in light of Mertens, read this language to include such consequential damages as sought by plaintiffs in the case sub judice. In finding front 348 pay an equitable remedy, the Sixth Circuit relied on its historical assessment of the nature of front pay. No such historical assessment applies to the damages at issue in the instant action. Rather, the Sixth Circuit, in Warren, characterized the same relief as compensatory in nature. See Warren, 905 F.2d at 981; see also Armstrong v. Jefferson Smurfit Corp., 30 F.3d 11, 13 (1st Cir.1994) (tax liabilities incurred after lump sum payments from plan are compensatory legal damages). Likewise, Howe does not support plaintiffs' position. In Howe, the district court entered a judgment for compensatory damages. The Eighth Circuit held that "[s]uch a judgment is legal relief, not equitable, and is not available under Section [1132(a)(3)]." The court then found that plaintiffs were entitled to receive only an award in the nature of restitution to compensate them for plan benefits of which they had been deprived. Howe, 36 F.3d at 756. Recovery of anticipated tax losses and lost tax-deferred growth income as are sought in the case sub judice are not provided as benefits under the terms of the plan. Such relief is not restitutionary but, rather, consists of traditional compensatory legal damages which are not recoverable under § 1132(a)(3). Next, defendants contend that plaintiffs cannot recover as damages the tax losses and lost growth income to age 70 for claims arising under § 1132(a)(2). As set forth above, this section allows a plan participant to seek relief under § 1109. Section 1109 of Title 29 provides: (a) Any person who is a fiduciary with respect to a plan who breaches any of the responsibilities, obligations, or duties imposed upon fiduciaries by this subchapter shall be personally liable to make good to such plan any losses to the plan resulting from each such breach, and to restore to such plan any profits of such fiduciary which have been made through use of assets of the plan by the fiduciary, and shall be subject to such other equitable or remedial relief as the court may deem appropriate, including removal of such fiduciary. The Sixth Circuit has held that § 1109 authorizes relief only to the plan itself, not to individuals. See Bryant v. International Fruit Prod. Co., Inc., 886 F.2d 132, 135 (6th Cir.1989). In Bryant, the court stated that "ERISA contemplates that breaches of fiduciary duties injure the plan, not individual beneficiaries, and any recovery thus goes to the plan." Id. Therefore, to recover the damages at issue in this motion, plaintiffs must be able to demonstrate a loss to the plan. See also Roth v. Sawyer-Cleator Lumber Co., 16 F.3d 915 (8th Cir.1994) ("if individual plan participants suffer losses, but the plan does not, the [fiduciary] is not personally liable for damages under [§ 1109]"). Plaintiffs argue that the damages at issue are a loss to the plan in that the plan is not able to distribute to the beneficiaries payments that are eligible for preferential tax treatment; thus, the value of the benefits to the plan participants is diminished. This does not, however, demonstrate a loss to the plan. As defendants correctly assert, the tax burdens are personal losses which belong to the individual participants and not the plan. See Oscar A. Samos, M.D., Inc. v. Dean Witter Reynolds, Inc., 772 F.Supp. 715, 717-718 (D.R.I.1991) (tax penalties and loss income are personal losses). Consequently, the plan does not suffer a loss for taxes that might have to be paid by the beneficiaries. Plaintiffs also seek as damages lost growth income until age 70 of each plan participant. However, the plan does not require defendants to maintain the plan for any specified time period. Rather, it expressly provides that "[t]he Employer may terminate the Plan by appropriate corporate action." See Plan at Article XV. Once the plan was terminated, it could not possibly suffer damages for lost growth income.[3] Thus, the Court concludes that the damages at issue are not damages for losses to the plan. Consequently, plaintiffs cannot recover damages for anticipated 349 tax losses and lost growth income under §§ 1132(a)(2) and 1109. Finally, defendants argue that damages for tax losses and lost growth income are not recoverable under § 1132(a)(1)(B). As set forth above, this section permits plan participants to recover specific benefits due under the terms of a plan. The damages at issue in the instant motion do not represent benefits due under the terms of the plan, and plaintiffs do not argue otherwise. Therefore, the Court must determine whether extracontractual damages are recoverable under § 1132(a)(1)(B). In Russell, the Supreme Court stated that the statutory provision explicitly authorizing a beneficiary to bring an action to enforce his rights under the plan [§ 1132(a)(1)(B)], ... says nothing about the recovery of extracontractual damages, or about the possible consequences of delay in the plan administrators' processing of a disputed claim. Thus, there really is nothing at all in the statutory text to support the conclusion that such a delay gives rise to a private right of action for compensatory or punitive relief. Russell, 473 U.S. at 144, 105 S.Ct. at 3091. The Court also stated that "[t]he six carefully integrated civil enforcement provisions found in [§ 1132] ... provide strong evidence that Congress did not intend to authorize other remedies that it simply forgot to incorporate expressly." Id. at 146, 105 S.Ct. at 3092. Since Russell, courts have concluded that extracontractual damages are not available to a plan participant under § 1132(a)(1)(B). See e.g. International Union UAW Local 91 v. Park-Ohio Indus., Inc., 876 F.2d 894 (Table), 1989 WL 63871, 1989 U.S.App. LEXIS 8677 (6th Cir. June 15, 1989); Harsch v. Eisenberg, 956 F.2d 651, 655 (7th Cir.1992); Reinking v. Philadelphia American Life Ins. Co., 910 F.2d 1210, 1220 (4th Cir.1990); Medina v. Anthem Life Ins. Co., 983 F.2d 29, 33 (5th Cir.1993). The Court finds that extracontractual damages for anticipated tax losses and lost growth income are not recoverable under § 1132(a)(1)(B). The Court next addresses plaintiffs' motion wherein plaintiffs move for partial summary declaratory judgment that the Court has the equitable power under ERISA to require the defendants to take all necessary action to enter into a closing agreement with the Internal Revenue Service pursuant to the Employment Plans Closing Agreement Program (CAP).[4] In so doing, plaintiffs contend that there exists the possibility of correcting all plan defects and of restoring tax qualification of the balance of contributions allegedly owed to plaintiffs. After reviewing the documents submitted by the parties, the Court is unable to determine whether or not CAP is even available to defendants to correct alleged plan defects. However, if CAP is available, it appears to be an appropriate equitable remedy to redress injuries to plaintiffs not otherwise recoverable under ERISA. Section 1132(a)(3) permits a participant or beneficiary to obtain "other appropriate equitable relief" not only for violations of the terms of the plan, but for violations of "any provision of this subchapter." Plaintiffs have alleged violations of fiduciary duties set forth in § 1104. See Complaint at ¶ 74(D).[5] Thus, plaintiffs may obtain equitable relief to redress such violations. The Court concludes that it has the power to order the equitable relief requested. As plaintiffs ask only for a declaration of the Court's power to order such a remedy, the Court will grant plaintiffs' motion for partial summary judgment.[6] THEREFORE, for the foregoing reasons, good cause appearing, it is *350 ORDERED that defendants' motion for partial summary judgment be, and hereby is, GRANTED; and it is FURTHER ORDERED that plaintiffs' motion for partial summary judgment be, and hereby is, GRANTED. NOTES [1] In plaintiffs' opposition, they concede that "[i]f Mertens precludes recovery of direct compensatory damages under [§ 1132(a)(3)], even under the distinct circumstances of Warren, then the class would have to look elsewhere in ERISA for relief." Plaintiffs' Opp. at 2. [2] In Russell, the plaintiff sought compensatory and punitive damages relying entirely on section 1109(a). Russell, 473 U.S. at 139 n. 5, 105 S.Ct. at 3088 n. 5. The Court expressly reserved the question whether extracontractual damages might be one form of "other appropriate equitable relief" under section 1132(a)(3). Id. However, in his concurring opinion, Justice Brennan discussed what he believed to be the proper approach in determining what damages are appropriate under section 1132(a)(3). He stated that courts should begin by ascertaining the extent to which trust and pension law as developed by state and federal courts provide for recovery by the beneficiary above and beyond the benefits that have been withheld; this is the logical first step, given that Congress intended to incorporate trust law into ERISA's equitable remedies. If a requested form of additional relief is available under state trust law, courts should next consider whether allowance of such relief would significantly conflict with some other aspect of the ERISA scheme. Id. at 157, 105 S.Ct. at 3098. However, he did not believe that a given form of monetary relief should be withheld "simply because a beneficiary's remedies under ERISA are denominated `equitable.'" Id. at 154 n. 10, 105 S.Ct. at 3096 n. 10. As set forth later in this opinion, the Supreme Court rejected similar reasoning in its Mertens decision. [3] Defendants concede that if they are found liable for breach of fiduciary duties, they could be liable to the plan for the profits they might have earned on assets that should have been a part of the plan during the years when the plan existed. The parties disagree on the method of calculating those profits; however, that issue is not before the Court at this time. [4] The CAP program is published in Chapter 11 of Internal Revenue Manual 7(10)54. [5] Plaintiffs allege that defendants breached their fiduciary duties by "failing to administer the Profit Sharing Plan for the exclusive benefit of all participants and beneficiaries, and failing to act with the appropriate care, skill, and prudence of a reasonable man as required by 29 U.S.C. § 1104." Complaint at ¶ 74(D). [6] It is within the sound discretion of the court to award appropriate equitable relief. At this time, plaintiffs have not demonstrated to the Court that defendants are even eligible to participate in the CAP program.	{ "pile_set_name": "FreeLaw" }
560 F.3d 964 (2009) Scott Lynn PINHOLSTER, Petitioner-Appellee, v. Robert L. AYERS, Jr., Warden, Respondent-Appellant. Scott Lynn Pinholster, Petitioner-Appellant, v. Robert L. Ayers, Jr., Warden, Respondent-Appellee. Nos. 03-99003, 03-99008. United States Court of Appeals, Ninth Circuit. March 20, 2009. Sean K. Kennedy, Lawrence B. Berroya, Anthony J. Cavalluzzi, Dean R. Gits, Sean *965 K. Kennedy, Federal Public Defender's Office, Los Angeles, CA, Michael R. Snedeker, Snedeker, Smith & Short, Portland, OR, for Petitioner-Appellee. Kristofer Jorstad, Office of the California Attorney General, Los Angeles, CA, for Respondent-Appellant. ORDER KOZINSKI, Chief Judge: Upon the vote of a majority of nonrecused active judges, it is ordered that this case be reheard en banc pursuant to Circuit Rule 35-3. The three-judge panel opinion shall not be cited as precedent by or to any court of the Ninth Circuit.	{ "pile_set_name": "FreeLaw" }
163 S.W.3d 471 (2005) STATE of Missouri, Plaintiff/Respondent, v. Ricky A. BLAKE, Defendant/Appellant. No. ED 84411. Missouri Court of Appeals, Eastern District, Division Five. April 5, 2005. Rehearing Denied May 16, 2005. Linda Lemke, Assistant Attorney General Jefferson City, MO, for respondent. Amy M. Bartholow, Columbia, MO, for appellant. Before MARY K. HOFF, P.J., KATHIANNE KNAUP CRANE, J. and LAWRENCE E. MOONEY, J. ORDER PER CURIAM. Defendant, Ricky A. Blake, appeals from the judgment entered on his conviction by a jury of trafficking drugs in the first degree, in violation of section 195.222 RSMo (2000), and possession of a controlled substance, in violation of section 195.202 RSMo (2000). The trial court found defendant to be a prior drug offender and sentenced him to concurrent terms of 20 years imprisonment and 7 years imprisonment, respectively. No error of law appears and no jurisprudential purpose would be served by a written opinion. However, the parties have been furnished with a memorandum opinion for their information only, setting forth the facts and reasons for this order. The judgment is affirmed in accordance with Rule 30.25(b).	{ "pile_set_name": "FreeLaw" }
In The Court of Appeals Seventh District of Texas at Amarillo ________________________ No. 07-15-00209-CV ________________________ IN RE STEVEN EDWARD BOYD, RELATOR Original Proceeding Arising from Proceedings Before the 47th District Court Randall County, Texas Trial Court No. 24,143-A; Honorable Dan Schaap, Presiding July 10, 2015 MEMORANDUM OPINION ON ORIGINAL PROCEEDING Before QUINN, C.J., and HANCOCK and PIRTLE, JJ. Relator, Steven Edward Boyd, proceeding pro se and in forma pauperis, seeks a writ of mandamus to compel the Honorable Dan Schaap to declare void the judgment in trial court cause number 24,143-A in which Relator was convicted of robbery. He also asserts the trial judge had a ministerial duty to suppress evidence in his robbery case because the State failed to meet its burden of proof. For the reason expressed herein, we deny Relator’s request for mandamus relief. After Relator was convicted of robbery, he executed a Trial Court’s Certification of Defendant’s Right of Appeal acknowledging that he waived his right of appeal. The certification was also signed by his trial counsel.1 The certification notwithstanding, he filed a pro se notice of appeal raising numerous complaints. Based on the certification, on August 1, 2014, this court dismissed Relator’s direct appeal. See Boyd v. State, No. 07- 14-00245-CR, 2014 Tex. App. LEXIS 8445, at 1-2 (Tex. App.—Amarillo Aug. 1, 2014, no pet.) (mem op., not designated for publication). See also TEX. R. APP. P. 25.2(d). On rehearing, this court addressed Appellant’s contention that he retained the right to appeal the trial court’s denial of his pretrial motion to suppress—concluding that Relator’s waiver of his right to appeal foreclosed any review of that issue. Boyd v. State, No. 07-14-00245-CR, 2014 Tex. App. LEXIS 9377, at 2-3 (Tex. App.—Amarillo Aug. 22, 2014, on reh’g). MANDAMUS STANDARD OF REVIEW Mandamus relief is extraordinary. In re Braswell, 310 S.W.3d 165, 166 (Tex. App.—Amarillo 2010, orig. proceeding) (citing In re Southwestern Bell Telephone Co., L.P., 235 S.W.3d 619, 623 (Tex. 2007) (orig. proceeding)). Mandamus issues only to correct a clear abuse of discretion or the violation of a duty imposed by law when there is no other adequate remedy by law. Walker v. Packer, 827 S.W.2d 833, 839 (Tex. 1992) (orig. proceeding) (quoting Johnson v. Fourth Court of Appeals, 700 S.W.2d 916, 917 (Tex. 1985) (orig. proceeding)). To show entitlement to mandamus relief, a relator must satisfy three requirements: (1) a legal duty to perform; (2) a demand for 1 The record reflects Appellant entered a plea of guilty to the offense of robbery in exchange for a recommended sentence of 30 years and dismissal of another charge pending in trial court cause number 24,142-A. As a part of that plea-agreement, Appellant waived his right to appeal. 2 performance; and (3) a refusal to act. Stoner v. Massey, 586 S.W.2d 843, 846 (Tex. 1979). ANALYSIS In a criminal case, the “normal method” for challenging pretrial orders is through appeal. Dickens v. Second Court of Appeals, 727 S.W.2d 542, 550 (Tex. Crim. App. 1987). Relator had an adequate remedy at law to complain of the trial court’s suppression ruling but chose to waive that right.2 Relator cannot now contest the lawfulness of the search of his vehicle that resulted in his arrest and conviction via a petition for writ of mandamus. Relator’s contention that the trial judge had a ministerial duty to suppress evidence in his robbery case has no merit. Under no circumstances may an appellate court tell a trial judge what his decision should be in a discretionary matter. See In re Shredder Co., 225 S.W.3d 676, 680 (Tex. App.—El Paso 2006, orig. proceeding). See also In re Layton, No. 07-10-00330-CV, 2010 Tex. App. LEXIS 7418, at *2 (Tex. App.— Amarillo Sept. 8, 2010, orig. proceeding) (mem op., not designated for publication) (concluding that dissatisfaction with a trial judge’s discretionary ruling is not the proper subject of a mandamus proceeding but may be remedied by ordinary appeal). Additionally, although Relator’s petition satisfies many of the requirements of Rule 53.2 of the Texas Rules of Appellate Procedure, he has not included copies of the judgment or suppression order that are the basis of his request for mandamus relief. Relator’s pro se status does not exempt him from complying with rules of procedure. 2 Relator entered into a plea bargain from which he had no right to appeal the robbery conviction. 3 See Pena v. McDowell, 201 S.W.3d 665, 667 (Tex. 2006); Mansfield State Bank v. Cohn, 573 S.W.2d 181, 184-85 (Tex. 1978). CONCLUSION Consequently, Relator’s request for mandamus relief is denied. Patrick A. Pirtle Justice 4	{ "pile_set_name": "FreeLaw" }
603 F.2d 225 Sheppard Holdings, Inc.v.U. S. No. 77-3066, 77-3052, 77-3170, 77-3176 United States Court of Appeals, Ninth Circuit 6/25/79 1 C.D.Cal. AFFIRMED	{ "pile_set_name": "FreeLaw" }
287 B.R. 822 (2002) In re Deanna Kathleen GARDNER, Debtor. Educational Credit Management Corporation, Appellant, v. Deanna Kathleen Gardner, Appellee. Bankruptcy No. 00-42099-13, Adversary No. 01-4036-SAC. United States District Court, D. Kansas. October 30, 2002. 823 Michael F. Brunton, Topeka, KS, for Debtor. N. Larry Bork, Goodell, Stratton, Edmonds & Palmer, Topeka, KS, for Appellant. Michael F. Brunton, Topeka, KS, for Appellee. Jan M. Hamilton, Topeka, KS, trustee. MEMORANDUM AND ORDER CROW, Senior District Judge. Educational Credit Management Corporation ("ECMC") appeals a single bankruptcy court order that was entered in the following three bankruptcy cases: In re Leana Rachele Wright and Daniel Ray Wright, 279 B.R. 886 (D.Kan.2002); In re Gary Darnell Green, 287 B.R. 827 (D.Kan.2002); and In re Deanna Kathleen Gardner, Bkcy. No. 00-42099-13. In that order, the bankruptcy court sustained ECMC's objection to the debtors' attempts to obtain an undue hardship discharge of student loans through the chapter 13 plan confirmation process, but the court denied ECMC's request to adopt "a per se rule that sanctions will be imposed for using that procedure." (Dk.5, Appx.A, p. 11). ECMC has appealed that order in each of these chapter 13 cases and has filed briefs in each case that are substantially the same.[1] ECMC argues the bankruptcy 824 court erred in not declaring a per se rule that it is a sanctionable event to file a chapter 13 plan containing this discharge language. The first appeal, In re Leana Rachele Wright and Daniel Ray Wright, 279 B.R. 886 (D.Kan.2002), was assigned to Judge Rogers who filed his decision affirming the bankruptcy court on April 29, 2002. In re Wright, 279 B.R. 886 (D.Kan.2002). The second appeal, In re Deanna Kathleen Gardner, No. 01-4036-SAC, and the third appeal, In re Gary Darnell Green, 287 B.R. 827 (D.Kan.2002), were assigned to Judge Crow. The three appeals raise the same issues of law and the facts in each appeal do not bear on those legal issues. As the bankruptcy court explained in its order, ECMC was not seeking sanctions in those cases but only sought "a declaratory judgment so that such [plan] provisions would be sanctionable in future cases." (Dk.5, Appx.A, p. 2). Even though the parties did not request consolidation, these cases should have been consolidated on appeal under these circumstances. STANDARD OF REVIEW The court reviews the bankruptcy court's findings of fact for clear error. In re Pena, 155 F.3d 1108, 1110 (9th Cir.1998). "Where there are two permissible views of the evidence, the factfinder's choice between them cannot be clearly erroneous." Anderson v. City of Bessemer City, N.C., 470 U.S. 564, 574, 105 S.Ct. 1504, 84 L.Ed.2d 518 (1985). "Review under the clearly erroneous standard is significantly deferential, requiring a definite and firm conviction that a mistake has been committed." Concrete Pipe & Prods. v. Construction Laborers Pension Trust, 508 U.S. 602, 603, 113 S.Ct. 2264, 124 L.Ed.2d 539 (1993). The court reviews de novo the bankruptcy court's legal conclusions. In re Primeline Securities Corp., 295 F.3d 1100, 1105 (10th Cir.2002). The bankruptcy court's order does not include any findings of fact. The court shall review de novo the bankruptcy court's conclusion that the objectionable student loan discharge plan provision is not per se sanctionable. RELEVANT LAW The Bankruptcy Code creates a presumption making student loans non-dischargeable in the absence of undue hardship to the debtor or the debtor's dependents. 11 U.S.C. § 523(a)(8)(B). This provision "was enacted to prevent indebted college or graduate students from filing for bankruptcy immediately upon graduation thereby absolving themselves of the obligation to repay their student loans." In re Hornsby, 144 F.3d 433, 437 (6th Cir.1998). The burden of proving an undue hardship rests with the debtor. In re Woodcock, 45 F.3d 363, 367 (10th Cir.), cert. denied, 516 U.S. 828, 116 S.Ct. 97, 133 L.Ed.2d 52 (1995). The debtor must carry this burden by a preponderance of evidence. In re Brightful, 267 F.3d 324, 327 (3rd Cir.2001). The Tenth Circuit in In re Andersen, 179 F.3d 1253 (10th Cir.1999), held that a bankruptcy court's order confirming a chapter 13 plan which contained language that summarily discharged an educational loan as an undue hardship was res judicata on the issue of undue hardship in a subsequent adversary proceeding. The Circuit reasoned that while the debtor may have the burden of proof, the creditor also "has a duty to ensure that its interests are adequately protected." 179 F.3d at 1257. Addressing arguments about the propriety of a plan containing such a provision and of 825 a procedure that would discharge an education loan without an adversary proceeding, the Tenth Circuit observed: That is, ECMC contends that, although no timely objection to the plan was filed and no appeal was taken following confirmation, Andersen had the burden of initiating an adversary proceeding in order to prove the otherwise uncontested fact of undue hardship. Without a judicial finding of such hardship at the close of an adversary proceeding, ECMC contends that the student loans cannot be discharged. We disagree. While Andersen surely had the burden of proving undue hardship, and while a discharge granted without such proof is inconsistent with the Code, it is critical that HEAF, as the party affected by this determination, failed to properly challenge the language at issue, the interim rulings of the bankruptcy court, or the confirmed plan. As we discussed above, it is absolutely incumbent upon a creditor to take an active role in protecting its interests, and a creditor which fails to do so is in a poor position to later complain about an adverse result. We echo the wisdom of the Third Circuit that, "[w]hile we do not understate the importance of the obligation of the bankruptcy court or the trustee to determine that a plan complies with the appropriate sections of the Bankruptcy Code prior to confirmation of the plan, we nonetheless recognize that the affirmative obligation to object to the . . . plan rested with [HEAF], not with the bankruptcy court or the trustee." In re Szostek, 886 F.2d [1405] at 1414 [(3rd Cir.1989)]. 179 F.3d at 1257-58. In justifying its holding, the Tenth Circuit relied not only on the creditor's failure to protect itself but also on "the strong policy of finality" protecting chapter 13 confirmed plans. 179 F.3d at 1258. Agreeing with the analysis in In re Evans, 242 B.R. 407 (Bankr.S.D.Ohio 1999), the bankruptcy court in the Western District of Oklahoma held that the inclusion of a student loan discharge provision in a chapter 13 plan is a sanctionable event and that the Andersen decision provides no protection from sanctions. In re Hensley, 249 B.R. 318, 322-23 (Bankr.W.D.Okla.2000). Characterizing such plan drafting as simply an attempt to "trap an unwary student loan creditor" and as a type of impermissible "gamesmanship," the bankruptcy court rejected any reading of Andersen that would encourage the practice of including such plan provisions and highlighted the fact that the student loan creditor did not try to collect in Andersen until after the debtor had completed the plan payments and received a discharge of the student loan debt. 249 B.R. at 319-21. Finally, the court in Hensley saw the inclusion of a student loan discharge provision as analogous to a debtor's claim of an improper exemption, both made in the hope of no timely objection. 249 B.R. at 323. The court noted that the latter situation was one where the Supreme Court had recognized the availability of sanctions to deter such conduct. 249 B.R. at 324. BANKRUPTCY COURT'S DECISION The bankruptcy court disagreed with the reasoning in In re Hensley, 249 B.R. 318, 320-23 (Bankr.W.D.Okla.2000), and In re Evans, 242 B.R. 407, 409-13 (Bankr.S.D.Ohio 1999), insofar as their conclusion that the debtor's filing of an adversary proceeding is "absolutely essential to any kind of undue hardship declaration." (Dk.5, Appx.A, p. 8). The bankruptcy court construed the bankruptcy rules as permitting an undue hardship determination to be made either in an adversary proceeding or as a contested matter and opined that "the litigation would proceed in essentially in the same manner" under 826 either procedure. (Dk.5, Appx.A, p. 4). The bankruptcy court was "unwilling to assume," as ECMC had done, that debtors and their counsel would include these student loan discharge provisions in the plan "when they have no basis in fact." (Dk.5, Appx.A, p. 8). Instead, it assumed that the debtors and their counsel by including provisions in their plan knew they were "certifying that to the best of their `knowledge, information, and belief, formed after an inquiry reasonable under the circumstances, . . . (3) the allegations and other factual contentions have evidentiary support.' Fed. R. Bankr.P. 9011(b)." (Dk.5, Appx.A, p. 8). The bankruptcy court agreed with the Hensley decision that it would be improper and sanctionable for the debtors' counsel to use such plan provisions on the mere hope of trapping an unwary student loan creditor. (Dk.5, Appx.A, pp. 8-9). It further observed that an undue hardship determination at the time of plan confirmation ordinarily would be "premature" and only "advisory" and that not until the plan was completed and debtor entitled to discharge would the court be likely to have all the information relevant and necessary in making this determination. (Dk.5, Appx.A, p. 9-10). The court, however, recognized that a debtor could have unusual circumstances where his financial situation was "almost certain to remain unimproved for the foreseeable future," such as debtor with "some permanent disability," and then an undue hardship determination could be made near the time of the plan's confirmation. The bankruptcy court concluded: [T]he Court is convinced that, in nearly all factual circumstances, seeking an undue hardship determination at the time of confirmation is inappropriate, and therefore, including an Andersen provision in a plan would likewise be inappropriate. In effect, including such a provision in a plan constitutes an allegation that excepting the debt from discharge will impose an undue hardship on the debtor and the debtor's dependents under the circumstances that will exist in three to five years, not under those at the time the plan is proposed. Debtors and their counsel can properly include Andersen provisions in chapter 13 plans only when it is reasonable to make such an allegation. (Dk.5, Appx.A, p. 10-11). Thus, the bankruptcy court sustained ECMC's objections to the debtors' inclusion of these plan provisions here but denied ECMC's request for "a per se rule that sanctions will be imposed" against debtors including such provisions in future chapter 13 plans. CONCLUSION Judge Rogers in In re Wright, 279 B.R. 886 (D.Kan.2002), affirmed the bankruptcy court for the following reasons: The difference between the ruling of the bankruptcy court here and that in Hensley is one of degree. Both courts condemned the practice of filing plans with the aforementioned language. Both courts acknowledged that inclusion of this language was unethical and sanctionable. In Hensley, however, the bankruptcy court took the step of informing bankruptcy counsel that sanctions would be imposed in the future in every instance where such language was included in proposed Chapter 13 plans. The bankruptcy court here was unwilling to go that far. While acknowledging that such language was subject to sanctions, the court indicated that it would examine each individual case to determine if sanctions should be applied. The bankruptcy court made a reasoned and appropriate analysis of the issue presented by ECMC. The court is persuaded by the reasoning and conclusions reached by the bankruptcy court. As correctly pointed out by the bankruptcy court, the inclusion of these provisions in *827 a plan in the hope that they will trap the unwary student loan creditor should result in the imposition of sanctions. The court, however, does not believe that a per se rule should be adopted. Debtors' counsel are on notice that the filing of plans containing this language will not be allowed unless there is a good faith basis for them. This court believes, as did the bankruptcy court, that these matters can be handled when they arise. "[I]t is perfectly reasonable to expect interested creditors to review the terms of a proposed plan and object if the terms are unacceptable, vague, or ambiguous." In re Harvey, 213 F.3d 318, 322 (7th Cir.2000). 279 B.R. at 889. This court fully concurs with Judge Roger's reasoning and conclusion in Wright. Consequently, the court affirms the bankruptcy court's order in these two companion bankruptcy appeals for substantially the same reasons expressed in Wright. IT IS THEREFORE ORDERED that the bankruptcy court's order of February 22, 2001, is affirmed. NOTES [1] In the appeal of In re Gary Darnell Green, 287 B.R. 827 (D.Kan.2002), ECMC filed an additional reply brief. Unlike like the other two cases, the debtor Green filed a brief on appeal. The reply brief does not address any facts or arguments unique to that case, nor does it raise any material issues not otherwise found in ECMC's original brief that was filed in all three appeals.	{ "pile_set_name": "FreeLaw" }
FILED NOT FOR PUBLICATION JAN 30 2017 UNITED STATES COURT OF APPEALS MOLLY C. DWYER, CLERK U.S. COURT OF APPEALS FOR THE NINTH CIRCUIT CONTEMPORARY SERVICES No. 14-56636 CORPORATION, a California Corporation, D.C. No. 8:09-cv-00681-BRO-AN Plaintiff-Appellant, v. MEMORANDUM* LANDMARK EVENT STAFFING SERVICES, INC., a Delaware Corporation; PETER KRANSKE, an individual; MICHAEL HARRISON, an individual, Defendants-Appellees, Appeal from the United States District Court for the Central District of California Beverly Reid O’Connell, District Judge, Presiding Argued and Submitted October 5, 2016 Pasadena, California Before: PREGERSON, PAEZ, and TALLMAN*, Circuit Judges. This disposition is not appropriate for publication and is not precedent except as provided by Ninth Circuit Rule 36-3. ** Judge Tallman was drawn to replace Judge Noonan after oral argument. He has read the briefs, viewed the recorded argument, and studied the record. Contemporary Services Corporation (“CSC”) appeals the district court’s grant of summary judgment in favor of Landmark Event Staffing Services, Inc. (“Landmark”) as to its claims for misappropriation of trade secrets under the California Uniform Trade Secrets Act (“CUTSA”), Cal. Civ. Code § 3426 et seq., and breach of contract. We affirm in part, reverse in part, and remand for proceedings consistent with this decision. 1. We review a district court’s grant of summary judgment de novo. Surfvivor Media, Inc. v. Survivor Prods., 406 F.3d 625, 630 (9th Cir. 2005). Summary judgment is appropriate where “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). 2. CSC asserted a CUTSA claim for misappropriation of trade secrets, alleging that Landmark acquired and used numerous CSC-created documents. “[A] prima facie claim for misappropriation of trade secrets requires the plaintiff to demonstrate: (1) the plaintiff owned a trade secret, (2) the defendant acquired, disclosed, or used the plaintiff’s trade secret through improper means, and (3) the defendant’s actions damaged the plaintiff.” Cytodyn, Inc. v. Amerimmune Pharm., Inc., 72 Cal. Rptr. 3d 600, 607 (Cal. Ct. App. 2008) (internal quotation marks omitted). 2 3. A trade secret is “information, including a formula, pattern, compilation, program, device, method, technique, or process that: (1) Derives independent economic value, actual or potential, from not being generally known to the public or to other persons who can obtain economic value from its disclosure or use; and (2) Is the subject of efforts that are reasonable under the circumstances to maintain its secrecy.” Cal. Civ. Code, § 3426.1(d). Here, CSC raised material triable issues as to whether its customer lists (CSC California #17-18), its deployment workbook (CSC California #12), and its PowerPoint disclosing financial information (CSC California #2) qualify as trade secrets.1 See Abba Rubber Co. v. Seaquist, 286 Cal. Rptr. 518, 526 (Cal. Ct. App. 1991) (where a customer list qualified as a trade secret); id. at 529 n.9 (noting that “ease of ascertainability is irrelevant to the definition of a trade secret”); Whyte v. Schlage Lock Co., 125 Cal. Rptr. 2d 277, 287-88 (Cal. Ct. App. 2002) (where specific and unique financial information qualified as a trade secret). In addition, CSC raised a triable issue as to whether Landmark unlawfully ratified employee Grant Haskell’s misappropriation of CSC trade secrets when Landmark failed to cease the use of CSC documents, disavow Haskell’s conduct, or terminate Haskell’s employment 1 To the extent CSC’s misappropriation of trade secrets claim was based on other documents, we affirm the district court’s ruling that CSC failed to raise a triable issue as to whether those documents qualify as trade secrets. 3 after Landmark “had reason to know” of Haskell’s misappropriation. Cal. Civ. Code § 3426.1(b)(2)(B); see also PMC, Inc. v. Kadisha, 93 Cal. Rptr. 2d 663, 675 (Cal. Ct. App. 2000) (finding triable issue where employer made “no real attempt to determine” whether trade secret misappropriation had occurred). 4. We therefore reverse the district court’s summary judgment ruling, and conclude that CSC satisfied the first two elements of a misappropriation of trade secrets claim under the CUTSA. The district court declined to decide whether CSC demonstrated causation and damages, however, and we therefore leave those issues for the district court’s consideration on remand. 5. Because CSC’s breach of contract claim was derivative of its misappropriation of trade secrets claim, we reverse the district court’s grant of summary judgment to Landmark on that claim. 6. In light of our disposition, we vacate the award of attorney’s fees to Landmark as premature. 7. We also GRANT the Request for Judicial Notice by Appellees Landmark Event Staffing Services, Inc., Peter Kranske, and Michael Harrison, filed on Oct. 5, 2015, ECF No. 36. 8. The parties shall bear their own costs on appeal. 4 For the foregoing reasons, we AFFIRM IN PART and REVERSE IN PART the district court’s grant of summary judgment, REMAND for proceedings consistent with this disposition, and VACATE the award of attorney’s fees in favor of Landmark. 5	{ "pile_set_name": "FreeLaw" }
356 S.W.3d 881 (2012) James BUTLER, Movant/Appellant, v. STATE of Missouri, Respondent/Respondent. No. ED 96365. Missouri Court of Appeals, Eastern District, Division Three. January 17, 2012. Timothy J. Forneris, St. Louis, MO, for Movant/Appellant. Shaun J. Mackelprang, Jessica P. Meredith, Jefferson City, MO, for Respondent/Respondent. Before ROBERT G. DOWD, JR., P.J., MARY K. HOFF, J., and SHERRI B. SULLIVAN, J. ORDER PER CURIAM. James Butler appeals from the motion court's judgment denying his amended Motion to Vacate, Set Aside or Correct Judgment and Sentence filed pursuant to Rule 24.035[1], following an evidentiary hearing. We have reviewed the briefs of the parties and the record on appeal and conclude the judgment of the motion court is not clearly erroneous. Rule 24.035(k). An extended opinion would have no precedential value. We have, however, provided a memorandum setting forth the reasons for our decision to the parties for their use only. We affirm the judgment pursuant to Missouri Rule of Civil Procedure 84.16(b). NOTES [1] All rule references are to Mo. R.Crim. P.2010, unless otherwise indicated.	{ "pile_set_name": "FreeLaw" }
50 B.R. 460 (1985) In the Matter of K & B MOUNTING, INC., Debtor. Bankruptcy No. 84-30804. United States Bankruptcy Court, N.D. Indiana, South Bend Division. April 22, 1985. 461 Patrick Whisler, Thomas Sciortino, Elkhart, Ind., for debtor. Scott C. Soldon, Milwaukee, Wis., for Union Local. ORDER ROBERT K. RODIBAUGH, Bankruptcy Judge. On January 31, 1985, debtor in possession K & B Mounting filed motion for rejection of collective bargaining agreement. Hearing on the motion was held on February 28, 1985, and trial was conducted on March 12, 1985. The time for filing of briefs having passed, the Court took the motion under advisement on March 29, 1985. K & B Mounting is engaged in the business of selling and installing truck equipment. Its president, Frank McNamee, filed a voluntary chapter 11 petition on behalf of the company on August 17, 1984. The Statement of Financial Affairs states that the company is located in South Bend, Indiana; however, Mr. McNamee testified at trial that its business operations were in Detroit, Michigan. He also testified that K & B Mounting has eleven employees, eight of whom are covered by a union contract. 1. Jurisdiction The court has jurisdiction over the parties and subject matter of the action. 28 U.S.C. § 1334, and the General Order of Reference of the District Court for the Northern District of Indiana dated July 11, 1984, entered pursuant to 28 U.S.C. § 157. 2. Motion for rejection of collective bargaining agreement. In its motion to reject the collective bargaining agreement K & B Mounting alleged that, although it had contacted Teamsters Union Local 299 of Detroit, Michigan, on numerous occasions in an effort to discuss the employment contract, the union had cut off the discussions. Because continued adherence to the collective bargaining agreement has caused the debtor serious cash flow problems, the debtor proposed modifications to the existing agreement. K & B Mounting alleged that the union had neither accepted nor rejected the proposal at the time the debtor had filed the motion to reject. The proposal of K & B Mounting was made by letter to Stanley Baker, business representative of Teamsters Local Union No. 299, by Thomas P. Sciortino, attorney for the debtor. While making clear that the offer was not all-inclusive or final, counsel for the debtor presented the following proposal of K & B Mounting: The employer is requesting terms in the contract indicating a one cent per mile reduction in the truckaway volume; a five cent per mile reduction in the driveaway rates; a fifteen cent per hour reduction in the wages of all hourly employees; and a suspension of payments under the health, welfare and pension plan. As a substitute for payments under the health, welfare and pension plan, the employer would join a plan under Blue Cross/Blue Shield, and pay one-half of the cost of that. The employee would pay the other one-half of the cost. Additionally, each employee who is receiving payments under the pension plan would receive a $2,000.00 contribution towards an IRA, such contribution to commence during the fiscal year which ends after our present one. Letter of September 5, 1984, from attorney Sciortino to union representative Baker. See Motion for Rejection of Bargaining Agreement, exhibit B, filed January 31, 1985. On November 7, 1984, Mr. Baker responded by letter to the debtor's proposal. He reported that the result of a meeting between himself and the employees of K & B Mounting "was a unanimous vote for the rejection of the Company's proposal." He then presented a counter-offer. The employees have instructed Teamsters Local Union No. 299, to negotiate 462 the National Master Automobile Transporters Agreement in its entirety. Letter of November 7, 1984, from Baker to Sciortino. See Motion for Rejection of Bargaining Agreement, Exhibit A, filed January 31, 1985. 3. Negotiations prior to motion. Two years prior to bankruptcy K & B Mounting had withdrawn from the Multi-Employer Bargaining Unit and had notified Local No. 299 of its intent to negotiate a separate collective bargaining agreement. See letter of January 13, 1982, Union's Trial Exhibit 6. Since then the union and employer K & B Mounting had been operating on an informal day-to-day basis with no signed collective bargaining agreement. However, K & B Mounting has maintained full payments of the insurance and pension benefits and has complied with the other terms and conditions of the collective bargaining agreement negotiated with other employers in the multi-employer bargaining unit. See Pretrial Brief of Local Nos. 299 and 364 at p. 2, filed February 22, 1985. On August 15, 1984, attorney Sciortino notified Mr. Baker by letter of the company's filing for relief in bankruptcy, and suggested a meeting in his offices "to discuss both the [labor] contracts and the matters surrounding the Union/K & B relationship." Union's Trial Exhibit 7. However, the parties were unable to agree on a meeting place. Therefore on September 5, 1984 Mr. Sciortino opened negotiations through the mail. He presented the proposal of K & B Mounting and offered alternative locations for a meeting to discuss the modifications. Union's Trial Exhibit 8. Mr. Baker refused to negotiate with Mr. Sciortino until he had received notification from company president McNamee that Mr. Sciortino in fact represented the company. He then responded to the debtor's proposal by rejecting the company's suggested modifications and by offering the master agreement under which the company had been working prior to 1982. Movant's Trial Exhibit N. Since the parties still could not agree on the location for negotiations, no further communication was established. The debtor filed its motion for rejection of the collective bargaining agreement on January 31, 1985. 4. 11 U.S.C. § 1113. The Bankruptcy Amendments and Federal Judgeship Act of 1984 [BAA] created a new Bankruptcy Code section that governs the rejection of collective bargaining agreements in Chapter 11 proceedings. Section 1113 was written by the Congress in response to the Supreme Court decision N.L.R.B. v. Bildisco and Bildisco,[1] 465 U.S. 513, 104 S.Ct. 1188, 79 L.Ed.2d 482, [11 BCD 564] (1984). As a result, rejection of a collective bargaining agreement is no longer governed by 11 U.S.C. § 365[2], but rather by 11 U.S.C. § 1113, which delineates the procedures to be followed and the standards to be applied in rejecting a labor contract.[3] The pertinent provisions follow: 463 § 1113. (a) The debtor in possession, or the trustee if one has been appointed under the provisions of this chapter, other than a trustee in a case covered by subchapter IV of this chapter and by title I of the Railway Labor Act, may assume or reject a collective bargaining agreement only in accordance with the provisions of this section. (b)(1) Subsequent to filing a petition and prior to filing an application seeking rejection of a collective bargaining agreement, the debtor in possession or trustee (hereinafter in this section "trustee" shall include a debtor in possession), shall (A) make a proposal to the authorized representative of the employees covered by such agreement, based on the most complete and reliable information available at the time of such proposal, which provides for those necessary modifications in the employees benefits and protections that are necessary to permit the reorganization of the debtor and assures that all creditors, the debtor and all of the affected parties are treated fairly and equitably; and (B) provide, subject to subsection (d)(3), the representative of the employees with such relevant information as is necessary to evaluate the proposal. (2) During the period beginning on the date of the making of a proposal provided for in paragraph (1) and ending on the date of the hearing provided for in subsection (d)(1), the trustee shall meet, at reasonable times, with the authorized representative to confer in good faith in attempting to reach mutually satisfactory modifications of such agreement. (c) The court shall approve an application for rejection of a collective bargaining agreement only if the court finds that (1) the trustee has, prior to the hearing, made a proposal that fulfills the requirements of subsection (b)(1); (2) the authorized representative of the employees has refused to accept such proposal without good cause; and (3) the balance of the equities clearly favors rejection of such agreement. The first and only reported case that has analyzed this new law[4] comes from the Minnesota Bankruptcy Court. In re American Provision Co., 44 B.R. 907 (Bkrtcy.D. Minn.1984). That court found that nine requirements must be met for court approval of the rejection of collective bargaining agreements. 1. The debtor in possession must make a proposal to the Union to modify the collective bargaining agreement. 2. The proposal must be based on the most complete and reliable information available at the time of the proposal. 3. The proposed modifications must be necessary to permit the reorganization of the debtor. 4. The proposed modifications must assure that all creditors, the debtor and all of the affected parties are treated fairly and equitably. 5. The debtor must provide to the Union such relevant information as is necessary to evaluate the proposal. 6. Between the time of the making of the proposal and the time of the hearing on approval of the rejection of the existing collective bargaining agreement, the 464 debtor must meet at reasonable times with the Union. 7. At the meetings the debtor must confer in good faith in attempting to reach mutually satisfactory modifications of the collective bargaining agreement. 8. The Union must have refused to accept the proposal without good cause. 9. The balance of the equities must clearly favor rejection of the collective bargaining agreement. Id. at p. 909. Two bankruptcy commentators have also examined the procedural framework required and the substance of the section 1113 rejection standard. Judge Stanley B. Bernstein, in his Bankruptcy Practice After the Amendments Act of 1984,[5] emphasized that the new Code section 1113 provided a "process" by which labor contracts may be rejected. There are now a defined set of discrete stages in the rejection process, with varying alternatives if the process aborts or bogs down at any stage. Id. at p. 121. He also analogized the section as a "barrier to the rejection of union contracts . . . [that] must be scaled before the bankruptcy court may consider an application to reject the contract." Id. at p. 122. Richard H. Gibson, in his article "The New Law on Rejection of Collective Bargaining Agreements in Chapter 11: An Analysis of 11 U.S.C. § 1113," 58 Am. Bankr.L.J. 325 (Fall, 1984), describes section 1113 as a three-step procedure set up in order to encourage collective bargaining. 58 Am.Bankr.L.J. at p. 328. The first stage is the mandatory proposal by the debtor to the union. The debtor is obligated to make a proposal for modification of the labor contract to the collective bargaining representative after filing the Chapter 11 petition but before seeking court approval for rejection of the labor contract. By implication, it is not sufficient for the debtor to claim that it bargained to an impasse with the union before it filed its Chapter 11 petition. Bernstein, supra, at p. 122. The proposal must meet certain statutory requirements. The proposed modifications must be necessary for the success of the debtor's reorganization. [O]nly modifications which are necessary to a successful reorganization may be proposed. Therefore, the debtor will not be able to exploit the bankruptcy procedure to rid itself of the unwanted features of the labor agreement that have no relation to its financial condition and its reorganization and which earlier were agreed to by the debtor. The word "necessary" inserted twice into this provision clearly emphasizes this required aspect of the proposal which the debtor must offer and guarantees the sincerity of the debtor's good faith in seeking contract changes. 130 Cong.Rec. S8898 (daily ed. June 29, 1984) (Sen. Packwood). They must evidence fair and equitable treatment of the creditors, debtor and all interested parties. The fair and equitable language was intended by the conference to insure that the type of balancing that takes place when the court finally rules on rejection also takes place during these preliminary negotiations. 130 Cong.Rec. S8892 (daily ed. June 29, 1984) (Sen. Hatch). . . . According to the conferees, that basically means that the economies in operation are now being borne solely or primarily by the employees covered by the union contract. Indeed, a strong inference may be drawn that the debtor has to prove that substantial concessions have been given to the debtor by suppliers, its secured creditors, state and local taxing agencies, and management and non-union employees. . . . In the end, fairness and equity in connection with proposals for modifications of union contracts means that no significant participant in the reorganization 465 process gets a free ride; everybody shares in aiding the debtor, not just the covered employees. Bernstein, supra, at pp. 123-124. In addition, the proposal must be soundly based upon "the most complete and reliable information available," and all information necessary to evaluate the proposal must be provided to the collective bargaining agent. 11 U.S.C. § 1113(b)(1)(A) and (B). The second step or stage of this process occurs in the interval between the presentation of the proposal to the union and the judicial hearing on the application for rejection. During that period the debtor must engage in good faith negotiations with the union, pursuant to the requirement of 11 U.S.C. § 1113(b)(2). The amount of flexibility allowed the debtor in meeting this obligation is also a "good faith" test: the number of meetings and the reasonableness of the time spent in negotiation depends upon the complexity and detail of the proposal and of the data given to the union for its evaluation. It is interesting to note that Senator Packwood intertwined the interpretation of what constitutes the debtor's "good faith" negotiation and the union's "good cause" rejection. The `without good cause' language provides an incentive of pressure on the debtor to negotiate in good faith. In practical terms, this language imposes no barrier to rejection if the debtor's proposal has contained only the specified `necessary' modifications. Thus, the language serves to prohibit any bad faith conduct by an employer, while at the same time protecting the employer from a union's rejection of the proposal without good cause. 130 Cong.Rec. S8898 (daily ed. June 29, 1984) (Statement of Sen. Packwood). In other words, a debtor negotiates in good faith when it meets the requirement of section 1113(b)(1) by offering only necessary modifications which affect all parties equally. Furthermore, a union probably has good cause to reject "any proposal that is not necessary for the reorganization of the debtor or that unfairly burdens the unionized workers relative to other parties." Gibson, supra, 58 Am.Bankr.L.J. at 341. The Minnesota Bankruptcy Court has also linked the "good faith" and "good cause" interpretations by placing on the union the burden of coming forth with the evidence for these two requirements. . . . [O]nce the debtor has shown that it has met with the Union representatives, it is incumbent upon the Union to produce evidence that the debtor did not confer in good faith. And . . ., once the debtor has shown that the Union has refused to accept its proposal the Union must produce evidence that it was not without good cause. Again, once the Union has come forward with evidence on these . . . elements, the ultimate burden of persuasion on each still lies with the debtor. In re American Provision Co., 44 B.R. 907, 910 (Bkrtcy.D.Minn.1984). No definition of "good cause" has been provided. However, bankruptcy courts are not meant to follow labor law decisions in determining what constitutes good cause. Senator Thurmond stated that this requirement "is obviously not intended to import traditional labor law concepts into the bankruptcy forum or to turn the bankruptcy courts into a version of the National Labor Relations Board." 130 Cong.Rec. S8888 (daily ed. June 29, 1984) (as cited in 58 Am.Bankr.L.J. at p. 340). The final stage is the debtor's filing for court approval of rejection of the labor agreement. Although the application for rejection may be filed at any time after the proposal is made, there must be evidence of good faith negotiations with the union before the debtor turns to the court. It must be kept in mind that one of the main purposes of the new Code section is to encourage solution of the employer's labor problems through collective bargaining rather than by means of the debtor's unilateral action and recourse to the bankruptcy court. Gibson, supra, 58 Am.Bankr.L.J. at 466 327. Furthermore, once the application has been made, the hearing on that application must commence not later than fourteen days after the date of the filing.[6] 11 U.S.C. § 1113(d)(1). It is at this point that the court must evaluate the equities of the case, and must find that "the balance of the equities clearly favors rejection" of the collective bargaining agreement. Judge Bernstein believes that the standard established in section 1113(c) for approving or denying the rejection of a union contract naturally suggests a two-stage hearing. The first stage will consider the issues found in § 1113(c)(1) and (2); the second stage, an analysis of the "balancing of the equities," will be heard if the debtor prevails in its first stage of proofs.[7] The first stage addresses the related questions raised by § 1113(b) whether (i) the debtor's proposal included only necessary modifications of the union contract, (ii) the debtor's proposal was "based on the most complete and reliable information available at the time" of the proposal, (iii) the proposal assures that all creditors, the debtor and all of the affected parties are treated fairly and equitably, (iv) the debtor provided the "relevant information": for evaluating the proposal, (v) the debtor met at reasonable times to confer in good faith over the modifications, and (vi) the union refused to accept the proposal "without good cause." [O]nly if the court finds on those issues [under ¶ 1113(c)(1) and (2)] in favor of the debtor will the second stage issue on the "balancing of the equities" be heard.[7] Bernstein, supra, at p. 132. Once this balancing stage is reached, the test is a broad equitable one, lacking rigidity. As both the language of section 1113(c)(3) and its legislative history suggest, this balancing test is a statutory codification of the central element in the Bildisco case. Gibson, supra, 58 Am.Bankr. L.J. at p. 343. However, the weighing of equities is not a new test; a substantial body of case law had used and interpreted that standard prior to the Supreme Court's Bildisco decision.[8] Therefore, although the legislative comments of this subsection give little guidance, earlier decisions have presented both the factors that the courts felt should be considered and those that the courts found controlling. A bankruptcy court should examine these precedents in determining which factors are applicable to the case at bar and in considering the weight to be assigned to each factor. Bernstein, supra, at p. 135. One commentator has suggested that the factors boil down to one issue: the reallocation of economic risks and the choice of the parties best able to bear those risks. Bernstein, supra, at p. 138. To another commentator the most important factor is whether the labor contract is truly a serious impediment to reorganization. When [examining the factors that controlled the precedents], the long lists of equities quickly melts [sic] down to the one, single question which is almost always controlling: what effect will rejection of the agreement have on the firm's prospects for reorganization? Gibson, supra, 58 Am.Bankr.L.J. at p. 345. 5. The burden of proof. Minnesota Bankruptcy Judge Kressel carefully analyzed the burden of proof of showing that the nine requirements of section 1113 have been met. In re American 467 Provision Co., 44 B.R. 907, 909 (Bkrtcy.D. Minn.1984). The court found that the debtor must prove, by a preponderance of the evidence, that all nine elements have been satisfied before a court may approve rejection of a collective bargaining agreement. [S]ince these nine requirements form the bases of the debtor's motion, the debtor bears the burden of persuasion by the preponderance of the evidence on all nine elements. However that is not to say that the burden of going forward with the evidence should in all instances be on the debtor. Regardless of where the ultimate burden of persuasion lies, assignment of the initial burden of production depends on the circumstances. Idem. However, the union is required to produce evidence in elements 5, 7, and 8. In particular, as to elements 5, 7 and 8, I think that to a certain extent the burden of production of evidence should lie with the Union. As to element 5, I think that it is incumbent upon the debtor in the first instance to show what information it has provided to the Union. It is then incumbent upon the Union to produce evidence that the information provided was not the relevant information which was necessary for it to evaluate the proposal. Id. at pp. 909-10.[9] After analyzing the language of section 1113(c)(3), Judge Bernstein argues that the debtor's burden of proof is heavier than the "preponderance" burden in the final test of balancing the equities. [T]he debtor's counsel has the burden of proving that the balance of the equities clearly favors rejection. The modifying adverb suggests that a preponderance of the evidence will not be sufficient. Bernstein, supra, at p. 134. 6. Application of the requirements of § 1113 to the debtor K & B Mounting. The court applied the section 1113 requirements to the facts herein, accumulated from the evidence and testimony of trial, the parties' briefs, and the record herein. In the first stage of analysis, the debtor must prove by a preponderance of the evidence that he has fulfilled the requirements of sections 1113(c)(1) and (2). The debtor's proof, however, was woefully inadequate. K & B Mounting did assert that it had serious cash flow problems, and its bankruptcy schedules revealed that its only major indebtedness was its obligation to the employees' health, welfare and pension plan. In his letter of September 5, 1984, counsel for the debtor asserted the following: . . . It is necessary for everyone to accept the lesser benefit package in order for the company to survive. I need not explain to you the consequences to the employees were it to become necessary for the company to liquidate. Thus the debtor does insist that the modifications suggested in its proposal are necessary for reorganization of the company. However, neither the union nor the court could assess the necessity of these modifications, since the debtor did not substantiate its proposal with "relevant" information selected from "the most complete and reliable information available" when the debtor made its proposal. As stated above, the debtor's bankruptcy filings are hardly sufficient. The union should be supplied with detailed projections and recommendations, perhaps made by a management consultant, preferably one who is independent of the interested parties. The debtor should present full and detailed disclosure of its difficulties and its proposed short-run and long-run solutions. If the debtor so requests, the court may authorize entry of a protective order during this stage in order to prevent the disclosure of information furnished to the union where the disclosure could compromise the debtor's competitive position. Bernstein, supra, at pp. 125-126. In summary, the debtor must provide to the union enough information to justify 468 each of its proposed modifications. The debtor was incorrect when it stated that it "need not explain" to the union the consequences of possible liquidation; that explanation is exactly what the debtor was required to make. And the test, in justifying each of the proposed modifications, is necessity, not convenience or desirability. Bernstein, supra, at p. 122. The debtor, in making such a proposal, is asking the union to sacrifice extremely important rights. Simple justice requires that the debtor only do so in a carefully considered and soundly-based manner. Gibson, supra, 58 Am.Bankr.L.J. at p. 336. The proposal clearly does not assure that all creditors and affected parties are treated fairly and equitably. Mr. McNamee, K & B's president, testified that he and his partner reduced their wages in 1981 and "tightened up on everything." They purchased equipment, for example, by paying by cash rather than by credit. The result of this management decision, however, was that, upon filing in bankruptcy the company had no secured debts, and the only major debt owed was that obligation of employee benefits under the labor contract. Therefore the proposal of K & B Mounting affects only one party in interest, the employees. The debtor has not shown that its proposal requires all parties directly affected management, nonunion employees, suppliers as well as unionized workersto sacrifice to a similar degree. Since no meetings took place between the debtor and the union, the debtor has not met the requirement of meeting at reasonable times to confer in good faith over the modifications. However, the court is not unaware of the union's improper stance in these negotiations; the union's refusal to recognize or to meet with the attorney for the debtor reflected its lack of good faith in these proceedings. Nevertheless, the court must say that the union had good cause to refuse to accept the proposal. The debtor has not met its burden in providing full information to the union or in providing a proposal which treats all parties fairly and equitably.[10] Because the court cannot find in favor of the debtor on the first-stage issues under section 1113(c)(1) and (2), it need not reach the second stage "balancing of the equities." Accordingly, the motion of debtor K & B Mounting for rejection of collective bargaining agreement is hereby denied. SO ORDERED. NOTES [1] The Bildisco decision established an equitable standard by which to measure rejection of an executory contract and permitted a debtor to ignore a labor contract immediately upon filing under chapter 11. The latter half of the decision, unilateral rejection of a labor contract, was unacceptable to organized labor. Therefore the labor lobby worked effectively through Congress to amend the Supreme Court decision. Full analyses of the process which led to the creation of the new Code section 1113 are found in Rosenberg, R., "Bankruptcy and the Collective Bargaining AgreementA Brief Lesson in the Use of the Constitutional System of Checks and Balances," 58 Am.Bankr.L.J. 293 (Fall 1984); Gibson, R.H., "The New Law on Rejection of Collective Bargaining Agreements in Chapter 11: An Analysis of 11 U.S.C. ¶ 1113," 58 Am.Bankr.L.J. 325 (Fall 1984); and Bernstein, S.B., Bankruptcy Practice After the Amendments Act of 1984, (PEC 1984). [2] 11 U.S.C. § 1113 became effective upon the date of enactment of the Bankruptcy Amendments and Federal Judgeship Act and applies only to cases filed after the date of enactment, July 10, 1984. § 553 of H.R. 5174; BAA § 541(c). [3] The new section 1113, found in Sub-Title J of Title III of the Bankruptcy Amendments Act, has been described as "an elaborate and thorough-going revision of the rejection process for union contracts," one which "created an expedited form of collective bargaining with a number of safeguards designed to insure that employers can not use chapter 11 solely to rid themselves of their union, but only propose modifications of the agreement that are truly necessary for the firm's survival." Gibson, "The New Law on Rejection of Collective Bargaining Agreements," supra at footnote 1, 58 Am.Bankr. L.J. 325 at 327. Although one court has criticized it as "not a masterpiece of draftsmanship" (In re American Provision Co., 44 B.R. 907, 909 (Bkrtcy.D.Minn.1984)), a bankruptcy commentator has complimented the new section by stating that "overall, the conferees deserve their self-congratulatory speeches reprinted in the Congressional Record of June 29, 1984." Bernstein, Bankruptcy Practice After the Amendments Act of 1984, supra at footnote 1, at p. 121. [4] Several court decisions have been published concerning section 1113(e), which allows interim changes in a collective bargaining agreement. In re Salt Freightways, 46 B.R. 347, 12 B.C.D. 872 (Bkrtcy.D.Wyo.1985); In re Wright Air Lines, Inc., 44 B.R. 744 (Bkrtcy.N.D.Ohio, 1984). [5] See footnote 1. [6] Pursuant to § 1113(d)(1), the court may extend the time for commencement of the hearing for a period not exceeding seven days, if required. [7] Bernstein's six questions to be answered in the first stage are virtually the same as the first eight requirements listed by Judge Kressel of the Minnesota Bankruptcy Court in In re American Provision Co., supra at footnote 3. [8] In re Overseas National Airways, Inc., 238 F.Supp. 359 (D.C.N.Y.1965); Shopmen's Local Union No. 455 v. Kevin Steel, 519 F.2d 698 (2d Cir.1975); In re Bildisco, 682 F.2d 72 (3d Cir. 1982); In re Brada Miller Freight Systems, Inc., 702 F.2d 890 (11th Cir.1983). [9] For the Minnesota Bankruptcy Court's explanation of the union's burden of production of evidence as to elements seven and eight, see page 10 of this opinion. [10] Congressional leaders intended that the revised rejection procedure of § 1113 should stimulate collective bargaining and limit the number of cases when a judge will have to authorize the rejection of a labor contract. 130 Cong.Rec. S8898 (daily ed. June 29, 1984) (comment of Senator Packwood). In accord with that intention, this court would have preferred the union to stimulate negotiations by requesting further information from the debtor or by explaining its rejection of the debtor's proposal. However, it is not so naive as to have expected it.	{ "pile_set_name": "FreeLaw" }
786 N.W.2d 579 (2010) 486 Mich. 596 PEOPLE of the State of Michigan, Plaintiff-Appellee, v. Jason Michael GURSKY, Defendant-Appellant. No. 137251. Calendar No. 3. Supreme Court of Michigan. Argued March 9, 2010. Decided July 22, 2010. 582 Michael A. Cox, Attorney General, B. Eric Restuccia, Solicitor General, Eric J. Smith, Prosecuting Attorney, Robert Berlin, Chief Appellate Lawyer, and Joshua D. Abbott, Assistant Prosecuting Attorney, for the people. State Appellate Defender (by Peter Jon Van Hoek) for defendant. Jeffrey L. Sauter and William M. Worden for amici curiae the prosecuting Attorneys Association of Michigan. Opinion YOUNG, J. Defendant was charged with and convicted of four counts of first-degree criminal sexual conduct for sexually abusing his girlfriend's child. At trial, the child's hearsay statements to a third party were admitted over defendant's objection. Those statements, which were made when the child first revealed the allegations of abuse, contained all the details of the alleged assaults and were used at trial to corroborate the child's testimony. Defendant appealed, arguing that the statements should not have been admitted because they were not spontaneously given as required by Michigan Rule of Evidence 803A. We agree that the child's statements were not "spontaneous" and therefore hold that the statements should not have been admitted under the limited "tender years" hearsay exception created by MRE 803A. We nevertheless affirm defendant's convictions because the improper admission of the hearsay statements was harmless error. The error is not so prejudicial as to require reversal because the hearsay statements were not used substantively at trial to prove guilt (but rather only to show consistency in the child's testimony), the statements were cumulative to the victim's testimony at trial, and there was other corroborating evidence of defendant's guilt. Accordingly, we affirm the judgment of the Court of Appeals, but do so on alternative grounds. I. FACTS AND PROCEDURAL HISTORY Defendant Jason Gursky was tried on and convicted of four counts of criminal sexual conduct in the first degree (CSC-I) for sexual penetration of a person under the age of 13.[1] The victim in this case, GA, was the daughter of Gursky's girlfriend, Lori.[2] 583 The charges against Gursky arose out of two alleged incidents of sexual contact with GA: one in September 2005, when GA was six, and the second around April 30, 2006, when GA was seven. On May 4, 2006, during a visit to the home of Stacy Morgan, a close friend of Lori, GA first alleged that Gursky had improperly touched her. The focus of this appeal is the proper characterization of GA's statements when she first discussed the sexual abuse. Those statements are thus provided here in detail, as relayed by Morgan during her testimony at Gursky's trial. Lori arrived at Morgan's home about 8:00 p.m. after picking her children up from their father's home. Morgan, acting on a suspicion that "something had been going on" with Gursky,[3] asked GA "if anyone had been touching her." GA did not verbally respond, but "got a horrified look on her face," and her eyes welled up. Morgan summoned GA to come closer and talk with Morgan and Lori, which she did and orally responded "What do you mean?" Morgan answered: "Has anyone ever touched your private parts?" GA's eyes welled up again, she started to suck her thumb, and she responded that somebody had. Morgan followed up: "Where have you been touched? Who touched you?" and then listed "people's names, every man's name that could come to mind, the last of which was Jason [Gursky]."[4] At the mention of defendant's name, GA began "bawling, [and] gasping for breath," pointed to her vaginal area, and indicated that defendant had touched her "down there." Morgan continued questioning GA: "How did he touch you? What did he touch you with?" GA responded: "With his finger." Morgan asked: "Did he touch you any other way? Did he touch you with his penis?" And GA responded that he had not. Morgan asked: "Did he ever touch you any other way?" and GA responded that "he kissed me with his tongue." Morgan followed up: "On your mouth?" GA responded: "No, down here" and again pointed to her vaginal area. Morgan noted that GA was "kind of hesitant" so she hugged GA and said to her, "Miss Stacy is your safe person. You know, tell me and I'll make sure it doesn't happen again." She gave GA time to calm down, during which time Lori left the room to call Gursky. Morgan then asked how many times the alleged abuse had happened. GA "kind of looked in the sky" and responded "I think it was four times because the first time was when we lived at Miss Tracy's basement." Later Lori confronted Gursky, who denied touching GA; when Lori brought GA into the room with Gursky, GA again began to cry but did not make any further accusations against Gursky. A few days later, GA wondered aloud to her mother, "what if it was a bad dream?"[5] 584 The following day Lori went to the police and prepared a written statement describing GA's allegations. A detective subsequently asked Gursky to come to the police station, where he questioned Gursky for approximately two hours. Gursky answered all the detective's questions, denied the accusations, and never requested a lawyer. During these interviews, the detective noted that Gursky's fingernails were "jagged." That same day GA was examined by a nurse, which is common when a sexual assault is believed to have happened within the prior 96 hours. GA complained to the nurse of experiencing pain in her vaginal area since "Jason put his finger in my pee-pee." GA told the nurse that defendant had kissed and touched her "where her pee-pee comes out from." During the examination, the nurse noted that GA had an abrasion on her labia minora, which appeared to have occurred within the last 24 to 48 hours, but could have occurred earlier. The nurse later testified that the abrasion was "consistent" with a fingernail scratch, or could have resulted from innocent behavior. Other than the scratch, the nurse found no other trauma to GA. Defendant was charged with four counts of CSC-I. Pursuant to MRE 803A, the prosecution provided notice that it would call Stacy Morgan to testify regarding what GA told her when GA first relayed the details of sexual abuse. MRE 803A provides a hearsay exception to allow the admission of statements by victims of child abuse under the age of 10 that would otherwise be excluded.[6] Before trial, defendant objected to the admission of GA's statements to Morgan on the grounds that they did not fall within the parameters of MRE 803A's hearsay exceptionspecifically, that the statements were not "spontaneous" as required by MRE 803A(2). Defendant argued that "it is clear from the statement of this Stacy Morgan ... that while she's there[,] names are suggested to this child, including [Mr. Gursky's] name ... she is continuously questioned as to what occurred here.... It is not spontaneous by any means." The trial court did not directly rule on this issue or address defendant's arguments regarding the lack of spontaneity. Instead, the court stated that "the reasonableness of the delay [between 585 the alleged incidents and GA's disclosures is] ... really the only issue I can consider." The court then held that the delay was reasonable, and Morgan's testimony thus admissible under MRE 803A. The trial commenced, and GA testified that she had awakened on two separate occasions when defendant had touched her "private" with "his finger" and "tongue."[7] She also testified that she first told this to Morgan and her mother, but could not recall being asked any questions by Morgan. Morgan testified about what GA had originally told her when GA had first disclosed the alleged abuse, the details of which are set forth above. Lori testified about the circumstances regarding GA's first statement of sexual abuse. She further testified about how she had found defendant in GA's bedroom at 3:30 a.m. on the night of the second incident with the bedcovers pulled down and his hands on GA's legs. The nurse also testified about her medical evaluation of GA, including the scrape on GA's labia. In closing argument, the prosecutor argued that if the jury believed GA's testimony, they must convict; she then acknowledged that this testimony was buttressed by Morgan's testimony which "corroborates everything GA said on the stand."[8] Defendant was convicted of all four counts and sentenced to four concurrent terms of 15 to 30 years in prison. On appeal, the Court of Appeals affirmed the admission of Morgan's testimony regarding GA's statements.[9] The panel concluded that although the trial court had abused its discretion by failing to address defendant's objection that GA's out-of-court statements were not spontaneously made, reversal was not required because the error was harmless: either way, the testimony was admissible. The Court of Appeals cited People v. Dunham for the proposition that "answers to open-ended, innocuous questions are spontaneous."[10] The Court reviewed the record and then reasoned as follows: 586 The victim responded emotionally to the first mention of the subject matter, crying and sucking her thumb. She willingly gave details that exceeded the scope of Morgan's inquiry. She pointed to her vaginal area and reported that the touching had occurred "down there," volunteered that the touching was with a finger and a tongue, denied that defendant touched her with his penis, and volunteered that the conduct had occurred over a greater span of time than suspected by Morgan. Taken as a whole, the victim's statements were primarily spontaneous, despite being prompted by Morgan's questions. Thus, the testimony would have been admissible had the trial court considered this objection and, therefore, the court's erroneous legal conclusion had no effect on the outcome of the trial.[11] On the basis of this reasoning and finding the statements to be "primarily spontaneous,"[12] the Court affirmed defendant's conviction. Defendant sought leave to appeal in this Court. We granted his application for leave to appeal and directed the parties to address specifically (1) whether the statements made by the complainant to Stacy Morgan on or about May 4, 2006, were "shown to have been spontaneous and without indication of manufacture" within the meaning of MRE 803A(2), and (2) whether it was more probable than not that any error in this regard was outcome determinative.[13] II. STANDARD OF REVIEW The decision whether to admit evidence is within the trial court's discretion, which will be reversed only where there is an abuse of discretion.[14] However, decisions regarding the admission of evidence frequently involve preliminary questions of law, such as whether a rule of evidence or statute precludes admitting of the evidence. This Court reviews questions of law de novo.[15] Accordingly, "when such preliminary questions of law are at issue, it must be borne in mind that it is an abuse of discretion to admit evidence that is inadmissible as a matter of law."[16] III. ANALYSIS A. THE "SPONTANEITY" REQUIREMENT OF MRE 803A 1. PRINCIPLES OF LAW Hearsay is "a statement, other than the one made by the declarant while testifying at the trial or hearing, offered in evidence to prove the truth of the matter asserted."[17] Hearsay is generally prohibited and may only be admitted at trial if provided for in an exception to the hearsay rule.[18] MRE 803A provides just such an exception for a child's statement regarding sexual assault in certain circumstances. The rule provides: 587 A statement describing an incident that included a sexual act performed with or on the declarant by the defendant or an accomplice is admissible to the extent that it corroborates testimony given by the declarant during the same proceeding, provided: (1) the declarant was under the age of ten when the statement was made; (2) the statement is shown to have been spontaneous and without indication of manufacture; (3) either the declarant made the statement immediately after the incident or any delay is excusable as having been caused by fear or other equally effective circumstance; and (4) the statement is introduced through the testimony of someone other than the declarant. If the declarant made more than one corroborative statement about the incident, only the first is admissible under this rule. A statement may not be admitted under this rule unless the proponent of the statement makes known to the adverse party the intent to offer the statement, and the particulars of the statement, sufficiently in advance of the trial or hearing to provide the adverse party with a fair opportunity to prepare to meet the statement.[19] MRE 803A, which codified the common-law "tender years exception," is also an exception to the prohibition against the use of hearsay testimony to bolster the credibility of a witness.[20] Relevant to this appeal, MRE 803A plainly requires the declarant's original statement to have been "spontaneous." The Michigan Rules of Evidence do not define "spontaneous." As when construing statutes, in the absence of a specific definition of a common term used in an evidentiary rule, it is appropriate to look to the dictionary definition to discern the term's ordinary and generally accepted meaning.[21] "Spontaneous" is defined as: "(1) coming or resulting from natural impulse or tendency; without effort or premeditation; natural and unconstrained; unplanned; (2) of a person: giving to acting on sudden impulse."[22] 588 The standards for spontaneity have been well litigated. The leading case on this issue in Michigan is People v. Dunham, a decision of the Court of Appeals holding that statements made in response to customary, open-ended questions may be considered spontaneous.[23] In Dunham, a child was asked questions by an adult mediator during the child's parents' divorce. The questions were generally innocuous and customarily asked of all children participating in divorce mediation, yet the child in Dunham responded with allegations of sexual abuse. Virtually every Court of Appeals decision (including the panel in this case) has applied Dunham when examining the issue of spontaneity, although the holding has been broadened to stand for the general proposition that statements made in response to questioning may be considered spontaneous.[24] Until this case, this Court has not itself discussed or defined the parameters under which a statement can be spontaneous for the purposes of MRE 803A.[25] Other states' courts and the federal courts have addressed the issue of spontaneity as well; their decisions may be classified into separate groups for our purposes here. The most recognizable spontaneous statements are those that arise out of pure impulsethat is, they are made by the declarant without prompt, plan, or questioning. This type of "impulsive" statement is prototypically spontaneous because it appears to "come out of nowhere" or "out of the blue." For example, in People v. Bowers,[26] the Colorado Supreme Court held that a child's statements were spontaneous where she made unexpected allegations of sexual abuse with no questioning or prompting from the adult. There, a babysitter was changing the child's brother's diaper when the child pointed to her brother's penis and said that her father "`had one just like that but it was bigger and he hurts me with it'" and the child also said to a foster care program coordinator that "`I don't like 589 boneys ... I don't like Daddy to put his boney on me.'"[27] The Court held that the statements were made "spontaneously without prompting or suggesting."[28] Statements that are made as a result of prompt, plan, or questioning by a third party, yet are in some manner atypical, unexpected, or do not logically follow from the prompt are also widely considered spontaneous. This type of "non sequitur" statement is generally considered spontaneous because it shows that the declarant was acting from natural impulses or tendencies by responding atypically to what may otherwise have been innocent prompts. For example, in State v. Aaron L.,[29] the Connecticut Supreme Court held that the victim's statement showed spontaneity and consistency, and was therefore sufficiently reliable to be admissible under Connecticut's residual exception to the hearsay rule. There, the child's statement, "`I'm not going to tell you that I touch daddy's pee-pee,'" did not "logically relate to the event that preceded ither mother admonishing the victim that it was not nice to grope her breast."[30] A third category that poses closer questions involves cases where statements are given as a result of open-ended and nonleading questions that include answers or information outside the scope of the questions themselves. Often, this type of unplanned yet responsive statement may be considered "spontaneous" because the information that results is based on knowledge independent of that provided in the question. For example, in State v. Shafer, the Washington Supreme Court held that where the child "without prompting" told her mother about encounters with the defendant and the child's mother then inquired further, while the child's "statements in response to her mother's questioning were not entirely spontaneous, they were not the result of leading questions or a structured interrogation" and were thus admissible.[31] Similarly, the decision in McCafferty v. Leapley[32] demonstrates how a spontaneous statement may arise out of simple questioning or innocent 590 prompting. There, the child's statements "about how her `daddy' sucked on her neck were given spontaneously in response to a nonleading question about how she got the mark on her neck. Her statements about this were consistent with what she told others and with what she demonstrated on [the adult's] own neck and with [the adult's] playroom dolls.... [It was also the child] who volunteered in play statements such as `this is how she could sit on her daddy's weenie.'"[33] The aforementioned Michigan Court of Appeals decision in Dunham holding that statements resulting from open-ended, nonleading questions may be spontaneousis another prime example of this type of statement. Statements falling within this last category, however, are also the type that are most likely to be nonspontaneous, and thus deserve extra scrutiny by trial courts before they may be admitted. When examining statements that have some of the same characteristics as GA's statements here, many courts have found a lack of spontaneity. The analysis they employed is informative for our purposes here. For example, the New Jersey Supreme Court's decision in State v. D.G. provides a useful comparison.[34] There, the court concluded that there was not a "`probability that the statement [was] trustworthy'" as required by New Jersey's applicable rule, because the "situation under which [the child] disclosed the sexual abuse was very stressful" and the child did not "spontaneously divulge information concerning the assault" to the adult, but rather the adult "interrogated her after finding her performing questionable acts while at play."[35] Interrogation, aggressive or leading questioning, and similar factual scenarios may all work to eliminate the spontaneity of a declarant's statement, which would thus render it inadmissible in the MRE 803A context. 2. APPLICATION Having examined these principles of hearsay and the requirement of "spontaneity" generally, we must determine the parameters of this requirement in Michigan for the purposes of MRE 803A. We hold that MRE 803A generally requires the declarant-victim to initiate the subject of sexual abuse. The question of spontaneity, at its essence, asks whether the statement is the creation of the child or another. There is certainly no doubt that the types of "impulsive" or "non sequitur" statements described above should be considered spontaneous for the purposes of MRE 803A because they result from the declarant's "natural impulse or tendency" or are "unplanned" and made "without effort or premeditation," as a 591 common definition of spontaneity provides. Such statements are quintessentially the "creation" of the child-declarant, and are thus certainly admissible under MRE 803A, assuming they meet the rule's other requirements. This case, on the other hand, requires that we address the closer question: whether prompts from adults render a child's responsive statement inadmissible. This type of statement most often arises in the context of questioning by an adult. We hold that the mere fact that questioning occurred is not incompatible with a ruling that the child produced a spontaneous statement. However, for such statements to be admissible, the child must broach the subject of sexual abuse, and any questioning or prompts from adults must be nonleading or open-ended in order for the statement to be considered the creation of the child. To be clear, we do not hold that any questioning by an adult automatically renders a statement "nonspontaneous" and thus inadmissible under MRE 803A. Open-ended, nonleading questions that do not specifically suggest sexual abuse do not pose a problem with eliciting potentially false claims of sexual abuse.[36] But where the initial questioning focuses on possible sexual abuse, the resultant answers are not spontaneous because they do not arise without external cause. When questioning is involved, trial courts must look specifically at the questions posed in order to determine whether the questioning shaped, prompted, suggested, or otherwise implied the answers. This approach requires that trial courts review the totality of the circumstances surrounding the statement in order to determine the issue of spontaneity. Even though courts should look at the surrounding circumstances and larger context in order to understand whether the statement was spontaneously made, we note that this review is not solely determinative of the question of admissibility. As MRE 803A requires, the statement must be "shown to have been spontaneous and without indication of manufacture."[37] The language of MRE 803A(2) clearly demonstrates that spontaneity is an independent requirement of admissibility rather than one factor that weighs in favor of reliability or admissibility.[38] Thus, even if, considering 592 the totality of the circumstances, the trial court determines that a statement is spontaneous for the purposes of MRE 803A(2), it must nevertheless also conduct the separate analyses necessary to determine whether the statement meets the other independent requirements of MRE 803A. Turning to the facts of this case, we do not conclude that GA's statements were spontaneously given. Morgan directed GA to sit on Lori's lap, whereupon Morgan, Lori, or both questioned GA about sexual abuse. Morgan testified that she specifically broached the subject of sexual abuse on her initiative, questioning and otherwise probing GA for details. According to her trial testimony, Morgan asked GA numerous questions, including whether "anyone had been touching her," "Has anyone ever touched your private places?" "Where have you been touched? Who touched you?" and, after identifying defendant, "How did he touch you? What did he touch you with?" There is simply no indication in this case that GA would have made the statements she made or even broached the subject of sexual abuse if not otherwise prompted and, indeed, directly questioned by Morgan. Moreover, the testimony indicates that GA hesitated for "quite a while" before making the first statement; this tends to suggest that GA did not come forth with her statements on her own initiative, and thus that the statements were not necessarily products of her creation. More troubling, Morgan specifically suggested defendant's name to GA in a list of possible perpetrators. These facts demonstrate that GA's statements were not spontaneously given, nor did they arise out of an otherwise innocent conversation or set of nonleading and open-ended questions. Although there were concededly spontaneous elements in GA's statements, this is insufficient to establish the general kind of spontaneity the rule requires. The Court of Appeals below concluded that "on balance" the statements were "primarily spontaneous" by focusing not on who broached the subject of sexual abuse, but instead on the nature of some of the questions that were open-ended, the degree of voluntariness GA displayed in answering questions and providing details not necessarily evident by the nature of the questions, and the physical reactions that GA exhibited as a result of the questioning. In this sense, the statements had spontaneous elements inasmuch as the answers were "given without premeditation," some answers seemed "unplanned," and some of her responses were "natural" and impulsiveand this is true even if GA's statements were given in response to direct questions. Nevertheless, when considering the questions in their entirety, we cannot conclude that GA's responses were, on the whole, spontaneous. As noted, because spontaneity is an independent requirement under MRE 803A(2)LQ rather than one factor that weighs in favor of reliability and therefore admissibility, an overall sense of reliability or trustworthiness cannot render nonspontaneous statements admissible under MRE 803A. In deciding that GA's statements are inadmissible, we must be clear that we do not expect a parent or other concerned 593 adult not trained in the delicate nature of questioning a child regarding sexual abuse to recognize the danger of influencing a child's responses with the type of questioning used here. Nor do we expect that most parents or adults would treat this situation casually in order to allow the child to come forward with a "spontaneous" statement. Indeed, quite the contrary is likely to be true: it is perfectly natural for a parent or other concerned adult to engage in direct questioning or seek as much information as possible if his suspicions are aroused regarding possible sexual abuse of a child. We merely hold that statements resulting from such questioning cannot meet the narrow grounds for admissibility under MRE 803A. The prohibition on hearsay is the longstanding general rule, and thus exceptions to this prohibition must be appropriately enforced.[39] In sum, we hold that a statement prompted by an adult's question specifically concerning sexual abuse is not spontaneous. This is true even if other indicia of reliability exist, such as an emotional response or details provided by the child that exceed the scope of the adult's inquiry. The Court of Appeals thereby erred by focusing on these other indicia of reliability rather than who broached the subject of sexual abuse, the specific questions asked by the adult during the conversation, and how some of the questioning suggested or implied answers. Viewing GA's statements in light of the totality of the circumstances in this case, these critical factors render her statements nonspontaneous. In future cases, though, we emphasize that a statement made in response to an adult's question or comment that does not concern abuse, or where the child brings up the subject of abuse, may be spontaneous, and for the purposes of MRE 803A may be equally as admissible as if the child had made a statement arising "out of nowhere." B. HARMLESS ERROR ANALYSIS Having determined that the trial court in this case abused its discretion by impermissibly allowing Stacy Morgan to testify regarding GA's out-of-court statements concerning alleged sexual abuse, we must next determine whether this error was sufficiently prejudicial to warrant reversal of defendant's convictions. We hold that it was not. Defendant's claim of error in this case involves preserved, non-constitutional error. The standard we must apply here is governed by statute. MCL 769.26 provides: No judgment or verdict shall be set aside or reversed or a new trial be granted by any court of this state in any criminal case, on the ground of misdirection of the jury, or the improper admission or rejection of evidence, or for error as to any matter of pleading or procedure, unless in the opinion of the court, after an examination of the entire cause, it shall affirmatively appear that the error complained of has resulted in a miscarriage of justice.[40] In making this determination for preserved, non-constitutional error, this Court asks whether, absent the error, it is "more probable than not" that a different outcome would have resulted.[41] The burden 594 is on the defendant to show that the error resulted in a miscarriage of justice.[42] Where the error did not result in a miscarriage of justice and a defendant cannot meet this burden, we have deemed the error "harmless" and thus not meriting reversal of the conviction.[43] Michigan law provides that where a hearsay statement is not offered and argued as substantive proof of guilt, but rather offered merely to corroborate the child's testimony, it is more likely that the error will be harmless.[44] Moreover, the admission of a hearsay statement that is cumulative to in-court testimony by the declarant can be harmless error, particularly when corroborated by other evidence.[45] This Court has cautioned, though, that "the fact that the statement [is] cumulative, standing alone, does not automatically result in a finding of harmless error.... [Instead, the] inquiry into prejudice focuses on the nature of the error and assesses its effect in light of the weight and strength of the untainted evidence."[46] In a trial where the evidence essentially presents a one-on-one credibility contest between the victim and the defendant, hearsay evidence may tip the scales against the defendant, which means that the error is more harmful.[47] This may be even more likely when the hearsay statement was made by a young child, as opposed to an older child or adult.[48] However, if the declarant himself testified at trial, "any likelihood of prejudice was greatly diminished" because "the primary 595 rationale for the exclusion of hearsay is the inability to test the reliability of out-of-court statements[.]"[49] Where the declarant himself testifies and is subject to cross-examination, the hearsay testimony is of less importance and less prejudicial. On the basis of this harmless error framework, we are not convinced that defendant has met the burden of showing that, but for the fact that Morgan testified regarding GA's original statements of abuse, it is more probable than not that a different outcome would have occurred. First, the prosecutor relied on Morgan's testimony only as corroboration for GA's direct testimony, and did not admit the testimony for its substantive value. The prosecutor's opening sentence when discussing Morgan's testimony during closing arguments explicitly indicated the limited purpose for which this testimony was offered: "Stacy Morgan's testimony corroborates everything that [GA] said on the stand last Friday." The prosecutor then proceeded to describe precisely how Morgan's testimony confirmed that GA's statements at trial and when talking to Morgan were the same. In essence, Morgan's statement was used to show that GA had not changed her story in the intervening time. Although Morgan's testimony was undoubtedly important, the record is clear that it simply was never used substantively by the prosecutor.[50] This is consistent with an MRE 803A statement generally, which is only "admissible to the extent that it corroborates testimony given by the declarant during the same proceeding...."[51] Second, Morgan's testimony was cumulative to GA's testimony at trial. 596 GA testified at trial and was subject to cross-examination. GA's testimony at trial was sufficient standing alone to support defendant's conviction of all four CSC charges.[52] Although whether a hearsay statement is cumulative is not dispositive to this analysis under Michigan law, it is an indicator that the error was not highly prejudicial, particularly in the presence of other corroborating evidence. Here, the improperly admitted portions of Morgan's testimony did not introduce any new information to the jury. Instead, Morgan's testimony was merely cumulative to GA's in-court testimony. Defendant contends that this case largely rested on GA's credibility and believability, which Morgan undoubtedly bolstered. However, there was additional corroborating evidence introduced which tends to belie this claim. Perhaps the most damaging of this evidence is Lori's testimony that she walked in to GA's room at 3:30 a.m. and found defendant kneeling at GA's bed, with the bedcovers pushed down, touching GA in the leg area. This testimony corroborates GA's testimony regarding the timing of the alleged crime, namely that defendant had touched and "kissed" her vaginal area that night, and corroborates precisely GA's testimony that her mother entered the room during the sexual assault and then left the room again. The nurse also testified that GA stated during the medical examination that she experienced pain in her vaginal area because "Jason put his finger in my pee-pee" and that defendant had kissed and touched her "where her pee-pee comes out from." This testimony was properly admitted under MRE 803(4), which allows the admission of statements made for purposes of medical treatment.[53] The nurse's testimony also introduced the fact that GA had recently suffered a scratch on her labia minora.[54] Thus, the other properly admitted evidence reveals that this case 597 was not purely a one-on-one credibility contest between the defendant and the victim. Third, to the degree that Morgan's testimony prejudiced defendant when she described how GA reacted during the conversation, the victim's emotional reactions are not hearsay and are perfectly admissible at trial.[55] Morgan testified about the horrified look on GA's face, how her eyes welled up, how she began sucking her thumb, and her crying, bawling, and gasping for breath. Testimony to this effect would be damaging inasmuch as these were GA's inadvertent, non-coerced physical reactions that tended to show the reliability of her statements. More important, though, the testimony about these reactions is admissible as non-hearsay because they are nonassertive conduct.[56] Morgan could properly testify as to GA's nonassertive conduct that she personally observed and about which she has first-hand knowledge. On the basis of this analysis, we hold that although Morgan's testimony was erroneously admitted, the error does not require reversal. Morgan's testimony was cumulative to and corroborated GA's testimony, which was further buttressed by other evidence. On this record, defendant cannot meet his burden of showing that a different outcome would have been the more probable result without Morgan's testimony.[57] IV. CONCLUSION We hold that the child's statements in this case were not "spontaneous" and therefore should not have been admitted under the limited hearsay exception created by MRE 803A. Statements specifically prompted by an adult's question concerning sexual abuse are not spontaneous, even if other indicia of trustworthiness or reliability exist. However, where the child brings up the subject of abuse, the resulting statement may be considered spontaneous, even if later questioning occurs by an adult. For such statements to be admissible, the child must broach the subject of sexual abuse, any questioning or prompts from adults must be nonleading and open-ended, and the statement must be the creation of the child. Although the trial court abused its discretion by admitting hearsay testimony in this case, we nonetheless affirm defendant's convictions because the improper admission was harmless error. Defendant has not been able to show that the error is 598 so prejudicial as to require reversal. Here, the hearsay statements were not used substantively at trial to prove guilt (but rather only to show consistency in the child's testimony), the statement was cumulative to other trial evidence, and there was other corroborating evidence of defendant's guilt. The decision of the Court of Appeals is thus vacated, and defendant's conviction is affirmed on other grounds. WEAVER, CORRIGAN, MARKMAN, and HATHAWAY, JJ., concurred with YOUNG, J. MICHAEL F. CAVANAGH, J., (concurring in part and dissenting in part). I agree with the majority that the testimony at issue in this case did not involve statements that satisfy the "spontaneous" requirement of MRE 803A, and, as a result, the trial court abused its discretion when it allowed the testimony. I disagree, however, that this error was harmless. I think that a full review of the record reveals that this case rested largely on the complainant's credibility, and, as the prosecution stressed in its closing argument, Stacy Morgan's corroborating testimony bolstering GA's credibility was an essential piece of evidence that was critical to the outcome of this case. Therefore, I think that defendant has satisfied his burden under People v. Lukity, 460 Mich. 484, 596 N.W.2d 607 (1999), to show that it is "more probable than not" that a different outcome would have resulted absent Morgan's testimony. Thus, I respectfully dissent from part III(B) of the majority opinion.[1] The majority's harmless-error analysis goes astray in several places. First, the majority glosses over the key details regarding the important facts in this case. Second, the majority gives insufficient weight to this Court's caselaw regarding the importance of improperly admitted hearsay. Finally, I disagree with the majority's attempt to minimize the importance of the hearsay testimony to the prosecution's case. To begin with, the majority ignores several key details regarding the facts that it relies on to argue that there was evidence, other than Morgan's testimony, that corroborated GA's testimony. First, the majority states that "the most damaging of this [corroborative] evidence" was Lori's testimony "that she walked in to GA's room at 3:30 a.m. and found defendant kneeling at GA's bed, with the bedcovers pushed down, touching GA in the leg area." Ante at 596 (emphasis added). The majority mischaracterizes Lori's testimony and overlooks a potentially innocent explanation for the evidence that it finds so damning. A full review of the record indicates that Lori testified that defendant stayed up late playing video games with her son on the night that she saw defendant in GA's room. She also testified that she had told defendant previously that she preferred that GA sleep in her pajamas, but, on that night, she had put GA to bed in her street clothes because GA had fallen asleep in the living room. When Lori confronted defendant about what he was doing in GA's room, he explained that he had changed GA into her pajamas. Further, while the majority states that Lori saw defendant "touching GA in the leg area," the record indicates that what Lori actually testified is that she saw defendant's hand "between [GA's] knee and 599 feet," which has much less sinister implications. In light of these details, the corroborative nature of this particular evidence is substantially weakened, along with the majority's harmless-error conclusion. Second, the majority also ignores several important details surrounding the nurse's and investigating detective's testimony. As the majority notes, the nurse testified that GA had a scratch on her labia minora, and the investigating detective testified that defendant's fingernails were jagged or sharp when he interviewed defendant. Although the majority acknowledges that the nurse testified that the scratch likely occurred in the 24 to 48 hours preceding her examination of GA, it fails to mention that the exam occurred five days after defendant allegedly sexually abused GA. Nor does the majority consider that the nurse testified that the scratch could have resulted from totally innocent behavior, such as a child playing. Furthermore, the nurse's testimony regarding GA's description of what had happened to her corroborates at most one instance of sexual abuse. It does not corroborate the testimony related to the other accusation of sexual abuse against defendant. Again, when this particular evidence is considered in context, its corroborative nature is substantially weakened, and the majority's harmless-error conclusion is further eroded. The majority also gives insufficient weight to this Court's caselaw when it concludes that the prejudicial nature of the error was limited because GA testified at trial and was subject to cross-examination, making Morgan's testimony merely corroborative and cumulative. In making these generalizations, the majority pays lip service to this Court's warnings that "the fact that the statement was cumulative, standing alone, does not automatically result in a finding of harmless error," People v. Smith, 456 Mich. 543, 554, 581 N.W.2d 654 (1998), and that hearsay evidence may tip the scales against a defendant when a case presents a credibility contest, especially when the declarant is a young child. People v. Straight, 430 Mich. 418, 427-428, 424 N.W.2d 257 (1988); Smith, 456 Mich. at 555 n. 5, 581 N.W.2d 654. Unfortunately, however, the majority largely fails to heed those warnings in reaching its conclusion. To start with, the utility of cross-examining a seven-year-old girl is debatable. In order to avoid the appearance of bullying a child before the jury, "no defense lawyer will subject a small child to an unnecessarily traumatic courtroom experience," even at the expense of leaving a possible error in the testimony undiscovered. Christiansen, The testimony of child witnesses: Fact, fantasy, and the influence of pretrial interviews, 62 Wash L. R. 705, 719 (1987). Further, a child "will adopt false memory as truth and be unable to distinguish the source of what she recalls. The sources of her knowledge are obscured and the possibility of falsehood hidden behind her sincere belief in the truth of her memory." Id. This concern is reflected in MRE 803A's limitations on the admissibility of hearsay statements made by children, which require that a child's statements be made as soon as practicable after the incident and that the statements be spontaneous and without indication of manufacture. Therefore, given that Morgan's suggestive questioning occurred before GA testified at trial, cross-examination may have been useless in this case. As a result, the jury may have been "presented with an unshakably false basis for assessing the weight of her testimony," and defendant's felony convictions may have been based on inaccurate information that was impossible to test. Id. at 719-720. Also, the majority's reliance on MCL 750.520h to argue that the prosecution in 600 this case did not need to corroborate GA's testimony is misplaced. The credibility of GA's testimony was a critical issue because there was little physical evidence in this case. Indeed, as the majority notes, GA's testimony was the only basis for defendant's conviction for one of the alleged incidences of abuse. Presumably, the only support for the jury's finding was its belief that GA was credible, which was unfairly bolstered by the inadmissible hearsay. Therefore, as the majority acknowledges, the prosecution did not need to corroborate GA's testimony only if we are willing to "assum[e] ... that the jury found her credible." Ante at 596 n. 52 (emphasis added). The fact that GA's credibility was the key issue is precisely why the error was not harmless: Morgan's erroneously admitted hearsay testimony strongly bolstered GA's credibility. Thus, as the majority admits, we are left to assume that even without Morgan's testimony the jury would have found GA credible. This case simply presents too many unknowns to base multiple serious criminal convictions on a bare assumption. Furthermore, there are several problems with the majority's reference to GA's credibility. First, it inaccurately states that GA's statements were "consistent over time." This ignores that several days after Morgan's conversation with her, GA made a seemingly inconsistent statement when she asked Lori, "Mommy, what if it was a bad dream?" Second, the majority's statement that it is not commenting on GA's credibility is incorrect and irrelevant. The majority does comment on the credibility of GA's testimony when it notes that GA's statement "remained consistent over time." Ante at 596 n. 52. Because the majority must rely on GA's admittedly inadmissible statement to Morgan to label her statements "consistent," the majority only compounds the harm and proves that Morgan's testimony was critical to the prosecution's case. Third, the majority's commentary on the credibility of GA's statements is irrelevant. The question is not whether this Court finds GA credible but whether the inadmissible hearsay unfairly influenced the jury's ability to determine GA's credibility. Because it is more probable than not that the hearsay influenced the jury and affected the trial's outcome, the error was not harmless. Contrary to the majority's claim, I do not discredit GA's testimony "in toto." Rather, I merely note that children, by no fault of their own, are highly susceptible to influence. On the basis of this widely accepted observation, which the majority accepts, I conclude that the jury's ability to determine whether it found GA's testimony credible was unfairly influenced by Morgan's inadmissible testimony to the point that the error was not harmless. Finally, the majority's attempt to minimize the importance of Morgan's hearsay testimony to the prosecution's case is also misleading. Ante at 595 n. 50. Simply because the prosecution listed Morgan's testimony as the "fifth reason" supporting conviction in her closing argument is not evidence that the testimony was not important. The order in which the prosecution presented the supporting evidence in her closing argument is not an indication of the weight that the prosecution or, more importantly, the jury gave the evidence. And, even if the order of presentation did somehow relate to the testimony's importance, it should be noted that in the first paragraphs of its closing argument, the prosecution stressed that GA's believability was key to the case. Furthermore, the first sentence of the prosecution's discussion of Morgan's testimony during closing argument stressed that Morgan's testimony "corroborated everything that [GA] 601 said on the stand. . . ." Similarly, it is irrelevant that "the prosecutor's discussion of Morgan's testimony accounts for less than 2½ transcript pages," given that this is no indication of the weight that the jury gave Morgan's testimony. Indeed, in People v. Snyder, 462 Mich. 38, 609 N.W.2d 831 (2000), we remanded for a new trial under the Lukity standard because of an erroneous evidentiary ruling by the trial court that affected the complainant's credibility. We reasoned that, much like this case, "the prosecution's case rested almost entirely on the testimony of the complainant," and the "prosecutor took advantage of the circuit court's erroneous ruling during her closing argument." Id. at 44, 45, 609 N.W.2d 831. In summary, defendant's convictions largely rested on GA's credibility, and, as the prosecution stressed, Morgan's corroborating testimony bolstering her credibility was an essential piece of evidence in this case.[2] Furthermore, much of the admissible "corroborating" evidence cited by the majority is less convincing when viewed in context, and the majority's conclusion that this case was not merely a credibility contest is called into question. Finally, as the majority acknowledges, this Court has held that hearsay evidence is more harmful in credibility contests, particularly when the declarant is a young child. Accordingly, I do not agree with the majority that the trial court's abuse of discretion was harmless error, and I would remand for a new trial. MARILYN J. KELLY, C.J., concurred with MICHAEL F. CAVANAGH, J. NOTES [1] MCL 750.520b(1)(a) ("A person is guilty of criminal sexual conduct in the first degree if he or she engages in sexual penetration with another person and if ... [t]hat other person is under 13 years of age."). [2] I refer to the complainant by her initials and her mother simply as "Lori" in order to protect their identities. [3] Earlier in the day Morgan and Lori had a private conversation wherein Lori mentioned "a situation that had happened prior" involving defendant and GA. Apparently this is what stirred Morgan to ask GA if anyone had been touching her. [4] Morgan was also asked if there were different reactions by GA when the names of the men were mentioned; she answered: "Each one, she just told me no, no, no, and as soon as Jason's name was mentioned, she welled up and said he did it." [5] Lori's testimony concerning the circumstances surrounding GA's statement was largely consistent with that of Stacy Morgan. Lori testified that she believed something was wrong before she and GA arrived at Morgan's house because GA was acting "a little different." Once Lori and her children arrived at Morgan's house, the children were running around, but "Stacy wanted me to have [GA] sit on my lap and ask her some questions, and I did, I asked [GA] some questions, and that's when I learned of." Counsel did not allow her to finish, but asked what GA's reaction was after the first question. Lori testified that GA started to cry, noting that GA hesitated for "quite a while" before she began to talk, and that she had a four to five minute conversation with GA. She stated that Morgan was present but she did not say whether Morgan asked any of the questions. When asked whom she first told about the abuse, GA testified, "[m]y mom." When the prosecutor asked whether anyone else was there, GA said "Her friend," "Miss Stacy." When asked "Do you remember how it came about that you told them?" GA responded that she did not. When asked whether she told "both of them or just one of them," GA testified, "Both." [6] Michigan Rule of Evidence 803A, which is a hearsay exception for a child's statement about sexual assault, provides in relevant part: A statement describing an incident that included a sexual act performed with or on the declarant by the defendant or an accomplice is admissible to the extent that it corroborates testimony given by the declarant during the same proceeding, provided: (1) the declarant was under the age of ten when the statement was made; (2) the statement is shown to have been spontaneous and without indication of manufacture; (3) either the declarant made the statement immediately after the incident or any delay is excusable as having been caused by fear or other equally effective circumstance; and (4) the statement is introduced through the testimony of someone other than the declarant. [MRE 803A (emphasis added).] [7] The facts of the actual sexual assaults, as described at trial, are as follows: The first and second contacts occurred on a night around August or September of 2005. GA was wearing pajamas and underwear in her bed. During the night, Gursky appeared in her bedroom, reached underneath her clothing, and touched her vaginal area with his finger and tongue. The third and fourth incidents occurred on one night at the end of April 2006. That night, GA had fallen asleep on the couch, so Lori put her to bed in her street clothes in the bedroom that GA shared with her brother, and Lori then went to bed herself. Lori woke up around 3:30 a.m. and noticed that her door had been closed; she walked out of her room and noticed that no one was in the living room where the TV was on, but she also saw that the door to the children's bedroom was slightly open. She opened the door and noticed Gursky kneeling by the middle of GA's bed, where the covers had been pushed to the end of the bed. GA was lying on her back and Gursky had his hand between her knee and feet. Lori asked Gursky what he was doing, and he replied that he was tucking in the children. Lori stood there a while longer, then left; a few minutes later she returned to the children's bedroom and noticed that GA had been changed into her nightgown. She then confronted Gursky: "Jason, what were you doing in there?" He repeated his prior answer: that he had changed GA into her nightgown. Lori stated that it left her feeling uneasy, so Gursky apologized and said it wouldn't happen again. [8] The trial court also denied a directed verdict at the close of the prosecution's case, noting that GA "has been absolutely consistent with her version of events from the first time she disclosed it through ... her testimony in court." [9] People v. Gursky, unpublished opinion per curiam of the Court of Appeals, issued July 17, 2008 (Docket No. 274945), 2008 WL 2780282. [10] 220 Mich.App. 268, 271-272, 559 N.W.2d 360 (1996). [11] Gursky, unpub. op. at 3 (emphasis added). [12] Id. [13] People v. Gursky, 483 Mich. 999, 764 N.W.2d 570 (2009). [14] People v. Starr, 457 Mich. 490, 494, 577 N.W.2d 673 (1998). [15] People v. Sierb, 456 Mich. 519, 522, 581 N.W.2d 219 (1998). [16] People v. Lukity, 460 Mich. 484, 488, 596 N.W.2d 607 (1999). [17] MRE 801(c). [18] MRE 802 ("Hearsay is not admissible except as provided by these rules."). [19] MRE 803A (emphasis added). [20] This Court first recognized the common-law tender years rule in People v. Gage, 62 Mich. 271, 28 N.W. 835 (1886), as a permissible rule to allow hearsay in order to corroborate the testimony of a child complainant. "The rule in this State is that where the victim is of tender years the testimony of the details of her complaint may be introduced in corroboration of her evidence, if her statement is shown to have been spontaneous and without indication of manufacture; and delay in making the complaint is excusable so far as it is caused by fear or other equally effective circumstance." People v. Baker, 251 Mich. 322, 326, 232 N.W. 381 (1930) (holding also that only a child's first statement made is admissible under the exception). However, this Court held in People v. Kreiner, 415 Mich. 372, 377-378, 329 N.W.2d 716 (1982), that the common-law tender years exception to hearsay did not survive the adoption of the Michigan Rules of Evidence in 1978. In its stead, MRE 803A was adopted on December 17, 1990, and became effective on March 1, 1991. [21] See Waknin v. Chamberlain, 467 Mich. 329, 332, 653 N.W.2d 176 (2002) (providing that this Court construes a rule of evidence in the same manner as a court rule or statute); In re Certified Question from the United States Court of Appeals for the Sixth Circuit, 468 Mich. 109, 113, 659 N.W.2d 597 (2003), citing People v. Morey, 461 Mich. 325, 330, 603 N.W.2d 250 (1999) (providing that this Court may refer to dictionary definitions in the absence of an explicit definition in the text being interpreted). [22] Webster's New Universal Unabridged Dictionary (1996). [23] 220 Mich.App. 268, 559 N.W.2d 360 (1997). [24] See, e.g., Gursky, unpub. op. at 3 ("In People v. Dunham, 220 Mich.App. 268, 271-272, 559 N.W.2d 360 [1996], this Court declared that answers to open-ended, innocuous questions are spontaneous."). [25] In 2008, this Court peremptorily reversed a decision of the Court of Appeals "for the reasons stated in the Court of Appeals dissenting opinion...." People v. George, 481 Mich. 867, 748 N.W.2d 568 (2008), reversing and remanding People v. George, unpublished opinion per curiam of the Court of Appeals, issued November 20, 2007 (Docket No. 271892), 2007 WL 4125372. In George, the Court of Appeals affirmed the defendant's conviction in a split decision, with Judge GLEICHER dissenting from the portion of the majority opinion holding that the hearsay evidence provided by the victim's mother and sister was properly admitted under MRE 803A. The dissent argued that the trial court ignored evidence that the victim's hearsay statement was not the first one made to another person (as MRE 803A requires), that the statement was not spontaneous, and that the defendant was prejudiced by this error. Regarding spontaneity, Judge GLEICHER wrote: Additionally, the evidence did not support a finding that the victim spontaneously made her statement to [the victim's sister,] Marquayla. Both Marquayla and the mother testified that the victim's report to Marquayla was not spontaneous, but was made in response to questioning. Marquayla's testimony reflects that the questioning included threats about "lying" and "getting into trouble." The victim did not supply any other information regarding the circumstances of the statement she claimed to have made to Marquayla. The absence of a showing of spontaneity reinforces the need, in this case, for a pretrial determination as to the admissibility of the hearsay evidence pursuant to MRE 104. [George, unpub. op. at 4 (GLEICHER, J., dissenting).] [26] 801 P.2d 511 (Colo., 1990). [27] Id. at 514-515. [28] Id. at 521. See also State v. Robinson, 153 Ariz. 191, 201, 735 P.2d 801 (1987) (the absence of leading questions was an important factor supporting the admission of a child's statement after the child made statements implicating the defendant while at breakfast with her mother without being asked any questions; the statement was thus spontaneous and fully explained with "little prompting"); In re Ne-kia S., 566 A.2d 392, 395 (R.I., 1989) (child responded to an adult's presence in his house by retrieving a stick and asking the adult to take it so the child's mother would no longer hit the child with it; the child later told the adult that his mother hit him on a daily basis and the adult testified that this was the "first thing Ne-kia told him. There was no reflection or deliberation involved."). [29] 272 Conn. 798, 865 A.2d 1135 (2005). [30] Id. at 816, 865 A.2d 1135. See also Swan v. Peterson, 6 F.3d 1373, 1377, 1381 (C.A.9, 1993) (where a child's day-care provider told the child to put her dress down because "no one should look at or touch her `private parts,'" the child replied "`Un-huh, Mommy and Daddy do'" and proceeded to make a detailed allegation of abuse, the court held that there was sufficient spontaneity because "[a]lthough [the child's] statement did not come out of the blue, it was not made in response to any question posed by [the caregiver]"). [31] 156 Wash.2d 381, 390, 128 P.3d 87 (2006). See also State v. Young, 62 Wash.App. 895, 901, 802 P.2d 829 (1991) ("Washington law... recognizes that a child's answers are spontaneous so long as the questions are not leading or suggestive.... [And caselaw had] broadened the definition of `spontaneous' to include `the entire context in which the child [made] the statement.'"). [32] 944 F.2d 445 (C.A.8, 1991). [33] Id. at 451. [34] 157 N.J. 112, 723 A.2d 588 (1999). [35] Id. at 122, 126-127, 723 A.2d 588 (holding that the child's statement regarding sexual abuse was not sufficiently trustworthy when made in direct response to the question "`[d]id anybody ever do anything like this to you to make you do this?'" after the child was found sexually touching her sister). See also Felix v. State, 109 Nev. 151, 167-168, 184, 849 P.2d 220 (1993) (adult could not remember whether child's statement "Martha hurt me here" while pointing to her vaginawas spontaneously made, and a second statement which came after "coercive questioning" could not be deemed reliable because answers provided by children after being questioned in a group were not spontaneous given that "there is no way to determine the extent to which the prior coercive questioning actually affected the statement."); United States v. Sumner, 204 F.3d 1182, 1186 (C.A.8, 2000) (the child's statements were not spontaneous where the child responded to questions by merely answering "yes/no" or pointing). [36] This approach is consistent with the Court of Appeals' original decision in Dunham, although not necessarily so with later panels of the Court of Appeals. For example, the Court of Appeals panel in the instant case applied Dunham in a broader context and unmoored from the factual situation of the original decision. In other instances, the Court of Appeals has applied this principle in a manner consistent with our decision today. By way of example, we note approvingly the analysis in People v. Leatherman, unpublished opinion per curiam of the Court of Appeals, issued June 30, 2005 (Docket No. 252679) at 8-9, 2005 WL 1540479. There, the Court of Appeals properly assessed how this rule applies in close cases: Dona[, the victim's mother,] admitted asking the victim a few questions after the victim initially told her that "Uncle Brad touched me down there," gestured toward her private area, and said that defendant did other stuff, too. Dona then asked what other stuff defendant did and when the victim stated that defendant had a "vibrating handlebar machine," Dona asked what he did with it. Dona also asked the victim if defendant said anything to her. The questions were not so specific and leading [as] to taint the spontaneity of the victim's statements. Dona's questions were fairly general given the context of the victim's statements. [37] MRE 803A(2) (emphasis added). [38] This is contrary to similar rules in other states where spontaneity is but one factor taken into account in determining whether a statement is sufficiently reliable and thus admissible. See, e.g., Ohio Evid. R. 807(A)(1) (providing that an out-of-court statement made by a child alleging sexual or physical violence against the child will not be excluded as hearsay if the "court finds that the totality of the circumstances surrounding the making of the statement provides particularized guarantees of trustworthiness" that render the statement reliable, "including but not limited to spontaneity...."). However, unlike our sister-state's rule, MRE 803A contains no "factor among many" language that permits the admission of a child's statement simply upon a showing of reliability even if it was not spontaneously made. [39] This Court will assess in its administrative rules process whether the language of the current rule should be amended. [40] MCL 769.26 (emphasis added); see also Lukity, 460 Mich. at 494-495, 596 N.W.2d 607. [41] See Lukity, 460 Mich. at 495, 596 N.W.2d 607 ("[T]he effect of the error is evaluated by assessing it in the context of the untainted evidence to determine whether it is more probable than not that a different outcome would have resulted without the error."). [42] Id. at 493-494, 596 N.W.2d 607. [43] See, e.g., id. at 491-493, 596 N.W.2d 607; People v. Mateo, 453 Mich. 203, 212-215, 551 N.W.2d 891 (1996). [44] People v. Straight, 430 Mich. 418, 426-428, 424 N.W.2d 257 (1988). [45] See, e.g., Solomon v. Shuell, 435 Mich. 104, 146-149, 457 N.W.2d 669 (1990) (BOYLE, J., concurring) (citing federal and published Court of Appeals decisions standing for the proposition that "improperly admitted hearsay evidence constitutes harmless error when it is merely cumulative of other properly admitted evidence"); People v. Hill, 257 Mich.App. 126, 140, 667 N.W.2d 78 (2003) ("An erroneous admission of hearsay evidence can be rendered harmless error where corroborated by other competent testimony.... [Here, the admission of improper hearsay] was merely cumulative and did not place any relevant and damaging information before the jury that the jury did not know already. Therefore, there was not a reasonable probability that, but for counsel's error, the result of the proceeding would have been different."). [46] People v. Smith, 456 Mich. 543, 555, 581 N.W.2d 654 (1998) (quotation marks and citations omitted). The Supreme Court of the United States has elaborated on factors relevant to making this determination: [W]hether ... the error was harmless beyond a reasonable doubt ... in a particular case depends upon a host of factors, all readily accessible to reviewing courts. These factors include the importance of the witness' testimony in the prosecution's case, whether the testimony was cumulative, the presence or absence of evidence corroborating or contradicting the testimony of the witness on material points, ... and, of course, the overall strength of the prosecution's case. [Delaware v. Van Arsdall, 475 U.S. 673, 684, 106 S.Ct. 1431, 89 L.Ed.2d 674 (1986).] [47] Straight, 430 Mich. at 427-428, 424 N.W.2d 257. [48] See Smith, 456 Mich. at 555 n. 5, 581 N.W.2d 654 (distinguishing Straight from the facts of Smith because "it involved the testimony of a five-year-old complainant, while the present case involves the testimony of a sixteen-year-old complainant whom the defense had full opportunity to cross-examine"). [49] Solomon, 435 Mich. at 148, 457 N.W.2d 669 (BOYLE, J., concurring), citing Swartz v. Dow Chem., 414 Mich. 433, 442, 326 N.W.2d 804 (1982). [50] By way of example, the facts of this case stand in stark contrast to those of People v. Straight. In Straight, this Court stated as follows: The hearsay testimony of the parents was not offered merely to corroborate the child's testimony, but rather was offered and argued for its substantive worth as the prosecution's closing argument clearly reveals: "And ladies and gentlemen, I would suggest to you that that was what was happening on that night in question that the statements made by [the child] at the hospital can be considered by you and even if she hasn't said on the stand what happened as she did yesterday, she just clammed up and said, `I don't remember,' or, `I don't want to say anything,' you can still find that the defendant is guilty merely from the testimony that the mother gave as to the information given to her and to the father as to what she said in the hospital." These comments establish that the parents' testimony was presented to the jury without limitation as substantive proof of defendant's guilt. [Straight, 430 Mich. at 426-427, 424 N.W.2d 257 (emphasis added).] Moreover, reviewing the entire record, we do not agree with defendant's characterization of Morgan's testimony as outcome-determinative in the trial. In support, defendant argues that the prosecutor devoted pages of the record to discussing Morgan's testimony. While true that the prosecutor discussed Morgan's testimony in her closing statement, it was the prosecutor's "fifth reason" for conviction out of seven reasons total. Moreover, the prosecutor's discussion of Morgan's testimony accounts for less than 2½ transcript pages, which likely amounted to no more than a few minutes time during the prosecutor's closing statement. Despite defendant's characterization to the contrary, we do not believe that this represents the type of overwhelming reliance that would lead to the conclusion that Morgan's testimony was highly prejudicial. [51] MRE 803A. This has always been the standard in Michigan, even under the prior common-law "tender years" version of the rule. See Baker, 251 Mich. at 326, 232 N.W. 381 ("[W]here the victim is of tender years the testimony of the details of her complaint may be introduced in corroboration of her evidence... ."). [52] MCL 750.520h provides that "[t]he testimony of a victim need not be corroborated in prosecutions under sections [MCL 750.]520b to [MCL 750.]520g." Defendant was charged of four counts of first-degree criminal sexual conduct, MCL 750.520b(1)(a), and thus GA's testimony did not need to be corroborated in order for the jury to convict defendant, assuming of course that the jury found her credible. And it appears that the jury did find GA credible in this case. For example, GA's testimony was the only direct evidence supporting the allegation that defendant had sexually assaulted her on the first occasion, yet the jury returned verdicts of guilty on those charges. Contrary to the dissent's implication, our assertion that the jury must find the victim credible if the victim's testimony is the only evidence of a crime in this type of case is merely a statement of obvious fact, not commentary on GA's credibility in this case. Moreover, we reject the dissent's citation of a single law review article in an attempt to discredit GA's testimony in toto. Post at 599-600. While there are admittedly unique difficulties in questioning children, we certainly find no support in the dissent's sweeping proclamation that cross-examination of GA was possibly "useless" in this case. As discussed earlier, even though GA's statements were not "spontaneous," there are many other indicia of reliability with regard to her statement, which remained consistent over time. [53] MRE 803(4) provides for admission of [s]tatements made for purposes of medical treatment or medical diagnosis in connection with 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 necessary to such diagnosis and treatment. [54] Although the nurse testified that the scratch had likely occurred within the last 24 to 48 hours, she also testified that it could have occurred earlier, encompassing a period that corresponds to GA's account of when defendant assaulted her. The police officer who interviewed defendant testified that he noted that defendant's fingernails were "jagged or sharp, uneven." [55] See MRE 801(c), which defines "hearsay" as a "statement"; a "statement" is then defined in MRE 801(a) as "(1) an oral or written assertion or (2) nonverbal conduct of a person, if it is intended by the person as an assertion." (Emphasis added). Thus, physical conduct or reactions are not hearsay as long as the conduct or reactions are not intended as assertions. [56] This conduct can be contrasted with actual assertive conduct by GA, which would not be admissible. For example, when Morgan asked GA if Gursky had "kissed" her with his tongue on her mouth, GA replied "No, down here" and pointed to her vaginal area. GA's act of pointing would be assertive conduct designated as hearsay by MRE 801(a) and (c), and would not admissible in this case given the foregoing analysis. [57] For these reasons, we similarly reject the dissent's contention that the error here was so harmful as to require a new trial. While the dissent criticizes a few of this opinion's characterizations or the weight this opinion gives to certain evidence, it fails to demonstrate how defendant has met his burden. Both defendant and the dissent call into question the credibility of certain evidence when viewed singularly, but when taken as a whole, the properly admitted evidence is sufficient to sustain defendant's conviction to the extent that we cannot say that it is more probable than not that a different outcome would have resulted. [1] Although I remain committed to my Lukity dissent, 460 Mich. at 504-510, 596 N.W.2d 607 (CAVANAGH, J., dissenting), because I think that defendant is entitled to a new trial even under the higher burden created by the majority in Lukity, I will apply that standard here. [2] Indeed, the trial court based its decision to deny defendant's motion for a directed verdict on its belief that "[t]he complainant . . . has been absolutely consistent with her version of events from the first time she disclosed it [to Morgan] through . . . her testimony in court."	{ "pile_set_name": "FreeLaw" }
Fourth Court of Appeals San Antonio, Texas JUDGMENT No. 04-13-00069-CV TARRANT COUNTY DEMOCRATIC PARTY; Steve Maxwell, In His Official Capacity as Chair of the Tarrant County Democratic Party; Texas Democratic Party; and Gilberto Hinojosa, In His Official Capacity as Chair of the Texas Democratic Party; Appellants v. John STEEN, 1 in his official capacity as Secretary of State of Texas, Appellee From the 345th Judicial District Court, Travis County, Texas Trial Court No. D-1-GN-09-00172 The Honorable Amy Clark-Meachum, Judge Presiding BEFORE CHIEF JUSTICE STONE, JUSTICE ALVAREZ, AND JUSTICE CHAPA In accordance with this court’s opinion of this date, we REVERSE the portion of the trial court’s judgment that denies Appellants Tarrant County Democratic Party and Texas Democratic Party their attorney’s fees incurred in the Brimer suit. We RENDER JUDGMENT awarding attorney’s fees of $15,953.91 to Tarrant County Democratic Party and $10,632.57 to Texas Democratic Party as reimbursement for their Brimer suit attorney’s fees, and award each postjudgment interest accruing from the date of the trial court’s final judgment at the statutory rate until paid in full. See TEX. FIN. CODE ANN. §§ 304.003, .005 (West 2006); Phillips v. Bramlett, 407 S.W.3d 229, 239 (Tex. 2013). We AFFIRM the portion of the trial court’s judgment that denies Appellants’ claims for attorney’s fees in the instant suit. We tax costs of this appeal against Appellee John Steen, or his successor, in his official capacity as Secretary of State of Texas. 1 Nandita Berry was sworn in as Texas Secretary of State on January 7, 2014. 04-13-00069-CV SIGNED February 19, 2014. _____________________________ Patricia O. Alvarez, Justice -2-	{ "pile_set_name": "FreeLaw" }
397 A.2d 171 (1979) STATE of Maine v. Thomas MORTON. Supreme Judicial Court of Maine. January 29, 1979. 173 Michael D. Seitzinger (orally), Asst. Atty. Gen., Charles K. Leadbetter, John Atwood, Vernon Arey, Asst. Attys. Gen., Augusta, for plaintiff. Sanborn, Moreshead, Schade & Dawson by Gordon H. Smith (orally), Augusta, for defendant. Before McKUSICK, C. J., and WERNICK, ARCHIBALD, DELAHANTY and GODFREY, JJ. McKUSICK, Chief Justice. Following a jury trial in Somerset County, to which venue was transferred by consent of the parties pursuant to Rule 21(b), 174 M.R.Crim.P., defendant Thomas Morton was convicted of two counts of felonious homicide, 17 M.R.S.A. § 2651 (repealed P.L. 1975, c. 499, § 15), for the murders of Florence and Joaquin Bettencourt.[1] On appeal, defendant raises numerous claims of error. We deny the appeal. Around 8:30 p. m. on December 9, 1973, a power failure in Liberty, Maine, left both the home of Florence and Joaquin Betten-court and Mr. Bettencourt's nearby used clothing store without electric light. Mr. Bettencourt closed his store around 8:45 p. m., a bit earlier than usual, and returned home. Sometime between 8:30 and 9:00 p. m. one of the Bettencourts' neighbors heard gunshots. Four days later a Waldo County Deputy Sheriff discovered the bodies of the Bettencourts on the premises of their residence. Mr. Bettencourt had been shot in the chest with shotgun pellets and in the forehead by a .22 caliber bullet. Mrs. Bettencourt suffered gunshot wounds from two different weapons, one of which appeared to be some kind of an automatic pistol. The Bettencourt home had been ransacked and the telephone wires cut. No money was found on the persons of either of the Bettencourts. Spattered candle wax drippings were found throughout the house. Five days after the discovery of the murders police seized a tan Oldsmobile driven by defendant. A search of the car revealed wax drippings similar to those found in the Bettencourt home. Within one week of the vehicle search, defendant left the State of Maine for Florida. I. Sufficiency of the Evidence Defendant contends that the evidence adduced by the State fails to support the jury's verdict. We disagree. The jury had before it testimony of Morton's extra judicial admission of participation in the murders, and the rest of the evidence, though circumstantial, was convincing and substantial. Of critical importance was the testimony of prosecution witness Harold Smith. He testified that in mid-November of 1973, about three weeks prior to the Bettencourt murders, defendant, along with three other accomplices including Smith himself, met to discuss and plan a robbery. One of the accomplices said he knew of an old man, Joaquin Bettencourt, who ran a used clothing store and usually carried large sums of money on his person. Noting that the store owner often carried a gun, the accomplice commented that it might prove necessary to kill him if he offered any resistance. No objection was voiced to the plan, and the four conspirators agreed to rob Bettencourt as he returned home from his store that evening. They drove to the Bettencourt residence and arrived at 9:00 p. m. It was agreed that Smith would cut the telephone wires running to the Bettencourt home. Before he could finish that task, however Smith was observed, and the conspirators abandoned the robbery attempt. Smith testified that while the conspirators fled from the scene in a tan Oldsmobile driven by defendant, Morton commented that it would be "at least a month before the heat died down."[2] The jury was apprised of numerous similarities between the November attempted robbery testified to by Smith and the December murders. First, both incidents occurred on a weekend, in the vicinity of 9:00 p. m., the store's customary closing time. Significantly, prosecution witness Regina Jackson testified that on December 9, 1973, the night of the murders, she overheard one of Morton's companions say to him: "We've got to get going because we've got to be there by nine." Second, similar weapons were used on both occasions. Smith testified 175 that Morton carried a twelve gauge shotgun during the attempted robbery of mid-November and that one of his accomplices was armed with a .22 caliber revolver and another with an automatic pistol. Ammunition recovered by a pathologist who conducted the autopsies of the Bettencourts included shotgun pellets, a .22 caliber bullet, and ammunition that could have been fired by an automatic pistol. Third, an attempt was made to cut the phone wires during the November incident; the wires were found cut when the December murders were discovered. Given the obvious similarity between the modus operandi of the two crimes and defendant's November statement that it would be "at least a month before the heat died down," the jurors were entitled to infer that Morton, having participated in one unsuccessful robbery attempt, returned to the Bettencourt home for a second attempt during which the murders occurred. The presence in defendant's car[3] of wax drippings chemically consistent with the drippings found in the Bettencourt home after the murders added circumstantial evidence of defendant's guilt. Finally, and most importantly, Morton's erstwhile girlfriend, Judith Harvey, testified that Morton told her he had been involved in the Bettencourt murders and said that he had "plugged" Mrs. Bettencourt "full of holes" because he was afraid that if he allowed her to live she might have been able to identify him. The trial testimony of co-conspirator Smith and girlfriend Harvey, the incriminating wax drippings, and defendant's departure from the State of Maine shortly after his car was seized and searched afforded the jury ample grounds for finding defendant guilty of the Bettencourt murders beyond any reasonable doubt. II. Search of the Tan Oldsmobile Defendant does not dispute the fact that at about 4:00 p. m. on December 18, 1973, the Maine State Police received information giving them probable cause to believe that a tan Oldsmobile, registered to one Marlene Roderick of Waterville, Maine, had been used in the commission of the Bettencourt murders. Waterville police placed the vehicle, then located in the Roderick driveway, under police surveillance. Simultaneously, the State Police commenced preparation of an affidavit for a search warrant. Before a warrant could be issued and executed, however, Waterville police noted that the car was being moved. The vehicle was stopped by Waterville police officers on a public highway around 10:00 p. m. The driver turned out to be the defendant, Thomas Morton. The vehicle was then towed by Arbo's Wrecker Service to Arbo's Garage on Grove Street in Waterville. Officers from the Maine State Police laboratory traveling from Augusta arrived in Waterville at Arbo's Garage sometime between 11:30 and 11:45 p. m. They conducted a search of the car and discovered traces of wax drippings, later determined to be similar to drippings found in the Bettencourt home. Morton contends that the police conducted an unconstitutional warrantless search and that consequently all evidence stemming from the search of the vehicle ought to have been suppressed. After a pretrial hearing, the presiding justice denied defendant's motion to suppress, noting, inter alia, that the exigent circumstances doctrine of Chambers v. Maroney, 399 U.S. 42, 90 S.Ct. 1975, 26 L.Ed.2d 419 (1970), validated the warrantless search. We find the presiding justice's ruling correct. When there is probable cause to search an automobile stopped on a public highway, immediate warrantless searches are constitutionally permissible because of the movable nature of the vehicle. Carroll v. United States, 267 U.S. 132, 45 S.Ct. 280, 69 L.Ed. 543 (1925). If the attendant circumstances 176 make an immediate search on the highway unsafe or impractical, the car may be moved to a more convenient location. If a search is promptly conducted after its arrival there, the probable cause factor extant on the public highway remains in force, and the warrantless search is constitutionally permissible. Chambers v. Maroney, supra, 399 U.S. at 52, 90 S.Ct. 1975; Texas v. White, 423 U.S. 67, 68, 96 S.Ct. 304, 46 L.Ed.2d 209 (1975); State v. Cress, Me., 344 A.2d 57, 63-64 (1975). Here, the need to employ trained officers who knew how to preserve delicate evidentiary material, such as wax drippings and blood stains, made an immediate search on the public highway impractical. The short delay between the car's arrival at Arbo's Garage and the commencement of the search was attributable to the fact that those trained officers had to travel from Augusta to Waterville. The vehicle search commenced as soon as they arrived and was expeditiously carried out without unnecessary delay. We conclude there was no error in the denial of defendant's pretrial motion to suppress the evidence obtained in the search of the car. III. Discovery Issues A. Financial Assistance Pursuant to former Rule 16(a) of the Maine Rules of Criminal Procedure,[4] defendant filed a pretrial discovery request seeking, inter alia, all documents relating to moneys paid by the State to any of the prosecution witnesses as compensation for their expenses incurred while attending other criminal trials. At a pretrial discovery hearing, the prosecuting attorney testified that the State had spent money during the course of the earlier trial of Morton's accomplice, Charles Heald, to reimburse witnesses for bus tickets, motel costs, and, in one instance, a car rental. The presiding justice observed that evidence regarding those payments would be of little use to defendant. They would not significantly impeach the credibility of the State's witnesses because these witnesses did not profit by testifying for the prosecution; they were merely reimbursed for the expenses they incurred in the course of appearing as State witnesses. Accordingly, the presiding justice denied Morton's discovery request. On appeal, Morton has been unable to demonstrate any prejudice stemming from this ruling. Nothing in the record indicates that the information sought by defendant was not readily available in the public records of disbursements made to the witnesses in the prior prosecutions. Rule 16 discovery is not designed to be a labor-saving device for defense counsel. Where the prosecution has material information which the defendant cannot easily obtain elsewhere, Rule 16 discovery is designed to equalize their positions. Here, since the public records were apparently accessible to both sides, Rule 16 cannot be employed by defense counsel for the purpose of making the prosecuting attorney do his work for him. See State v. Boyajian, Me., 344 A.2d 410, 413 (1975). Furthermore, defendant was in no way prevented from discussing the subject of financial reimbursement with prosecution witnesses in advance of trial, or from cross-examining them on this subject at the trial itself. On this record, we find 177 no abuse of discretion on the part of the presiding justice. B. Psychiatric Records Defendant also made a pretrial discovery request for all psychological and psychiatric records pertaining to prosecution witness Judith Harvey in the possession of the Women's Correctional Center or the Bangor Mental Health Institute. Former Rule 16(a) could be used only to obtain materials "within the possession, custody, or control of the state." See note 4 above. Though the Women's Correctional Center and the Bangor Mental Health Institute are state agencies, former Rule 16(a) was not intended to require the prosecuting attorney to produce materials "not within his possession or the possession of his office, but filed elsewhere in some unrelated department of state government." State v. Heald, Me., 393 A.2d 537, 541 (1978). The word "state" in former Rule 16(a) imports nothing more than the office of the prosecuting attorney.[5] Since the requested psychiatric records were not in the possession of the prosecuting attorney, the presiding justice correctly denied defendant's pretrial discovery request for these materials. IV. Expert Opinion Testimony The prosecution presented the expert testimony of F.B.I. agent Ralph Strickland, who testified concerning the chemical composition of the wax drippings found in defendant's tan Oldsmobile and in the Bettencourt home. Strickland told the jury that infrared spectrophotometric analysis showed that both sets of drippings were composed of paraffin and stearic acid.[6] Although he declined to state "positively" that the drippings in the Oldsmobile came from the same candle which produced the drippings found in the Bettencourt home, Strickland stated that the two sets of drippings were consistent in chemical nature and might have been produced by the same candle. Also testifying for the State, Dr. Irving Goodof, a pathologist who examined the bodies of the Bettencourts, gave his opinion that they died sometime between December 9 and December 11, 1973. Aside from this estimate, Dr. Goodoff declined to pinpoint the time of death with any degree of "reasonable medical certainty." On appeal, Morton contends that the trial court erred in admitting the testimony of Strickland and Goodof over his objection because neither witness was willing to testify with "certainty" as to his opinion on relevant facts. We have recently rejected the contention that an expert must testify with "certainty," preferring instead the rule that "the degree of [an expert's] certainty . . . merely goes to the weight of his testimony, not [to] its admissibility." State v. Mitchell, Me., 390 A.2d 495, 501 (1978). Accordingly, Morton takes nothing by his contention that the trial court erred in admitting the testimony of these two expert witnesses. V. Refusal to Grant Mistrial Defendant argues that prosecutorial misconduct in the course of cross-examination of defense witness Evelyn Francis required the declaration of a mistrial, which the trial justice declined to grant. We do not agree. 178 Francis, the sister of Morton's accomplice Charles Heald, was asked by the prosecuting attorney if her brother was currently incarcerated in the Maine State Prison. Defense counsel did not object to this inquiry, and Francis answered in the affirmative. The prosecutor then started to inquire into the reason for Heald's incarceration, but before he could finish his question, defense counsel objected and the objection was sustained.[7] Arguing that the prosecutor had alerted the jury to the fact that Heald had already been convicted of participating in the murder of the Bettencourts, defense counsel moved for a mistrial. The prosecutor responded that he had merely intended to ask Francis about her brother's convictions for other offenses, unrelated to the Bettencourt murders, in an effort to show that Francis had testified for her brother on a number of past occasions. There is no evidence that the prosecutor intended to refer to Heald's conviction for his part in the Bettencourt murders. Because the prosecutor was interrupted before he could finish his question,[8] the jury heard nothing more than the fact that Heald had been convicted of some crimea fact they already knew from the preceding question and answer establishing Heald's current residence in the Maine State Prison. The trial justice noted that there had been no remark connecting Heald's incarceration to the Bettencourt murders. The motion for mistrial was correctly denied. VI. Exclusion of Evidence of Alleged Threat Against Bettencourts by One Kelley Defense counsel called one Gary Kelley and asked him if he recalled having a conversation with Jeffrey Pyska in early December of 1973 at the Holiday Inn in Augusta. Kelley said he did not remember speaking to Pyska and specifically denied ever telling Pyska or anybody else that he had some intentions regarding the Bettencourts. Defense counsel then called Pyska as a witness. The prosecution objected, on grounds of relevance, to the anticipated testimony of Pyska, and the objection was sustained. Defense counsel then made an offer of proof, stating that Pyska would testify that in early December of 1973 (about a week before the Bettencourt murders) at the Holiday Inn in Augusta Kelley, while displaying a revolver, told Pyska "that he wanted to rob the Bettencourts, or have someone else rob them, and he would pay $2,000." The presiding justice thereupon informed counsel that he would exclude the proffered testimony as irrelevant but would give further consideration to his ruling if the defense could adduce additional evidence linking Kelley to the Bettencourt murders. Defense counsel, however excused Pyska without asking him any questions and at no time presented any further evidence or offer of proof even mentioning Kelley or showing any involvement by him in the murders for which Morton was being tried. The presiding justice committed no error in his handling of Pyska's proposed testimony. The determination of close questions of relevancy arising in the heat of trial is left to the discretion of the trial justice, and on appeal his ruling will be overturned only for an abuse of that discretion. State v. Gagnon, Me., 383 A.2d 25, 31 179 (1978); State v. Lewisohn, Me., 379 A.2d 1192, 1202 (1977). In view of the remoteness of Kelley's alleged remarks from the issue of Morton's participation in murdering the Bettencourts, we would be reluctant to find an abuse of discretion in the circumstances of this case. In any event, however, we interpret the presiding justice's action to be an application of Rule 403, M.R.Evid.[9] In balancing the minimal probative value of the proffered testimony against the danger of confusion of the issues and misleading the jury, as well as considerations of undue delay and waste of time, the presiding justice was justified, and indeed in our considered judgment required, to rule as he did. Even if the proffered testimony was technically "relevant evidence" within the definition of Rule 401, M.R.Evid., ("evidence having any tendency to make the existence of any fact that is of consequence to the determination of the action more probable or less probable than it would be without the evidence"), it did little to prove or disprove anything involved in Morton's trial. Kelley's statement indicating, when taken at full face value, his interest in robbing the Bettencourts or having them robbed, is far removed from contradicting the evidence of Morton's participation in murdering the Bettencourts. At most, the thrust of the proffered testimony is that Kelley might also have been involved in some way in the Bettencourt robbery, in the course of which the victims were killed. The physical evidence points without contradiction to the fact that several persons participated in the murders. Remote evidence that another individualKelleymight also have been within that guilty group, directly or as a procurer, does nothing to disprove the involvement of defendant Morton. That evidence in no way disproves any of the numerous individual pieces of evidence tying Morton to the crime, such as Morton's admission to Judith Harvey, the presence of candle wax in his car, his participation in the prior aborted robbery attempt, and his attempt to prevent the search of his car. Pyska's testimony had little or no probative value in the trial of Morton for participating in the group responsible for the Bettencourt murders. On the other side of the Rule 403 balance, injection of the question whether Kelley was also involved would tend to turn the Morton trial into a trial of Kelley. It would confuse the single issue in the Morton trial: Was Morton one of the several murderers of the Bettencourts? The jury could be misled into thinking that any evidence of Kelley's possible involvement admitted in Morton's trial necessarily raised a doubt as to Morton's participation. If Pyska's testimony were admitted, the State could hardly be denied the opportunity of presenting in turn evidence that Kelley was not involved, and the Morton trial would then go far afield from the issue of Morton's guilt or innocence, causing undue delay and waste of time. Pyska's testimony was properly excluded in absence of any further details increasing its probative value so as to offset the negative consequences of its admission. 180 Whether the presiding justice's exclusion of the Pyska story represented a determination of lack of relevance or a balancing of considerations under Rule 403, he committed no error of which this appellate court will take cognizance. VII. Exclusion of Evidence Regarding Blood Stains Found in Defendant's Car At trial, Marlene Roderick, the registered owner of the tan Oldsmobile driven by defendant, testified that two days before the search of the car Morton had returned the car to her with the assurance that he had vacuumed the car thoroughly and had "made sure it was very clean." Anticipating correctly that the prosecution would argue to the jury that Morton had cleaned the car in an attempt to destroy all evidence which might link him to the Bettencourt murders,[10] defendant tried unsuccessfully to introduce evidence showing that an F.B.I. laboratory analysis of blood-stained items found in the car revealed the presence of deer blood. Drawing upon the fact that Marlene Roderick testified, both on direct and on cross-examination, that her husband had been engaged in illegal night hunting, defense counsel argued that the F.B.I. blood analysis would forcefully support the contention that Morton cleaned out the car in an attempt to destroy evidence which might incriminate his friend, Mr. Roderick. The trial justice refused, however, to allow defense counsel to question State Police Officer Ronald Eccles on the subject of the F.B.I. blood analysis. The justice concluded that "the fact that someone used this car and may have engaged in other crimes is not particularly relevant to this matter." Later in the course of the trial, defense counsel again raised the issue of the admissibility of the F.B.I. blood analysis, stating the rationale for the relevancy of the evidence with greater clarity than before.[11] Defendant made a complete offer of proof. The prosecuting attorney, while reasserting his objection to the evidence on relevancy grounds, stated he was willing to stipulate that if the evidence was allowed it would show the presence of both ruminant animal blood and other unidentifiable blood in defendant's car. Defense counsel contended it would show more specifically that the ruminant blood was actually deer blood. The prosecuting attorney then agreed to stipulate that the evidence, if admitted, would show the presence of both deer blood and blood of an unknown origin. The defense was denied the opportunity to get this stipulated evidence before the jury. On this record we are compelled to find that the presiding justice's exclusion of defendant's offered evidence was erroneous. The prosecutor initially presented evidence showing that defendant thoroughly cleaned out the car before returning it to Mrs. Roderick. This testimony was clearly relevant. It supported the inference that defendant had attempted to conceal evidence linking him to the Bettencourt murders. Defendant merely sought to rebut this inference. If the prosecution's explanation of defendant's conduct was relevant as tending to support the inference of defendant's guilt, then the defense's alternative explanation of the same conduct in an effort to demonstrate defendant's innocence must be equally relevant. See State v. Clark, Me., 394 A.2d 779, 782 (1978). The trial court erred in denying defendant the opportunity of showing that some of the blood stains in his car were of deer blood. *181 That error, however, does not justify reversal of the jury's finding beyond a reasonable doubt that Morton participated in murdering the Bettencourts. First, defense counsel was not prevented from arguing to the jury his explanation of defendant's car-cleaning conduct.[12] Furthermore, if the blood analysis results had been admitted, the jury would have been apprised that Morton's car contained not only deer blood but also other blood of an unknown origin, which the jury might have inferred to be the blood of one or both of the murder victims. Thus, admission of the blood analysis would have both helped and hurt defendant's case. Even if the blood analysis had been admitted in evidence, the rest of the evidence amply supported the jury's finding of defendant's guilt beyond a reasonable doubt. At most, the asserted exculpatory explanation for Morton's thorough cleaning of the car before turning it over to Mrs. Roderick goes to only one, relatively minor thread in the solid fabric of the State's case. The fact that defendant's car may have been used for night hunting by Mr. Roderick would not in any way detract from the evidence that showed that defendant admitted his participation in the Bettencourt murders to Judith Harvey. The presence of candle wax in defendant's car similar in chemical composition to the wax found in the Bettencourt home raised a strong inference of guilt that the blood analysis would not have explained away. In addition, the jury heard Smith's testimony that defendant had participated in the aborted robbery attempt of November 1973, which bore many similarities to the operative facts of the December murders. Finally, defendant's November statement that it would be "at least a month before the heat died down," his attempts to prevent his car from being searched, and his departure from the State of Maine to Florida shortly after the car was seized, all point inescapably to the conclusion that Morton was involved in the crimes for which he was tried. Given the strong evidence of guilt adduced by the State, we conclude that any error in excluding the blood analysis evidence did not constitute prejudicial error. VIII. Defendant's Other Claims of Error Defendant has raised some ten other issues concerning the admission and exclusion of evidence, double jeopardy, and discovery requests. We have read with care the voluminous transcript of the trial, giving particular attention to every one of defendant's claims of error. We find merit in none of them. Accordingly, the entry must be: Appeal denied. Judgment affirmed. POMEROY and NICHOLS, JJ., did not sit. NOTES [1] We have had occasion to review the convictions of accomplices of Morton for these same murders. See State v. Heald, Me., 395 A.2d 457 (1978); State v. Heald, Me., 393 A.2d 537 (1978); State v. Littlefield, Me., 374 A.2d 590 (1977). See also n.2 below. [2] For his participation in this criminal venture, Morton was convicted of conspiracy to commit robbery. On appeal, we affirmed his conviction. State v. Heald [and Morton], Me., 367 A.2d 1372 (1977). [3] The tan Oldsmobile that is here designated as "defendant's car" was registered in the name of Mrs. Marlene Roderick, but was used by defendant 90-99% of the time. When the police asked Mrs. Roderick's permission to search the car, defendant in a "loud whisper" told her he did not want the police to search the car. [4] At the time of defendant's trial, Rule 16(a), M.R.Crim.P., provided: "Discovery and Inspection. Upon timely motion of a defendant and upon a showing that the items sought may be material to the preparation of his defense and that the request is reasonable, the court shall order the prosecuting attorney to permit the defendant to inspect and copy or photograph designated books, papers, documents, or tangible objects which are within the possession, custody, or control of the state, including written or recorded statements or confessions made by the defendant or a co-defendant, written or recorded statements of witnesses, transcripts of the testimony of witnesses before the grand jury, and the results or reports of physical examinations and scientific tests, experiments, and comparisons. The order shall specify the time, place, and manner of making the inspection and of taking the copies or photographs and may prescribe such terms and conditions as are just." This rule was deleted and replaced on January 3, 1978, by a new Rule 16. [5] Subsection (b) of new Rule 16, M.R.Crim.P., effective January 3, 1978, clarifies the scope of the prosecuting attorney's duties, by providing in part: "The attorney for the State's obligation extends to matters within the possession or control of any member of his staff and of any official or employee of this State or any political subdivision thereof who regularly reports or with reference to the particular case has reported to his office." [6] Although defendant did not raise the issue at trial, he now argues for the first time on appeal that the subject of Strickland's testimony was not a proper one for expert testimony. In making this determination, the trial judge must "consider whether the matter is beyond common knowledge so that the untrained layman will not be able to determine it intelligently and whether a person with specialized knowledge can give a helpful opinion." Field & Murray, Maine Evidence § 702.1 (1976). We have no doubt that the topic of infrared spectrohphotometric analysis is an arcane subject beyond the ken of the average lay juror and that Strickland's expert testimony on this matter was therefore entirely appropriate. [7] Defense counsel's motion for mistrial was based on the following line of questioning: "Q. Mrs. Francis, would you mind telling us your maiden name? "A. My maiden name? "Q. Yes. "A. Is Evelyn Heald. "Q. And your brother is Charles Heald, is he not? "A. Yes, Charles Heald is my brother. "Q. And Charles Heald is presently in the Maine State Prison, is he not? "A. Yes, he is. "Q. Because he was convicted _ _ _ "[Defense Counsel]: Your Honor, objection. "[The Court]: I'll sustain the objection. [8] We do not mean to criticize defense counsel for interrupting. On the contrary, an alert defense attorney is to be commended for objecting quickly before prejudicial remarks have made their way into the record. [9] Rule 403, M.R.Evid., reads in full as follows: "Although relevant, evidence may be excluded if its probative value is substantially outweighed by the danger of unfair prejudice, confusion of the issues, or misleading the jury, or by considerations of undue delay, waste of time, or needless presentation of cumulative evidence." Questions of the admissibility of threats uttered by a person other than the defendant against the victim of the crime were at one time resolved by application of the judicially created "direct connection" test. That test required that the defendant show that the threat was uttered by someone who "committed some act directly connecting him with the crime" and "tend[ing] clearly to point out someone besides the accused as the guilty person." State v. Umfrees, 433 S.W.2d 284, 287-88 (Mo.1968). See Alexander v. United States, 138 U.S. 353, 11 S.Ct. 350, 34 L.Ed. 954 (1891); People v. Mendez, 193 Cal. 39, 223 P. 65 (1924). Although Dean Wigmore recognized that the "direct connection" test enjoyed widespread acceptance, he criticized it sharply. 1 J. Wigmore, Evidence § 139 (3d ed. 1940). We have no reason for taking sides in that controversy, preferring instead to analyze the admissibility of the evidence of Kelley's threats in terms of the general balancing principle of Rule 403, M.R.Evid. [10] In his closing argument, the prosecuting attorney commented: "Now when he [defendant] brought it [the car] back, he told Marlene that he had cleaned it out thoroughly, but he had not cleaned it thoroughly enough to pick up the red, red-pink, coral, whatever color you choose to attach to it, wax that was attached to the handles of the car." [11] Defense counsel stated: "You [the prosecution] have elicited testimony that he [defendant] cleaned the car. We are making the point that that has created a suspicion that he cleaned it out because it was used for some illicit purposes. For your purposes, you know, it's one thing, for our purposes it's consistent that he had cleaned out the car because it had been used for night hunting." [12] In his closing argument defense counsel said: "Now when Thomas Morton suggested to Marlene Roderick that she ought not let them search the car, it is just as reasonable to suggest, isn't it, that he was concerned about any night hunting implications as anything else at that timethe 30-06 ammunition, the red substance throughout the car, and you have heard the officers' testimony about that. Yet the State gives great emphasis to that, and they say this guy was cleaning out his car in December 1973, therefore, this has great significance. I ask you whether it is also reasonable from the evidence that the State has presented, can you say beyond a reasonable doubt that that is not the alternative way of looking at it, that there was evidence of night hunting, and that Thomas Morton being friends of the family, the Roderick family, was suggesting to Marlene Roderick that she did not have to help the State convict her husband at that time of night hunting."	{ "pile_set_name": "FreeLaw" }
. ' fl03ii'I RATIFICATION OF OIL AND GAS LEASE . STAlEOFTEXAS § FILED IN § 13th KNO\-Y ALL MEN OY THESE COURT OF APPEALS PRESENTS; COUNTY OF DeWITT § CORPUS CHRISTI/EDINBURG, TEXAS 12/29/2014 8:00:00 AM WHER£.a.s, on lho llnd ofOctoba, 2007, LOR EMF. H. KOOPMANN, an annarrl~ wo1n1111 , u lM5cf. d\dc•ccuk ind ddlvtr w H1' WKE ENTER PR {SES, u Le11eo, a ccrn io Oil. Gll fJld Minera l Le11JC l l evidenced by DORIAN Memorandum orE. OJI RAMIREZ and G;u Le&K, nid M<momidum l>cing duly rccon»j In Volume HJ, 11 Pllf" lf76 Of the omclll PuhJJc Rocord1 of OeWill Clerk C<lunty. Texas. l\nd c.ovcdng: no ncrcs of lond, more or less, being 1 pon of Section No . IJ, ln di~11ol• R•i lrood Company Survey, A·277., DtWin Cau.niy, Tcu>, being drscribcd.., ~ nnd IM.£I~ i11 th0t c<:nnin Oeed da1ed D«;c;rnbcr2'7 , 1996, from Loil Striebcr, lndivl<lu• lly an4 tl lnde p<11dcn1E~· ecun I• of die Esme orlcrry Strichcr, Doe<iutd, •s Gr•nto r, lo Gilbcr1 A. Koopmnnn and wife, Lor on< H, KOOJ>lnonn, o..1 <.iranltt , and bcinu recorded in Vo lurnt 14, ~c 42~ of the Official Public Record' ofDcWin Couniy, TeKns. here inaner c.lled ·~h• Lease". Reference 10 said Lu.so ond lo the record 1hcrcofbcing modo for oil purpo..,3; and, WHEREAS, nid Leise ond all rightJ ond J)fivileses th=undcr nrc now ownod and hold by BURLINGTON RESOURCES OJL & GAS COMPANY LP, whose l111dms Is P.O. BOK 1961, llou.uon, Tcxiu 7125 i -1967, hcre.inaf\er c&l\ed "Le>1ce"; ~1d, WHEREAS, it Is tl1e d.. ire of LOIS WOLPMAN STRIEl!ER, a Widow, the undenlgned, to 111.lopt, nitlfy .and confinn 1aid L<ASt ; For adequote coos idcrttion, in ha·nd paid, the r11Ceip1 and surndcncy ufwhith il ocknowlod&cd Jl\d con foued, I, of Loli WQlpm•o Stri~btr, t wldo,., !ho undtrsign•d do hen:by rarify, 1dop1 and confirm the Subj«I 1..t65e in ell of ii:! tenm and provu ioru. and do her<by le:u<:, gnnt, dcmis<, ar.d let 1he llJ\d! c.ovorrd by the Subject Le~le unto B URL.lrlG!ON R£SOURCIS OIL&. CAS CO:-.lPANY LP, 1ubje<:1 toand in nccordance wi th thetcnru 111d provhioni of the .Subj ect Lu>us i(I h&d been ar.d original ps rty to uld Leu,... And, I LOIS WOl,PMAl'I STRIEBtR, 1 widow, tho undcrsillr><d, do he<cby •&r<" that the laid " L<a; c" il • vnlid u1d submtini Oil "'1d G.., L.e1Jc . ~£/J . ::ru.l~ In w ilnC!<.$ whereof, 1his insrrumcm \;\'l3 CXtcuted lhisst:=_diy or JtllR. 2008 . ~ /d~ oL I i:t--' J , LOISWOL~ STATEOl'TEXAS COUNTY OF !&.W IT i :ir& .:r"'tj Thi• irutrument wu ocknowle<lgoJ i>oforc me on this tho ~AY o ( ;;,,.,t, :!OQ8, by or lAi> Wo lpma o S1rl•btr. NCJTARY PU\ll C o;"TA·n ; "' " TJ;> Y .4<:' L 30'(">'=13lo ·Ol'10 Lt i't:$ l1b ·~ ~ 803:31 ll"llUl.I Confidential KOOCOP00000944 447 NOTICE OF CONFIDENTIALITY RIGHTS: lF YOU ARE A NATURAL PERSON, YOU MA\' REMOVE OR STRJKE ANY OR ALL OF THE FOLLOWING INFORMATION FROM ANY TNSTRUMENT THAT TRANSHRS AN lNTLREST IN REAL PROPERTY BEFORE IT IS FILED FOR RECORD IN THE PUBLIC RECORDS: YOUR SOCIAL SECURITY NUMBER OR YOUR DRlVER'S LICENSE NUM13ER. AMENDMENT TO OlL, GAS AND MlNERAL LEASE (PAID UP LEASE) THIS AM'END!vlENT TO OIL, GAS, AND MINERAL LEASE is executed to be effective ns of this 22nd d.ay of October 2007 by and between LORENE Il KOOPMANN, ~n unm arried woman , ncting herein by and tluvugh Rnlph Koopman and Karen M. Koenig, my attorneys- in -fact, who se address is: 40 5 FM I08, York town, Tcl\a.~ '/8164, RALPH KOOPMANN , a muTled 1tun doling iu hi~ !<>le Mid scparnte property, who>e address is 774 Sumchos Road, Yorklowri. Texas 78 164 , and KARE:N M. KUEl'l1G , a married woman dealing i11 her !Ole and !cpiar.atc property, whose address is 34&9 ST. Hwy 72W, Cuero, Texas 77954 (col lecti vely, "Lessor"), .uid l)URLINGTON RESOQRCES OIL & GAS COMPANY LP, who~e !ddm.s is 600 North Dairy Ashford, Houston, Texas 77079-2197 ("Burlington"). Lessor and Burli ngton !!IC sometimes referred lo hcr.:in coll~tively us !he "Parties," R£CfrALS WH EREAS, that cenaln Oil. Gas, and Mine.rill Lease, d.ated 22nd da y of Octobe r 2007 wa.s mnde a.nd entered into between LOR.EN E H. KOOPMA1,1N ai1d llAWKE ENTERPRISES, as "Le~see," (tile " Lease"), a Memorar.dum of which Lc.lse is ~corded in Vol·Jmc 24J , Pa ge 876 of the Official Rcco rdl of DeWitt Co unty, Te xas, co vering the foll ow!n g descri bed lands (•.he "leased p ~:m is e~ "} : IJO atru or l_a odl mor, or IUJ, lJ~ine;. ptr 1 or Se-tthrn No. 13~ lndl mnul• }tgl\to:u.J Co~1p1 ny Survey, A-272, PeW lll Coun<y, Ttu1, and b<:lng lh• n1nt land ddc.ribtd ••TRACT NO. ONE •n<I TRACT NO. TWO ln that ccrt•in Dm J d.11od O«cmber 27, 1996, from Loi• Stri<bu, lndl>ld•olly and u lndrpc11denl Euc utr ll of I~• E>tAlr of J<rry Strlehar, dtrnstd, 01 Grulor, to Gilbert A. l<oopm•nn ••d wlft, (...(lnnot H . koopm1nn, aJ Cnfif.iee, 1-na bc::fnt: n-conle;cl In Volume 14 1 P-'ii'.I 4l~, Omch-I Public R<cordlJ O<.Wln COMnty , Tuu: and WHEREAS, the Lease was assigned from HAWKE ENTERPRISES, llS Assignor, lO Burlington, 11.1 Assignee, as evidenced in thut ce11ai11 AssigJ11ncnt da1cd January 9, 2008 and rtcorded in Volume 2.50, P~ge 822 of the OfficiHJ Public Records of DeWill County, Texas; and WHEREAS, there was w conveyance of an undivided 1wo/1hirds (21)) m incr~I imerest in the ks~ premises described above, from LORENF. H. KOO.PMANN to RALPH KOOPMANN and KAREN M. KOENIG Ill evidenced in 1h0t cenain Giff Minera l Deed dated June 10, 20 10, and recorded al Volume ) 13, Page 758, Of!lciaJ Public Record s or DeWitt County, Texa.s; and WHERE AS, •> a res~lt of th e partial CCJnvoyunc:c, the niincr'i!l inte rest in the lc ~ d premil<:s described above is now owned by LORENE H. KOOPMANN, RALPH KOOPMANN A.ND KAREN M. KOENJG, onc-1hitd ( l/J) eai;.h; ar.d WHEIU'!J\ S, Lessor (as to all of t~ir interes ts). and Burling ton des ire to nm end the L c a~ e in certain respecls; NOW, 1'H£RlFOTU:. for Im Do\l ar3 ($1 0.00) and ol./1c1 good und va.IWJ.ble considernt ion . the rcceip[ and suffic1cncy of whic h are hereby 3cltJ1owled gcd, [he Parties do her~ b y amend Lhe Lease, as follows : - 1- Confidential KOOCOP00001050 449 THE A!'<IBNDMEl'IT I. hragn ph 3 of th e le;ue shall~ dtle!ed In ill ent'lrcty .a.nd replaced with the fo llo wing: J. I Tnc royal ti es to be paid by Lc ssoc arc: (a) on oil ; 22.5% of that produced nnd saved frorn 5o id land , the same to be delivered, fr ee of e.1 1 col!S and expenses to the Lcs.~or into !Ii<: pipeline, or other teceplac lc 10 which the Lessee may connect its we ll s or the marke t va.Jue thereof, cu the option of the Les.sor, such value to be determ ined by ( I) tht hi ghest poslCfl price, plus premium, if any, offered or po id for oil, cn nden~111 e, di~lil lnt e, or othtr liqu id hydro;:nrbons , respec1ively of a like type ond gn:iviry for the field where produced and when nm, or (2) ril e gross proceeds of the sa le 1hereJ.)f, whichever is grc111cr. (b) on gas , including casingncad gas or other gaseous subs!Mlce, produced from said land 21 ..5% of the greater of (l) the rnarket value at tht wellhead of such gas, paid to l..e>sOr free of all co~s wid expenses, or (2) !he gro31 pNceeds re~ lized frum the sale of suc h gas, free of all toSl!l and expenses, to the fi rst non ·ttffiliatcd third party purchaser un dc-r a bona fide amu length sale or contrnc1. "Gross proceeds" (for royalry payment purposes) sha.11 mean the total monies lllld other cons ide ration accruing lo or paid lo ihc Lessee or ru.eived by l..e3sce fo1 dispo5i li on or sale of all unp ro<:essed gas proceeds, res idue gas , ga:s plan t prodocts or other products. Gross procuds shall hiclork, but ~ h a.ll not b~ li mited to advance paytnehts, take-or-pay payments (whether paid pursuun t to co ntrac~ in settlement or received by judp,01cnt) reimbLITT<:nmit for produc ti M or sc11cror1a uixes and 0.IlY and aJl o\ber rcimbUrsemcnts or payment$. (c) on all other minerals mined and marketed, ·22 .5% cithct in lcind or va lue at the well or mine , al Lcsse<:'s election, cxccpi that on sulphur mined and 1norkctcd, the roye.Jry 5hall 't>e 56.00 ixr long 1011. .3.2 If any disposilion, confT~c t or sale of oi l or gas shall include any reduclioo or ch11.rge for the expen.ses or costs of production, trca\tnent, txnnsport:aiion, manufoc ruring, process or marketing of the oil or gas. lhen suc h deduction, expense or t ost shall be added to the marker vnJut or g.ro!>I proceeds so that L"'1sor's roya.lty sha ll never be chargeab le directly or ind1ret\ly "'ith any costs 01 expenses other than i!S pro ratn share of severance or pHx!Uct ion UlXt'!S. J.3 After the end of the pri mary term, wlJk Lhcre is fl gus well on thh lease or on acrcnge poo led therewith but gus is ·not being so ld or used, Les3ee may poy as royaliy co the l essor at the add.rc5s sel out above on or before nindy (90) days after U1e date on which ( l) said well is shut in, or (2) tho Jund covered hereby or any portion thereof is included in a pooled unit on which a well is located, or (3) thb lcirn: ccllScs to be otherwise muintuined !l!l provided heroin, whichever is the later date, ~nd thereafter at annual in1etV•lh , the sum of $75.00 pe r mineral acre, and if such payment is mndc or tend ered , thi~ )e113e >h<>.ll not terminate and it wiil be considered that giu i$ being produced from lhi s !eroc in paying quantities, bui if such ·payment is nol made or tendered , thi s lease shall tc1Tninate. II. Tb.e ncood ~rn t e ac • a[ P•r~gr1ph No. 4 or the LuH, whlrh ls H i oul lmmtdi~t•ly below, 5n•ll be. deleted in iU <.ntirc ty: "Such pooling shal l be :nio a unit or units not ex~ e ed i ng forty ( 1lO) ncre> pl1,13 an acreage tolerance of ten per1:e nt ( 10%) thereof fo t oil, and unit3 not exceed ing six hundred fon y (640) ac res ei!C h plu s an acreage 1olernnce of ten percent ( l 0%) thereof for gas, provid~d lhat, shou ld govemmcntul nuthoricy havi ng jurfadictlon prescribe or permi t the creation of any driU ing, Jp11cing or prcra1ion uni ts larger than those s~ified above, such units moy be created or cnllliged to conform in !iu to i11e drilling or spacing unitl !o pre!cri.bed or ptrmi11ed or 10 the prorntion unit's as may be authori zed for obt!ln\ng t.he maximlun allowable production from one weiL •· Confidential KOOCOP00001051 450 JIJ. P1rairaph No. 5 of tbe uut shall be deleted In lti entin:ty and replaced with the follolVing: (a) DRILLING OPERA TlOl'-IS: If within 30 days prior to the expiraiion of the primary 1cnn or at the expiration of the primary tem1, Lessee is then eogaged in drilling operations on said land or upon lands pooled therewith, this ku.se shall remain in force only so long os such. opcnltions or drilliog operations for any additional wcll(s) arc prosecuted on the lease or lands pooled therewith with no cessation of more than 120 consecutive days between !he tennination of drilling operalior.s of one well and the commencement of drilling operations on a subsequcnr well, and If such operations result in the production of oil, gas or other mineral, so long the("C.afttr as oil, gas, or othrr mineral is produced from said land, or from land pooled thc:mvith. (b) CESSA ilON Of' PRODUCTlONIREWORKINO OPERA TlONS: If, after the expiration of the primary tenn of this lease and after oil, gas, or other mineral is produced from said land, or from land pooled therewith, the production thereof should cease from any cause und lbe lease i.s not otherwise maintained, thi9 lease shall not icrrninatc if Lessee commences drilling operations within 60 days thcrea.f\er and continuously conducts drilling opernrions without ce~t.ion thereof for more U1an sixty (60) days between the termination of drilling operations of a well and the commencement of drilling operations on a subsequent well and if they result in production of oil and/or gas or oilier rnincral, so long thereafter ll.S oil, gas or such other minerals are produced from said land. If witliin such $ixty (60) day period afl.u such cessation of production, Lessee commences reworking operations tu opposed to drilling operations, this lease shall not tcrmina1e so long os Lessee conlinuously conducts 3uch reworking opcretjons on such well witl<0ul cessation thereof for mer: than sixty (60) d~ys and if 3uch reworking o~rations on such well resull!I in re-c!lllbli$hmcnl of production of oil, gas or otl1cT min<:ra.J, so long thercafler n~ oil, gas or other mineral is produced from s~id land or lands pooled therewith. (c) Any pooled unit designated by Lessee in accordance with the terms hereof, may be dissolved by Lessee by instrument filed for record in the appropriate records of the county in which the leased premises are situated at any time after the completion of a dry hole or the ctlS5atioo of productioa on said w1i1. ln the event n well or wells producing oil or gas in paying quantities should be brought in on udjncent lu.nd und such well or wells is/ure draining the leased premises, or land pooled therewith, Lessee agrees to drill such offset well or wells as a rcaionably prudcrn operator would drill under the sll.ITle or similar ciroumslunces. Lessee may al 11.ny 1ime exccuie and deliver 10 Lessor or place of record a release or releases covering any portion or portions of .the above described. premises and thereby surrender this lease ns to such portion or portions and be relieved of all obligations o.s to the screage surrendered. IV. hragrupb 8 of the lease shall be deleted in its entirety and rcp!;iced with tile following: 8. The breach by Lessix of any obligation arising hereunder shall nol work u forfeiture or termination of this lease nor cause a termination or reversion of the estute created hereby nor be grounds for cancellation hereof in whole or in part. No obligation reasonably to develop the leased premises shall arise during the primary term. Should oil, gas or other mineral in paying quantities be discovered on said premises, then after the exµiraiion of the primary tem1, Lessee shall develop the acreage retained h~.reunder as a reasonobly prudent operator. If after the expiration of the primary tcnn, Lessor considers that or~rntions are not nt any time being conducted in comp.liance with thi.s lease, Lessor shnll notify Lessee in writing of uie facts relied upon o.s constit\lting a breuch hereof, and Less.ee. if in deiault, 9Mll have si:-ny days after receipt of ~uch notice in v<hich to cotruncncc the compli!nce with the obligation! imposed by virtue of this ins1rumen1. -l - Confidentia I KOOCOP00001052 451 '------------- ---- - - -- - Y. Pan1gnph 9 or rhe !ensc shall be d,fered In its entirety and rcpbc~d wirb lbt following: 9. Lessor express ly disclaims any warrnnty of lillc to the premi ses above described . fn the event ofiailure of title, Lessor shall never be required 10 rcrum any bonus or an)' other payment made to Le.s sor under th is lease. By acceptnnce of Lhis Lease, Lessee acknowledges that it has been given full opportun ity to investigate 3.!ld hns conducted sufficient invetigarion to sntisfy itseli n~ to the title lo the LMd , and Lei~e assum~ all risk of title failure s. It. i! agreed that if 1hi3 lei>Se covers a less interest in the oil. gas, sulphur, or other minemls in all or any parl of said land than the entire and undivided fee simple csuue (whether Lessor's interest is herein specified or not), or no interest lhert in, then the royalties and oth<or monies accruing from any part as 10 which U1i:; lease coven 1han such full i111crest, shall be paid only in the proportion which the in1 cresl therein, if any, covered by this lease, bellfS to the whole Md und ivided fee simple c~ tnle th erein . VJ. Puugr11ph C(d) or the Addendum of the Lea3e 1h1dl be Jel~te1l in its en lirety ~nd rtplnced with the followlnc: (d) Prior lo initial construction of c~ c h pipeline thereon, Lessee must pay the Lessor S3 .00 per fool in length for a sixty -foo l (60') wide pipt:linc right-of-way for inslalling pipelines necessary for production of any well on the l eu~e premises or on lands poo led therewith, which righ1 -of-wny shall ri:ducc 10 u 1hir1y-foot (J O' ) ngh1-of-way afu:r C-Onstruction o.nd in~tnllation of rhc pipe li ne. After iruiallation, replacement, or repair, tho 11rcn occupied by nll buticd pipelines sh~ll b<: bnckiillcd ao d tamped, M d o!herwi5e rcs1on:d to i\5 cond iti on pnor to instnl la1ion, ~plac eme n 1, or repair, utilizing the ''double ditch" rne1hod . Lessee must pay Lessor S 1,00-0.00 a.s • liquidated dam age amo\lJ1t for any oak tree damaged or destroyed by l,essec which tree has ~ 1runlc diameter ove r t~n inches ( lO"i when measured twenty ·four inc.hes (24") from ground lcvd, to be increased SI 00.00 ~r inch for e•ch inch in d iameter over I 0 inr.ohcs . Prior to commencing surface operations p<:rlaining to any well lo be drilled on the lease premises , U:s~e must deliver lo surface owner a dam•gc. paymen\ of S \ 0.000.00 Iv be applied 10 th~ damages to be incurred from &uch opcmions (~ucil damages including and associattd with the con.slruction of an access 1oad, power \inc, well p!ld, reserve pi~ fresh water pond w1d well production facilitie s a.1 pennil1cd by u1is l~ as e). Such .payment docs not preclude Lc~ sce from being liublc for the puymeni of additional damages ifsuch damages exceed Sl 0,000 .00. Vil. Pungr~ph E. or lht Addentlum lo tht Luse $h a ll br ddclttl hi lis enl lrely and replaced wil!I the following~ E. MINERAL LIMlTATfON : II is expressly lmdcrslood and provided !hat ihis lease covc·rs oil o.nd gas and liquid hydrocarbons, along wiU1 the products nnd by- products lhcreof, but this lease does 001 cover urunium, fissionable maierials or any ot.ha minerals of any type, here making palliculnr mention of water, the Lessee herein being given no right to explore for, nor devel op lllly part of tl1e h111d for production of water therefrom except wi th regard 10 producin g waler lo be used ~o lely with regard to f..e..-& e's oil and gns drilling, h)'draulic fracl\HC stimulation operations and completion operat ions upon the knsed premises a.nd MY such water well must be limiied to waicr prod uction only f10m U1ose depths below 500 feet be low the land rnrfai:e. L=e is e,;pre5..~ l y prohibited f!ilm using water from Lessor's wells, creeks and warering placu . Notwi thstMding anything tci the con trary in thi! \ease conwncd, Les~~ shal I a l 11.H timc5 protect the here in leased tru1d from drainage of ail and gM from wel l! on adjoining huid s. VIII. Pirag'raph F of the Addendum to the Lea" shall be dtlt1cd in irs ~ntirety and replar~d with lite following: ----- -------------------------~ · ..- - Confidential KOOCOP00001053 452 F. POOLING LlMlT ATIONS: (a) P201ing For Veriical Oil Well:;. Notwiu1standing anything contained herein to the contrary, pooling of this lease for vertical oil wells as classified by the Texas Railroad Commission is prohibi1ed. (bl Pooling for Gas Wells and Horizonta l Oil Wells. [n the even! Lessee exercises its option to pool as authorized herein and o.s limited hereby, the right to pool a vertical gas well or a horiwnlal &'13 well is hereby limited to 160 acm plus 10% tolerance as to all horiwns from .the surface of the ground lQ 11. depth of 7,500 f~t below the surface of the ground nnd to 320 acres plus 10% tolerance as to all horizons from 7,500 feet below the surface of the ground to a. depth of l 0,000 feet below the surface of the ground, and to 640 ucres plus l 0% tolcnmce as lo all horizons beneath I0,000 feet below the 5tnface of the ground. TI1e right of Lessee to pool for a horizontal oil well is hereby limited to 160 acres p.lu3 I0% t0Je111.nce as 10 all horiu:ms from the surfa~e of the grolllld to depth of 7 ,500 feet below the surface of the ground and to J10 acres plus I 0% tolerance if comp leted ot a depth of more lht\Il 7,500 feet below the surface of the ground provid~d that an additionnJ eighty (80) acres may be alloncd to such well for production purposes for every eight hundred twenty-seven feet (827') of horiwntal drainhole displacement (us defined by I.be Railroad Commission of Texas) over nnd above 4,000 feet of horizontal drainhole displacemen!. (c) Special Field Rules. If at the time of crention of any oil or gns unit comprising all or a p~ of the herein lca.sed premises spedal Field Rules of the Railroad Commission of Texas are 10 effect, Lessee shall have the right to pool all or a part of the herein leased pmniscs only up to the maximum acreage permit1ed to be assigned to a well in coru1ection with such oil or gas u11it under such special Field Rules, but in no event shall such unil or units contain more than the max.imwn acreage allowed by paragraph f(b). (d) Additional Horizgntal Well Provision;. In exercising the pooling rigJns granted in this lease applicable to .horii.ontal wells, Lessee shall file of record a writt~n declaration describing the borizonlJll wiit as to the spe<:ific leases and acreage to be included therein as well as the vertical lim its of the productive horiwn or zone and. stating the effective date of pooling; however, as 10 any horizontally completed well, Ltssre shall have ninety (90) days from initial completion in which to nrnend such written dc3ignat\on of unit to increase or decrease the o.creage, include or exclude specific leases or Inlets EIS · well as redefine the vertical llmits of the productive ronc, subjl:Ct to the limitation~ contain~d in this le;isc. lf such unit is filex.l nnd wnended within such period of time, Lcs.>ee ~hall file of record in the county v.11ere the lands are located a written declar~tion describing the revised unit and stating the effective date of revision. To the extent any portion of the leased premises is included in or excluded from the unit by virtue of 'uch revision, the proportion of unit production on which royalties a.re payable under !his paragraph shall be adjusted accordingly as of tlie effective date for the rnvised unit, subject to the limitations herein. The effective date of any· unit. formed for horizontal drainholc wells under this paragmpfi or any revision thereof shall be the date set forth as the effective date by lessee in the wrinen declaration that is [lied ofrecord for such unit or revisio n thereof. (e) Termin•tion of Pooling b.)'_(,C3~. Notwithstanding the decision in Wagner & Brown v. Sb ..pp.ord, 282 S.W. J 419 (Tm<. 2009), or similar authority: i. Lessee may only e.-.;crdse 1he rights to pool the interest of lessor in tM land and at the depths l~d hereby !llld only as to the lands and depths as to which this lease has not terminated as of the date such pooling document is filed in the office Of the County Clerk of the county where the land leased hereby or llllY portion i3 located. Upon partial termination of this lease, as .to any portion of the l!ll1d and/or 115 to any depihs, the rights of Lessee to pool the land andfor Confidential KOOCOP00001054 453 depths le ased hereunder may be exercised by lessee only for U1Dt portion of !he land ill1tllor those depths CJ.3 to which l.hi3 lcax has not rem1 inated. ii. If the leased p11:mim 1 or a p<irtion thOTeof, or the interest of the Lessor in part or all of the land described herein is validly pooled with other land lo form n unit prior to the partial or complerc termination of this kase, upon part ial terminntion of this lease as to 11teo and depths or complete tmnination oi this lease, Lessor may at nny tlme l11crcafter terminate the pooling and unitization of the Lessor's interest in any portion· of the interesr leased herein that hai tcnninalcd in any such uni I, by executing and filing for record in the office of the County Clerk of tho cowity in which the land leased hereby or any portion the~of is t0<:atcd, a document identifying or describing the area arnJior depths as t.o wbich such pooling is terminated. 111. Jn no event will l~.ssor be requ ired to bear costs of drilling either \>efort' or pfter this lens<: bas tcrrnimucd. IX. Pangraph H of th e. •ddeadum lo lhe Ltau )hall b< ddetffi io it~ cntlret-y Mnd replaced wiih lhe following: H. NON-POOLED PUGH CLAUSE: Lessee must within 90 days after the completion of any well on tho lc:;ml premises which is not p<JO!e!l under the provisions of Paragraph 4 or Paragraph F hereof, designate in writing and place of record with the County Cierk of the county in which L'ie property is located, a description of that purl of the leil.:led premi-1es whi~h shall De aHoned ("Allonc;J Aren") lo such well for production pucposes, the maximum size of such pan to be nlloncd being limited as follows: (n) Vertical Oil Wells: Na more than 40 acres plus 10% tolerance to be allotted in and around each wel.I classified n3 an oil well by !be Railroad Commission ofTeiGi.s if completed nt a depth of !0,000 feet or less below 1he su.rface nor more than 80 acres plus 10% tolerance if completed at a depth of more than l0,000 feet below the rurface. (b) Qas Wells and Horizontal Oil ~: No mOie than 160 acres plus J 0% tolerance 10 be allotted ln and around each ve11icnl gas well and horizontal gas well if compk1cd at a depth of 7,500 feet or less below the ~urface or the ground, nor more 1han 320 acres plus I0% tolerance if completed at a depth of more than 7,SOO feet below the surface of lhe ground, but less than J0,000 fee1 below the surface of1he grnwid, no more Lhw1 640 acres plus l0% tolerance a5 lo uU hori.:z.ons beneath I 0,000 feet below the surface of the grolL1d. No more than l 60 ncrcs :plus I0% tolerance 10 be allotted in and around each horiz.onlal oil well if completed al D depth of 7 ,500 feel or less below the sW"face of the ground, nor more lh1111 320 ncres plus 10% 10Jerance if completed al a depth of more than 7 ,500 feel below the surface of lhc ground provided that an ndditional eighl)' (80) acres m~y be allotted to such wdl for pro<luclion pwpose~ for every dghl hundred twenty scvc11 feel (827') of horizontal drainholc displacemenl (as defined by th' Railroad Commission of Texas) over nnd above 4,000 feet of horizontal drainholc displacement. Produclion or operations on said AJiotted Arca by the Lessee shal l maint~in this lease in effect only wi!h regard lo the land within such filCa. This lease shall terminate at lhe end of the primary Jenn as to such part or parts of the leased land lying oulside the Alloned Area unless !his lease is perpetvate<l as to such land outside the Allotted Area by operalion3 condu.c1cd thereon or by production of oil or gas or any such operslioos and such production in nccordar.ce with the provisions hereof. X. Paragraph J. of the addendum of the Leue !ball be delered in its entirety 2nd .replaced with 1he following: -6. Confidential KOOCOP00001055 454 ·TIP Bt.TRLLl\iGTON RESOURCES OIL & GAS COMPA..l'fY LP: By: By: ---"~"-'-~"4J,..o..:.....:=-- Name: fWtvi.K- ,/)., UH!..(.i ~-> Title: AUorney-io-Fact 1~\t L Tl-it STA.TE OF TEXAS § § COUNTY OF 1)t1Jfr.\t- § This instrument was acknowledg~d before me on this the_D_ day of =tiec , 2010, by RALPH KOOPMAWand KAREN M. KOENIG as a1tomey3-in-fuct on behalf of LORENE fl. KOOPMANN. THE STA TE OF TEXAS § § COUNTY OF])W.J; tJ-: § This insm1ment .was acknowledged before me on this thefl day of =t ~C , 20\0, by RALPH KOOPMANN. THESTATEOFTEXAS § COUNTY of'Qe.\ u~ ttH This instrument wa.s acknowledged before me on this th~ day of :s)...e.J , 2010, by KAru:N M. KOENlG. ·II· Confidential KOOCOP00001060 459 THl!:STATEOF TEXAS § § CO\JNTY OF HARRJS § This instrument was acknowledged before me on . this the_J_l_ day of D~k-: , 2010, by M1f1(J<..... f· (!19.4{1-sct , the Anomey· in- Fact for BROG GP Inc,, a Delaware corporation, the sole General Partner of Burlington Resources Oil & Gas Company LP, a D¢1aware limited partomhip, on ~half of said partnership. }J;;ag;;>~ ~ Notary Public, State ofTexas • 12. Confidential KOOCOP00001061 460 ------········--- .-· :Th · 1ti.' J. MfNIMUM ROYAL TY: lfthe royalties to be paid wider this lease during 12- rnonth periods as described below arc li:ss than the sum of$ l 00.00 per acre then leased ("minimum royo.lly"), and Lessor sends Lessee notice in writing of same, then this tease will tem1inutc u.1 Llic end of 90 days oiler Lessee receives wrinen notice from Lessor, unless the Lc-ssec pays 10 the royalty holders a sum of money equal to the difference between said minimum royally per acre and the total of all roy·alty monies on production so paid during the applicable l 2-month period. Said 12-month periods arc the initial period bcgiMing with the date of first producticrr from the lease premises and cad1 successive 12-rnonth period thereafter. The payments m out in this paragraph do not relieve Les.see of the req\liremcnt of production in paying quantities to muint.ain this lease. Notice as to this pnragi:nph will deemed t.o be given when it is deposited in the mail. certified, return rcuipt requested. XI. The following .1entence contained In Paragraph Q.(2) of tbt addendum of lbc Lean shall be detettd in it3 entirety: "Any later work done on the well wili be deemed to be reworking operation~." XII. The following delinilious shall be :i,dded lo Puagr.ipb Q or the Addendum to the l~ase: "Horizontal well" shall mean a well having a horiwntal drain hole which shall be deviated n minimum of seventy degree.'.! (70°) from the vcrtica.I and 'be.ing a minimum horizon1nl displacement in the objective formation of one hundred fifty feet (150') in Length measured between the point at which the drnin hole penerrates the top of the form~tion 10 be prodoced and the end point or rermitms of the horizontal drain hole. For 1he purposes of this provision, "terminus", "hori.rontal druinhole" ond "correlative intervals" shall be defined in accorda.nc~ with the Rules and Regulations of tl>c Railroad Commission of Texas or other govenunentaJ u\lthority having jurisdiction. "Reworking Operations", "operations for reworking", "commencement of reworking operations" and words of similar import shall have the same meaning, being the actual re -entry ioto llf1 existing wellbore with equipment capable of re- entering, reworking o.nd/or completing such well and the timely proseculion of such operations in such well bore in good faith towurd the re-cstabtishment of production of oil or gu.s from such previously producing zone or wnes." Xlll . P1r11graph T of the Addendum to the Lt.iue shall be delct~ in its cntirdy and rtplaced with the following: lNDEMNIFICATION : LESSEE AND ITS SUCCESSORS AND ASSIGNS SHALL INDEMNIFY, DEFEND AT ITS SOLE COST AND EXPENSE AND HOLD LESSOR HAAA1LESS fROM A..ll/D AGAlNST ANY AND ALL CLAIMS, LOSSES, LlABILITI.ES, COSTS, CAUSt~S OF ACTION, SETTLEMENTS, AW ARDS, PENALTIES, FEES, ASSESSMENTS, FINES, CHARGES, DEMANDS, LIENS, l'IJNITTVE DAMAGES, ATTORNEYS FEES, AND JUDGl'vtENTS OF EVERY KJND OR CHARACTER, KNOWN OR UNKNOWN, FIX.ED OR CONi' JNGENT (COLLECTIVELY, ~CLAIMS"), AfUSINC IN WHOLE OR IN PART OUT OF TtlE ACTS OR OMISSIONS OF LESSEE, LESSEE'S LICENSEES, CONCESSIONAtRF.S, SUBCOl'ITRACTORS, OR ANY OTHER PERSON on ENTITY ACTING BY, THROUGH OR UNDER LESSEE IN CONNECTION WITH ITS OPERATIONS ON AND POSSESSION OF THE LEASED PREMISES, lNCLUDlNG WITHOUT LIM1TATION ANY CLAlMS ARISING FROM TORT, PERSONAL rNJURY, DEATH, PROPERTY DAMAGE OR NUISANCE, AJUSlNG FROM ANY ACT OR OMISSION OF LESSEE, LESSEE'S LICENSEES, CONCESSIONAIRES, SUl'ICONTRACfORS, OR . 7. Confi de ntial KOOCOP00001056 455 ·1!)1 ;}' ANY OTHER PERSON OR ENTITY ACTING BY, THROUGll OR UNDER LESSEE. !'lfRTHER, THIS INDEMNITY APPLIES TO THE ABOVE CLAIMS REGARDLESS OF HOW SUCH ARE CAUSED. nns LEASE SHALL EXPlRE IN A.CCORDANC.t:: wrrn THE l'ROVISIONS SET OUT HEREIN, BUT LESSEE 'S OR ASSIGN"E E.'S OlH.. IGATlON TO INDE1\11'<1FY A.NU HOLD THE lNDE~NfFlE:O PAR1'1ES HAR.l'.-n,.ESS POR ACTIONS OCCURRING DURlNG THE TERM OF Tms CONTRACT SHALL SURYTVE: TH:E TERJ\11NATION OF THIS LEASE. fF LESSEE FAit,S OR REF USES TO fULLY PERFORM IN ACCORDANCE W!rn nus INDEMNIFICATION PROVISION , LP..SSOR AT U:SSOR'S OPTION, AND WJTllOUT R.ELJEV1NG LESSEE OF LESSEE'S ODLIGATIONS, MAV SO PERFORM, llUT Af,L COSTS AND EXPENSES INCURRED BY LESSOR fN THAT EVENT SHALL BB REIM.DURSED nv LESSEE TO LESSOR, TOGETHER WHH INTEREST ON THE SAl\-tE FROM THE DATE Ai-I)' SUCH EXPENSE WAS PAID BY LESSOR UNTIL REIMBURSED DY LESSEE. AT THE RATE OF TWELVE [12) PERCENT !'ER ANNUM. lessee and its representnlives, and lhcir ~ucce$SOrS shall not be responsible for or required to defend or indemnify Lessor or its representatives frorn lhe Lessor's tir il~ npresen\ll li vc's gross negligence or willful misconduct Lessee muse rnnincnin in effect at all times during its opcra1 ions under this lease a l.iabilily inmrnr1ce policy in an amount of 1101 less than S3,000,000.00 prottctiog Lessor ngainst lll l cl~ims uiaing by vinue of the Lessee's failure to comply with the provisions of this lease, and must furnish Leslor prior lo beginning such opcra lion;; with proof of the existence of suc;h policy. !fLeS$ee'S operalions wide r I.his lease arc conducted under the name of Conoco Phillips or one of its affil iatc3 for whic h Co noco Phillips is responsible, then Lessee may ele·: t fo self·insu.rc the aforementioned amount and will provid e Lessor with written notice of such election µrior to beginning such opcn tion s. XIV. Paragraph U of the Add codum lo the lca.Je 1"2 U be deldtd in Its eatirety •nd repla,ed wllb the followln~ ; U. DIVJS ION ORDER: Neither the Lrn,eo nor any other party disbursing oil or ge.s royally as provi<kd under this !ell!Jc or through ngrHment of the third party with the l es>ee may require L~sor to execute a division order as n rcqui5itc for the Lessor being pllid royalti~s ""ith the exception that n division order tlrnt pcovides only a stipulation of 1.>te Lessor's royalty interest may be 1e<1vircd or lhe Lessor. Neither this Lease nor ~ny mms or provisions )\ercin shn ll ~ altered, anicnded , extended or ratified by any division order or l.raMfcr cHdcr c~tcuted by Lessor, its successors, agcnls or assigns, bu1 any division orders or transfer orders shall be fo r !he sole purpose of confirming lhc extent of Lessor ' s inler~t in production of oil and gas from I.he lcuscd prernists. However, to Ule ex ront there are interests which purport to burden Lessor's roya lty which a.re in dispute or may, in the funu-e, be disputed, the excculion of divi9 ion ozdcrs i~ not a waiver of the rii.hts to so dispu1c the inlcrem, rto; does such execution in 11ny way ratify, revive , or othcrwl!c approve of any luch in1ere.1rn. if any . Pa 1'2gl"l!ph W oftbe Addendum to !he lease shall~ dtldcd in itJ entirety and repl~etd 'l'l'ith the rallav,.fog: W. SEISMIC OPERATIONS : No nulhoriry is hctein granled to Lessee 10 condui;1 se ismic open1tior.s ;1~Jc;:'s•e pays 1h::: surfoce owner prior .10 beginning of such operations . ~et' acre for the entire l~nd above described . After completion of scch operarion3, l ~s c e mu${ restore L~C land to its original condition just prior 10 such operJtions and mu sl p ~y the rurface owne r and any tenants 1he actual llnoun t of dam ages arning fro m such o~ra t i o n s . Les s~ e 's right to conducl sei smic operations upon th~ herein le ased prcm'isc s shall be non· c< ChiSiYC and Lessor hereby reserv~ the right 10 granl to third parlies, the ·righ1 to: I .i conduct sdsmic opctarior~ upon such premi!cs, ond 2.) use the dntl• re5ulling from such ~ismic operations u such ihird par1y deems nccesta.ry including but no l limited io 1he marketing/sllle of ~uch d.. 1a. Less.o r s h ~ll b~ • B- Confidential KOOCOP00001057 456 cntiLlcd to all compensation paid by such third parties for \he right to conducl ieismic opcrat io11s. Funher, tl1is tease shall be subject to t.he cig)n-1 of all :hirJ p1U1ies under a.ny se ismic permits whi'h cover all or any part of :he here in leased propcny whicb may be in effce1 at il1e time of the cxe ution of this lease. XVI. Paragnph X of the Addendum !Q the le•ic ~ba ll be de.le led 111 ib e n lir~ty . XVU . Tbe following provi.lioni il.JaU bt added tu tbr lc~ic; Le ~sec shall 11.fld agrees to never claim, 1101 seek to secure ony of the lands ' or rntnerali in the ground covered by thi s lcnsc by upplicnOon or clnim of any stetutc of li mitations or advcr.;e possession, inel11ding, but llO t limited to nny cl oim under tbe Tu~• Civ il Practice and Remedici Code St(li01u 16.025, 16.026, LG.027 or 16.028, as now enacted or as mi>y hcrcinallcr be nmcndtd. Lcs~ cc shnll and agrees never to seek to matufe limi ta1io11 s litlc to Uic oi l, gas Md rela ted mincrnl ~ In the ground covered by this lease. The purpose of th is provision is to bar any claim of limitutions ti tl e by Lessee and th us abrogate the <lpplication of ill1y theorie s under which relief was grn ntcd in r.!•turu l C1u Pipeline C o. v, Pv o[, 124 S.W. 3rl 188 (Tex. Sup. 2003), or similar authority. In ihc even t that Lessee should ever file a law~uit ngain$t Lcs~or wherein it cl11ims that it owns the oil , gos or other miner:1ls or any interest in the lands covc1cd by thi s loasc by reason of >111y statute of limitation, any interest of Lessee wider U1i$ lease shall be 8Utomntically deemed forfr itcd and tem1inatecl u~ of lhe date such l~ws uii is fi led, and Lessee will th.erea.tle r have no interest whntS-O<lvcr in this lease or any lands described herein. L.csscc may defend ltulr In court at:ih:11t claims brought a&>1.init Lt'H tc aud m~y au~rt llrulll tl on1 as a dtfwse but In no tHnt m~y Ln.1<c usut In aoy form or b i hion, advcnc poBc~uion of Lu io r 's real proptrty IRnds or minena ls In the ground . NOTrCE OF TOP LEASE O FJIER: If at any time within the primary tem1 of tr11s lease and whi le the same remains in force and dTc.:;t, Le ssor rec. eiv~ a bona li de offe r ncceplilble to Lessor to enter into un addlt.ionul icHSc (top lease) coverin& all or part of the leased premises, ~ssor (wi1houl disclosing the terms of such offer) shall notify Lessee in wriline, that Lessor ho i received such ofTcr. Les sor agrees that it shall not accept such offer (by the execution of a lop lease ) un til 15 d.-iys after Lessor gives notic'c of the offer to Lessee. Noti ce as to this pard{lfaph will deemed- to be given when it is dep0 sited in the muil, certified, return recei pt requested . PERFORJ'rlANCE: Upon the later of the expiration of lhc- primary term, or the extended tem1 by cont inuous operations, force majcurc or other suvi111{S clauses, if Lessee has inc luded a portion of the leased la nds from this lease into an All otted Arca{s) or poo led un it(s) (YDcve lopcd Lands"), but le% than nil lunds from this tense have been included in any sue.Ji Allotted A.rea(s) or pooled unil(s), ond the lease , os it perta.i ns w such lands remaining onn lhiitcd or unpoo lerl (''UnDcvclopc<l Lands'') tcnni natcs according !O the tenns of tl1e lea1c lllld/o r any ~rrteodntents thereto, L~"ee agfccs 10 pay to l.cssor n onc·tirnc non-pcrfonnence puymcnr on such UnDevcloped Lands at thnt rate of SS,000.00 per net mineral acie ("UnDevelopcd Lands pAyment"). Such VnD~v el opc d La.nds Paymen t shall be due lllld payable to Lessor, or Lesso r' s assigns. witJ1in 60 day_~ uflcr such p:irtial lease tcnn inatlon . Such p• )men t shull bear interest from the due date (60 doy~ after partial lease terminatio n) until th~ date o( pnymenl thereof M the rate of 12% per annum. No such payment s h~ll be due on any: I . Developed Lands; 2. Ponion of the land covered by thi s lc"5e within un Alloflcd Area(~) or poo led cni1(1), upon v;hich ~ wc ll(s) hos lxen drilled. plu gged l!J",d at-and oned as a dry )\()!c. Fo r the purpo~c• of de tennining the ocreagc not subj ect 10 the Undevel oped Lands Payment <U1der t b i~ . 9 .. Confidential KOOCOPOOOO 1058 457 exception, the maximum amount of leased lands (either Allo11ed or pooled unit) per dry hole well is J20 seres; 3. Ponion of the property leased herein if there is a material ti1le problem with said property; 4. Portion of the herein leased propeny, if the inability to include such portion of the leased property in a w1it is a result of a change in the rcgulutions of ihc Railroad Commisgion of Texa:i or other governmental aulhoricy which such change in reguJatioru occurs after the uatc that any part of the leased prcmi~s is lawfully pooled or a!lo11ed 10 uny well drilled on said premises. Lessor agrees to act in good faiU1 to facilitate Lessee in compliance wiih the foregoing to facilitate proper pooling of Lessor's lands and Uic drilling of wells. XVUI. MISCELLANEOUS Lessor does hereby adopt, ratify and confim1 the Lease and recognizr;s the full validity of the same, and does hereby GRANT, LEASE, and LET to Burlinglon Resources Oil & Gas Company LP, its successors nnd assigns, all of the interest of the said undersigned in the leases premises, subject to and in accordance with all of the terms and conditions set forth in the Lease, as hereby amended . This Amendment to Oil, Gas, and Mineral Lease shall be binding upon and inure to ihe benefit of the Lessor and Burlington, and their respective heil1l, personal representat ives, successors, and assigns. This instrument may be executed either as one instrument or in seve ral partially executed counterparts and the original arld all countctpa.rts shall be corutrued together and sha ll constitute one lnsrrumenl. Should less than all of the named panics execute thb instrumen t, !.his in3trurncnt shnll be bioding on lh°"c who arc signatories. IN WITNESS WHEREOF, this instr11ment is executed to be effective as of the dace ti rst above wrirten. LESSOR: LORENE H. KOOPMANN By·.RJ.\LPHOOiMANl ~~ AHomey-in- Fac t KARENJ: KOENIG . to . Confidential KOOCOP00001059 458 • 6'7901 NOTICF:. Of EXJ:RCISE OF OPTIONS TO EXTF..ND MINERAL Ll:ASES • STATl3 Of TEXAS COUNTY OF DEWITT KNOW ALL ~iEN BY THE.SE PRESENTS: Wl[EREAS, 13URLL"'lGTON R.E.'iOURCES OIL&. GAS COMPANY LP. 1 Dcluwru-c limited partners hip, whose addr~ il PO Box 219"/, Houston, Tcnv, 77252- 2 197 (herein referred to as "L<s><c) i5 tho owner oi those ccrtuin oil, gn~ and mi neral Jca;c! idcmified on E"'1ibi t "A" anached hereto and made o part hereof for ell purpose~ (herei n referr«! to as "Mineral Leases'')·, and WHEREAS, each of th~ Minera l Lt!as~s provido tl1Hl the prirnnry term rnay bo oxlonded at any time prior to the expiration of th o origlrrn l prirnnry lenn per iod by tendering to thu respective lc"50 r{s) tho option bo111Js pra.'ICrihod i11 !he lease vin check or dro(l ·tendcrcd lo tl1e depository bank named In th o lease or tnailu1 to th o i<'ssor{s) nl the 11ddreMr-3 provided In said Mineral lease (or such ot~ or address u~ lcsror nrny s111Jucq11cntly tumlsh Lessee vin wrl llcn nolico); al\d WHE.rl.EAS, the Mineral Leases furth er provide th~l shou ld tho option lo e~tend <11c pri n1.11y lenn IJe exercisi:d, i1 sha ll be considered for all purpose• !IS if the origi11al primary lcnn in !!<!Ch of such Mineral Lease) WllS for n period offive (5 ) y~!I~; 8nd WHEREAS, LcS)e<! hs.s eleooled to exercise tho. option to exten d th• prim~!)' lenn of Cl/Ch of tho Minero! Lu.sr.s idcntifiw in Exhibit "A" ultuched here.lo by tenderi ng payment by check or draft ts Sc i forth in sRid Mi ne13 J Lc.ucs. NOW, TKEREFORE, L = hereby places third putks on no1icc thl\t it has c•cn:i5Cd the option to e.-.tend t.~. primary tenn of tho Minern l ~e1 <lesCflbtd on E1Uiibit "A" attached herc10 to a toul of five (5) )'Carl in each of Juch lease~ by lendering lhe conside ration recited in th e respective Minorn l [..ease.' by check or drat\ in ~C£-O((Jil!1~" with tho ttrms, t:onditioM and provi!ions 0(1he resptctive Mincrnl £.uses . IN WITNESS WHEREOF, this Notir,e of EMn:i!e of 01>tio1u 10 Extend Mrnei;il L.casc1 ilus been oxc<:uted on tJiis ~day of hf.v .A___ , 20 l U. STAT!: OF TEXAS COUNTY OF HARRIS Thi~ in strurnenl wus acknowledgt:d before me0 11 ll1e ~~of lfJJfiA.!A<, 20 10, by M11rk B. C11.rlislc, Aumncr-in-Fact of BROG GP Inc., 1K:ti11g as sole grncn1J pi1rt11er of Durlin gton Rewurces Oil & Gas Company LP, • Oelowaro limi ted part11~r.1hip, on behalf O( SA!d limited partJ>er5hip. My co mrnissi n expires: /l-l!- ,')tJ/0 )05" L,l_f.& - 00(} ___ Confidential KOOCOP00000931 462 () 0 ::;,• ::!! Q. EXHIBfT "A" en TO ::J NOTICE OF EXERCISE OF OPTIONS TO EXTEND MINERAL LEASES tt Q) Lt=A::>c 1r<rUKMAI IUN NUMBER LESSOR EFFECTIVE DATE ORIGINAL LESSEE STATE COUNTY BOOK PAGE 303680-000 John Paul Guidrv Februat\119, 200 7 Premi~re Laoo' S<!IYi<:e$ LLC ,TEXAS DEWITT 224 296 303701~:ioo Edwin 0 Rossow el ux March 7, 2007 Hawl<e Enternmes TEXAS DEWITI 23€ 415 303750-000 William Dwor=-M< Februarv 2, 2007 Premiere land Services L.LC TEXAS DEWITT 224 i 288 • 303857-000 Andrew M Hod<!e Aoril 9. 2007 Ha>We Entc<orises TEXAS DEWITT 222 .I.al 30386()..000 T<!ddv W Aven et ux AOOl. 18. 2007 Hawke En ternrises TEXAS DEWITT 226 358 303973-000 FlO<iart Konczewski et ux .J\D<il 11. 2007 Hawl(e Entero rises TEXAS DE W1TT 226 360 303974.000 Herman Konczewski Ao.-j 1 i, 2007 Hawke Enrernrises TEXAS DEWITT 226 353 3'~4<344-001 Men Mueller et Ul< " Man::ll 14, 2007 Hawt:e Entar=iSl!!S TEXAS DEWITT 222 495 J0.4061..000 Alt.on Rav Jatu1l<a el ux Febru;;uv 2i 2007 Hawice Enten><ises TEXAS DEWlTT 222 4a5 304063-000 Saran Aroiistein et al Februarv 27 . 2007 Hawke Ente.!Drises TE-XAS DEWITT 722 4<!3 304065-000 L.acl<ev l""1<l umit~'<l f (lbruarv 23. 2007 Hawke Enterorises TEXAS DEWlTT 222 489 304081..000 -Jennie Lvnn HwdeslV AOOl 17, 2007 Hawke Enternrises TEXAS DEWITT 226 362 3().4082-000 Martin Luther Wolter et .ux ADri! 17. 200 7 Hawte Enterorlsm TEXAS DEWITT 22ti 366 304083-000 Leona Riedesel I Januarv 30 2007 HS'.'-'ke Entemrises TEXAS DEWITT 222 487 304150-000 Gld1lberT)I Partnern LTD I April 2S' 2{)07 Hawt<e Enten:>rise$ TEXAS DE WlTT .226 364 30-i 155-000 Baram<JJV\ Fam llv Trust FebroalY 14, 2007 Hawke Enterori5es TEXAS DE WlTT 222 501 3().C!~ Bamman.o FamllvTrust I Februar.1 14, 2007 Hawk e Enternri~:es TEXAS DE W ITT 222 499 3041 &')-000 l C Tnk>le et ID Fet>ruarv 21. 2007 Ha'Wl<e Ente~ TEXAS DE WlTT 270 406 31)4219-000 JOl:lanna Wild """"3, 2007 H""-'ke Enterorises TEX.AS DEWITT 226 374 • ~220-000 Jerome R Wild el ux u,,., 3, 2007 Hawke Ent:ernnscs TEXAS DE WI TT 235 d17 304.222-000 Robert H Mei:>c:OOn el vx AJ:>fi30. 2007 ' Premiere Land Services LLC TEXAS DEWITT 225 793 304224-000 Robert T Melsdlen et al Al>ril 30, 2007' . Prem iere Land Sel'l!ice:l. LLC TEXAS DE VlllTf 229 38 3[;422£.-000 V~oinia Wil'rnetn - P,l;a<; 7. 2007 Ha-•1ke Enternri«.es TE.MS DE WITT 225 - 357 =" 0 304227-000 304228-000 Robert T Meiser.en et ux Robert T Mi5i:;ct\ffi etux Ap{iJ 30, 2007 April 30, 2007 Premiere Lan.<i &!rvlce~ LLC TEXAS DE WlTT Premiere Land &Mee$ LLC TEXAS DE WITT .225 225 78.9 791 Paul V Grav et LI)( 304234-.'lOO Ma~ 8. 2007 Hawke Enternrises TEXAS DE WITT 236 423 0 304246-000 Clifford Dwayne Parke< et wt .Jutv 30, 2007 Hawke En terp~ TEXAS DEWITT 233 722 () 304252-000 AttliU< Garrnrt M iUer et ux A!:<i 2s. 2007 H:.wlrn E11t,.rprtse• TEXAS DEVl/JTT 225 4 18 304253-000 Jerald J Rouelt. et ux Premiere L911d Setvic:e!. LLC TEXAS DEWITT 225 8.9 5 0 3042~-000 Jerald J fi.o55Ctt er ux Mav8 2007 MavS, 2007 Premiere Land Services LLC TEXAS DEWITT 226 8S4 -0 ' 304255-001 .le.mid J Ros"'tt et u ._ May 8 2007 Premiere Land Se<vices LLC TEXAS DEWlIT 226 893 0 0 0 0 1ol5 0 (0 (.,.) ....., 463 () 0 :::::J ""1\ c. (t) 3(}4255.-002 Oaoline Harms Mav 8. 2007 Premiere Land Seivicas LLC TEXAS DE WlTT 229 037 ::s ,.... 304256-000 Jerald J Rcssett el UlC 3(}4260-000 Rinehold Borchardt Mav 8 2007 Mai 16. 2007 Premiera land Servic2s LLC TEXAS DEWITT HawkeEn~es TEXAS DEWITT 243 243 846 BBS ru 304262-001 Otto Lee Koeornng 304262-002 Marcie Ann Dici<erson Mav 29. 2007 Mav29. 2007 Hawi<e Enterof.ses Hawke Enti>rorises TEXAS DEWITT TEXAS DEWITT 236 236 421 419 236 374 236 3i6 304280--000 Darvin Mueller et a! Mav 11. 2007 Hawke Ente<t>Oses TEXAS DEWITT 236 378 304318-000 Cody Jafuf\<a Aoril 26, 2007 Hawke Enlerorises TEXAS DEWITT I 226 370 3043.27-000 Houts Baker March 1. 2007 Hawi<e Enterprises TEXAS DEWITT 222 5{)7 304328-000 304 3.29--000 304331-000 304415-000 304531-000 304561-000 Jerrv Wavne Schmiedlin et ux Karen Kay Lukes Alton Rav Jalul\<:a et u::c Michael P Klein et t1x Rinehdd Borcha.rdt et al Bennie Drabek et ux Fehnt:>rv 21. 2007 Marcb 15, 2007 Marel115, 2007 June 5. 2007 May 16, 2007 Jur;e 13. 2007 Hawke En11>mrfses Hawke Enterprises Hawke Enterorises Hawke Enterorlses Hawke Enterprises Hawlo;e Entefllfises TEXAS OE WITT TEXAS DEWITT TEXAS DEWITT TEXAS DEWITT TEXAS DEWITT TEXAS DEWITT 222 2Z2 222 236 243 233 505 509 503 452 841 725 • 304 58:>-000 Leon J Resoondek et ux June 15, 2007 Hawke Enterorises TEXAS DEWJTT 233 727 30<!584--000 Leon J Resoondek et ux June 15. 2007 Hawke Entero<ises TEXAS DEWITT 233 729 304585-000 F r.1t1CeS Warzecha Jo.me 20, 2007 Hawke Entemrises TEXAS DEWITT 233 724 233 720 233 721 304589-000 L C Sievers et al July 13, 2007 Hawke Enterprises TEXAS DE WITT 233 766 304099-000 EUQene lbrom July 13, 2007 1-!aw!ce Enterprises TEXAS DEWITT 233 737 304700-000 Robert lee I b<om et ux Julv 13. 2007 H3'bi<e Enterprises TEXAS DEWITT 233 741 304701-000 Hollis 0 Baker Julv 11. 2007 Hawl\e EntB!t)!ises TEXAS OE WITT 233 743 304702-000 Oavld lbrom et ux July 3, 2007 Hawke Enterprn;es lt:XAS DEWITT 233 716 A 0 304 703-010 Cat!Jerin-e Ko!odzieicvk et vir 304705--000 Robert Lee lbrom 304707-000 Daniel Ibrom et ux 30470$-000 Patricia Gail lhrom et vlr 304710-000 Shirley R Crain 30471Hl00 Melvin Sl.-aube et ux Julv 13. 2007 Ju/y 13; 2007 Julv 13. 2007 Julv 3. 2007 July 11. 2007 Julv 11. 2007 Hawke EntenxilHl-S Hawke Entel'Prises Hawke .E nterprises HawkeE~es Haw1<eEn~ Hawke Enteronses TEXAS DEWITT TEXAS DEWITT TEXAS OE WITT TEXAS DEWITT TEXAS TEXAS DEWITT DEWITT 233 233 233 233 233 233 745 735 739 714 758 750 • 0 304 723--000 Marvin C Koopmann JulY 17 2007 Haw1\e. E.nterori~ TEXAS DEWITT 233 754 () 304771-001 Frnnk Kulik et ux Julv 20 2007 Haw!ce Ent~risas TEXAS DEWITT 233 733 TEXAS DEWITT 0 304;72-000 Warren Leml<e et ux 304783-000 Robert Edward Moll etat July 20, 2007 July 23, 2007 Hawke Entt!rpriseo Hawke Enterprise:1 TEXAS DEWITT 233 243 760 833 '1J 304642-000 Alvin Stanches Jr July 27. 2007 Hawke Erttero.ri~ TEXAS DEWITT 233 756 0 0 0 0 2 of 5 0 (0 (..) (..) 464 I - - - - - - - - - - - - - - - - - - - - - - - - - -- - - - ' 0 0 :::s :::!? 0. 304865-000 lsabeJI Ann Van 8everen Julv 27. 2007 Hawke Entemrlses TEXAS DEWJTT 233 752 ([) 304868.000 James Jendr; Auaust1,2007 H~ Enterrvkes TEXAS DEWITI 236 384 :::s 233 762 e: 304870-001 David Er1er et al Auoust 1, 2007 Hawke Enternrises TEXAS DE WITT 233 764 tu 304871-00t Mich~ I R Grunder et al November 29 , 2007 Hawke Enterorise!> TEXAS DEWITI 24 3 852 304885-000 Carolyn S We>t:rve Julv 27, 2007 Hawke Entemri•es TEXAS DEWITT 233 747 3048a5-000 David A Stubblefield et ux Seo!ember 6, 2007 Hawio:e Entemrkes TEXAS DEWITI 236 437 304a87-GOO Elna Bi<'.ICl5 Auoust 10. 2007 Hawke Ente""'ces . TEXAS DEWITT 234 392 304888-000 Barbara J Siu bblefield Seoteml>er 6 2007 HawkeEnte~ TEXAS DEWITI 236 435 • 304889-001 Alton R Cieleocki el ux Auaust 2. 2007 Haw!<;e Ent_...n•- TEXAS DEWITI 236 407 304893-000 MarceHus W Weisch.,..;11 Residua1y Trust Au<>ust 2. 2007 Hawke Entero<ises TEXAS DE WITT 2:36 400 304909-000 Loretta Fav Burce· A1:nust 2. 2007 Hawke Entemrisas TEXAS DEWITT 238 396 304911--000 Scott Straube -A1Xlust 2 2007 Haw'ice Enternrises TEXAS DEWITT 233 749 304922-000 David A lbrom et ux Ju!v 31. 2007 Hawke Ent......,rises TEXAS OE V\qTT 236 405 304929-000 Morres M Van Beveren et m Julv 27. 2.0 07 Hawlr.e Entemri«es TEXAS DEWITT 2.33 718 30494-4-000 Barbara Theilin Octuter1B. 2007 Hawke E.ntertlfi&es TEX.AS DEWITI 243 858 304945-000 Charles T Hahn et ux Aunust 7 2007 Hawke Enterprises TEXAS DEWITT 236 411 304949-000 EuQene James lt>rom A•....,ust 6. 2007 H awl<e Entero<i&eS TEXAS OE WlTT 236 409 3Q.(9 50--000 Leon James Srubar Jr eta! A•.,,Ust 8, 2007 Hawke Ent~ TEXAS DEWITT 243 630 304951-00-1 Rueben W'!'JE.e Thamm el ux Auaust 16 2007 Hawl<:e Enternrises TEXAS DEWITT 236 402 304 9!»-000 Irene HaM Ai "'US{ 7 2007 Hawke En!ernrises TEXAS DEWITT 236 447 30495&-000 Kerm~ C Koehler etux September 5, 2007 Hawke Enrerorises TEX.AS DEWITT 236 386 304959--001 St.e ven D Scott tit ux Auaust 10. 2007 Hawke Enterorises TEXAS DEWITT 236 388 305000--000 T rov H Stuart el al Auaus!10 2007 Hawke Entrunrises TEXA.S DE WITT 236 398 305228-000 Jose G Perez et ux Seoternber 1. 200 7 Hawke Enterorises TEXAS DEWITT 236 445 • 305230-001 Patricia Ann Shocldev Aun\Jst S. 2007 Hawk., Enl:aro<isea TEXAS DEWITT 236 449 305232-009 Phil E Mueller et ux Auaust10 2007 Hawke Enll!!rroses TEXAS DEWlTT 236 390 30523-4-000 Hilmer E Kooomarin et al. Seotember 4, 2007 Hawlte E~ses. TEXAS DEWITT 243 827 305235-00-0 Robeit G Watson el ux September 5. 200 7 HawkeEnte~ TEXAS DEWITT 236 413 236 380 "00 305236-000 .Ravmood W Pawlik Jr Seotember 5, 2007 Hawke Enternrises TEXAS DEWITT 305245-000 Karen B Robinsoo SEIP!ember 24 2007 H ""''ke EnrerDrises TEXAS DE WITI 2.43 819 3052-48-000 Edwin A Baros SPnlember 10, 2007 Hawke Eote<D<isas TEXAS OE WITT 243 826 305258--000 Hilmer E Kooomann Seotember 4, 2007 Hawke Enterorises. TEXAS DEWITT 243 812 C') 305260-001 Elizabeth C Connois Auoust 30, 2:007 Hawke En!emrisas TEXAS OE WJTI 236 433 305260·002 Catherine Clark Ralston Aooust 30 2007 Haw!<e En!etpli&es TEXAS DE WITT 236 431 0 305261-001 Richard H Borchard Jr Auaust 28. 2007 Hawke EntemriS&s TEXAS DEWITT 236 394 '"'O 3052U2--001 Raloh Borchard el ux Auaust 28, 2007 Hawke Enternris~ TEXAS DEWITT 236 443 0 0 0 0 3 at5 0 (D (..) .i;::.. 465 --····--·-- --- -- · -·--·-- - -·-·····-·---·--···-···- ·• - - --·--··· - · --- - ···-·--·-··· (") --· 0 ::l a. ct) 30530S-OOO Isabella Nelsoo Barrett October 4 . 2007 Hawke Enterprises T EXAS DE WITT 243 818 305310-000 Ke ndr1cl<. W Baros et tu September 24 , 2007 Hawke E nterp rbes T EXAS DE WITT 243 825 :::J ~ 305311-000 Cec:J M Davi<ison el ux Seotember 13. 2007 Hawke Enterprises T EXAS DE WI TT 236 429 305312-000 Quentin L Yam:ev et ux October 5. 2007 Hawke Enterprises TEXAS DE \'VITT 243 808 ~ Mereloo Love! et ux 30 5 31 3--000 Seotember 7 2 007 Haw'~e Entertxises TEXAS DEWITT 236 382 305314-000 Martin Alllarez Castillo etux November 20. 2007 Hawke En!efi:>rises T EXAS DE\NI TT 243 867 305 3 17--001David A WriQht and wife Patricia Wright September 10. 2007 Hawke Entemrises TEXAS DEWITT 236 441 305328-000 Huebner Trust Seotembe< 24. 2007 Hawi<a Enterprises TEXAS DEWITT 243 806 305331-000 Marvin Stanchos SeJ)1ember 6. 2007 H awke Emerorises TEXAS DEWITT 243 811 236 • 305370..001 Michele Maraldo et al Seoll!mber 11. 2007 Hawke Enterprises TEXAS DEWITT 427 3053 7 4--000Fred C H®hes et ux Sentember 26, 2007 Hawke Enterprises TEXAS DEWITT 243 829 305384-000 Isabell Ann Van Beveren Seotember 26. 2007 Hawlle Enterprises TEXAS DE WITT 243 815 305387--000 Jerry McAda ms et ux October 22. 2007 Hawke Enterprises TEXAS DE'MTT 243 865 305392-000 Mariorie BrEX<len et a l October 25. 2007 Hawke Enlemfises TEXAS DEWITT 243 854-855 305393-000 Mariocie Breeden et al October 25. 2007 Hawke Entemrises TEXAS DEYVITT 243 860 305466-001 David L Urban Seotember 26 2007 Ha:wi<e Enterprises TEXAS DEWITT 243 810 305466-002 Wavne D Urban September 26 2007 Hawke Enterprises TEXAS DE WITT 243 809 3054SS.001 Donuld Jansky et ux Seotember 1. 2007 Hawl<e Enterprises TEXAS DEWITT 24 3 80-4 30547 1-001 Joel P Smith et tu October 3. 2007 Hawlle Enterpri ses T EXAS DE WITT 243 816 305480-000 Karen Koopmann K oenig Oc!ober 22. 2007 Hawl\e Enternrises TEXAS DEWITT 243 875 305482-000 Ralph KOOPm ann October 22. 2007 Hewi<e En!!!rnrises TEXAS DEWfTT 243 874 305486-000 l.ofeoe H Koopmann October22 2007 Hawlce Enterprises TEXAS DE WITT 243 876 305518--000 Sandra H ilOOc!l et al October 22 2007 Hawke Entsrprises TEXAS DEWJTT 243 872 305530-000 Elenora Klaevemarm Odober 10 2007 Hawke Enterorises TEXAS DE Vl.1TT 243 862 305533-000 Ken t Edward H iibric:h et ux Nove mber 16. 2007 Hawke Enterprises TEXAS DE WITT 243 865 305.534-0(}1 Elenora Klaevemann October , 0, 2007 Hawke Enterprises TEXAS OEWlTT 243 891 :A 0 305545-000 Lois B Chesney 305598--000 Ameila Ortiz 305603--000 Elna Bioas 305616-000 Michael A~lhon·1 Maron 30563 1--000 Cart H Schlenker Jr Estate September 2.0 2007 October 17 2007 A1...,ust 10. 2007 ()ctober 10 2007 October 26 2007 H awke Hawke Enterprises Enterprises Hawke Enrerorisas Hawke Enterprises Hawke Ent&rorisas TEXAS TEXAS TEXAS TEXAS TEXAS DEWITT DE WITT DE'MTT DEWITT DE WITT 238 2 43 234 238 243 291 832 3S4 268 879 • 305632--000 Harland Sch.lenker et al Octobe<' 26, 2007 Hawke Enlerorisees TEXAS DE WITT 243 869 0 305635--000 Hariand Schlenker et ux Ociobe.- 26, 2007 Hawk e E ntemrisas TEXAS DEWITT 243 87 1 (') 305678--000 Jeanne E Gueniero October 22, 2007 Haw'ke Enterprises TEXAS DE WITT 243 877 305774--000 G W Lamb Ill e1 Li)( November 1 2007 Hawke Enterprises TEXAS DEWITI 243 856 0 305787-001 Geo<oe Lcwma1 November 7. 2007 Hawiote Enterprises TEXAS DEWITT 243 897 '"'O 305787-002 Heav Stakes November7. 2007 Hawke Enterprises TEXAS DE WITT 243 895 0 0 0 0 4 015 0 (0 w 01 466 (") 0 ::I -·c.""""co 305767-003 EdlWl Ear1 Gaxia No;-ember i . 2007Hawke Enterprises TEXAS DE V'llTT 243 893 3059'32-00l C bff0<d Owavne ?ar!<er et ux July 30 2007 H3\ri;e Ente ronses TEXAS DEWITT 233 723 ..... ::I 3059.32-002 James K Crain et at 3059.39-000 w i Mumme ~t ux December 19, 2007 Hawke Enteronses November 1. 2007 Hawke Enteror~ TEXAS DE WITT TEXAS DE V'.1TI 267 243 252 886 ~ 306048-001 Debbie Lynn Hileman November2t 2007 Hawke Enlernrises TEXAS OEWlTI 243 885 3()6(\( 9--000 MeMn R H1lbr'id1 6< ux No\-emb-ef 15 2007 Haw!<e Enlernrises TEXAS DE WI TT 243 839 30622()-()00 Jo1\anna Wild May 3 2007 Haw1\e Enteronses TEXAS DE WITI 226 372 306925--00, Robert L Zaiontz Dee>!mber7, 2007 Hawke Enterprises TEXAS DEWITI 252 351 TOGETHER WITH All AMENDMENTS. RATiFICATIONS, CORRECTIONS ANO/OR MODIFICATIONS OF THE Oil, GAS MID MINERAL LEASES DESCRIBED HEREIN • X) ., --< ~~- ~ -3 ~.~~-: ~ ~il ~ - · ;11 n -~~0~6- -£'.it )'- o <,~i1~~> o~i ~. 8"'. ~ F er: • <OJ a --- #rr. ;:i a.. -f"I ~ ~ ~ ~'i ~;~ :<m ~ ~ -:S- ti ~7- co~ g ~ o. ~ c.o o O. a c,..... 1~ r ~~-~--- :op-~~.0 ~ ~1 ~.,, ~; g~ =" ~ir~~ 0 0 o~ g ~ "2 lf ;«f _, ~>= .,.~ I · 0 JJ~i:lO.. -, ("') ~ ... ,j <=>' I) "" l:::; 0 ' ...ii!?'~ ~ ~ r ""O 0 0 0 0 5 of 5 0 U) w en 467 • 79812 NOTICE OF CONFIDRNTIALlTY RIGHTS: IF YOU ARE A NATURAL PERSON, • YOU MAY ru:MOVE OR STIUKE ANY OF TlfE FOLl.0\'tlNG INFOAAIAT!ON FROM nns INSTRUMENT BEFORE fT IS FILED FOR RECORD IN T1IE PUBLIC RECORDS: YOUR SOClAL SECURITY NUMBER OR YOUR DRIVER'S LICENSE NUMBER RATIFICATION OF OIL, GAS AND MINERAL LEASE STATE OF TEXAS § § COUNTY OF DEWITI § THAT WHEREAS, Lorene H. Koopmanii, as Lessor, did ex~ute and deliver to Huwkc Enterprises, as U:ssee, a Pa.id-Up Oil, Gil:! und Mineral tease dated Ociober 22, 2007, a Mcrooraudum of which is recorded in. Vo1L1mo 243, Pugc 876, Official Records, De Wi n County, Tex.as, covering U1e fo llowing described tract of land: 120 sues of lnnd, more or les.$, being u pu.rt of Section no. 13, lnd iftliol~ Railroad Company Survey, A·272, DeWitt County, Texa.s, and being the :111mc lnnd described as 'Truct No. One' IJ\d Tmct No. Two' in that certnin Deed dntcxl December 27, 1996, from Lois Stricber, individu~.l ly Md as lndq><:ndent Executrix of 1ho Esta.le of Jerry Striobcr, de<:eased, a.S Gnntor, to Gilbert A. Koopmann and wife, Lorene H. Kooprnlllw, 115 Grantee, recorded in Volume I 4, Page 425, Offici•l Records, DeWitt County, Tc XA.!1 . (bcrcinll Ae: ~fcrred Co., the "Lc.uc") Referem:e to the Lease and the record of the Memorandum th~rcof bei.ng here made for all purposes mid WHERE.AS , the Lease was assigned to BUJlingtan Re..murces Oil & Gas Company, LP in an Assignment da1cd effective January 9, 2008, m:orded in Volume 250, Page 822, Official Records, De Wirt County, Texas; WHEREAS, the lease was ex.tended in a Notice of Exercise of Options to Ex1eoo Mineral Lea1cs dated March 3.u, 2010, which is rt'Cordcd in Volume 305, Page 12, Offic.ial Records. DeWitt County, Texas; 11J1d WHEREAS, it is tbe desire of Lois Strieber hereto to udopt, ratify and c.onfinn said Lea~. ns wnended. NOW, THEREFORE, in c-0osiderution of the prcmi.,cs am.I other valuable coo.siclcration, the receipt of which is hereby nclmowledged, l, LO IS STRIBBER, do hereby ADOPT. RATIFY and CONFIRM !.he U'11Se, as amended, in all of its terms and provisions, and do hereby LEASE, GRANT, DEMfSE.and LET unto the suid Burlington Reso1Jrccs Oil & Gas C'...omrmny, LP, its sucasso.rs ll.fld assigns subj~t to iuid in accordance with all of Uie tenns and provisions of said Lease, as u.mended, ill fully und completely ll$ iff had origiMlly tx:en named as .a Lessor in the Lease e.nd had rn:cutcd.. acknowledged and delivered the $atrlC. And l do hereby agree and decl11re Urnt the Lease, as a.mended, in all of it.!! term s nnd prnvi6ions i binding on me and is a valid and subsisting oil, gll.3 and m(neral lease. Execu ted this !) 1 l.ois Striebcr Rutificalion of Oil OllS Mineral uase Confidential KOOCOP00000946 469 NOTICE OF CONFIOENTlALITY RIGHTS: IF YOU ARE A NATURAL PERSON. YOU MAY R!!MOVE OR STRIKE ANY OR ALL OF TiiE FOLLOWING INFORMATION FROM NlY INSTRUMENT THAT TRANSFERS /IN INTEREST IN REAL PROPERTY BEFORE IT IS FILED FOR RECORD IN me PUBLIC RECORDS: YOUR SOCIA).. SECURITY NUMBER OR YOUR DRIVER'S LICENSE NUMBER. ROYAL TY DEED STATE OF" TEXAS KNOW ALL l<IEN BY THESE PRESENTS: COUNTY OF OEW1n Thal I, Lo!s S\rl~b.r. hereina.~er 'Granter'. P.O. Box 458. Yorlltowr'I; TX 78164. Oe\Nll\ Co1Jniy, Texas, for ond In consldoration or Ten and No/100 Dollar.; (S10.00) and otner good, valuable, nnd suffa;lenl consldtm llon lo me, l/le receipt and sufflclcm;y or which Is hereby acknowledged, Herein g1unts, sells, and conveys, unto Burlin~lon Resources. Oii 8. Ga3 Company LP. o Delaware ilrnt!od partnar.ihlp, who!i! acldr11tts 19 6-00 Nortll Dairy h!hford, Houston, TX no79, horelnaltn1 "Gra n11to", gixly pe1cool (60'/o) of Granlor'1 lnt111113t In U111 royal\Jila dorivod by Gmntor from tho production <X · all, oas. casing head ga•. go..oollno, difi1Jnnto ond condensato produced from !he toflov.i rig descrlbl!d land' or lands pooled therev.1tll: ~: All lhoil cortaln IOt. tr.ict. wnd/or parcal of land, lying and being situated In OeW1t1 County. Texa&, Wesl of the Guadalupe River, be!ng a part of Sedlon No. 13. Indianola Railrond Company Survey conveyed by V. W~don lo Henry Grube, by dC!<:'d d1ltd Novomber 20, 1690, ~ In VOiurna 3:1, PagM 38-40. Coed Rocords of ()<)Witt County. Taxas; and c.:rnveyed to Un~ MutJler, ne~ Grub•, by Henry Gruba tiy deed doled March Z4 , 1905, and by August Gru~. and W ullam Grube. by deed dali!d Soptembor 25, 1005, an<I by Adolph Grube 11nd Christian Grub&, by deed dale<! November 22, 1905, oll of said deeds being of rocord lo "1e Oee<l Recor~ of OcWiU County, Tu.<as; G<ild tract of land being described by meles and bounds .as follows, lo- w~ BEGINNING nl l1'e most noMem romer of U1u W.F. l\Jnorbach 100 acres tr<1et of land on iha noc1heas1llna of Soction No. 19. and thn !Oulhwe.st ilne of SecUon 13; THENCE. North 25 degn>e.$ E&>l 050 vora.:> to" • l t1ke, THENCE South GS del)rees East 5S4 va'"3& toe atal<e; THE NCE Sou!h 25 d11greas West 958 var.is to a sl<Jlto on the southwest llne of Se<:Uon 1J, and th~. r\OrtNlasl II~ ol Section 19, tho m°" t cutam ccf!l<'r of W .F. Afflerbo.:h'e !and, l"HENCE NORTH 65 DEGREES Wast 594 YOrti to tho place of b-eglnning, containing 100 aero~ of Jund, mora 0< fess. and bolng the name p(Operty describe<:i In deed from Henry G. Atn~rtlBch et al to Martha E. Hoepkan, Clatt'ld March 17. 11156, record&d In Volum<' 137, Page 612, Deed Records or DowiU County, Twcas and being the same property described In deed froni Ma.rtJ1 E. Hoopkon et vlr to Jerry Sltinber et ux, C!alod Octobor 15, 1969, r1corded In Volume 179, Pago 220. Doad Re<;Orda of D.iWltt County, TX. Trac t Two· /'JI ll\u( ~rtaln lot, lract arnllor per~I of land, tying and being situated In DeWitt County, TSJ!'.a.5, a p.art or ttle Sectlon 13, lndlanOla. RR. Co. Sur1ay, and a part al lt1'I 100.8 acr~ tract ot !and con~ye.;i to G. w. AHletbach by John F. Kub;il.a et ux. Therua Kubala, by d&ed tlal&d Au9<rnl 4, 191g, recorded In Volume 63, Pago -4, Dot..'<! Rucoros of DoV'iltt County, Ta><as and deticr1bed iu follows. to-Wit llEGINNING at a Sl.Jkll, tho e~sl corner of llou 100.S acto tract. being lhe nortl1 comer 'CA 0:i. G w. Afl\e1ba:dl ;oo a1:1e tract THENCE Norl1' 65 degraea west 118.3 vara~ to~ smka, me north corner of \his vact and the Eosl comer of th\! Emil Borchard~ 80.e acres lraci; THENCE Soup1 2,5 dogree;; West 953.3 vardg to a stal<a ror corner; TMENCE South 65 degte<ls East 116.J varn~ to u ~ka. tha west corner of tile 100 ~cro Inlet bolon9lng lo G.W. All\elbadl; 1HENCE North '2.5 oegrees East 953.3 varaa to lho placu ol BEGINNING, COl\talninQ 20 llCNI$ of land. mo<e or tut. being lho $1lmo rr.c1 descnbed In deild from Henry o . Amcrbaell et ~I dated IY.atdl 17, 19515, recon1ed In Volume 137, Paga 611, Deed Confidential • • ·· .. Roccros of DeWitt County, Texas, a~cl be!i1g the same property dos.crit;G<l I/\ daoo from Meta A ond He1mar1 A. Rle.dasel to Jl)(T)' and Lois Striobor, d~tco ~ober 20, 1009, recorded in Volume 179. Pa~:313. De&<! Records of DeWlitCounty, Taxu . ThiS CQnvoyanc.1 iS made an.:1 acooipttd e;.;pc~y ~ubject to tho temis ol any valid and wbsisting oU , gll.'I and mlne111t !ill!!le cir~ oove1lnq tht laoctt made pr\ot to the dew of tti!I Royalty Deed, bUI covers tho lnter~t In royaltie:s desaite<l above o1 al gucil oil. gea, caalnghead I.Jal, gagoline. di6tillate and 0011donsatn due and to be paid unoor !he terms of any guch loa~o or lttases as 11 royalty illleresL Notwith$tandlng lho f0<eiolng, It Is expressly undel"ltexx! ~I ti\e provlli\Qr.i; of lllls paragraph a/lall no\ have the e ffect ol ravMng, raUfylng 01 edrnltt!llg eny 5vch lea!e or leases lhal (ru)y have hero!OIOOJ tormlnated In W!'.ole or In part, nor of ostoPPll19 the Grantee horotn from asslltting lha Invalidity or termlnatioo of MY such poor oU, gas 3/ld rnlnorar leae.e or loo6Cs. Orantor agrees to execute and dellver ta Grantee 011 :wch oth~r additional assignments, notices, divloion omcrs, transfer oroor.i , and al!ler documents and to do all &uci1 other and furthor ac\$ and thing~ ss may bQ noce$Sary lo more fully and cllectively assign and convey to Gran!ee U1e rights, titles. lnturou ts, and estates In the royally conveyed hereby or lnlendod so to bo To have and to hold, the above d~scrlbod pr~mi>le~ . logqth~r with 1111 and nlllf)ular Uio rjghl6 and appurton3nc93 thereto In anywise belonging, unto lhe Granlt!o, ibl heirs and aosigns. forov • r. This Royalty Do~d Is rnudo without warranty of tltio, C.lqlro:;~ or lmpllod. Grontoo rePfOSCnt.G, confirm5, and worrnnt5 to Orantor I/1st the ooqu~rnon and nccor;.l.'»nce or !his Royalty Deed by Gr~nlce Is based upon Gr;lnloa's lndepandeot investJgallori and d.aterminntion or the economkl potenUal, qu~11Uty, arid velue, tt oily, of pny Q\I end gas that may be a part of the above de9Cliboo promlws. and tnat Grantee hns 110\ and l!l ri-0l rulylnD upon any etatemen~ Jo formation. Of roprnentallon thal may havo i>.en made or glvftn by Grontoi· In lll\Y n'lanner pertainl~g to :Wch tnatte11. WITNESS m)' hand this~ d3y or Aug us~ 2011. GRJ>.NTOR l.Ols Slriewr GRANTEE BURLING N RESOURCES Oil & GAS COMPANY LP By: BR G INC., fta sole General Partner ··."- -- -- - - . - - - - - - - - - - -- - Confidentia l KOOCOP00001019 472 ························--·- ····················- ···- ··············- --- - · · - - - - - - -- - ACKNOWl.EOGMEICTS STAtE OF TEX{IS § ,A}u..t.c. t. S § COUNTY OF-Ol:;Wfff § Thill !ns\f\Jment was Lots Stlieber. acknov~t1dg~d b~f011> me ol\ the L(.,+/.i day of a (j /.s :; t-I< I 2011 , by ~£ rfo~~r [Geal) Typed or Prlntild Nam11 of Notary Notary's Comml&slon explres: _ _ __ STATE OF TEXAS § couNrvoF Barri.$ i This instrum11nt was acknowlwged before me on tho lSi1l day of A~u;;;{ 2011, by DaYid w. Twomey, Attorney.Jn-Fact or BROG GP, !no.. as Sola general partner of 8\J(ngton Resources Oil I!. Gas COmpeny LP, a Delaware limited partne~hip, on behalf of lti6 partnership. [$eat] Notig l'tl~ Stats of Teim.s , 1 o e moruc01 Typed or Printed Name or Nota~ J. Notary's Cornrn~lon aXj)i~:) ;;)0 /} . ' Confidential KOOCOP00001020 473 ·-- . ···-- -·- -- ----' .,,, tonocoPhil lips id:/\/. i'POPER f Y AUt1 il INTEROFFICE CORRESPONDENCE 805 32 I JM! 2J 1. TO: Cindy D. Blevins 810G POB Bartlesv ill e t.' -· ) SUB JECT: Check one New Contract Setu_e_ - Maintenance Data F i l i~.a_ x FROM: Sheryl Kohl DATE: L.;>- l Lo. 11 AGREEMENT NO.: 2Jf54~ ·cn::J TYPE OF AGREEME'NT: W~aJty [)Ge_J PARTIES: ~U\f..., \-\ . ~~OX'£\ . PROSPECT NO:i08.JJJA PROSPECT NAME: Eagle Ford COUNTY: Dcl.D;t\' STATE: TX WE LL NAME(S): NIA PROPERTY NUMBER: NIA REMARKS: for THANKS . PLEASE ACKNOWLEDGE RECEIPT OF TH IS PACKAGE BY SIGNING IN THE SPACE BELOW AN D RETURNING THIS I THE SENDER. Confidential KOOCOP00001021 474 ·-. 79555 NOTICE OF CONFIDENTIALITY RIGHTS : IF YOU ARE A NATURAL PERSON. YOU MAY REMOVE OR STRI KE ANY OR ALL OF THE FOLLOWING INFORMATION FROM ANY INSTRUMENT THAT TRANSFERS AN INTERE ST IN REAL PROPERTY BEFORE IT IS FILED FOR RECORD IN THE PUOLIC RECORDS: YOUR SOCIAL SECURITY NUMSER OR YOUR ORJV.ER'S LICENSE NUMBER. ROYALTY DEED STATE OF TEXAS KNOW ALL MEN BY THESE PRESENTS : COUNTY OF OEWITI Tna\ I, Lois Strieber, hereinaf1er ··Grantor' . P.0 Box 458, Yorktown , TX 78164 , DeWitt County , Texas, rar and in consideration or Ten and No/100 Dollars ($10. 00) and atne1 good, valuable. and or sufficient consideration to me, the receipt .and sufficiency which is hereby acknowledged, Herl!ln giants, sells, and conveys, unlo Burlington Resources, Oil & Gas Company LP, a Delaware limit~ partnership, whose address is 600 North Dairy Ashford, Houston , TX 77079 . hereinafter "Grantee', sixly percent (60%) of Grantor's Interest in the royal1ies derivad by Granter lrorn the production of oil, gas, casinghead gas. gasoline, disttllate and condensate produced from the following described lands or l;;inds pooled therewith: Traci One: All thal certain lot. tract. and/or parcel of land. lying and being situated in DeWitt County. Texas. West of the Guadalupe River, being a part of Section No. 13, Indianola Railroad Company Survey conveyed by V . Weldon to Henry Grube, by deed dated November 20, 1890, recorded in Volume 33, Pages 38-40, Deed Records or DeWitt County, Texas; and conveyed to Lina Mueller, n~ Grube, by Henry Grube by deed dated March 24 , 1905. and by August Grul)e, and William Grube. by deed dated September 25, 1905, and by Adolph Grube and Chlistian Grube, by deed dated November 22. 1905, all of said deeds being bf record in the Deed Records of DeWitt County. Texas ; said tract of land being desc1lbod by metes and bounds as follows, lo- wit: BEGINNING at the most northern comer of the W F. Atftemach 100 acres tract of lano on the northeast line of Section No. 19, and the southwest Jlne of Section 13: THENCE North 25 degrees Easl 958 varas lo a stake; THE;NCE Sou th 65 degr'eos East 594 varas to a stake; THENCE Sout~ 25 degrees West 958 varas lo a slake on tt1e southwest nne or Secliori f 3. and the nor1heasl line er Section 19, the most eastern comer of W.F. Afflerbach 's land; THENCE NORTH 65 DEGREES Wes t 594 varas to the place of beginning, containing 100 acres or land, more or less, and being the same property described In deed from Henry G . Afflerbach et al tc Martha E. Hoepken, dated March 17 , 1950, recorded In Volunie 137, Page 612, D~d Records of Dewitt County, Texas and being the same property described In deed from Marth E Hoepksn el vir to Jerry S:rieber et ux, dated October 15, 1 &69, recorded in Volume 179, Page 220, DeE!(J Records of De Wit! County, TX Tract Two: All that certain lot, tract and/or pari:el of land , lying and being situaled in DeWitt County. Texas. a part of ttie Section 13, Ind ianola R.R. Co. Survey, and a part or the 100.8 acres tract of land conveyed to G. W. Aftlerbach by John F. Kubala el ux . Theres.a Kubala , by deed dated August 4, 1919, recorded In Volume 83, Page 4, Deed Recoras or DeWitt County. Texas and described es rollows, to-wit: BEGINN ING at a stake, Uie east corner of the 100.8 acre tracl being !lie nonh corner of the G.W. Afflerbach too acre tracl; THENCE North SS degrees west 118.3 varas to a stake. the north corner of this tract and the East corne r of Urn Em il Borchardt, 80.8 acres trncl THENCE South 25 de91ees West 953 3 varas to a stake for corner, THENCE Sovli1 65 degrees East 118.3 varas lo a slake, !he w~I corner of the 100 acre tract belonging to G.W. Affle1bach; THENCE North 25 degrees East 953.3 varas to the place of BEGINNING. containing 20 acres or land, more ot less . being the same tra.ct described in deed from Henry G . Attlerbach et al dated March 17. 1956. recorded in Volume 137. Page s ·11 , Deed '" Confidential KOOCOP00001022 475 ( . Records cl OeW11t County , Texas. and being I/le 'arno property described •n deed rrom Mela A and Herman A . Riedesel to Jerry and Lois Slneber. dated October 20. 1969. re<;orded in Volume 179. Page 313 . Deed Records o f OeW1H County. Ter.•• This conveyance i ~ made and ar.ceptod expressly su b1ecl to the terms of any valid and subsistin g 011. g~s and m ineral tease or l eas~s coverinlJ the ra nds mado prior to th e date or this Royalty Deed. bu t t;Ovo rs lhe interest in royalties described above of all such oil. gas , casin9head gas. gasoline. dlsll l l~tc and conoel)sale due and to be paid under vie terms or any suc t1 lease or leases as a royalty in t ere~I No tw1thst<lnd1ng the l01agoing. 11 is exp1e5sly understood !hat the previsions or thlg paragraph ~hall nol have the eHeci ol ;cviYing. ra~lyhg or adm1t11ng any sueh toa se or leases that may have here1oforo terminated in whole or tn part. nor ot os topping the Grantee herein from a:;serting the invalidity or termination of any such prior oil. gas and m ineral lease or leases. Grnntor agrees to execute and deliver to Gra ntee all sucf1 other addltlona t asslgnm11nts, nOlices. division orders. transfer orders, and otner documents and to do all ~uch olner and fur1he r acts and th ings as may oo necessary to more fully and eflc-ct•vely assign and convey to G rani ee the rigt1 ts. ~Ues, •nlerests. and es tates in thr. royatty conveyed 11oreby er ir.tended so lo be. To nave and lo hold. the ·above desrnboa premises, loge lhar wilh all and singu lar th e rig hts ano appurtenances thereto '" anr.vise belcng1ng , ur11o the Granloo, Its heirs a nd assign s, forever . Thi& Roya ll y Oeod is mode withcut warra nty o f 11110. express or implied. Grantee represen ts. "'nfirms. ~nd wa rr ants to Grantor U1a1 the acquisition and acr.eplance of f11ls Royalty Deed by Granlee ls based upon Gr:rnteo·s independent u1vest1gation and de1ern11nat1on of l11e e~onomic polencial . qlwnliiy. and va lue . II any , of ai y oil and gas thal may be a part of the above described premises, and Ina! Grantee has Mt and rs not 1elying upon an·t 5Ultemenl. information. or repre3entatron that may have been made or grveci by Granter In any manno r per1aining to such matters. WITNESS my Mnd this _jJ£!:_ day ol Augus t. 201 t . GRANTO R Lois Slrlebe r ~k~w GRANTEE BURLIN N RE SO URCES OIL & GAS COMPAt~Y LP By. BR G G INC., its sole General P artne r Oy· N~m-e-._-i..;)£!1U...~~~~='-:l:,---- Tltie: Confidentia l KOOCOP00001 023 476 \ ,'"/, I ACKNOWLEDGMENTS STATE OF l'E>l,AS § /J1.<. "'"c.'t.::; § C0 UNTY 0 F .QliWff'T'" § This instrument was acknowledged before me on lhe / k.r/,, day ors2,.,;J'' 1f . 2011 , by Lois Slrieber. · .J-- (sea l] Typed or Printed Narne or Notary Notary's Commission expires: - - - - - STATE OF IEXAS § COUNTY OF jdo..rri$ ~ This inslrumont wag acknowledged before me on lhe ~day ~uJf or , 2011. by David W . Twom ey, Altomey-in-Fa<:I of BROG GP, Inc., as sole general partner 01811ington Resources Oil & Gas Company LP, a Delaware limited partnership, on behalf or the par1nership. , NICOU MAAUCCI (sealj ® ;~ MT COMMJ8llJOtl EXPIRE.! MJOU8T27, :ZOt t N°f!Q' Pu~lic, State ofTexa.s 1CO .Q rY)a.r11 CC,1,, Typed or Printed Name of No1arg NotBry's Comm ission expires. • J l :;J'] 0 -.:iD } J 1 Confidential KOOCOP00001024 477 ConocriPhillips Diane Schaenen, CPL Starr Landman - North Eagleford Aaset Team Gulf Coast Bu1lness Unit 3Wl-5012 P.O. Box 2197 Houston, TX 77252-2197 Phone: 832.486.3922 Fa11: 832.-486.2296 December 7, 2011 Ralph Koopmann, Individually and as A-1-F for Lorene Koopmann 774 Slanchos Road Yorktown, TX 78164 Karen M. Koenig, lndlvldually and as Attorney in-Fact for Lorene Koopmann 3489 Slate Hwy 72 W. Cuero, TX 77954 Lois Strieber P.O. Box458 Yorktown, TX 78164 Re: Shut-In Royalty Payment Lackey Unit A #1 well DeWitt County, TX Ladies and GenUemen: Bur11nglon Resources Oil & Gas Company LP \Burlington") recently dnlled the captioned well in DeWitt County, TX. The well was spudded on October 30, 2011, and the drilling rig was released approximately November 28, 2011 We anticipate beginning a frac job on the well December 11, 2011, which will last four days. Subsequent to frac'ing the well, we will flare it for two days to establish commercial production. The spacing unit for said well Includes an oil, gas and mineral lease from Lorene H. Koopmann to Hawke Enterprises dated October 22, 2007. The deed from Lois Strieber to Gilbert and Lorene Koopmann requires commercial production on or before December 27, 2011 or the interest retained by Mrs. Strieber reverts to Mrs. Koopmann. However, the deed also provides for the payment of shut-In royalties. We are tendering shut-in royalties to ensure that all parties' interest, if any, in the well is maintained. Consequently, we are enclosing checks for all of you which constitute shut-in royalty payments and conform to the terms of the deed from Mrs. Strieber to Mr. and Mrs. Koopmann. We anticipate that the Lackey Unit A #1 well will be producing first quarter 2012. Diane Schaenen Encl. Confidential KOOCOP00000903 479 ConocJPhillips - Riiey Nelson ConocoPllllllp& Company Land-Gun Coast P. 0. Box 2197 Houston, TX 77252-2197 Office: (832) 486-6406 Fax: (918) 661-6172 !Wey .G.NelaOt\OCOOOQOPhi~ps.com February l, 2010 Lorenc Koopmann 405 Fm 108 Yorktown, TX 78164 Re: Notice of Assignment of Interest in . Oil, Gas and Mineral Lease Dated l 0/2212007 Recorded in De Witt County, Texas Lse # 305486-000 Dear Lessor: Reference is made to that certain Oil, Gas and Mineral Lease ("Lease") dated 10/2212007, between you and Hawke Enterprises, which Lease is now owned by Burlington Resources Oil & Gas Company LP ("Burlington"), an affiliate of ConocoPhillips Company. Per the terms of the Lease, we arc providing notice of an Assignment of Overriding Royalty Interest (''OR.RI'') in said Lease from Burlington to Texas Crude Energy, Inc., whose address is 2803 Buffalo Speedway Houston, T~xas 77098, effective December I, 2008. This ORR! is carved out of Burlington's working interest in your Le8se, and does not affect your royalty interest designated in said Lease in any way. A copy of said Assignment is included for your own personal records. If you have any further questions, please feel free to contact "me. Sincerely, ~~~ Riley Nelson Landman Encl. Confidential KOOCOP00000904 480 Gingerich, Todd R From: Alstrom, Tuff B Sent: Wednesday, October 19, 2011 9:28AM To: Gingerich, Todd R Subject: FW: Lackey Unit A #1 well A717077 DeWitt County, TX Go ahead and put !his one on your calendar as well. Tuff Alstrom (918) 661-0323 From: Schaenen, Diane Sent: Wednesday, October 19, 2011 9:21 AM To: Alstrom, Turf B Subject: RE: Lackey Unit A #1 weM A717077 DeWitt County, TX Absent production or a shut-in payment, the Royalty Deed expires 12-27-11. I thought if we paid it on or about the 1st of December, it might be a nice Christmas present for the Striebers, and might take away some of the sting from the Koopmann's, who were expecting to receive the entire 22.5% royalty. Nso, the well should be drilled (but not completed) by Dec.ember 1. If we pay the Koopmann's sooner than that, they might be inclined to fight the language in the deed requiring wells capable of "commercial production". I don't want to fight that battle any sooner than I have to! · Thanks very much for your attention to this matter! Diane From: Alstrom, Tuff 8 sent: Wednesday, October 19, 2011 9:14 AM To; Schaenen, Diane Subject; RE: Laclcey Unit A #1 well A717077 DeWltt County, lX Diane, we can take care of this with no problem. Do you know when the payment is actually due? We can make it anytime but if you are wanting to wait until December we can do that too. Tuff Alstrom (918) 661 -0323 from: Thomas, Sharla L Sent: Wednesday, October 12, 2011 11:49 AM To: Schaeoen, Diane Cc: Alstrom, Tuff B Subject: FW: Lackey Unit A #1 well A7170n DeWitt county, nc Dione- Tuff Alstrom with our RPA- Property Maintenance group pays the rentals, shut-ins etc on the Eagle Ford wells. Via this response I have copied Tuff with your request. Best Regards, cJ7&aflla. ~ Division On:ler Advisor - Eagle Faro ConocoPhillips Company-Real Property Administration . 1 Confidential KOOCOPogq~o905 PO Box 7500 Bartlesville OK 74005·7500 e Pflone: 918.661.0522 FAX 918.662.3559 [email protected] fl"Qm: Schaenen, Diane Sent: Wednesday, October 12, 2011 11:17 AM To: Thomas, Sharia L subject: Lackey Unit A # 1 well A717077 DeWitt ColM!ly, nc Sharla - We anticipate spudding this well on October 23, 2011. I'm attaching a copy of the permit plat for the wen. Tract 4 covers an oil & gas lease from Lorene H. Koopmann. Mrs. Koopmann and her now deceased husband rereived their interest in a gift royalty deed dated December 27, 1996, wherein Lois Steiber (Grqntor) reserved 50% of the royalties (NPRI). Absent commercial production, the deed expires December 27, 2011, and 100% of the royaltles will vest in Lorene H. Koopmann. Mrs. Strieber has assigned 60% of her 50% of the royalties to COP, with the understanding that we will get a well down and producing in compliance with the gift deed, such that they don't lose their royalty interest on December 27, 2011 . We won't have the well producing in paying quantities by December 27, 2011 . However, the gift deed provides for shut-in royalties. Consequently, could you please put a reminder on your calendar to pay Lorene H. Koopmann (&her family) and Lois Strieber a shut-in royalty on December 1. The lease provides for $250/net mineral acre shut-in payment, & the lease covers - 120 acres. Consequently, payment to Lorene Koopmann (&her family) would be $1500, payment to Lois Strieber would be $960, and the 60% of 50% would be net tq COP. The·other leases in the unit don't expire until next · year, and we anticipate the well being on line at that point. I'm attaching a copy of the ownership portion of the August 25, 2011 drilling tiUe opinion for this lease for your infonnation, as well as a copy of the Royalty Deed from Lois Strieber to COP. If there's anything more you need from me, please let me know. I'll put a copy of this e-mail on my calendar for December 1, and we can communicate further on that date, if necessary. Thanks so much for your assistance in this matter. Please let me know if you have any questions. Diane «File: 2011101211110988.pdf » «File: 2011101211111765.pdf » «File: 2011101211150072.pdf » 2 Confidential KOOCOP09R90906 Page 1 of2 Gingerich, Todd R From: Schaenen, Diane Sent: Monday, December 05, 2011 6:22 AM To: Gingerich, Todd R; Alstrom, Tuff B Subject: FW: [EXTERNAL]Fwd: Lorene H l<oopmann oil & gas lease 305486-000 Attachments: 333-741 OPR.pdf Todd- Lorene Koopmann granted power of attorney to Ralph Koopmann & Karen Koopmann Koenig. Wlen you cut checks on this lease, please attribute her Interest 1/2 to Ralph & 1/2 to Karen. Please make the checks out to "Ralph Koopmann, Individually and as Attorney-in-Fact for Lorene H Koopmann" and ~Karen Koopmann Koenig, Individually and as Attorney-In-Fact for Lorene H. Koopmann". Thanks much! Diane From: Margaret Forrester [maitto:[email protected]] Sent: Friday, December 02, 2011 7:16 PM To: Schaenen, Diane Subject: [EXTERNAL]Fwd: Lorene H Koopmann oil & gas lease 305486-000 Diane, Here it is. Let me know if you need help with anything else. Thanks, Margaret ---·----- Forwarded message ---------- From: <[email protected]> Date: Fri, Dec 2, 2011 at 3:47 PM Subject Fwd: Lorene H Koopmann oil & gas lease 305486-000 To: [email protected] Dear Margaret: Attached is .pdf of the Power of Attorney dated 6/10/2010, filed 12/27/2010 #73542 333/741-744 OPR AlJ the beSt, Robert -Original Message-- From: robertjholleyjr <[email protected]> To: margaretforrester <[email protected]> Sent Fri, Dec 2, 2011 2:43 pm 1215/2011 Confidential KOOCOP09R90907 Page 2 of2 Subject: Re: Lorene H Koopmann oil & gas lease 305486-000 -Headed to the Clerk's office in 5 minutes ... wiH let you know -Original Message- From: Margaret Forrester <mamaretforrester®9mail.com> To: robertjholleyjr <[email protected]> Sent Fri, Dec2, 20112:39 pm Subject: Fwd: Lorene H Koopmann oil & gas lease 305486-000 Thanks again Robert!! Call or e-mail me if you have any questions. 512.913.5156 - - Forwarded message - - From: Schaenen, Diane <[email protected]> Date: Fri, Dec 2, 2011 at 2:34 PM Subject: Lorene H Koopmann oil & gas lease 305486-000 To: Margaret Forrester <[email protected]> Margaret - As we discussed, Lorene H Koopmann, Ralph Koopmann, and Karen M. Koef)lg each have 1/3 participating royalty interest in the captioned lease. I think I've seen something somewhere \I/herein Lorene gave Ralph and Karen power of attorney over her affairs. We will be paying shut-In royalties to Ralph, Karen, & Lorene next week. Please have someone check the county records for a Power.of Attorney document regarding Lorene. I think it would have been filed ~ince the beginning of 2011 . Thanks I Diane Margaret Forrester (512) 913-5156 Margaret Forrester (512) 913-5156 1215/201 I Confidential KOOCOPogepo908 Page I of2 Gingerich, Todd R From: Schaenen, Diane Sent: Monday, December 05, 2011 8:22 AM To: Gingerich, Todd R; Alstrom, Tuff B Subject: FW: [EXTERNAL]Fwd: Lorene H Koopmann oil & gas lease 305486-000 Attachments: 333-741 OPR.pdf Todd- Lorene Koopmann granted power of attorney to Ralph Koopmann & Karen Koopmann Koenig. Wien you Cllt checks on this lease, please attribute her interest 1/2 to Ralph & 112 to Karen. Please make the checks out to "Ralph Koopmann, Individually and as Attorney-in-Fact for Lorene H Koopmann" and "Karen Koopmann Koenig, Individually and as Attorney-in-Fact for Lorene H. Koopmann". Thanks much I Diane From: Margaret Forrester [mallto:[email protected]] Sent: Friday, December 02, 2011 7:16 PM To: Sc:haenen, Diane SUbject: [EXTERNAL]Fwd: Lorene H Koopmann oil & gas lease 305486-000 Diane, Here it is. Let me know if you need help with any_thing else. Thanks, Margaret -·---··Forwarded message------- From: <[email protected]> Date: Fri, Dec 2, 201 I at 3:47 PM Subject: Fwd: Lorene H Koopmann oil & gas lease 305486-000 To: [email protected] Dear Margaret: ~. Attached is .pdf of the Power of Attorney dated 6/10/2010, filed 12/27/2010 173542 333/741-744 OPR All the best, Robert -Original Message- From: rober1jholleyjr <[email protected]> To: margaretforrester <[email protected]> Sent Fri, Dec 2, 2011 2:43 pm 12/5/2011 Confidential KOOCOP00000909 485 Page 2 of2 Subject: Re: Lorene H Koopmann oil & gas lease 305486-000 -Headed to the Clerk's office in 5 minutes ... will let you know --Original Message- From: Margaret Forrester <[email protected]> To: robertjholleyjr <[email protected]> Sent Fri, Dec 2, 2011 2:39 pm Subject: Fwd: Lorene H Koopmann oil & gas lease 305486-000 Thanks again Robertll Call or e-mail me if you have any questions. 512.913.5156 - - - Forwarded message - - - - From: Schaenen, Diane <[email protected]> Date: Fri, Dec 2, 2011 at 2:34 PM Subject: Lorene H Koopmann oil & gas lease 305486-000 To: Margaret Forrester <[email protected]> Margaret - As we discussed, Lorene H Koopmann, Ralph Koopmann, and Karen M. Koenig each have 1/3 participating royalty interest In the captioned lease. I think I've seen something somewhere wherein Lorene gave Ralph and Karen power of attorney over her affairs. We will be paying shut-in royalties to Ralph, Karen, & Lorene next week. Please have someone check the county records for a Power of Attorney document regarding Lorene. I think It would have been filed since the beginning of 2011 . Thanks! Diane Margaret Forrester (512) 913-5156 Margaret Forrester (512) 913-5156 12/5/2011 Confidential Gingerich, Todd R From: Schaenen, Diane Sent: Tuesday, November 01 , 2011 1:26 PM To: Gingerich, Todd R Subject: RE: 305486-000 Attachments: 2011110113204539.pdf Todd- The calculations for Lois Strieber are correct The interest owned by Lorene Koopmann is split 1/3 to Lorene, 1/3 to Ralph, & 1/3 to Karen (see the first 4 pages of 1st Supp. OTO dated 7/26/11 ). Thanks I Diane 2011110113204539 .pdf (1 MB) Ftom: . Gingerich, Todd R Sent: Tuesday, November 01, 2011 9:45 Not To: Schaenen, Oia ne Subject: 305"86-000 Diane, I wanted to confirm with you the Shut-in payments for Lorene Koopmann and Lois Streiber. $75 • 120 acres = $9,000.00 Lorene Koopmann received 112 Interest from Lois, so she would get a payment of $4,500.00 Lois Streiber conveyed 60% of her 50% interest to Burlington per the Royalty Deed, so her total payment would be $1,800.00 Let me know if my calculations are correct and we will get the payment set up to pay both parties. Thanks Diane. Todd Gingerich I Associate Property Maintenance Rep Real Property Administration I ConocoPhillips Company I 820 J Plaza Office Building Bartlesville, OK 74004 Phone: (918)-661 -5133 I Fax: (916)-662-3557 · [email protected] 1 Confidential KOOCOP02~P0911 Gingerich, Todd R From: Schaenen, Diane Sent: Tuesday, October 25, 2011 9:05 AM To: Gingerich, Todd R Subject: RE: lackey Unit A #1 well A717077 DeWitt County, TX You were right; the amendment stipulates $75/net ac. Thanks for the catch! Diane From: Glng,rictl, Todd R Sent: Tuesday, October 25, 2011 8:06 AM To: Schaenen, Diane Subject: ~E: Lackey U!Vt A #1 well A7170n DeWitt County, TX Diane, were you able to determine an amount for the Shut-in Royally? Thanks again. -Todd Gingerich ~n,Olane Thursday, OdDber 20, 2011 8:11 AM Gingerich, Todd R RE: LacXey Unit A #1 well A7170n DeWitt County, TX I'll check & get back to you. From: Glnge:ich, Todd R Sent: Thursday, October 20, 2011 8:01 AM To: Schaenen, Diane Cc Alstrom, Tuff 8 Subject: RE: Lackey Unit A 1 1 well A7170n DeWitt County, TX Diane, after reading through the lease and the amendment to the lease, the highest amount I see for the Shut-in royalty Is $75 per acre. Is there another amendment that states $250 an acre or was it just an error? Thanks Diane. -Todd Gingerich frGm: Alsb'om, TulT B Sent: Wednesday, Octnber 19, 2011 9:28 AM Toi Gingeridl, Todd R Subject: FW: Lac:key Unit A #1 well A7170n DeWitt County, TX Go ahead and put this one on your calendar as well. Tuff Alstrom (918) 6G1-0323 from: Sdlaeoen, Diane Sent: Wednesday, October" 19, 2011 9:21 AM To: Alstrom, Tuff B Subject: RE: Lackey Unit A 11 well A717077 DeWitt C.ounty, TX Absent production or a shut-in payment, the Royalty Deed expires 12-27 -11 . I thought if we paid it on or about the 1st of December, It might be a nice Christmas present for the Strleber.;, and might take away some of the sting from the Koopmann's, who were expecting to receive the entire 22.5% royalty. 1 Confidential Also, the well should be drilled (but not completed) by December 1. If we pay the Koopmann's sooner than that, they might be Inclined to fight the language in the deed requiring wells capable of ''ex>mmercial production". I don'twant to fight that battle any sooner than I have to! · Thanks very much for your attention to this matter! Diane Fnlm: Alstrom, T"7' B Sent: Wednesday, October 19, 2011 9:14 AM To: Sc:haenel1, Diane Subject: RE: Lad<ey Unlt A # 1 well A717077 Diane, we can take care of this with no problem. Do you know when the payment is actually due? We can make it anytime but if you are wanting to wait until December we can do that too. Tuff Alstrom (918) 661 -0323 From: Thomas, Sharla l. .Sent: Wednesday, October 12, 201111:49 AM To: Sdlaenen, Diane Cc: Alstrom, Tul'f B Subject: FW: LacXey Unlt A 11 well A717077 DeWitt County, TX Diane- Tuff Alstrom with our RPA- Proputy Mainte.nonee group pays the rentals. shut-ins etc on ttie Eagle ford wells. Via this response I have copied Tuff with your request. Best Regards, ~~ Division Order Advisor - Eagle Ford ConocoPtiilllps Company-Real Property Administration PO Box 7500 Bartlesville OK 74005-7500 Phone: 918.661.0522 FAX 918.662.3559 [email protected] From: Sc:haenen, Diane Sent: Wednesday, October 12, 201111:17 AM To: Thomas, Sharla L SUbJec:t: Lackey Unit A 111 well A717077 DeWitt County, 1X Sharfa - We anticipate spudding this well on October 23, 2011. I'm attaching a copy of the permit plat for the well. Tract 4 covers an oil & gas lease from Lorene H. Koopmann. Mrs. Koopmann and her now deceased husband received their interest in a gift royalty deed dated December 27, 1996, wherein Lois Steiber (Grantor) reserved 50% of the royalties (NPRI). Absent commercial production, the.deed expires December 27, 2011, and 100% of the royalties will vest in Lorene H. Koopmann. Mrs. Slrieber has assigned 60% of her 50% of the royalties to COP, with the understanding that we will get a well down and producing in compliance with ttie gift deed, such that they don't lose their royalty interest on December 27, 2011. We won't have the well producing fn paying quantities by December 27. 2011 . However, the gift deed provides for shut-In royalties. Consequently, could you please put a reminder on your calendar to·pay Lorene H. Koopmann (&her family) and Lois Strieber a shut-in royalty on December 1. The lease provides for $250/net mineral acre shut-in payment, & the lease covers -120 acres. Consequently, payment to' Lorene Koopmann (&her family) would be $1500, payment to Lois Strieber would be $960, and the 60% of 50% would be net to COP. The other-leases in the unit don't expire until next year, and we anticipate the well being on line al that point. 2 Confidential KOOCOPOQ990913 I'm attaching a copy of the ownership lion of the August 25, 2011 drilling title op. for this lease for your information, as well as a copy of the Royalty Deed from Lois Shieber to COP. If there's anything more you need from me, please let me know. I'll put a copy of this e-mail on my calendar for December 1, and we can communicate further on that date, if necessary. Thanks so much for your assistance in this matter. Please let me know if you have any questions. Diane «File: 2011101211110988.pdf » «File: 2011101211111765.pdf » «File: 2011101211150072.pdf » 3 Confidential KOOCOP00000914 490 .Gingerich, Todd R From: Schaenen, Diane Sent: Tuesday, November 29, 201110:58 AM To: Gingerich, Todd R Subject: RE: Shut in payment lo Lorene Koopmann et al 305486-000 Dewitt County, TX 1rs not urgent. The 7th (or thereabouts) is fine. I'm in the process of putting together the letter that I'd like you to send with the checi(s. The mineral owners are NOT going to be happy, so putting off getting yelled at for a week is fine with me! Thanks! Diane From: Glngeridl, Todd R Sent: Tuesday, November 29, 201110:56 AM To: Sdlaenen, Diane · Subject: Rf: Shut In payment to Lorene Koopmann et al 305486-000 Dewitt County, TX Diane, our next check run will be on the 6th of December and we can get the check out on the 7th, but if you are wanting to get it out this week, let me know and we can have a check cut this Thursday and get it out sooner. I wasn't sure how urgent you were on getting the check out, so let me know and I will be happy to accommodate. Thanks. -Todd Gingerich Fram: Schat!nen, Diane Sent: Tuesday, November 21, 20111:08 PH To: Glogerictl, Todd R ~ RE: Shut In payment to Loreoe Koopmam et al 30548&000 Dewitt Coonty, TX Thanks! Hava a great Thanksgiving. From: Glngerldl, Todd R sent: Tuesday, November 22, 20U 1:07 PH To: !)d:laenen,Olane Subject: RE: Shut In payment to Lorene Koopmam et al 30548&000 Dewitt C.ounty, TX Diane, go ahead and send it up Tuesday and we will be sure to include it with the checics. Thanks. -Todd Gingerich From: . Schaenen, Diane Sent: Tuesday, November 22, 2011 10:58 AH To: Gingerich, Todd R "· Subjed:: Shut In payment to Lorene KoopnlCIYI et al 305486·000 Dewitt C.ounty, TX Todd - I have a letter that I would like to include with the shut-in checks that will be going to Lorene Koopmann, Ralph Koopmann & Karen Koopmann Koenig. If I write it & scan it to you next Tuesday or Wednesday, would that be sufficient time lo include it with the checks? Thanks. Diane Confidential KOOCOPogg~o915 •. , Gingerich, Todd R From: Schaenen, Diane Sent: Monday, December 05, 2011 1:41 PM To: Gingerich, Todd R Subject: RE: Lorene H Koopmann o~ & gas lease COP lease 305486-000 shut-in royalty payments being generated week of_Dec. 5 Yes. That works for me. from: Glngerieh, Todd It Sent: Monday, December 05, 20111:24 PM To:· Schaenen, Dtane 5ubjed: RE: Lorene H Koopmann oil & gas lease COP lease 305486-000 shut-In royalty payments being generated week or Dec. 5 Diane, since some changes have already been made to these payee's, would you be alright with Tuff and I cutting the checks as listed below and we can address the envelope to Ralph's address for both of his checks? At this point it will be easier than trying to create a new payee number for Ralph and trying to move things around. Thanks. -Todd From: Sd\aeoen, Diane Sent: Monday, Dec2l'nbl!r 05, 20111:13 PM To: Gingeridl, Todd R SWjed: RE: Lorene H Koopmann oil 6. gas lease COP lease 30548&000 shut-In royalty payments being generated weelt « Dec. 5 Send it to Ralph, please. Lorene still has an active address, at least according to the phone book, but since Ralph's name appears on her check, send it to him. Thanks. Diane From: Glngerlch, Toc,id R Sent: Monday, Dea!mber OS, 201112:47 PH To: Schaenen, Diane · Subject: RE: Lorene H Koopmann Oil &gas lease COP lease 305486-000 shut-In royalty payments being ge~erated week of Dec. s Diane, the checks will be issued as follows. I wanted to make sure we get this correct. You mentioned below that Karen and Ralph get one jointiy, so are we sending the check to one of them or still sending it to Lorene? Lorene H Koopman Ralph Koopman & Karen M Koenig AIF's -$3,000.00 (Lorene's a'ddress) Karen M Koenig - $3,000.00 Ralph Koopmann - $3,000.00 Lois Streiber - $3,600.00 Let me know If this is correct. Thanks again Diane. -Todd From: Schaeneo, Diane sent: Monday, Deceni>er' 05, iOll 10:29 AH To: Gingerich, Todd R SUbJect: RE: Lorene H Koopmann oil &. gas lease COP lease 305486-000 shut·ln royalty payments belng generated wee.It ot Dec. 5 See attached. Confidential KOOCOP099~0916 ' • NOTICE OF CONFIDENTIALITY RIGHTS: IF YOU ARE A • NATURAL PERSON, YOU MAY REMOVE OR STRIKE ANY OR ALL OF THE FOLLOWING INFORMATION FROM ANY INSTRUMENT THAT TRANSFERS AN INTEREST IN REAL PROPERTY BEFORE IT IS FILED FOR RECORD IN THE PUBLIC RECORDS: YOUR SOCIAL SECURITY NUMBER OR YOUR DRIVER'S LICENSE NUMBER. AMENDMENT TO OIL, GAS AND MINERAL LEASE (PAID UP LEASE) THIS AMENDMENT TO OIL, GAS, AND MINERAL LEASE is executed to be effective as of this 22nd dey of October 2007 by and between LORENE R. KOOPMANN, an unmarried woman, acting herein by and through Ralph Koopman and Karen M. Koenig, my ettomeys-in-fect, whose address is: 405 FM 108, Yorktown, Texas 78164, RALPH KOOPMANN, a married mmn dealing in his sole and scp1ratc property, whose address is 774 Stanchos Road, Yorklown, Texas 78164, and KAREN M. KOENIG, a married woman dealinc io her sole ind arp1nte property, whose address is 3489 ST. Hwy 72W, Cuero, Texas 77954 (collectively, "Lessor"), and BURLINGTON RESOURCES OIL & GAS COMPANY LP, whose address is 600 North Dairy Ashford, Houston, Texas 77079-2197 ("Burlington"). Lessor and Burlington arc some1imes referred to herein collecrively as the "PartiC!." RECITALS WHEREAS, that certain Oil, Gas, and Mineral Lease, dated 22nd day of October 2007 was made and enlered into between LORENE H. KOOPMANN and HAWKE ENTERPRISES, as "Lessee," (the "Lease"), a Memorandum of which Lease is recorded in Volume 243, Page 876 oflhe Official Records of DeWitt County, Texas, covering the following described lends (the "leased premises"): 120 acrc1 or llad, more or less, btl111 • p•rt of Section No. IJ, lndlanoll Rallro1d Co111pan)' Saniry, A·l72, DeWllt Coant)', TaH, aad bch•c lhe .. m• IHd daerlbal u TRACT NO. ONE and TRACT NO. TWO I• lh•t ter11i1 Detd dalcd l>n:cmber 17, 1996, fnna Lob Strltber, l•divldu•lly Hd II l1dep«adcal E1teetrl1 or lhe !.slate of Jerry Stricber, deuascd, H Cunlor, to Gllber1 A. Koopmeaa and wife, LoJ"Ule H. Koopmaa11, 11 Cnntet, end bd•& recorded In Volanie 14, pa1e 425, Offiwl Public Rm>nh, DcWtu County, Tuu; end WHEREAS, the Lease was assigned from HAWKE ENTERPRISES, ag Assignor, lo Burlington, as Assignee, es evidenced in thet certain A.<isignment dated January 9, 2008 and recorded in Volume 250, Page 822 of the Official Public Records or DeWitt County, Texas; and WHEREAS, there was a conveyance of an undivided twollhirds (2/J) mineral in1erest in the leased premises described ebove, from LORENE H. KOOPMANN to RALPH KOOPMANN and KAREN M. KOENIG as evidenced in that certain Gift Mineral Deed dated June 10, 2010, and recorded at Volume 313, Page 758, Official Public Records of DeWitt County, Texas; and WHEREAS, as a result of the partial conveyance, lhe minml interest in the leasi:d premises described above is now o~d by LORENE H. KOOPMANN, RALPH KOOPMANN AND KAREN M. KOENIG, one-third (1/3) each; and WHEREAS, Lessor (as to all of their inlerests). and Burlington desire to amend 1he Lease in certain respecis; NOW, THEREFORE for Ten Dollars (SI0.00) and other good and valuable consideration, the receipt and sufficiency of which arc hereby acknowledged, the Parties do hereby amend the Lease, as follows: -1- Confidential KOOCOP00000917 493 • THE AMENDMENT • I. Paragnpb 3 of the lease shaU be deleted in ita entirety and nplac:ed wi~ tbe follow In&: J. I The royalties to be paid by Lessee are: (•) on oil, 22.5% of that produced and saved from said land, the same to be delivered, free of all costs and expenses to the Lessor into the pipeline, or other receptacle to which the Lessee may coMect ita wells or the market value thereof, at the option of the Lessor, such value to be detetT11incd by (1) the highest posted price, plus premium, if any, offered or paid for oil, condens.te, distillate, or olher liquid hydrocarbons, respectively of a like type and gravity for the field where produced and when run, or (2) the gross proceeds of the sale thereof, whichever is greater. (b) on gas, including casinghead gas or other gaseous substance, produced from said land 22.5% of the greater of (I) 1he market value al the wellhead of such ga.•, paid to Lessor free of all costs and expenses, or (2) the gross proceeds realized from the sale of such gas, free of all costs and expenses, to the first non-affiliated third party purchaser under a bona fide arms length sole or contract. "Oross proceeds" (for royalty paymenl purpo5eS) shall mean the total monies and other consideration accruing to or paid to the Lessee or received by Lessee for disposition or sale of all unprocessed gas proceeds, residue gas, gas plant products or other products. Gross proceeds shall include, but shall not be limited to advance payments, take-or-pay p11yments (whether paid pursuant to contnu:t, in settlement or received by judgment) reimbursement for production or severance taxes and any and all other n:imburscmcnl! or payments. (c) on all other minerals mined and marketed, 22.So/o either in kind or value at the well or mine, at Lessee's election, excepl that on sulphur mined and mllrlteted, the royalty shall be $6.00 per long ton. 3.2 If any disposition, contratf or sale of oil or gas shall include any reduction or charge for the expenses or costs of production, treatment. lranspor1ation, manufacturing, process or marl<eting of the oil or gas, Lhen such deduction, expense or cost shall be added to the market value or gross proceeds so that Lessor's royalty shall never be chargeable directly or indirectly with any costs or expenses other than its pro rata share of severance or production taxes. 3.3 After the end of the primary tcnn, while there is a gas well on this IC11Sc or on acreage pooled therewith but gas is not being sold or used, Lessee may pay as royalty to the Lessor at the address set out above on or before ninety (90) days after the date on which (I) said well is shut in, or (2) the land covered hereby or any portion thereof is included in a pooled unit on which a well is located, or (3) this lease ceases lo be otherwise maintll.incd as provided herein, whichever is the later date, and thereafter at annual intervals. the sum of $75.00 per minend acre, and if such payment is made or tendered, this lease shall not tenniDAte and it will be considered that gas is being produced from this lease in paying quantities, but if such payment is not made or tendered, this lease shall t.erm.inate. IL The second 1enlenc:e of Paragnpb No. 4 orlbe Lem1e, wbicb is sel out immediately below, Jball be deleted in lb entirety: "Such pooling shall be into a unit or unitJ nol exceeding f0r1y (40) acres plus an acreage tolerance often percent (10%) lhcn:of for oil, and wiilJ not exceeding six hWldred forty (640) acres each plus an acreage tolerance of ten percent (10%} thereof for gas, provided that, should governmental authority having jurisdiction prescribe or permit the creation of any drilling, spacing or proration units larger than those specified above, such units may be cruted or enlarged to confonn in size 10 the drilling or spacing units so ~ribed or pmnined or lo the prorarion units as m11y be authorized for obtaining the maximum allowable production from · one well." - 2. Confidential KOOCOP00000918 494 • • Ill. P•n1raph No. Sor the Luse 1hmll be deleted In lb entirety and replaced with the rollowing: (a) DRILLING OPERATIONS: If within 30 days prior to the expiration of the primary tcnn or at the expiration of the primary term, Lessee is then engaged in drilling operations on said land or upon lands pooled therewith, this lease shall remain in force only so long as such operations or drilling operations for any additional weU(s) arc prosecuted on the lease or lands pooled therewith with no cessation of more than 120 consecutive days between the ten'nination of drilling operations of one well and the commencement of drilling operations on a subsequent well, and ir such operations resull in the production of oil, gas or other mineral, so long thereafter as oil, gas, or other mineral is produced from said land, or from l1111d pooled therewith. (b) CESSATION OF PRODUCTION/REWORKING OPERATIONS: If, after the expiration of the primary term of this Jell.Se and after oil, gas, or other mineral is produced from said land, or from land pooled therewith, the production thi:reof should cease from any cause and tho lease is not otherwise maintained, this lease shall not t.enninalc if Lessee commences drilling operations within 60 days thereafter and continuously conducts drilling operations without cessation thereof for more than sixty (60) days between the tennination of drilling operations of a well and the commencement of drilling operations on a subsequent well and if they result in production of oil and/or gas or other mineral. so long thereafter as oil, gas or such other mini:rals arc produced from said land. If within such sixty {60) dAy period after such cessation of production, Lessee commence.!! reworking opcn1tions as opposed to drilling operations, this lease shall not tenninatt so long as Lessee continuously conducts such reworking operations on such well without cessalion thereof for more than sixty (60) days and if such reworking operations on such well results in rc-establishmcnl of production of oil, gas or other mineral, so long thereafter as oil, gas or other minml is produced from said land or lands pooled therewith. (c) Any pooled unit designated by Lessee in accordance with the terms hereof, may be dissolved by Lessee by instrument flied for record in the appropriate re<:erds of the county in which the leased premises arc situated al any time after the completion of a dry hole or the cessation of production on said unit. In the event a well or wells producing oil or gas in paying quantities should be brought in on adjacent land and such well or wells is/are draining the leased premises, or land pooled therewith, Lessee Bgrec,9 lo drill such offset well or wells as a reasonably prudent operator would drill under the same or similar circumstances. Lessee may at any time execute and deliver to Lessor or place of record 11 release or releases covering any portion or portions of the above described premises and thereby surrender this lease as 10 such portion or portions and be relieved of all obligations as to the 11cr~ge surrendered. IV. P•ngnpb 8 ortbc lcue sbU be deleted in lh entirety •nd replaced with the rotrowlng: 8. The breach by Lessee of any obligation arising hereunder shall not work a forfeiture or lcnnination of this lease nor cause a termination or reversion of the estate created hereby nor be groundl for cancellation hereof in whole or in part. No obligation reasonably to develop the leased premises shall arise during the primary tenn. Should oil, glll or other mineral in paying q1W1titics be discovered on said premises, then after the expiration of the primary lcnn, Lessee 5haJI develop the acmige rclAined hereunder as a reasonably prudent operator. If after the expiration of the primmy lctm, Lessor considers that operations are not at any lime being conducted in compliance with this lease, Lessor shall notify ~ in writing of the facts relied upon as constituting a breach hereof, 1111d Lessee. if in default., shall have siX"ty days after receipt of such notice in which to commence the compliance with the obligations imposed by virtue of this instrument • J. Confidential KOOCOP00000919 495 • • V. Puagraph 9 or the lease abaft be ddtted in Its entinty and replaced witb the following: 9. Lessor expressly disclaims any warranty of title to the premises above described. In the event of failure oftiUe, Lessor shall never be required to return any bonus or any other payment made to l..e.5!or under this lease. By acceptance of this Lease, Lessee acknowledges that it has been given full opportunity to investigate and has conducted sufficient investigation to satisfy it.self as to the title lo the Land, and Lessee assumes all risk of title failures. It is agreed that if this lease covers a less interest in the oil, gas, sulphur, or other minerals in all or any part of said land titan the entire and undivided fee simple estalc (whether Lessor's interest is herein specified or not), or no interest therein, then the royalties and other monies accruing from any part 89 to which this lease covers than such full interest, shall be paid only in the proportion which the interest therein, if any, covered by this lease, bears to the whole and undivided fee simple estate therein. V1. Paragraph C(d) ortbe Addendum of the Lease 1h•ll be deleted in ih entirety and replaced with the following: (d) Prior to initial construction of each pipeline thereon, Lessee must pay the Lessor $3.00 per foot in length for a sixty-foot (60') wide pipeline right-of-way for installing pipelines necessary for production of any well on the lease premises or on lands pooled therewith, which right-of-way shall reduce 10 a thirty-foot (30') right-of-way after construction and inm.llation of the pipeline. After installation, replacement, or repair, the area occupied by all buried pipelines shall be backfilled and tamped, and otherwise restored to its condition prior to installation, replacement, or repair, utilizing the ''double ditch" method. Lessee must pay Lessor Sl,000.00 as a liquidated damage amount for any oak tree damaged or destroyed by Lessee which tree has a r.runlc diameter over ten inches (10'') when mcaswed twenty-four inches (24") from ground level, to be increased SI00.00 per inch for each inch in diam~ over 10 inches. Prior lO conuncncing surface operations pertaining to any well to be drilled on the lease premises, Lessee must deliver to surface owner a damage payment of SI0,000.00 to be applied to the damages to be incurred from such operations (such damages Including and associated with the construction of an BCCCS! road, power line, well pad, reserve pit, fresh water pond and well production facilities as permitted by this lease). Such payment does not preclude Lessee from being liable for the payment of addition.al damages if such damages exceed SI 0,000.00. VII. Paragraph E. of the Addendum lo Che Lea1e shall be deleted In ifs enttrety aad replaced witb tbe following: E. MINERAL LIMITATION: It is expressly underslood and provided that this lease cover.; oil and gas and liquid hydrocarbons, along with the products and by- products thereof, but this ICASC docs not cover uranium, fissionable materials or any other minerals of any type, here making particular mention of water, the Lessee herein being given no right to explore for, nor develop any part of the land for production of water lhmfrom except wilh regard to producing water to be used solely with regard to Lessee's oil and gas drilling, hydraulic fracture stimulation operations and completion operations upon Lhe leased premises and any such water well must be limilcd to watu production only from those depths below 500 lttt below the land swfacc. Lessee is expressly prohibited from using water from Lessor's wells, creeks and watering places. Notwithstanding anything to the contrary in this lease contained, Lessee shall al all times protect the herein leased land from drainage of oil and gas from wells on adjoining lands. Vll1. Paragraph F of lbe Addendum to lhe Lease thaU be deleted In its enlln:ty and replaced wilb the following: ·•· Confidential KOOCOP00000920 496 • • F. POOLING LIMITATIONS: (a) Pooling For Vertical Oil Wells. Notwithstanding anything contained herein to the contrary, pooling of this lease for vertical oil wells as clauificd by the Tens Railroad Commission is prohibited. (b) Pooling for Gas Wells and Hori1.0ntal Oji Wells. In the event Lessee exercises its oprion to pool as authorized herein and as limited hereby, the right to pool a vertical gas well or a horizontal gas well is hereby limited to 160 acres plus 10% tolerance as to all horizons from the surface of the ground to a depth of 1,SOO feet below the surface of the ground and to 320 acres plus 10% tolerance as to all horizons from 7,500 feet below the surface of the ground to a depth of 10,000 feet below the surface of the ground, and to 640 acres plus 10% tolerance as to all horizons beneath I 0,000 feet below the surface of the ground. The right of Lessee to pool for a horizontal oil well is hereby limited to 160 acres plus JO% tolerance as to all horizons from the surface of the ground to depth of 7,500 feet below the surface of the ground and to 320 acres plus 10% tolerance if completed at a depth of more than 7,500 feet below the surface of the ground provided that an additional eighty (80) acres may be allotted to such well for prod11etion purposes for every eight hundred twcnty·seven feet (827') of horizontal drainhole displacement (&S defined by the Railroad Commission of Texas) over and above 4,000 feet ofhoriz.ontal drainholc displacement (c) Special Field Rules. If at the time of creation of any oil or gas unit comprising all or a part of the herein leased premises special Field Rules of the Railroad Commission of Texas arc in effect, Lessee shall have lhe right to pool all or a part of the herein leased premises only up to the maximum acreage permitted to be assigned to a well in connection with such oil or gas unit under such special Field Rules, but in no event shall such unit or units con1ain more than the maximwn acreage allowed by paragraph F(b). (d) Additional Hqrizontal Well Provisions. In exercising the pooling rights granted in this lease applicable to hori1..0ntal wells, Lessee shall file of record a written declaration describing the horizontal unit as lo the specific leases and acreage to be included therein Ill well as the vertical limits of the prod11<:tive horizon or zone and stating the effective date of pooling; however, as to any horizontally completed well, Lessee shall have ninety (90) days from initial completion in which to amend such written designation of unit to increase or decrease the acreage, include or exclude specific leases or ll'8Cts as well as redefine the vertical limits of the productive zone, subject to the limitations contained in this lea5e. If such unit is flied and amended within such period of time, Lessee shall file of record in the county where the lands arc located a written declaration describing the revised unit and stating the effective date of revision. To the extent any portion of the lensed premises is included in or excluded from lhe unit by virtue of such revision, the proportion of unit production on which royalties are payable under this paragniph shall be adjusted accordingly as of the effective date for the revised unit, subject to the limitations herein. The effective date of any unit fonned for horiz.ontal drainhole wells under this paragraph or any revision thm:of shall be the date set forth as the effective date by lessee in the written declaration that is filed of record for such unit or revision thereof. (e) Termination of Pooling by Lessor. Notwithstanding the decision in Wiper & Brown v. Sbeppard, 282 S. W. 31d 419 (Tex. 2009), or similar authority: i. Wsee may only exercise the rights to pool the interest of lessor in the la.nd and at the depths leased hereby and only as to the land3 and depths u to which this lease has not terminated as of the date such pooling document is filed in the office of the County Clerk of the county where the land leased hereby or any portion is located. Upon partial termination of this lease, u to any portion of the land and/or as to any depths, the rights of Lessee to pool the land and/or Confidential KOOCOP00000921 497 • • depths leased hereunder may be exercised by lessee only for that portion of the land llnd/or those depths as to which this lease has not terminated. ii. If the leased premises, or a portion thereof, or the intc:test of the Lessor in part or all of the land described herein is validly pooled with other land to fonn a unit prior to the partial or complete termination of this lease, upon partial tennination of this lease as to area and depths or complete termination of this lease, Lessor may at any time thereafter terminate the pooling and unitization of the Lessor's interest in any portion of the interest leased herein that has terminated in any such unit, by executing and filing for record in the office of the County Clerk of the county in which the land leas~ hereby or any portion thereof is located, a document identifyine or describing the area and/or depths as to which such pooling is terminated. iii. In no event will lessor be required to bear costs of drilling either before or after this lease has terminated. IX. Paragraph H of the addendum to the Lease shall be deleted In its entirety and replaced with the following: H. NON-POOLED PUGH CLAUSE: Lessee must within 90 days after the completion of any well on the leased premises which is not pooled under the provisions of Paragraph 4 or Paragraph F hereof, designate in writing and place of record with the County Clerk of the county in which the property is located, a description of that part of the leased premises which shall be allotted ("Allotted Area") lo such well for production purposes, the maximum size of such part to be allotted being limited as follows: (e) Vcctical Oil Wells: No more than 40 acres phu 10% tolerance to be allotted in and around each well cl11Ssified as an oil well by the Railroad Commission of Texas if completed at a depth of I0,000 feet or less below the surface nor more than 80 acres plus I()GAi tolerance if completed al a depth of more than I 0,000 feet below the surface. (b) Gas Wclls and Hori7.0ntal Oil Wells: No more than 160 acres plus I Oo/o tolerance to be allotted in and around each vertical gas well and horizontal gas well if completed at o depth of 7,500 feet or less below the surface of the ground, nor more than 320 acres plus 10% tolerance if completed at a depth of more than 7,500 feet below the surface of the ground, but less than 10,000 feet below the surface of the ground, no more than 640 acres plus 10% tolerance as to all horizons beneath 10,000 feet below the surface of the ground. No more than 160 acres plus 10% tolerance lo be allotted in and around each horizontal oil well if completed at a depth of7,SOO feet or less below the surface: of the ground, nor more than 320 acres plus 10% tolerance if completed at a depth of more than 7,500 feet below the surface of the ground provided that an additional eighty (80) acres may be allotted to such well for production purposes for every eight hundred twenty seven feet (827') of horizontal drainhole displacement (as defined by the Railroad Commission of Texas) over and above 4,000 feet of horizontal drainhole displacement. Production or operations on said Allotted Arca by the Lessee shall maintain this lease in effect only with regard to the land within such area. This lease shall terminate at the end of the primary term as to such part or parts of the leased land lying outside the Allotted Arca unless this lease: is perpetuated as lo such lll!ld outside the Allotted Ma by operations conducted thereon or by production of oil or gas or any such operations and such production in accordance with the provisions he~f. X. Paragnpb J. of the addendum of the Le11e shall be deleted in its entirety and replaced with the following: -6 - Confidential KOOCOP00000922 498 • • 1. MINIMUM ROY ALTY: If the royalties to be paid under this lease during 12- month periods as described below are less than the sum of$ I 00.00 per acre then leased ("minimum royalty';), and Lessor sends Lessee notice in writing of same, then this lease will tenninate at the end of 90 days after Lessee receives written notice from Lessor, unless the Lessee pays to the royalty holders a sum of money equal to the difference between said minimum royalty per acre and the total of all royalty monies on production so paid during the applicable 12-month period. Said 12-month periods 11re the initial period begiMing with the date of first production from the lease premises and each successive 12-month period thereafter. The payments set out in this paragraph do not relieve Lessee of the requirement of production in paying quantities to maintain this lease. Notice as to this paragraph will deemed to be given when it is deposited in the mail, certified, return receipt requested. XI. The following scmh:nce contained in Paragraph Q.(2) of the addendum or the Luse shall be deleted in its entirety: "Any later work done on the well will be deemed to be reworking operations." XII. The following definitions shall be added to Paragraph Q of the Addendum to the lease: "Horizontal well" shall mean a well having a horizontal drain hole which shall be deviated a minimum of seventy degrees (70°) from the vertical and being a minimwn horizontal displacement in the objective formation of one hundred fifty feet (150') in length measured between the point at which the drain hole penetrates the top of the fonnation to be produced and the end point or tenninus of the horimntal drain hole. For the purposes of this provi~ion, ''terminus", "horizontal drainhole" and "correlative intervals" shall be defined in accord11nce with the Rules and Regulations of the Railroad Commission of Texas or other governmental authority having jurisdiction. "Reworking Operations", "operations for reworking", "commencement of reworking operations" and words of similar import shall have the same meaning, being the actual re-i:ntry into an existing wellbore with equipment capable of re- entering, reworking and/or completing such well and the timely prosecution of such operations in such well bore in good faith toward the re·cstablishment of production of oil or gas from such previously producing zone or zones." XIII. Paragraph T or the Addendum to the LHse shall be deleted In Its entirety and replaced with the following: INDEMNIFICATION: LESSEE AND ITS SUCCESSORS AND ASSIGNS SHALL INDEMNIFY, DEFEND AT ITS SOLE COST AND EXPENSE AND HOLD LESSOR HARMLESS FROM AND AGAINST ANY AND ALL CLAIMS, WSSES, LIABILITIES, COSTS, CAUSES OF ACTION, SETILEMENTS, AWARDS, PENALTIES, FEES, ASSESSMENTS, FINES, CHARGES, DEMANDS, LIENS, PUNITIVE DAMAGES, ATTORNEYS FEES, AND JUDGMENTS OF EVERY KIND OR CHARACTER, KNOWN OR UNKNOWN, FIXED OR CONTINGENT (COLLECTIVELY, "CLAIMS"), ARISING IN WHOLE OR IN PART OUT OF THE ACTS OR OMISSIONS OF LESSEE, LESSEE'S LICENSEES, CONCESSIONAIRES, SUBCONTRACTORS, OR ANY OTHER PERSON OR ENTITY ACTING BY, THROUGH OR UNDER LF.SSEE IN CONNECTION WITH ITS OPERATIONS ON AND POSSESSION OF THE LEASED PREMISES, INCLUDING WITHOUT LIMITATION ANY CLAIMS ARISING FROM TORT, PERSONAL INJURY, DEATH, PROPERTY DAMAGE OR NUISANCE, ARISING FROM ANY ACT OR OMISSION OF LESSEE, LESSEE'S LICENSEES, CONCESSIONAIRF.S, SUBCONTRACTORS, OR . 7. Confidential KOOCOP00000923 499 • ANY OTHER PERSON OR ENTITY ACTING BY, THROUGH OR • UNDER LESSEE. FURTHER, THIS INDEMNITY APPLIES TO THE ABOVE CLAIMS REGARDLESS OF HOW SUCH ARE CAUSED. THIS LEASE SHALL EXPIRE IN ACCORDANCE WITH THE PROVISIONS SET OUT HEREIN, BUT LESSEE'S OR ASSIGNEE'S OBLIGATION TO INDEMNIFY AND HOLD THE INDEMNJFIED PARTIES HARMLESS FOR ACTIONS OCCURRING DURING THE TERM OF THIS CONTRACT SHALL SURVIVE THE TERMINATION OF THIS LEASE. IF LESSEE FAILS OR REFUSES TO FULLY PERFORM IN ACCORDANCE WITH THIS INDEMNIFICATION PROVISION, LF.SSOR AT LESSOR'S OPTION, AND WITHOUT RELIEVING LF.SSEE OF LESSEE'S OBLIGATIONS, MAY SO PERFORM, BUT ALL COSTS AND EXPENSES INCURRED BY LESSOR IN THAT EVENT SHALL BE REIMBURSED BY LESSEE TO LESSOR, TOGETHER WITH INTEREST ON THE SAME FROM THE DATE ANY SUCH EXPENSE WAS PAlD BY LESSOR UNTIL REIMBURSED BY LESSEE, AT THE RATE OF TWELVE (12) PERCENT PER ANNUM. Lessee and its representatives, and their successors shall not be responsible for or required to defend or indemnify Lessor or its representatives from the Lessor's or its representative's gross m:gligencc or willful misconduct. Lessee must maintain in effect at all times during its operations under this lease a liability insurance policy in an amount of not less than $3,000,000.00 protecting Lessor against all claims arising by virtue of the Lessee's failure to comply with the provisions of this lease, and must furnish Lessor prior to beginning such operations with proof of the existence of such policy. If Lessee's operations under this lease arc conducted under the name of Conoco Phillips or one of its affiliates for which Conoco Phillips is responsible, then Lessee may elect to self-insure the aforementioned amount and will provide Lessor with written notice of such election prior to beginning such operations. XIV. Paragraph U of the Addendum to the lease shill be deleted In its entirety and repl1eed wllh the following: U. DIVISION ORDER: Neither the Lessee nor any other party disbursing oil or gas royalty as provided under this lease or through agreement of the third party with the Lessee may require Lessor to execute a division order as a requisite for the Lessor being paid royalties with the exception that a division order that provides only a stipulation of the Lessor's royalty interest may be required of the ~k Lessor. Neither this Lease nor any terms or provisions herein shall be altered, amended, extended or ratified by any division order or transfer order executed by f 0 )t. Lessor, its successors, agents or assigns, but any division orden or transfer orders shall be for the sole purpose of confirming the extent of Lessor's interest in L- K production of oil and gas from the leased premises. However, to the extent there are interests which purport to burden Lessor's royalty which arc in dispute or KK. may, in the future, be disputed, the execution of division orders is not a waiver of the rights to so dispute the interests, nor does such execution in any way ratify, revive, or otherwise approve of any such interests, if any. fo!iL xv. Paragraph W or the Addendum to the lease shall be deleted In its entirety and replaced with the following: W. SEISMIC OPERATIONS: No authority is herein granted to Lessee to conduct seismic operations unles;_j.cssec pays the surface owner prior lo bcgiMing of such operations S39trj!e'l"acre for the entire land above described. After completion of such operations, Lessee must restore the land to its original condition just prior to such operations and must pay the surface owner and any tenants the actual amount of damages arising from such operations. Lessee's right to conduct seismic operations upon the herein !cased premises shall be non- exclusive and Lessor hereby reserves the right lo grant to third parties, the right to: I.) conduct seismic operations upon such premises, and 2.) use the data resulting from such seismic operations as such third party deems necessary including but not limited to the marketing/sale of such data. Lessor shall be • 8. Confidential KOOCOP00000924 500 • • entitled to all compensation paid by such third parti~ for the right lo conduct seismic operations. Further, this lease shall be subject to the rights of all third parties under any seismic permits which cover 1111 or any part of the herein leased property which may be in effect at the time of the execution of this lease. XVI. Paragraph X of the Addendum to the lease shall be deleted in its entirety. XVII. The following provulon5 shall be added to the IC81e: Lessee shall and agrees to never claim, nor seek to secure any of the lands or minerals in the ground covered by this IC83e by application or claim of any statute of limitations or adverse possession, including, but not limited to any claim under the Texas Civil Practice and Remedi~ Code Section• 16.0lS, 16.026, 16.027 or 16.028, as now enacted or as may hereinafter be amended. Lessee shall and agrees never lo seek to mature limitations !itle 10 !he oil, gas and related minerals in !he ground covered by this lease. The purpose of this provision is to bar any claim of limitations title by Lessee and thus abrogate the application of any theories under which relief was granted in Natural Gas Pipeline Co. v. Pool, 124 S.W. 3d 188 (Tex. Sup. 2003), or similar authority. In the event that Lessee should ever file a lawsuit against Lessor wherein it claims that it owns the oil, gas or other mincnils or any interest in the lands covered by this lease by reason of any statute of limitation, any interest of Lessee under this lease shall be automatically deemed forfeited and terminated as of the date s1H:h lawsuit is filed, and Lessee will thereafter have no interest whatsoever in this Lease or any lands described herein. Lenee Play defend ibelr lo court agaln1t cl~ims brought against Ltssce and may Hurt limitations as a defense but lo no event may Lessee assert In any form or fashion, adverse posse11ion or Lasor'1 real property landt or minerals io the ground. NOTICE OF TOP LEASE OFFER: [fat any time within the primary tenn of this lease 11nd while lhe same remains in force and effect, Lessor receives a bona fide offer acceptable to Lessor to enter into an additional lease (top lease) covering all or part of the leased premises, Lessor (without disclosing the terms of such offer) shall notify Lessee in writing that Lessor has received such offer. Lessor agrees that it shall not accept such offer (by the execution of a top le~) until IS days after Lessor gives notice of the offer to Lessee. Notice as to this paragraph will deemed 10 be given when it is deposited in the mail, certified, return receipt requested. PERFORMANCE: Upon the later of the expiration of the primary term, or the extended term by continuous operations, force majeure or other savings clauses, if Lessee has included a portion of the leased lands from this lease into an Allotted Area(s) or pooled unit(s) ("Developed Lands"), but less than all lands from this lease have been included in any such Allotted Arca(s) or pooled unit(s}, and the lease, as it pertains to such land!!! remaining unallotted or unpooled ("UnDevelopcd Lands") terminates according to the tenns of the lease and/or any amendments thereto, Lessee agrees to pay to Lessor a one-time non-perfonnance payment on such UnDcvelopcd Lands at that rate of 55,000.00 per net mineral acre ("UnDevelopcd Lands payment"). Such UnDevelopcd Lands Payment shall be due and payable lo Lessor, or Lessor's assigns, within 60 days after such partial lease termination. Such payment shall bear interest from the due date (60 days after partial lease tennination) until the date of payment thereof at the rate of 12% per annum. No such payment shall be due on any: I . Developed Lands; 2. Ponion oflhe land covered by !his lease within an Allotted Arca(s) or pooled unit(s), upon which a well(s) has been drilled, plugged and abandoned as a dry hole. For the purposes of determining the acreage not subject lo the Undeveloped Lands Payment under this - 9· Confidential KOOCOP00000925 501 • • exception, the maximum amount of leased lands (either Allotted or pooled unit) per dry hole well is 320 acres; 3. Portion of the property leased herein if there is a material title problem with said property; 4. Portion of the herein leased property, if the inability to include such portion of the leased property in a unit is a resuh of a change in the regulations of the Railroad Commission of Texas or other governmental authority which such change in regulations occurs after the date lhat any part of lhe leased premises is lawfully pooled or allotted to any well drilled on said premises. Lessor agrees to act in good faith to facilitate Lessee in compliance with the foregoing to facilitate proper pooling of Lessor's lands ond the drilling of wells. XVIII. MISCELLANEOUS Lessor does hereby adopt, ratify and confinn the Lease and recognizes the full validity of the same, and docs hereby GRANT, LEASE, and LET to Burlington Resources Oil & Gas Company LP, its successon and iusigns, all of the interest of the said undersigned in the leases premises, subject to and in accordance with all of the tenns and conditions set fonh in the Lease, as hereby amended. This Amendment lo Oil, Gas, and Mineral Lease shall be binding upon and inure to the benefit of the Lessor and Burlington, and their respective heirs, personal representatives, successors, and assigns. This instrument may be executed either as one inslnlment or in several partially executed counterparts and the original and all counterparu shall be construed together and shall constitute one instrument Should less than all of the named parties execute this instrument, this instrument shall be binding on those who are signatories. IN WITNESS WHEREOF, this instrument is executed to be effective as of the date first above written. LESSOR: • 10 . Confidential KOOCOP00000926 502 .. . • • BURLINGTON RESOURCES OIL & GAS COMPANY LP: THE STATE OF TEXAS § COUNTY OF =\)Wfdf ~ This instrument was acknowledged before me on this thc.d:2_ day of =Dtc , 2010, by RALPH KOOPMANfl'and KAREN M. KOENIG as attomeys-in-fact on behalf of LORENE H. KOOPMANN • •~~ ~~i(N * ':1.,. :o} •...:t.--7 PAlRICIAJ. BASSETT N111Jry PuWc, Slillt or Tuu &ly ComlMPoll uplrrs APRIL 5, 2013 THE STATE OF TEXAS § COUNTY OF"])U.µ: '\t: ~ This instrument was acknowledged before me on this theti day or :]) e.c , 2010, by RALPH KOOPMANN. ~~ PAmlCIAJ. BASSETT (.{'}•\NolJly PubHe, Stile of Tem ~~J My Commission Expires .!,!,~ APRIL 5, 2013 THE STATE OF TEXAS § COUNTY oiQe.l u: ~H This instrument was acknowledged before me on this th~ day of "3)e ( , 2010, by KAREN M. KOENIG. l~rlt,\ PATRICIA J, BASSITT 'I ~·i·' Not1ry Publlc, Slale or Tcus ~}~~l My commission Elpns ··.,,:,...~ APR rt s. 2013 - JI - Confidential KOOCOP00000927 503 ' . • • THESTATEOFTEXAS § § COUNTY OF HARRIS § This instrument was acknowledged before me on, this the--21._ day of D~~ . 2010, by t't11f1l.& JI. c~~Ct' ' the Attorney-in- Fact for BROG GP Inc., 11 Delaware corporation, the sole General Partner of Burlington Resources Oil & Gas Company LP, a Delaware limited partnership, on behalf of said pannership. )iJ;otg?~ , - Notary Public, State of Texas - 12. Confidential KOOCOP00000928 504 1'-fAL PROPERrY ·Al)Hfll 14 6 0ld fES 16 11 .. . . .. • ' \ Confidential • KOOCOP00000929 505 • MEMORANDUM OF OIL AND GAS LEASE 56287 • STATE OF TEXAS § § KNOW ALL MEN BY THE.SE PR.ESENf'S: COUNTY OF DE WITT § . WHEREAS, THAT on the 22ad day of October, 2007, Lortne H. Koopman, H 111marritd womaa, whose address is, 405 FM 108, Yorktown, Tnu 71164, hcn:inaftcr called "LESSOR", did enter into and deliver unto HAWKE ENTERPRISES whose address is 330 Rayrord Ro1d, Salle 196, Spring, Te111 77386, hereinafter called "LESSEE", that certain Oil and Gas Lease, covering 110 acres or land, more or less, in DeWitt County, Texas, said lands being more fully described as follows, to wit: 120 1cres or lud, more or less, bd•& a part or Secdoa No. 13, hdl81olll Railroad Compuy S11rvey, A- 272, DaWltt County, Tu.u, and bd•& tlle nme lud descrlbej as TRACT NO. ONE ud TRACT NO. IY1:'.Q In that certain Deed, dated December 27, 1996, lrom Loll Strleber, ladMdaally 11d .. lndepeade1t Encwtrix or llle Eshte or Jerry Strirber, deceued, u Gr11otor, lo Gilbert A. Koopman a 111d wire, Lore1e H. Koopmann, u Grantee, aad belq recorded la Volaine 1-4, pp '425, Official Pubtlc Recordl, DeWitt County, Tuu. The 1bovementioned Oil and Ga.s Lease provides for a three (3) year Pfimuy term from CXtober 22, 2007 (unless extended pursuant to the tenns thcn:in) and contains an option to extend the primary tenn for an additional iwo (2) years, and is subject to all othor 1enns end provisions set forth in said Oil ind Gas Lease. A copy of said Oil and Gas Lease is in the possession or Lessor and l..euee, named herein. This Memorandum may be executed either as one Instrument or in several partially executed counterparts and the original and all counterpans shall be cons1n1ed togemer IJld shall constitute one Memonndum. Should less than all the named Lesson execute this Memorandum. this Memonndum and its respective Oil and Gas Lease shall be binding on those who are signatories. JN WITNESS WHEREOF, this instrument is effective on the dale first above written. STATE OF TEXAS § COUNTY OF vewJJ § This instrument was acknowledged before me on this "'" f- day of October, 2007, by Lorene H. Koopmann. CHRISTOPHER II. CRAIN "1Pll>lc.Mofbs "1~1i1Jlra ...,.!0,2011 ~lier recording return to: Hawke Enterprises 330 Rayford Road, Sulfa 196 Spring, TX n386 Confidential KOOCOP00000930 506 . '. ~. 6'7901 NOTICE OF EXERCISE OF OPTIONS TO EXTEND MINERAL LEASES • STAT£ OF TEXAS COUNTY OF DEWITT KNOW ALL MEN BY THESE PRESENTS: WHEREAS, BURLINGTON RESOURCES Oll. & OAS COMPANY LP, a Delaware limited parlnmhip, whose address is PO Box 2197, Houston, Texas, 77252- 2197 (herein referred to as "Lessee) is the owner of those certain oil, gas and mineral leases identified on Exhibit "A" attached hereto and made a part hereof for all purposes (herein refened lo as "Mineral Leases"); and WHEREAS, each of the Mineral Leases provide that the primary lcnn may be extended at any time prior to the expiration of the original primary tenn period by tendering to the respective lessor(s) the option bonus prescribed in the lease via check or draft ·tendered 10 the depository bank named in the lease or mailed to the lessor(s) at the addresses provided in said Mineral Lease (or such othCf' address as lessor may subsequently furnish Lessee via written notice); and WHEREAS, the Mineral Lell$CS further provioo that should the opt.ion to extei1d tho primary lonn be exercised, it shall be considcn:d for all purposes as if the origi1111l primary t.enn in each of such Minenil Leases was for a period of five (S) years; and WHEREAS, Less,ee has elected to exercise tho option to extend the primary term of each of the Mim::ral l..c8W.'I identified in Exhibit "A" altechcd hereto by tendering payment by check or draft as set forth in said Mineral Leases. NOW, THEREFORE, Lesseo hei:eby pluces third parties on notice that it has exercised the option to extend the primary term of the Mineral Lcasei; described on Exhibit "A" attached hereto to a total of five (.S) years in each of such leases by tendering the consideration recited in the rcspedive Mineral l.eases by check or draft in accordance with the terms, conditions and provisions of tho respective Minctal Leases. IN WITNESS WHEREOF, this N~ of Exercise of Optjona to Ex.rend Mineral Leases has been executed on this~ day of "1,.,r .,l.... . 2010. STATE OF TEXAS COUNTY OF HARRIS This instrument was acknowledged before me on tho L~ y//_~. of 2010, by Mark B. Carlisle, AUDmey-in-Fact of BROG GP Inc., acting as sole general partner ofBu·rlingtOn Resources Oil & Gas Company LP, a Delaware limited partnership, on behalf of said limited partnership. My commission expires: /J-1/--JU/0 ~~ih Notary Public in and fOftl1StllteOrTexas 3051/ft- OOC> Confidential KOOCOP00000931 507 0 0 ::s -.. -·c. C1) EXHIBIT"A" ::s ~ TO · NOTICE OF EXERCISE OF OPTIONS TO EXTEND MINERAi. LEASES or Lt:A::>t: ~ - .. - llUN NUMBER LESSOR EFFECTIVE DATE ORIGINAL LESSEE STATE COUNTY BOOK PAGE 303680--000 John Paul Guidrl February 19 2Q07 Premiere Land Servloes LLC TEXAS DE\MTT 224 296 303701-000 EdWln O Rossow el ux March7 2007 Hawke Ent..,,,...... TEXAS DEWITT 236 415 303750-000 William Dwor""2Vk FebruillV 2 2007 Premiere Land Services LLC TEXAS DEWITT 224 288 • 303857.-000 Andrew M Hn<1ne April9 2007 HBWl\e Enhln>riaes TEXAS DEWITT 222 481 303860-000 Teddv W Aven et ux 11.nr:il 18 2007 HawkeEnte~ TEXAS DEWlTT 226 358 303973-000 Florllln Koncz.ewakl et ux Anril 11 2007 Hawl(e Enteron..111 TEXAS DEWITT 226 360 303974-000 304044-001 Hemlan Konezewsk.I Meo Mueller et ux . ADrf! 11 2007 March 14, 2007 H awlle Ente11>11Ht1 Hawke Enteron1es TEXAS DEWITT TEXAS DEWITT 226 222 353 495 304061-000 Alton Rav Jalullca et ux Febn.iarv 21 2007 Hawke- TEXAS DEWITT 222 485 304063-000 S.rah Aronstein et al Februarv 27, 2007 Hawke EnteroriHS TEXAS DEWITT 222 483 304065-000 Lld(ey Land Limited Fetiruarv 23 2007 Hawke Enlel'Pr1HS TEXAS DEWITT . 222 489 304081-000 Jennie Lmn H11n:MK!v ADrll 17 2007 Hawke Eneeronsn TEXAS DEWITT 226 362 304082-000 Martin Luther Wolter et ux ADtll 17 2007 Hawke EnterPn- TEXAS DEWITT 226 366 304083-000 Leona Rleduel JanuatY 30 2007 Hawke EntBrP1111U TEXAS DEWITT 222 487 304150-000 Granbenv Partners LTD ADlfl 26 2007 Hawke EnlarDrl&M. TEXAS DEWITT 226 364 304155-000 isaramann Famil'I Trust Februarv 14 2007 Hawke Er11en1n.... TEXAS DEWITT 222 501 304151).00() e.ramann Family Trust Februatv 14 2007 HilWka Enl8r'Pr1sn TEXAS DEWITT 222 499 304160-000 L C Thiele et ux FebNa!Y 21 2007 Hawke Enlll!ltlma5 TEXAS DEWITT 270 406 304219-000 JohannaWdd MllY3 2007 Hawtce Enmrcnsn TEXAS DEWITT 226 374 • 30422()..()()() Jerome R Wild et UJC MilY3, 2007 Hawlce Enlllll>OHS TEXAS DEWITT 238 417 304222-000 Robert H Malschen et ux Aotll 30 2007 Premiere Land Services LLC TEXAS DEWITT 225 793 3().4224-000 Robert T Meisdlen et al . "111'130 2007· . Premiere Land Services U.C TEXAS DEWITT 229 38 304~00 Virginia Wlllm.th • MilY7 2007 Hawt<.e En1111110Sn TEXAS DEWITT 228 357 ~ 304227..000 Robert T Me~ et ux ADrll 30 2007 Premiere Land S.rvlca LLC TEXAS DEWITT 225 789 0 3()4228-000 304234-000 Robert T Me-.chen etuJC Paul V UlllV el ux Allri30 2007 Mav8 2007 Premiere Land Services LlC TEXAS DEWITT Hawke En-.-. TEXAS OE WITT 225 236 791 423 0 3042"6-000 Clllrol'd Dwavne Pancer et ux JulY 30. 2007 Hawke Enieronus TEXAS DEWITT 233 n2 0 .,, 304252.000 A111'lur Gan.ti Miller el ux #,Dlt 25 2007 Hawke En111rnr1se1 TEXAS DEWITT 226 418 0 3G4253-000 304254-000 Jerald J Ro1Mtt et ux Jerald J Rosaett et ux M"'18 2007 Mav8, 2007 Premiere LIW!d Servlc:al LlC TEXAS DEWITT Premiere L311d Services UC TEXAS DEWITT 226 226 895 894 304255..001 Jerald J Rossett et ux Mav8 2007 Premiere Land Services LLC TEXAS DEWITT 226 893 0 0 0 0 1or5 0 co w N 508 0 0 :J ::::!? c. ...m-· Cl> 304255-002 Daoline Hanns t.A:nr 6 2007 Premiere land Ser.r.ices LLC TEXAS DEWrIT 229 037 :J 304256-000 Jerald J Ros11ett et ux Maya 2001 Premiere land Serv'.ices LLC TEXAS DEW1TT 243 846 304260-000 Rlnehold Borchardt MllY 16, 2007 Hawke Entemrises TEXAS DEWITT 243 889 - 304262-001 304262--002 Otto Lee Koennin!l M81'!lie Ann Dickerson Mav29 2007 May 2.9, 2007 Hawke Enterprises Hawl\e Enrsn>rtses TEXAS DEWITT TEXAS DEWITT 236 2.36 236 421 419 374 236 376 30428()-0()() Darvin Mueller et al Mav 11 2007 Hawke Enterprises TEXAS DEWITT 236 378 304318--000 Cody Jaluftca ADril26 2007 Hawke EnU!mrises TEXAS DEWITT 226 370 304327-000 Hollis Baker March 1 2007 Hawke Entemrtaes TEXAS DEWITT 222. 507 304328-000 304329-000 304331..000 304415-000 304531-000 304581-000 Je1TV Wavne Schmledlin et ux Karan Kav Lukes Alton Rav Jalufka et ux Michael P Klein et ux Rlnehold Borchardt et al Bennie Drabek flt ux February 21 2007 March 15, 2007 March 15 2007 Junes. 2001 Mav 16 2007 June 13, 2007 Hawl(e Entemr1541s Hawke Enterprises Hawke Enterprises Hawke Entemrises Hawke Entemrises Hawke Enterprises TEXAS DEWITT TEXAS DEWITT TEXAS DEWITT TEXAS DEWITT TEXAS DEWITT TEXAS DEWITT 2.22 222 2.22 236 243 233 505 509 503 452 841 725 • 304583-000 Leon J Resoondek et ux June 15 2007 Hawke Ent""'rises TEXAS DEWITT 233 n1 304584-000 Leon J Respondek et ux June 15 2007 Hawke Enternrises TEXAS DEWITT 233 ng 30458&-000 Frances Warzecha June 20 2007 Hawke Enterprises TEXAS DEWITT 233 724 233 720 233 721 304589·000 L C Sievers et al Julv 13 2007 Hawke Enlerortses TEXAS DEWITT 233 756 304699-000 EUQenelbrom JulV 13 2007 Hawke Enlerprises TEXAS DEWITT 233 737 304700-000 Robert Lee lbrom et ux July 13, 2007 Hawke Enterprises TEXAS DEWITT 2.33 741 304701..000 Holli& 0 Baker Julv 11 2007 Hawke Enterprises TEXAS DEWITT 233 743 304702..000 David lbrom et ux Julv 3 2007 Hawke Enterorlses TEXAS DEWITT 233 716 ~ 0 304703.000 304705-009 304707-CIOO 304709.000 304710·000 304711-000 Catherine Kolodzieicvk et vlr Robert Lee lbrorn Daniel lbrom et ux Patricia Gall lbrom et vlr Shirtev R Crain Melvin straube et ux July 13. 2007 Ju v 13,-2007 Ju v 13 2007 .h!IV3 2007 Julv 11. 2007 Julv 11 2007 Hawke Enterpnses Hawke Enteri>nses Hawke Enteronses Hawke Enterorbea Hawke Entarcrlses Hawke Enterortses TEXAS TEXAS TEXAS TEXAS TEXAS TEXAS DEWITT DEWITT DEWITT DEWITT DEWITT DEWITT 233 233 233 233 233 233 745 735 739 714 758 750 • 0 304 723.000 Marvin C Kooomann July 17. 2007 Hawke Enlel'Dl1S&S TEXAS DEWITT 233 754 0 304771-01>-1 Frank Kulik et ux Julv 20 2007 Hawke Entemrises TEXAS DEWITT 233 733 Warren Lemke et ux HawkeEn1......ru.e._,. 0 304n2-000 304783-000 Robert EclWard Motl etal Julv 20, 2007 Julv 23· 2007 Hawke Entel'Drises TEXAS TEXAS DEWITT DEWITT 233 243 760 833 '1J 304842-000 Alvin Stanchos Jr J ulv 27. 2007 Hawke Enterorlses TEXAS DEWITT 233 756 0 0 0 0 2 of5 0 co w w 509 0 0 -·= """' c. C1) 304865-000llsabeUAnn Van Beveren July 27, 2007 IHawl<e fntel'l)rlges TEXAS JOE WITT 233 752 = :::!: 3048684'01James Jendrv Au!!Us! 1. 2007 I Hawke Enterprises TEXAS IDE WITT TEXAS JOE WITT 236 233 233 384 762 784 - 304870-001 IDavid Erler el al Aunust 1. 2007 IHawkeEntermses A> 304871-001 IMlchael R Grunder et al November 29. 2007 IHawke Ent~ TEXAS roe WITT 243 852 . 304885-000 ]Carolyn s Welbye July 27, 2007 (Hawke Enteroriaes TEXASIDE WITI 233 747 3048!M>-0001Davkl A Stubblefield et ux Seotember 6. 2007 IHawke Enterprises TEXASIDE WITT 236 437 304887-00CllElna Blaoa August 10, 2007 (Hawke Enterpnses TEXAS JOE WITT 234 392 304888-0oG IBarbara J Stubblefield Septembers. 2007 !Hawke Enteronses TEXAS IDE WITI 236 435 • 304889-001 IAlton R Clelenckl et ux Auousl 2. 2007 IHawke Enlen>rlses TEXAS IDE WITT 236 407 304893-000 I Marcelus W WelllChwill Reslduerv Trust Aunust 2. 2007 IHawke Ent8f'Drtles TEXAS IOE WITT 236 400 304909-000lloretta Fay Burge Auaust 2. 2007 IHawke Enterprises TEXAS lDE WITT 236 396 304911-000IScolt Straube August 2, 2007 IHawke Enlerprlaes TEXAS ICE WITI 233 749 July 31. 2~ 304922:0001Dallid A lbrom el ux 304929-000JMorres M Van Beveren et ux 304944-000 Barbara Thedin Juty 27, 2007 October 18. 2007 I (Hawke Ent8rD<IH9 Hawke Enterp!!ses Hawke Enbmlrises TEXASIDEWITT TEXASIDEWITT TEXAS DE WITT 236 233 m 405 718 8s8 304945-000ICharle:s T Hahn et ux Auaust 7. 2007 IHawke Enterprises TEXASIDEWITT 236 411 304949-000IEuaena James lbrom Auou&t 6. 2007 IHawke EntefJ>riaes TEXASIDE WITT 238 409 304950-oOOlleon James Srubar Jr etal Auoust 8. 2001 IHawke Ent.et'Dllsee TEXASIDEWITT 243 830 304951-00-1 IRueben Wayne Thamm et ux August 18, 2007 IHINll<e Eritemrtses TEXAS ICE WITT 236 402 304956-000 Irene Hahn Aunust 7. 2007 Hawka TEXAS DE WITT 236 447 I 3049S8-000 Kermit C Koehler etux 304959-001 Steven D Soot! et ux Auaust 10. 2007 j September 5, 2007 Hawke En!!!rpris< Hawke EnlarDrises TEXASIDE WITT TEXAS OE WITT 236 236 386 388 ~OSOOO-OoOITrov H S!IJart el al August 10, 2007 IHawke Enterortses TEXAS (OE wrtT 236 398 3052213--000IJoae G Perez et ux Seotember 1, 2007 !Hawke El'Ufprtses TEXAS IDE WITT 236 445 • 305230-001 IPaicla Ann Shocldev Auaust 8, 2007 IHllWke ENerpl'ises TEXAS ICE WITI 238 449 305232--000IPhll E Mueller et ux Auaust 10. 2007 I Hawke EnterDrises TEXAS !DE WITT 236 390 305~001Hllmer E KooDmann et al Seotember4, 2007 !HIWke Enterpriles TEXASIDE WITT 243 827 305235-000IRobert G Watson et ux September 5. 2007 IHawke En!erorlses TEXAS IDE WITI 236 413 "0 3052Je..()Q0jR!ymond W Pawiik Jr September 5, 2007 !Hawke Ent!!prises TEXAS IOE WITT 238 380 0 305245--000 Karan B Rot>mon Seotl!lnber 24, 2007 Hawke ~ -~- -- TEXAS OE WITT m 819 305248-0001 Edwin A. Baros Seotember 10, 2007 IH;rwXe Entltrl>risea TEXAS IDE WITT 243 828 305258-000IH Wmer E Kooomann Seotember4, 2007 IHilWlte Entel"Dlfses TEXAS IDE WITT 243 812 0 3052B0--0011Elizabelh C CoMors 305260--0021Celherine Clark Ralston Auoust 30. 2007 IHawke Entert>riae11 Au!lust 30. 2007 IHawke Enterprises TEXASIDEWITT TEXASIDE WITI 236 238 433 431 0 305281-001 IRichard H Barchard Jr Augusl28. 2007 !Hawke Enterprises TEXAS ICE WITT 236 394 "'tJ 305262-001 IRalph Borchard et we Auciust 28. 2007 IHawke Enterprises TEXAS IDE WITT 236 443 0 0 0 0 3 of5 0 (0 w .s:. 510 0 0 :::s ~ ..-· Q. (D :::s m 305309--000 laabella Nelson Barrett 30531~0 l<endricil w Bartl$ et ux 305311..000 Cec:ll M Davidson el ux 305312-000 Quentin L Yancev et ux 305313..()()() Merelon love! et ux October 4 2007 SeDlllmber 24 2007 SeDtember 13 2007 OdDber 5 2007 seottimber 7 2007 Hawke Enterprises Hawke EnllllrDrises Hawke Enll!ronses HawkeE Hllwke t:mAmrlses TEXAS DEWITT TEXAS DEWITT TEXAS DEWITT TEXAS DEWITT TEXAS DEWllT 243 243 236 243 236 818 825 429 808 382 305314-000 Martin Alvarez Castillo etux November 20 2007 Hawke EncerJJrises TEXAS DEWITT 243 867 305317.001 OaYtd A Wrirlnt and wife Pabicia Wrial\t SeDtembef 10. 2007 Havwtte tnl8lllrises TEXAS DEWITT 238 441 30532.8-000 Huebner Trust Seotember 24 2007 Hawke Enlel'Drises TEXAS DEWITT 243 806 305331..()()() Marvin Stanchos S.DtAmber 6 2007 Hawtte EnterDri&eS TEXAS DEWITT 243 811 • 30537~1 Mlehele Maraldo et al S.PUtmber 11 2007 HIWke Enlel'Drille5 TEXAS DEWITT 238 427 305374-000 Fred C Huahes el ux SeDtember 26 2007 Hawke Enlerortses TEXAS DEWITT 243 829 305384-000 Isabell Ann Van Bevel'eJ1 s..ntember 26 2007 Hawke Enlel'Drises TEXAS DEWITT 243 816 305387..000 Jerrv McAdams 111 ux October 22, 2007 Hawke EnlerDrises TEXAS DEWITT 243 865 305392-000 Mal10!1e Breeden el al October 25. 2007 Hawt<e Enleroriaes TEXAS DEWITT 243 854-855 305393-000 Manorie Breeden et al Oclober25 2007 Hawke EnterDriaes TEXAS DEWITT 243 860 305466-001 David l Urban Se"""mber 26 2007 HawkeEnte~ TEXAS DEWITT 243 810 305466-002 Wavne D Urban Seotl!mber 26 2007 Hawke Enterorises TEXAS DEWITT 243 809 305469--001 Donald JanskY et ux Ser>tember 1 2007 Hawke Entel'Drises TEXAS DEW11T 243 804 305471.001 Joel P Smith et ux Oc1ober 3 2007 Hmwke Ent9CPrises TEXAS DEWITT 243 816 305480-000 Karen Kooi>mann Koenia October 22. 2007 Hawke Enlemnsm TEXAS DEWITT 243 875 305482.000 Ralph Koopmann OdDber 22 2007 Hawtce Enlllnlrises TEXAS DEWITT 243 874 30~86-000 Lcnne H Koomnann Octaber 22 2007 HIW!te Eni.rorisee TEXAS DEWITT 243 876 305518-000 Sandra Hilbrich el el OdDber 22. 2007 Hawke Enl8f'D098S TEXAS DEWITT 243 872 305536-000 Elenora KlaevemaM October 10 2007 Hawke Enterprises TEXAS DEWITT 243 862 305533-000 Kent EdWard Hllbrlch et UlC November 16. 2007 Hawke Ent.en>Os811 TEXAS DEWITT 243 865 • 305534--0().1 Elenore Klaevemenn October 10 2007 HIWke EnterD11ses TEXAS DEWITT 243 891 305545-000 Lois B Chesney saot11mber 20 2007 H11wke Enllll'Dl\!les TEXAS DEWITT 238 291 305598--000 Amelia Ortiz ·Odober17 2007 Hirwlce Enlf!mrts es , , TEXAS DEWITT 243 832 305603-000 Elna BIQQI AUaUSl 10, 2007 Hawke En.....,rlses TEXAS DEWITT 234 394 ~ 305616-000 Michael Anlt1ony Maren October10 2007 Hawlle Enll!fllnlle3 TEXAS DEWITT 238 268 305831..000 C&r1 H Schlenk« Jr Estate October 28, 2007 Hawke EnlllrJJrises TEXAS DEWITT 243 879 305632.000 Karlend Schlenker et al Oclober 26 2007 Hawke Enlllmrisees TEXAS DEWITT 243 869 0 305635--000 Harland Schlenlter et ux Odober26 2007 Hawl<e Enl8nlttses TEXAS DEWITT 243 871 0 305678-000 Jeanne E Guerriero October 22. 2007 Haw!c11 Ent..,.,,,w.s TEXAS DEWITT 243 en 305n4-000 GWlambllletux November 1 2007 HawtteEn~ TEXAS DEWITT ' 243 856 0 305787.001 George Lowman Nowtmber 7, 2007 Hswl<e Enrtwnrises TEXAS DEWITT 243 897 "'tJ 305787-002 Hedv Stakes November 7 2007 Hawlle En•....,rises TEXAS DEWITT 243 895 0 0 0 0 4 ofS 0 co w en 511 0 0 :::::I ::!? c. 305787..003 Edwin Ear1 Galda November 1 2007 Hawke Enlaronses TEXAS DEWITT 243 893 C'D 305932-0<l.1 Clifford Dwavne Parker et ux Jutv30 2007 Hawk• EnlerprlHa TEXAS DEWITT 233 723 ..... :::::I -· Al 305932-002 305939-000 3060.(8-0CM Jamet1 K Crain et al WT Mumme et we Debbie Lvnn H~eman DecefTlber19,2007 November 1, 2007 Novan\ber21.2007 Hawke Hawke Erarorises EntarDrisu Hawke BM1111isn TEXAS DEWITT TEXAS DEWITT TEXAS DEWITT 267 . 243 243 252 886 885 306049-000 Melvin R Hilbrich et ux N0119mber 15 2007 Hawk.a Enleronle! TEXAS DEWITT 243 839 306220-000 Johanna Wild Mav3.2007 Hawke Enlerorisn TEXAS DEWTIT 226 3n 306925-001 Robert L Zaiolltz December7, 2007 H~lll Enlal'l>ri.ses TEXAS DEWITT 252 351 • TOGETHER WITH ALL AMENDMENTS, RATIFICATIONS, CORRECTIONS ANO/OR MODIFICATIONS OF THE OIL, GAS AND MINERAL LEASES DESCRIBED HEREIN ~ e!! ~ t.a\!11 3 ~~6,, ~--11 f.fl"c n Q -~1~~Q • ~ ~ ititllf ! ~ ~~ ...... ~-.l! 8.,.. -C Oj!:§- i;- · fll ·O a '< c.o •1 !i;1~ J:Dco c 9. ..., 0 -i; o;;i :::>~t.j~ ... ~ . ........ "00 ft I~~ is r';/ I' I :::t :J:) ~ IE,:o ~ iJ~~c. Q 0 0 "'tJ 0 Ii a ~ F 0 0 0 5 of 5 0 <O w en 512 • • Notice of Confldentfallty Rights: H you are 1 aahlnl penon, you may remove or 1trike any of the followiDa informatloa from this imfnlmmt before it is faled for record la tbe Public Recorcb: Your Social Security Nu..mber or your Driver's Lk.nue Number. OIL, GAS AND MINERAL LEASE (PAID UP LEASE) THIS AGREEMENT made this 22nd «Dy of October, 2007, between LORENR H. KOOPMANN, 111 unmmicd woman, Lmsor (whcthct one or more). wlKKe address is: 405 FM I01, Yorktown, Tew 78164, llld HAWKE ENTERPRISES, whose addrns is: 330 Rayford Rold, Suho 196, Spring. Tcus 77316, Lwcc, WITNESSE11f: I. ~in consideration ofTen llldNollOO Dollars ($10.00) In hand paid, of the royahiea herein provided 111d oflhe agreemenrs of Lessee herein oonlained, hen:by grants, leues and lcu exclusively unto Leueo for the purpose of inverliptlna. exploring, l'fOJPOCllng, drilling a.nd mining for and produeing oil, gu and all other minmls, ainducting cxplontlon, geologic: and geophysical surveys by selsmogrsph, core, lest, gravhy, and magnetic methods, l1ylng pipe lines, building roads, tanks, power stations, telephone lines and other stnJetures thereo , · i1Ye111 thlfflta, 10 produce, save, take care of, treat, traNport, and own said produc:tJ, and housing its cmployeu, the following dcsaibed land in DeWitt County, Texu, 10-wll: 120 1<m of laad, 111ore or less, bel11& a part or Seclloo No. 13, l1dlHol1 RaUroad Company S11"1'ty, A-27l, DeWitt County, Tues, and ~lag the a1u land described u TRACT NO, ONE 11d !RAC! NO, TWO In that certain Deed, daled Dectmbcr 27, 1996, rro• Loli Strlcbcr, lndtvldually 1ad u J.depadnl EncatrlJ: or IJtc &tale or Jerry Strlcber, decHHd, u Crantor, lo Giibert A. Koopman ud wtrc, Loren H. Koop•HI, as Gnintte, and bdai: recorded la Volu•e 14, ptp <415, OIJklal hbllt Records, DeWitt CoHly, Tnu. 'Alil ' - alla _ . , anlll h11lu•• all lllul e-..i w 1laltiM ~ 1 . - -.!•111 • RNls- .. 11M a.II ,....lllilri,. •.-MN all1v1, ""4Mlh• IM -111laMill1-.i) w ~ ar i11..ij-•~11 ....p 1111 i111lllMI wilhkl 1h1 h1111.,... efllle 1111111 ..... 1141..ly •-"~Ml ..... l . Without refemicc to the c:omme:ncemcnt, proKCution or c:essalion at any lime of drilling or other developmenl operations, Ind/or 10 the dlscorny, d.CV'l:lopment or ccs:salion at any time of production or oil, ps or Olhcr minenls, and without fiu1he:r payments !ban lho royalties h=ln prvvided, and notwithsl&nding anything cbe ha'cln contained to tbc C<leltnry, this k&sc shall be for. term or ~years livm this dale (1:11lcd "prirary lam") and as long thcral!Cf u oil, gas or other minenl iJ producccl from .aid land OI' land wilfl which sald land is pooled hereunder or~ long u this lease Is continued in efToc:t u Olhuwise provided hCRin. 3. The royalties to be paid by l..esJee are: (•)on oil, .!.l1m of the prodllellon ~and saved from said land, the samt 10 be dclim-ed, free of all eosu and expenses IO the Lessor Into the pipeline, OI' olhcr re~tacle lo which the Leuec may connec:t its well1 or the mutct value !hereof, at the option of the Lcuor, such value 10 be dcl.crminod by (I) the highest posted price, plus pRmium, if111y, olTmd or paid for oil, condensate, distillate, or other liquid hydrocarbons, resp«tlvely of a llke rypc and gravity ror the field where producod and when nin, or (2) the gro.. proceeds ofdle ale !hereof, whichever is greattr. (b) on pt, lncludine casinpad eas or other gaseous substance, produced 6'om •id land, fillb of the pu~ of(I) the market value al tho wellhc:IMI ofsuc.h p.11 paid to lessor free of all wru and expensea, or (l) lhe IJ'OH PfOCceds rcallz.cd ftom the Hie of sueb gas, free or 111 coatJ and expenses, to the first non-affiliated third patty purchaser under a bona fide II/Tiii length Ille or contract. "Orou proceeds" (for royalty payment purposes) $hall mean the toCll monies and other consideration acc:ruing lo or paid tho Les.sec or received by Lessee for dl1poilllon or sale of all unproceued gas proceeds, residua gas, gas pl.lo! products or Oilier productJ. Gross proceeds shall include, bul is not limited 10 advmu payments, take-or-pay paymcnll (whelher p1id pursuant co conlnct, In 5Cttlement or received by judgmenl) reimbunement for production or sevcnnco Wies and any and all oilier re!mbursemcnll or paymr.nll (e) If 1ny disposi1lon, aintnia or sale of oil or gas shall include any reductlon or dwtc for tho cirpenses or cosrs of production, 1rca1ment, ll"lllUpCKUtlon, manufacturing. proce.ss or mllli<e1ing of l/w: oil or gas, then meh dcduc1ion, expense or cost shall be edded 10 lhe market value or !VOSS proceeds so Iha! lessor's royally shall~ be chaJiuble dlrcctly OI' indlrec:11y with any costs or upenm otm lhan ils pro 111la share of sevenmce Ill'" produi;lion w:c.s. (d) While !here is a gas well on this lease or on acreage pooled ~th bul g11 is not bcina sold or UJCd, ~may P9Y u royalty co the credit oflhe owner or owners ofroy.all)' hereunder in- CitiT&!ll B111k 11 ypdaown. TCIU, (...tilc.h blnlt and its lllCCCSSOr1 an: die l'l))'lhy owner or owmcr'• •gent, and shall ~inue as deposilOI}' for all 'lldl 1ums whldl Lcssu may pay bc:reundcr, rcprdlcss of chanseJ In ownenhlp of royalties) on or before ninety (90) dsys after the d1t1 on whlc.h (I) said wdl Is shut In, or (2) the land coven:d hereby or Ill)' ponlon !hereof Is inc hided in 1 pooled unit on whh;h a wolf ls loc.alat, Of (3) lhll leme _ , to be otherwise malntllnc.d as piovided herein, whichem' Is the Illa' dale, and !hereafter 11111nllll inlcmls, die sum s:u.!N pa millml acre, Slid if such payment 11 made or tr:ndcml, this lease shall nae tamlnale and it will be considered that gas is being produced li'om thiJ lcue in pl}'lng qwnlitles; and ( c) on alt other minmls mined and mlltceted, ono.-1en1h eilher in kind or onlue 11 tho wdl or mine, al Lessee's election, Clt(epl !hit on 1ulphlll' mined and marltded, Ille ro)'lll)' shlll be Sl.00 pcT long Ion. Lessee sh.Ill hve fiee use of oil, gat, ooal ind war.er li'om said land, CJC«pt Wllti:r from Lessor's wells, creeks and w11uln1 pl~ for 11! opc~ionl heTcundcr, 111\d I.be roy.alty on oil, ps and c:o1l 1h1ll be compuled •Iler deducting any so used. Confidential KOOCOP00000937 513 .,. • • 4. r..es-, 11 its option, Is lle1dly &iYen the ri&hl and power ro pool or ccmblne the ac:reage covered by !hi.I lease or any portion thereof IS ro oil lllld au. or cllhcr of them, with 111y other land covered by this kale, mid/or with Ill)' other land, lease or leases In !he immediate vicinity thereof to the extent hereinafter s1fpul11cd, wh!:ll in 1.cs-·• judgment it Is necessary or ~vlsablc IU do so in ordu properly 10 explore, or !O dcw:lop and opeflle uid loased premises in compli1ncc with the rule1 or regul•tion1 of !he R1llroad CommluiOll of Texas, or other lawM authority, or when !O do $0 would, in the jlllfgment of Leuec, promote the con~on or oil and gas in and 111\der and tbU may be produced from said pn:mlJC1. Suc.h poolinc shall be Imo a unit Of imits no< oceeding forty (-40) ~plus an acreage rolcfance or ren ptlUlll (10%) thereof for oil, 1111d unill not exceeding slit hundrid fony (6-40) 1CttS udi plus an acreage 1oleooce of ~n pm:ent (I 0%) thereof for gu, provided thll., should govemmenial authority having jurisdklion prescribe or pennit the creation of any drilling. spacing or proration unill larger than thowo speclncd above, such units may be created or enl11ged 10 confonn iii sW: to the drillln1 or spacing units Ml preJcribed or permirtcd or 10 Ille prora1ion units as may bt authorized for obUining the muim11m allowable production frcm one well. LcSSH may pool the aueage or inltmts 1bove described, or any portion thet'cot; as above provided, as 10 oil or gu in any one or mon: mncs, &/\d uniu $0 formed need not conform in 1lzc or aru wilb the unit or units inro which the lease a pooltd or combined as 10 any OIMr zone, 111>d oil unilS ~ nor conform as to ami with 8' uni1L The poolin3 in one or mere insllnceS shall nol cxh1w1 the rights of the l..cssce hereundtt to pool this leuc t1t portions theieor into other units. ussee r.hall file for recool in the appropriate reconlJ of the counly in which rho leased pn:mise1 ~ sltu:alcd an instrument dcKrlbin& Ind deslifttllng the pooled ac:reage IS a pooled unit; 111\d upon 1uch rccordatlon tho unil shall bo otrective u ro 111 parties htrelo, their heirs, successors, 1111d mlpu. imspcttlve of whether or not the unit ls likcwbe effective IS to 111 other owners of surf&ce, mlnenl, IO)'lfly, or other rights in land included in auch unit. Laseo msy at its election CllCKiso its pooling ope ion before or afttt 'omm~ng opera1lom (or or completing an off or gas well on the lcued pre.miJCS, and rhc pooled unit may include, but it is not required to include. S.nd or lcase.s upon which • well capable of producing oil or ga in p1yin3 quantitics hu lhcmofore been completed or upon which opcnlfons for the drilllng or a well fot oil or gas have theretofore been commenced. In the event of opmilions for drlllln& on or prodU<ltion of oil or cu from any part ofa pooled unit which Includes all ora portion of the land covered by this lease, regardless of whclher such operations fOI' drilling were commenced or s11eh producrion was Jeeured before or after the execution of this instrument or the insaument dal"1'1in& !he pooled unit.. SUl:h opct11tions shall be COllSldtted as openrlons for drilling on or production of oil CK ps trom land coven::d by this lease whether or not the ~II or wells be localed on the pmniscs c.ovcn:d by this lease and in such o:,1ven1 openllons for drilling shall be deemed lo have been commenced on S4id find within the meaning or pangnsph S of this lease; and tho e.ntil'I llCTCllge constituting such unit or units, as to off and gas, or either of them, es hcRin provided, 1hall be tRaled for 111 purposes. oxccpt the payment of royalties on production ll'om the poolc.d unit, IS If the $am<1 were in<:1ude1:1 in this 1usc. For the piapose of COlllJMlling the royalties to which owncl'I of royalties and payments out of production and each of them shaU be entitled on production of oil and gas, or either of them, ftom the pooled unit.. there shall be allOClll:d !O the land covered by this lease and included In said 11nit (or touch separuc ltKI within the unit if this leue coven lCJllRle incu within the unit) a pro rara ponlon of the oil and &IJ, or either of them, prochloed li'om the pooled unit after deductin& lh•I used for opcntlon.J on the pooled unll Such 11foe11lon shall be on an acrc&Je basis·thal ls lo say, Uiete shill be anocated to the 11Cn:a&e ~ by this lease and includcil In the pooled unit (or to each sqiara1c ltKI within the unit if lhfJ lease coven sep;ntc tnclS within the unit) that pro !'Ill pcwtion of the oil and gu, or cithel or them., produced fi'orn the pooled unit which the number of surface a=s covered by this lease {or in ndl sudl separl1C In~) and included In the pooled unit bears to the total number of surftcc 1e1a included in the pooled unit. Royalciu hereunder shall be computed oo Ibo portion of such procluc:tian, whc1hct ir be oil and gas, or either or them, so 1t1oca1ed to the land coveted by this lcHe aml Included in Ille unit jllJ1 u though such production waT ftom such land. The production from an oil well will be oon1idercd 1.1 producrion from the lease or oil pooled unit from whldl ii ls producing and not M production trom a 111 pooled unit; and production from 1 ps well will be considmd as prodlldion ftom the lea!e or ps pooled 1111it from which if is producing and not !Jom an oil pooled uniL The fonnatlon of any unit hereunder shall not have the effect of changing the owne:ship of any delay rental or shut-in pniduction royalty wllicb 1111)' become flC)'llble andeJ' this lase. If this !cue now or hercaltet cover11cpamc Inlets, no pooling or unitimtion of royalty inrercm u between any sYCh ~Inds is Int.ended or lh11f be implied or mull mntly from the inclusion of sw:h separllc tracts within this lease but us1ee shall nevtl1heless have the righr ro pool as ~ided above with c.onseqllelll 1flocalion of produelion as abov.: provided. As used in this puapaph 4, the words "Jcp11ato Incl" mean any tract wilh royalry ownership differing, now or hel'Clfter, either as 10 paniet or amounts, from lhlt as to &ny other pan of the lealed premises. 5. If 11 tht lllqlintion or the primary tcnn, oll, gu, or other mineral is not bel111 produced on uid land, or frorn land pooled LhcRwith, but Le.ute fJ then engaged in drilling or rcworldng opcratlonl lhen:an, or &hall have comple.led 1 dry hole thereon within 60 days prior to lf)e elld of the primlll)' ~nn, the fell.Se ah1ll remain in forte so long as opcratlom on said well or for drilllng or ll!WOrking of any addition.ii well 111: prosecuted with no cessation of more th111 60 cons~utive d1y1, Ind if they mult in the production of oi~ gas or other mineral, so long lhm:111\er ilS oil, gas. or other mineral ii produced fiom nld land, or li1Jm land pooled !herewith. If, after the ~xpifation of tho prim8y rmn of this lease and after oi~ gas, or other mineral is produced ftom Aid 11.11d, or from land pooled dlemvil.h, the prodUC(ion lhereofshould cuse from any ause. this lca5C s.hlll n:mal• In foru oaly if Leu« commences openrions for drilling or reworld11g within 60 days after !he: ceu.alion of s11eh produC1ion but .th.all rrmain in force and effect so long u suc:h operations ~ prosctuled with no cen11ion or more than 60 consecutive days, and if they rcs11h in the production of oi~ aa.s, or other mineral, so lotig thtrc;after as oil, ps, or other mineral Is produced from said land, or from land pooled therewith. Any pooled unit designated by IAsoe In accordance with the renru hereor, may be dissolved by Lessee by insln.lmcnt filed for record in the appropriate records of the county In which the lel$ed premisea In: situllcd 11 any time after the c.omplefion of a dry hole or !he cessation of prod1Jttion on said unit In the event a ~II or wi:llt prodlKing oil or ps In paying quantities should be brought in on ldjec.ent land and d111ining the k&wj premises, or I.and pooled I.herewith, Lessee aU"J to drill S>Kh olTsel well or wells as 1 reasonably prudcm opera.tor would drill under the aame or similar clrwms1anecs. Lessee may 1t iln)' tlrne e~rc and deliver lo Lessor place of record a release or releucs covcrina any portion or ponions of the 1bovo described pn:miw and thereby swrender lhls lease as to suc.h portion or portions and be relieved ohll obllpdons as !O the acm1ge su~ . 6. LcuR shall have lhc right at any lime dllrin& or within sli months after tho expir'llion of thk lease lo remove Ill (!fOpmy and fixrure:s pl.lad by Lc.uec on said IAnd, including the right lo draw 11\d Rmove 1U casing. Thereafter same become Iha property of Lessor. When required by Leuor, LcJffi: will b..-y all pipe fines below ordlnuy plow depth. and no openrlons shall be conducted within SOO feet of any midence or barn now on uld land without Lcuor's consent 7. The rights of either party hcrwndCS" m.ay be auigned in whole or in part, and Ilic provisions hereof shall exicnd to their heirs, succcuorJ and auipis, but no change or division In owncnhip of the land or !Vflllties, however aw>nrplishcd, Jhall operate to enlarac die obligttlons or diminish the n&Jits of Lesm:; and no chan&e or divuion in such ownmhlp shall bo binding on Uisee until thirty (30) dll)'S after ussce shall have been furnished by regislered U.S. mail al Lusee'1 principal place of bwlness with 1 certified 2 Confidential KOOCOP00000938 514 • • c:opy of recorded lns1rument or imuvrnenu evldencln& 11mc. In the noen1 of usipunmt hereof io whole« ill pat liabilily for bn:8Ch or any oblipllon hereunder lhall rtJt exclusivtly upon the owner of thl.s lease or of 1 portion lhmof who commits IUCh bRlch. 8. The bruch by Lesaco of any obligation ulslna hereunder &hall not worlc a for1'eit11re or tennhution of thl.s ltue nor cause a t.crminalion or revcnion of the CSblo anted hcn:by nor be vuuncb for tal!CCllatlon hcn:of in wholo or In part. No obligation reasooably to d.ovclop the lellSCd pmnl.su sh.Ill arise during llM primary rorm. Should oil, gas or Olhot mllltnl in 119ying qullllllleJ be discovered on said pmnises, thai after die expirtbon of the primuy tam, Lessee shall de\'elop the aaap reWncd heminder as • reasonably pnident opcntor, but in dlsdtargin1 this obligation ii 1hall ln no evmt be required to drill more thin one well per forty (40) 11ercs or lhc na retained hereunder and capable of procb:lng oil in payin& quaruitiu and one well per 640 ~ plu1 111 1Cte1ge toluance no1 to c~ 10% of 640 acres of !he an:a retained berellndc.- and captble or producln1 aas or ocllet mine.1111 In paying quantities. If al\er the 01>iration or the primwy 1cnn. lePof conaiden tlwl opcntlons an not at any time being ccnductcd ill complitnce with this lc&se, lcssof ahlll notify Lesacc in WTirin1 oflhe facll relied upon u constituting a breach beRof, 111d t..t.s.see, if In dcC.ult, shall haYoe sixty days after receipt of S4lcll notice In whkh lo tonlmencc CM c.ompllance whh Ibo obligalionl lmpoted by virtue ofthl.s lnstrumcnL 9. Lusor hmby wamnt1 llld 1~ to defend the title to all of Leuor'1 Interest in said Jud and qree1 Iha Lessee aa its option may dilch1rge any tax. monwc or other lien upon said land either In whole 0t in part. mi in event Lessee docs ao, It $hall be subrop<ed ID such lien wilh the right to enfurce same and apply royaWes ewuln1 hetounder towatd '91i$fying same. Without lmptimlent ofl.cu ee's right under the WV!'lnty in even! offailun: oft/de, ii is api:ed that if Lessor own' In interest in the oll, gas or odlcr minerals on, In or llJ'lder said l111d leu thin the entire fee simple CJlllte, whether or not this lease plllpOftl to eovu the whole or a f,..cllorlll ina:rest, rhea the royaltiH to be paid Lessor shall be ,.,duccd In the proportion that his lnlCl'CSI bears to the whole and undivided fee and In aoc:or~ce whh the nilure of the utate of which Lessor is seized. Should any one or mcwc of die parties named above u Lessors fall to execule thlJ lease, ii shall nevertheless be binding upon the pezty or panics execurln1 the same. JO, Should l.cs1CC be prevented from complying with any eiqi=s or implied covenant ofthil lwc, from cond\Jtting driiCing or rcW«lcing operations dtm>on ot on IJnd pooled therewith or !tom poducing oil or cu thcreltom or ll'om land pooltd the~ by l'UIOll of scarcity of or inability lo obtain or to uso equlpmcnl or 11111erial, or by operation of force m1jcure, any Fedml or state law or any orda', rule or ~culation of govmuncntll authority, then whlk IO prenntcd, L=ec'a obllpllon to eotnply wllti 111Ch comiant ahall bo 1uspcnded, and Lasec &hall not be liable in damages for fall~ ID comply therewith; and thlJ tcue shall be cf;1Cnded ..tlile IDd ao long u Lascc is p!CVClllcd by my rucb cau.se from conductina drillln1 or ~Wol1dng operationa 011 or from produdng otl or ps from the leued pmnlsa or land pooled therewith, and the time whik Lessee is so ~!rd shill not be counted apinsc Lenee. anything in thi1 lcuc to tho contrary no1wid!Slanding. SEE ADDENDUM, PARAORAPHS A THROUGH AA, A1TACHED HERETO AND MADE A PART HER.EOP POR ALL PURPOSES. IN WITNESS WHEREOF, this inltrument Is uccuted on the dtJe f1111 abow written. LO(~,..i ){r4..,_...-= TlfE STATE OF TEXAS : COUNTY OF DEWITT : This instrument was acknowledged before me on the 26111 day of October, 2007, by LORENE H. KOOPMANN . CIWS'Tlll'HEll M. CllAIN llDy Nill:, lillll d .... lly~- .lmlwy SO, ZOii ~"'-~ ~Lif.STATE OF TEXAS 3 Confidential KOOCOP00000939 515 . . • ADDENDUM • THE PROVISIONS Of 1lflS ADDENDUM SHALL CONTROL AND GOVEJU.I OVEJI. ANYTHING HEREIN ABOVE PROVIDED WHICH MAY BE IN CONFLICT HEREWllll. A. PUGH CLAUSE: Notwithstanding aoythin& to the~ hmln ec>nlalncd, drillln& opcndOIU on or production li'om a pooled °' °' unk unils et111bli1hed wldci' the pnivision of Puqnpb 4 Pwqrapb X hmof, Cllltnclna luld c:o~ bmby and other b.nd, lball malnlaln this lease in folce only as to land lndudcd in Juch imit Of unll>. The !cue may be 11ainllined In force 5 to die remainder of the 1..d in any manner herein provided for. B. INGRESS&. EGRESS: In the event Ill)' of tho KRqc wV!:fed by lhla !cue Is released by opmtion ofd!e terms of Paragraphs A or H hereof, l...cuce shall have the rigbr of ingress and epess for production pWpOSCI lla'OSS Ifie released ~ lo the aaup retained hereunder if 1uch right i.s necesury for Lessee to have acca.s to the malned acreage. C. LAND USE: (RE.FllRENCE HEREIN TO LESSOR ALSO REFERS TO SURFACE OWNER) (•) Should I.us« or 1enant1 on the leased pmnisa suffer Ion of, or cllrna&i: IO, Q'OpJ, ~. run, livesaoclc. WllU wells, fmc:es, roaclt, other pc!Wnal property, buildings or other improvemencs, u 1 result of opetallons or Lessee unde.- thi' lease, Lessee apees to pay Lenor or such fdWlts the actull amounr of their said Ion or dmn.lge. It Is npmsly undenlood aJld provided !hit the da11U1&CS provided to be paid under the terms of this leaso shall be payable within 60 days after wriuen oollco by Lessor 10 Lessee of the accrual of such damases 111d If such damage• are not paid within 60 d•)'I l'rom the rKelpt of any such norice then such d111111gcs shall bear inlercst at the nrta of I 0% per armum from the elite of 11Ccr1J1l of such damage., (b) Within a reasonab~ dme after Lessee's need thefefOI' shall have ceased. Lessee shall fill all pits and other cxcavlllioM mlldc by Lenee upon die lwed premiset, leYel oft' 1111 mounds llilde by UsJee upon the lease prembu, and itmovo all debriJ and rubbish plllced by Lessee upon the leased pmnl1e1 and rato19 Iha Ntf'- to ill ori&inal in-drilling conditlan aa -1)' u posaible. Lestee shill erect and m1int11ln ll'Ound 111 open pill a fence e1p1ble of turning liYllllOCk. To protect Lcuor'1 li\'CStocli, Lessee and those ccnductlna surface and/or seismic operations on the lease snmllel mu.II nae allow truh. dcbri1, cw ~l\isc 11-orn audl operation to exist on the poand, inc:luding, but noc lim~ to, fllgging mnerial, wire, plaWcs, chemical ruiduc, Of' ocher foRlgn object> or mlleriab lbll would endanger or injlll'll livcS!oelt. Upon cessallon of use thaeof by IMsco, it will notify Lestor of 111ch ~lion and at the option of tho Lcuor will leaYC on lllepmnlses u ~ oflhe propaty ofl.cuol'all cattle guanli, waler wclla, bridges and roeds placed lhcreon by Luscc, iU successors or assigns. lhequested by Lessor-, lessee must plw: 111 romd and pld em-ct in piles on the !use ll loc:adons desl&nated by lessor. A c:anle gu.-d with lock-W shall be plal:ied ll the QllmlCC ontu die lease snmlles tbrolJ&b which the LcNco will ban accesJ to the premises wfdl ~ tu Ill)' Mii beln& drilled on die lease premltet or land pOOlcd lttcmvith. Said lock·bar lhaU be ktpt closed and locked at all limos Cllcepl during times of em-anc.. by lcs:lee, Its agents and panics operating Wider die Lessee. Lessee agrees to maintain all roads and pat!u upon which ii b"lvcfs In a condition which iJ as good u or bctlEr !ban !he conditioo of such ra.d or palhway prior lo I~'• entry upon the 1bcm--described net. The loadon of 111y ro.! installed by ~ murt be along • Rl\ltc nquelted by Lessor, however, ~ must DOC male• 1111 unn:aso111ble noquest. Any rwds lrmaDed by Lessee md the drill site must be made up of al least six inches (6, of computed pvcl which lfl'l'CI shall be ~ of stones llO( in excess of two inches (2") in diamdcr. AdeQulle and ample chlnasc lhall be provided on !he roach Ind drill site ID avoid llandin& water. Lcuee must In.WI a slxteai f'ool (16') ptvanlzzd tube p111 In each of Lcuor'• fenca fhrou&h which It must p&D durin& ks opentions. ( c) None of Lcuor's fresh water m.y be used for ~onday recovay IMlbods of oil m au pniduction. Lessee is aprcaly given no ri&fll to disposa of "'Y waste oil or salt Wiiia' on or ow:r lhe leased pmnlses or 181\d poolod dlerewith. All oil-based drilling mud, cllltln&I, and deleterious substances from the ~JI or brou&flt onto the premises by Lea. are to be hauled off the leased ~lses by Lcuoe. t..w.ec agrees that any oll hued mud. drilli111 compound containing 1 bydtocution blse or any material which is hanntul to the 1011 used in Lessee'• opentions on Hid land will be pllCed In 1 poc1able steel storage contalnw dumg drillin& opentlona on said land, and Leuce shall ranovo 111 such mlld1, c;ompoundJ, m11eri1ls and 11onaa conllinm from tho land aJld dispose or It off the leased smmiseJ. Any water based drilling mud not c:oot.lining any of llid delctcrioas 111b5t1nccs shill be &preed. disced, and leveled by tho Lessee near the IOClllon wh«CI the mud was u5ed u di~ by Lessor. The: topsoil of the drill site mwt be removed before Installing the drill site. Allor completion of its use by Lessee, all topsoil th11 bu bcm mno~ mwt be retvmed to the original location and spread over the ara, disced in. and appropriate f!TllSIU pl111ted 1nd ns-sprigged according lo the Lessor's ~irements. The: well equipment and localion !hall be kepi IS clean IS possible 11111 timu, and roads used by Lmee should be kept in good~ of ~pair. Lessor rcterVes the right to Inspect and checlc for accuracy 111 meten tlvough which le3.sor'1 royalty m1y bo marketed. (d) It b here agreed thl1 Lessee win pay the LesSOI' for eath turftca acre used by the i . - ill lt1 operations, wh~ it be for the drill 1tt., pits, production &cllities or roadJ, Sl,S00.00 PCf 1ao as •peed Mllfau dllll\lge, Ill addition to JllYln& those amounts set fonh with regard to otlc tn:c1 and plpcllnes Id Oii! ~low. Lcssca mUJl pey the l..asof SI .00 por foQt in lensd! fur• atxty.fooc (60') wld• pipeline ri&flt-ot-way for lmtallloa pipelines occemry for pn>ducllon of any well on !he least premlseJ, whicb right-of·w.y 511111 nduca lo a thirty.fooc (JO') ri&frt-of·way after ~on and insllllalion oflha pip~llne. U:ueo mini pay Lcnor $7SO.OO as• liquidated darnlge 1111ount for 111y oak tree dama&ed or deslroycd by Lessee which tre0 hu • tNnk dlameler oYer twelve inches (Ir) when measured twenty-fllur Inches (24") from ground Incl, to be locn:ascd SI00.00 per Inch l't!r etCh Inch O¥t:r 12 In~. Pri« to commencins surfKe opera11ons penainlna to 111y wen co be drilled on the premlaes, Lessee shall pay Surlla Owner all swfice cillnaga anticlpall:d II-om such surfau oper'llionL Thaeafter, if ac1111I surfaoee danu&a u aicd Ille ~t paid by Lwu to the rurface o - , then Lessee shall P'>' all addidonal surfllCll damages Immediately. (c) NoiwlthsUndlng me general 1mns of gnnt wntained In thiJ lease, lho Lestee Is noc given the right co c:rcct or m.ain1ain refining flcilit.les, or 111y olhe:r Ulnttion or treating fsilhlcs on die lease premli.es unless dircctJy rellted to Ille prodllClion, tre:l!ment, llDd recovay or oil, ps. sulphur, and Olhcr leased minenils from thl• luae or &om 11114 pooled therewith, ud such ~lllties, if ID)', lhll1 be only those ~asonably nuemzy fur pn>duction, treatment 111d recovery of such leased subslanca &om dill lease and bnd pooled lh«ewith. (f) Upon faminalion of th it lease, Lessee •l!J'C$. binds and obllpies ltstJlf ID plus In acconlance wicb !he Rule:i ~ Regulllions of lhe Railnllld Commluion ofTcus 1111y well clrilled by Ll:lsee. In lhe OYl:llt LellOO shall 1'111 IO ph1&IUCll well in~ with die forqolng provisions, then l...cSSOC' sllall haYe the right to do so 11 Lessee's expense and lhall be entitkd to ~co>'tf ftoom Lessee Ill 4 Confidential KOOCOP00000940 516 • eirpcn$CJ incuned In the pluglng of any such well, together with a reasonablo attomey's ~County, Tcxu. • rte and venue fOf lutb ltlloo shaU be In 0. SHllT'·IN LIMIT: It is expressly apud and p!'O'fided Cl\ll thb leale cannoc be held, malnlalned, llOI' atmded under and by vlnuc or tho •hut-in '" well pnivUlon of this lease for a longer tmn be)'ood lhe prilllll)' tam 111111 rwo (2) consecutive yan lmmedl3Uly thefaftor, or fOf ahol1ct laml 11 various lnlervals not ID exceed in the ...,..m two (2) , - , in all E. MINERAL LlMITATION: It is aprcslly undenlood ad provided that this lase coven oil and ps 111'1 liquid hydnx:lrt.om, along widl tho produas 111d by·produc:U thereof, but Ibis leuc does DOC cover unnlvm, fia lanable m1tai11J Of 1111y odltf minerals or any lypO, hen: rrAkin& panicu!. mention ofw.tcr, lho Lcucc herein bein1 giv.:n no right to explore for, nor dtVl!lop 111)' part of the land (Of production of w.tcr !h=from except wi1h ~ to produdnz: Wldtr lo be u.scd told)' whh reprd IO lcsRe's oil and ps drilling opcnlions. Notwithstanding anything to Ille contrary in this lease conbllned, l.eSJcc dlall 11 all rimes protect the herein leased land from drainage of oil and gas from wells on adjoining llllds. F. POOLING LIMITATIONS: . (•) Jn the event Lessee exercises its option to pool u authorizied by !he 1crms and provision• or Parlgrlph 4 herein, the right to pool for 11&1 including condensate and distillati., is hereby limited ID 160 ~plus t0% tofCTllllQC IS ID all horizons from the sutf'Ke oftho VCKJ11d lo I depth of S,000 feet below the Rlrl'1cc of the crocmd and to 320 l l:ICI plUJ 10% tolcm!ce U IO all horilom &om 5,000 feel below tho surftce of the ground lo a depth of9,000 feet below the sric. oflhe &fOllnd, it bein1unders&ood11ta1 Lessee shall have Iha right to pool or unitl1.0 the L\ndl coven:d hucby for gas including condensate or dllllllate u to all dr:plhs below 9,000 re~ below the 111rfl1e:~ orthc ground l111CCordancc with the tenns lllld provisions set forth In 11kl Plngraph 4 above. lfl..euco excrciJcs Its right lo pool 1 au well localed on tho Lessor's land, it mu.sl place Into the pool ll leut $0% of Lessor'• land origln1lly !cued Ind dumbed herein, unlcr.s Iha ,.Id laocl originllly luscd herein docs not exceed 150 ICm In auch case 111 of tho llllld must be included in said gas pool. {b) Lessee acquires no rights or power ID pool any of 1he lbove descn"bed land for oil, ii being undmlood and lg1=i that pooling provisions as provided for ltutln ~limited to gas and/or gu disrllla.lc only. O. RELEASES: Lessee must furnish to Lessor within 60 dl)'l after lhe tcnnination ofthiJ lease with reg,ard lo 111y pan of the hmin lascd pmnl.ses from 111y cau.. 1 duly executed md •cknowlodpd illllnlment releuing OI' evN!enclne the tcrmlllllion of the lease as to th11 pll't of th.e land upon which the lwe has tuminaled. U:ssee qrcc1 IO p1y !Assor SIO.OO per day u liquidated damqa in DeWitt County, Tous, for 1..w.ee's hihn to furnish said release within I.be time provided. If the l..esRC docs so Iii~ such damages per day ARE ID bqln ICCl\llng on I.be 61 • d.y 1ftcr sui:b tamlnadOll. Said amoat ii ~ to be 1 n:Dllllble mnounl IO omet llClllal dmnqcs wbicb Ire dilricull to detcnnlne. Said liquated dJmi&t amount i1Umilt>d10 I muimum amount ofSl,000.00. H. NON.f'OOLED PUGH CLAUSE: ~must within 90 dlyl afttr lite compldlon or 1111y IWll on the IC&Wd premhes which Is noc pooled under lhc provisions of Par1~ 4 or Pwagnpi X hereof desipiat.t In wridn& Md pl.Ke or recx>rd widl thl County Clcrlt of~ County, Texas, • description of that pmt of the le.od pranjsa whi"1 shill be 1llolled IO sucll well for~ JU1I09CS. no "'°" lhllll 40 llO'eS plua 10% tolennce IO be allolled in fDd ~each well ct.uiricd a 111 oil well by the kallrold Comm!Jsion of Texas if complaled 111 depth of 9,000 feet or less below the surface nor more than 10 ea-a plllS I0% IDlerance IO such oil well if compkd 111 a depCb or more th1119,000 feat below lhc surface, and no more INn 160 aaa plm 10% iolenncc to be allolUid in and mound each wdl cWsificd u 1 pa ~II by die Railn111d Commluioo or TGXu if completed at a dq>lh or S,000 flld or le11 below the aurlice of the gtOllnd, nor men than 320 llQ'CS plua I0% tolcran~ If complded at 1 depth of more thazi 5,000 feet below the sumu oflhe pound b\11Imthan9,000 feet below the surficc not more than 640 acres pllll 10% tolerance to Sllch 115 well ircompleted Id a dep«h of9,000 f...c or mon below tho surface. Produc:tion or opmtlons on said allotred area by the Leuec shall mainllln lhls lease in effect only with regard ID the land within the descn"bed uea. This leue sh11l 1c::nnlnate 111 the end or lhc primary Cam u to such put or paits or the leased land lying outside the allotted area unless this lea.so is ptlpellllted as lo such la!ld outside the allontd area by operatlonl conducted thcmm or by prodlldion of oil or gas or any ruc;h opcndo111 and ruch production In a«ordlncc with the provisions hcrcor. I. PAYMENT LOCATION: All roynltles, surf'l.CO damages, and other paymcnlJ duo under lhis lease sh•ll bo payable In~ County, Tcxa, unlcn OlhC1Wlse herein provided. J. Ml'NIMUM ROY ALTV: lflho royalties to be paid unda thll lnse durln1 12·monlh periods u tbT!bed below ue le5I dim the sum or S25.00 per ICl'tl !hen leased ("mlrlimum n>y1lty"), Ind Leuor scnds Lenee norlcc in wrltina or same, thell this leaie will tmnilllll: II the aid of 90 dayJ 1fter LeA~ ~l~es wrlt11ll notice ltom LellOI', Wilm the Leuee pays to the royalty holders 1 sum of money cq111I to the dilfcn:nce between said minimum ruy1l1y per acre Ind Ifie total of all royally monies on production so p1ld durlni: Ibo appl'"blo 12-momh period, Said 12·monlb pcriodl IR the initial period bqinnll!c widl the diUl off~ production from Ille lease prcmlJci Ind each JUCCCSSin 12-month pcilod liima.fta'. Tho pl}'1Mllts '4:t out In this pengnph do not n:licve Lessee of the requlmnent of produc:tlon in paying quaMitia IO maintain t!Jis lease. Notice u lo this panpwph will dmncd to be glwn when ii Is deposited in the mail, cutificd, mum reci:ipl rcqutsled. K. INFORMATION PARAGRAPH: Lcuor or bl1 agent shall have 11CC1CU to 111y well bein& drilled on tho pn:mise3 but must not lnrerfuc w1lb Lessee'• opentloru. At Lessor'• rrqum, l..eJJCC mast furnish Lesaor or hlJ agent with copies or Jogs. elettriQI w.:11 formation •W'VCYI llld analyu1 or formllloa samplct used by Lessee with reprd to arry well on tho pra11lsa wi.lhin JO days after well aimplc:tion or niqucsi, whlthovcr it liter. ~mun fWnish lessor on n:quni cop1c1 of ale contract conccmlng oi~ ps, ud other minent11Tom Ill)' wtll on the land. All of the~ lfO 10 be furnished Lessor Ill hll address Id out above. ~~to koep all lnfonnallon cotiridmtlai for a period of twenty four(24) months from receipt. unltn said luformltlon is necessary fOf 1 lawsui1. L ROY ALTV PRODUCTION: Paymemts of royalty under lhc tmns of this lcuc ahlll oevu bcu or be c:hlqed wilh, eithc:r directly or lndin:clly, 111y pat of Iha mm or expenses of production, pthcrin&. ddtydntlon. ~Ion. lnn$pOltllllon. ,,..,.,~ proccuhl&. trntiiig, pan-production expenses, marbling Of olltcrwbe making the oll or ps ready for Ille or we, nor any COlll or conllruclion, opcntiotl or dcpRclalion af any plane or Olbtf r1cilitiet for proceatna or tm11.ln1 laid oil or gu. AnythiAg 1o the contrary herein no«wlthstandina. it ls expressly provided thll the tcnna of this ~ lltall bo controlling over tho provilloos of Puqnpll J(a), (b) llDd {d) oflhl1 lease to~ wntnry Ind thb panigmph ahlll not be tr'C&ll:d a su.rplusage ~1111 the llokling in the s Confidential KOOCOP00000941 517 C&1CS • • styled "Hqjtaq Rmurw.Jn-.. v. N1tjQNbW. 939 S.W. ld 111 (Ta. 1996) and "Judice y. Mewbo!lne Oil Co. 939 S.W. 2d 135-36 (Tex. 1996). M. DEEP RJOHTS: At lhe end of lhe primary term htreof or the expiratlon of any exri:rulon or miewal of tho primary tcnn, whichc~ oecurs later, this lease lhall 1L1U1matieally eXJ>ire u to all deplhi !yin& dee~ th~ 100 feet bel<WI tho decpC$t oil or pa slrlla found co be t1p1blo ofpiod111:ing in p1ylng or conunm;ial quantirles durln1tho1erm oflhlt lease. Provided IK'lwever, lft.euce is then eoppl In drillin& or rr:wortin& opcn1lo111 on the ftled pn::mlses or lllldt pooled dwwwillt, this lwe shall rwmaln In l\all lbn::a u to 1\1 dcpdu so long u 1uch drillin1 or mirorking opcmlona are ~ed with no c:essation of mOR thin sixty (60) ~ivedays. N. ROYALTY PAYMENT DUE DATE: All roydy pi)'lllClllS on acnial procluQion an: duo and payabhi within 60 d.ys after the end of the month in which the produdi<MI occwrcd. In the event Lasce becoolta dellnquent in wch payment, lhe ~ mllSt notify tho Leisee of tho default and if Lui.ee does not pay the delinquent amount within IS days atb:r Lcuor has tent aucfl notice of tho delinquency lo Lessee by cet1lfied mall al itll addmt set out above, i . - m111t pay Interest on the delinquent roy1lty emount ind on all other royalties aubsequently becoming delinquent until 111 delinquent peymenb hlvo been paid, tho interest rate 10 be 12% per year and computed os to -h of IM dclinq11e11t amounts be&innlng wllh the date each becomes due. Lessee's obligations to pay royalties under this lease shall be S«Uted by a fU'SI lien under the provision:s of Section 9.l 19 of the TclCl.I Business Ind Commerc:e Code exttnding 10 all of Lessor's royal!)' share of all all and p.s production ind the proueds of such diare or the piodualon from die prcmisn. l.csloa's :ialc of the royally oil and ps shall not e111inguish thb lien, which lien is thereby impressed on the monies rcuivcd for the rQyalty oil and p;s. In the event ofl.e.ssee's b&nlcnrptcy, Le5SOr shall posseu 1 lien on all proceeds fi'om ttic s.ale oflhc royalty oil and gal. 0. REPORTS: In the event of production nf oil, gas, and olher liquid hydrowbons &om the leased premlsea or land pooled lk!ewi!h, lhc Les.see muit del.im' lo the l.eJsor henlin afta' Lesso1"1 wrilla\ request eopin of all manlhly nll and ps production rqMlfU required IO be tiled wldl lhe Teua Railroad Commission conc:cmlna the well or wells on thc ~ PfCllllses Oii iand pooled lhertwl!h, such delivay to be 11 the ~time u the fllln& time therefor n:qu!rtd by aid C.Ommb:slon. P. NOTIFICATION: The Lessee mwt nolify wsor not lw lhan 4& hour1prior10 any enlrulce on the lcalCd prcmiut, of tho date ii will enur the land, including in •udt notice lite purpose of the Gnlry and, lhpplicable, lite specific location ofany well to be drilled on the leased premises. This will not apply, however, 10 "°'"'''well inspec:!ioa operwtlons (gmieers, e1c.) Q. DEF1Nl110NS USED IN IBIS LEASE: (I) Tho ltm\I udrillina opentionl" or "opcmi0111 for drilling" shall mean lhM lite drilling rig Is In position with the bit on the ground and rolatin&. (2) A well is "completed" undc:r lhe provisions of1hi1 lwc (I) live d1ya after the well reaches total deplh and oo attempt is 1!11de to comp'lete the well u a producer or oil and/or gu by runnln11 of production cuing. or (2) thiny daya after the date production wing is eell\el\WI In !lie well (u mlected by the cemcntlna affidavit required to be flied with lhe Railroad C.Ommlssion of Tau) In the evcat 1111 ancmpl b 1111de to c.omplcle the well as a producer or oil wrd/ar ps. Any Iller wort dql')I! qn th '"'II will be dccllled 10 bt rc- wom111 opermlol\s. (3) A well is deemed "aM!doned" at the earlier of(a) when pcmunently plu&&ed, or (b) "1len tcmporwily plugged by 1Mtall11lon ora dly-holc tree or by weldln111 steel pllll: 11 the IOp of the o:ulng. R. Taken Olll(Negligent Losa) S. POLLUTION AND CONTAMINATION; (I) It Is qreed and undcm-1 bctwtc11 the Lcswr &/Id the Le1sce thll the Lessee will In its opcnlions on the lc.a.sed pmnlses comply wllh all Fedcnl. mid Stile laws, rules and rcg11Jation1 with n:gard to the avoidance of pollution and CDPlaminalion, inc.luding, but not limitt:d to, the Comprehensive Envirnnmcn.. I Response, Compensation and Liability Ad of 1980 ("CERCLA"). the Rcso~ Conserwtion and Recovny Ai:! (''RCRA"), The Texes Health and Sefety Code, Rules and Regulations of any Stale or Fedenl 11Cfrnlnlstrn1ive •CUICY and all amendments l!ien:to u and whC!I they becomo effective. (2) l.essee osnimes all responsibility to pn>led. defend, indemnify, and a ve l..essoJ harmless from and aplnsl all claims, dtmlnds, and CMIStl of action of ewry kind 1111.d clwa:!cr arlstn& dinldly ot indit'CICilly &om any Ind all poflutlon Of contaminEIOll wbidl may occur dtrllg tho condJK:l of opcnlion hmlmder whetba' aboft the !Md IUlfKo w bolow, illc:ludln&. btrt llOl llmlred ID, those which l"tl$Ult &om 1plll1 of matm.als llllJ/or garbage, or which may rault &om lire, blowout, cral«ing, M:Cpllp, Oii flow of oil, PJ, 'Wiier or ollltl' .subs1ance, u wdl as from the use or disposition of oils, nutds, conumina.ted cuttings. lolt eimilllion .ad fish n:covesy mllaials and fluid. (3) Lessee mt.Ut control and remove all polluting or conWllinating lllbslance. it brinp or ClllSCS IO be brought on tho land. If a third perty performing worlr. for the Leuee commits an 1et ar nonisslon which Rmlts in such pollUllon or COlll8Tllination or falhn IP wmpfy with the •forcmcnliol!Od laws govcmin& same, I.he Lesaco shall be n:sponsible lheref!K 10 the Lei$« widc:r this parqrapll. (4) This ban ongoing obligation on the pin nfthe l..cuee which survives lho 1crmination oflhc leuo wilcss tllC Lcswee fumlshes to lho Lessor 11 Lest1eo'• cicpenile an E!lvlronmenfll Audit 11 die urmlnation of the lease sllowlng lhll thens It no polfudon or contaminallon &om Leuee's operations wider tJtls laase then In ulstma: on the i-d land or land pooled tberiwith. Slid audit shall be conducted by 11 person ayud upon by Lwor and Lusee who ls qualified IO conduct such •udit. {S) Lessee mwt immediately norlfy ~ upon laming Oii swpccting th•I any environmental eonwninarion or pollu'llon ha! oe<:uired on the lease ~ises. (6) Lessa! must m.a.intafn in effect 11 1ll lime5 durin& its operallons under 1111• lease a lltbllil)' Insurance policy in amount Of not Jess lhlii1 S 1,000,000.00 protecting l.e$sor •&•irut all claim• arilln11 by virtue of the l.euee's failure ID comply with the pniviJioru of this Pangnph S, and must fumlsh Ltsso.. prior ID !Je&lMlng such operallOlll with proof of the eidstcnce or l1JC.h policy. 6 I Confidential KOOCOP00000942 518 • • T. JNOBMNIF1CATION: Lessee 11Jtt$ lO indemnify, hold hmmlm ind defend l.nsor II Leiscc's COit against Ill claims for dlmlru to pcno!I or property arising out of or conl'ICQed with L.estec's open.lions on or oc.;upancy or the leased pmnises. Lessee wlll comply with 111 enviTonmen11t pi-ote<;tiDll mt pollution IJws. U. DIVISION ORDER: Neilher the Lessee nor any olhet pany dlsbuning oil or ps roy1lty u provided und~r this ka.se or through •1"Cmcn1 or lhe third pt.rty wilh the Le.ssec may miulre Laaor to cxoculc 1 divi1lo11 onlcr u 1 requisite for the Lessor being p&id roy.lclcs wilh the excepcion 1h11 a division order !hat prov~ only 1 stipulallon ofdlo Leuor's royally lnlcmt ITllY be required of the Lcnor. V. RATIFICATION: Prior lO e:itercisin& ilJ ri&lrt to pool or wiitiic any p&lt or the lease premises, Lcucc must oblain ratifitllion of chis luse by all holden of outstanding royalty, if 1ny, lhcnby pl'OCCIClin& Wsor li'om cl&inu of such roymlty holders. lcsJeC mUSI bell' Ill)' excess roymlty occasioned by Lessee's Iii.ii~ to obtain such mifkalion. W. l·D SEISMIC OPERATIONS; No aulhorily is herein panted to Lcsscc to conduct seismic opcntlon111Slng l·D method IDl!CSS Lenee pa)'1 lht sur~e owner prior lo beginning of such opcrallons S2.S.OO per !!CR for lhe CTttlrc t1nd above ducribcd. After completion of such opentlons, Less.cc mu.st restore lhe land to Its origlnal condition just prior to such opentlons and must pay the surrtcc owner ind 1ny 1cn111ts the actual 1mount of dunag-es irising &om such opcntfons. X. HORIWNTAL DRILLING: In the event 1 well Is drilled in which the horlr.onttl compol!C'llt or the gross complellon intcrval exceeds one hundn:d (100) foci in length ("horizontal completion well"), pooling shall boon a swf1e11 acr~ge basis (defined below) to incl~ Ille lenath of 1he horizontal dr1inhole beginning d 1 poinl where the horiZA>nlll drmlnhole penelnltcs IM com Ialive inlttVll and extending to tho 1.erminu1of5udi horizontal drainhole. For the purpose orlhl1 provision, ~1ermlnu1", "hDl'lzontal drainhole" and "com:latlve Interval" shall be defined in accordance wilh 1he Rules and Recul1dons of lhe Railrold Commission of TexllS or other aovtmmcntal authori1y having jurlsditlion. The dilgonal of ulcl units ah all comply wllh the Rules and Regul11loR1 of said Alllhority, Including bul not lirnil!ld to, Statewide Rule 86. usurface acrell&' basil" mwu the production on which the Lessor's ro~lty Is caltul1tcd ahall be lhat pD11fon of rot.I unit JlfOduet)on which the surlKe am:qc co~ by tfil1 lwo and Included 111 the unit bean 10 lhe total surlace IQ'Cago in th• uniL The siie or the unil for a horizontal completion well wilt\ 1 drill s.itt IOUled on die above dcac:r!bcd propcll)' or In which the above described property is pooled where !he drlll 1ite IJ locallld olfthe leased pn:mkn shall not cx.cced the unit slic pcrmlncd by lhe R.allltlad Co111m1Jsion of Tex.. In CKCl'CWn& the poolin& riahU pWllcd in lhis ~ I.a.see shall file or reeonl I wriltal deelWltion describing the unll U to lho speclfto lase.I llld ICl"eJl8 to be ~hided !herein U \Wit u the vertical llmlll of lhc prod&Klivc horizon or ZO(ll) Ind statina Iha •lfoahoe elm of poollnJ; hawewr, u IO llDY horimnwly complcud well, Lessee sball hive ninety (90) days fiolll inllill ccmpletian la which to llll1Clld Jucb written ck:ripmtion of llnit to lncn:ase or detrcase the acraae, inclllde or exclude specific lea5CJ OI' IJ'ICU u well u ~dcliM the vi:rtlcal limits of the productive lDlC ill order IO form to Ille -11 spacing or density pn:acnl>ed by die Rallrold Commwion or Tau. If sud! un.ir Is filed Ind •mended wldtln sueh period Of time, Lessee ~I fife Of record in the counl)' where the Janda lie louted I wriam declararion describlnc the revised unil INI stating the cfrccli...: date or rcvlsi011. To lhe CX'IClll any portion of the le.ucd prcmbea is Included in or excluded &om the uni! by virtue of such revirion, tilt: proportion of unit produ~lllft 011 which royaltfn n payal>le under th~ (>1Rg11ph wll be adjllSCtd "cordingly as of the offCCllvc date for the revised 1R1it. The effective d&lc of my tat it formed for horimnlll dralnholc wells undc:t this pananph or any m'Uion thereof shall be the date set fonh IS the cff'ecdve date by lcsseci in thcl wriacn dccl-lon thu is flied ofn:conl for sudl unit or n:vlsion thcm>f. Y. ASSIGNMENT; Lessee must advise Lessor of the names and addresses of each assignee or transferee of all or any part of the lease prcmjse, or rights beret.Ulder within thirty (30) days after the execution of such assignment Z. EXTENSION: The lmsor herein grants to lhe Lessee the option to oxrend the primll)' ttrm of this lease lbr 111 lddldonal IWO (2) yun bcgirilllna October 22 20 I0. provided howcvcc for said ~lrl\Jion to take etrccr, lite Lcsscc m~ dell WI' to die Lessor on or prior 10 Cktobq 22, 2010, 1 cash amoon1 or124.QOO.OO. If Slid IJ'llOWll la not dcllveted tu !he Lcnor within !he lime provided. !his option shall autnmllic1lly tom1ina10. Should tho eldenslon oplion be exet11lscd as herein provided, It shall be considered for all pullJoses u though lhis Lease originally provided for a prlmll')' tenn of five (5) ycan. AA. HEADINGS: The per1graph and section beadings appnrlng in this lgJeemcnt are for convenience of referc:nc.e only and are not lnlellded, to any ~tent or pllfpOse, to llmit or define tho text of any pl118"ph. SIGNED FOR IDENTIFICATION: 7 I Confidential KOOCOP00000943 519 • •• RATIFICATION OF OIL AND GAS LEASE fW3f>'I • STATE OF TEXAS § § KNOW ALL MEN BY THESE PRESENTS: COUNTY OF DeWITI § WHEREAS, on Ille llad of October, 2007, LORENE H. KOOPMANN, 111111niurricd-11, as 1 - , dideXC(;Ule and deli var to HAWKE. ENTERPRISES, as Lessee, a celtlin Oil. Gas and Mlncnl Lease a evidenced by Memorandum of Oil and Gu Lease, said Memorandum bei!lg duly recorded In VollMl!c 24J, 11 P1&e 176 of Ille Omclal Public Recotds of De Wilt County, Texu, 1111d covnin&: 120 acres of land, more or less, being a part or Section No. 13, lndillj()la RAilra.d Company Survey, A-272, De Win County, Texas, beini: dtlietibed as TRACT NO. ONE and IM.CI NO. TWO ln that certlin Occd dated Ococember27, I 996, liom Lois Strieber, Individually and as Independent ExcMrix of the Est.ie af Jury StrleOO', Deceased, as Gran1or, to Oilben A. Koopmann and wife, Lorene H. Koopmann, as Grantee, and being ttc-Ordcd In Volume 14, pqc 425 of the Official Public Records of De Witt County, Texas. hereinafter called "the wsc". Refc:rcnce to said (,case and to lhe record thcreofbclna made foc 111 pUTJ>Oses; and, WHEREAS, said Lease and all rights and prlvllc&et thmumlcr 111e now owned and held by BURLINGTON RESOURCES OIL & CAS COMPANY LP, whosuddrus is P.O. Box 1967, Houston, Tew 772S 1-1967, hereinafter called "LCPCc'; and, WHEREAS, ii Is lhe desire of LOIS WOLPMAN STRIEBER. 1 widow, the undC11igned, 10 adopt, ratify and ~nlinn uid Leas.c; For adequate considention, In hand paid, rhe receipt and sulfK:icncy of which Is acknowledged and confessed, I, of Lois Wotp111ao Striditr, a widow, the undersigntd do hereby ratify, 8dop1 and c:cnlitm lhc Subjecr Lease In 111 of its terms and provisions and do hctcby lease, grant, demise, llld let the lands wvcred by lhe Subject l.euo UlllO BVRUNCTON RESOURO:S OIL& CAS COMPANY LP, subjec1 to and inacc.orcW1ce with lbe!mnl ind IJC')vi1ion.s oftbe Subjocl ~asirt had been and original party ro Rid Lease. And, I LOIS WO LP MAN STRJEIER, 1 widow, I.he undrrsigned, do heRby agree lhll die said "Lc:uc" is a valid and suMisling Oil lllld Gas L.ease. ..f'iA .:r~I~ In witneu whettof, this Instrument was executed thiJ!l::::..day of,_., 2008. Lalor: STATE OF TEXAS § § COUNTY OF PeWIT § ~rJ .:Tc.11 This instrument wu acknowlc4gcd before me on this the;::i9ay of Jmi, 2008, by of Loll Wolpm.. Slrltber. 60351 Afla' rtt.Ofdi.na plwr: rcrum to: f'.iled for Record % 3lORayford Hawtc Enrcipriset Ti.II, lh&\£\..\h day \ • "LI'. , ~..Qa RDad fl96 .r · 'YJ odcdc · M Sp<lna, Texu 71316 El.VA PE IEA&W. COUNTY Cl.Bl( OF {j) qiWI Cov!ty. Tp.mo I - ~ Deputy Confidential KOOCOP00000944 520 :) .... .. .. - - . !i"J'c---- !If Al. PROP£1l i Y AUMlll :;..:--:··~ .': :':4 · ·,_ : :. ·,., . ...'-"·' . . .... .:. ·.i.·~ "·,1:·1 w.~~r11:1.:mrr l~·;~i:~ •· .'t_r • : 1 c.•.J :-. - -:· 1. :, ,•·--'.. ,....·.... ·:·, 5 3 j 4 97 NOV 21 ~ . . ·- - . ' . ~::·~:'.~.~·~~~. ,..f[~~;..~;.: ;.}·-· • ~ . .. Id ;· ...Yo .; ....; :,·: ., ·. v. ..:-:•'- i" . .. . -· --- - - . . ,.,·....... . _ • 1•J ' .. "' · • t "' •' ..."': •. ;.., ·,: .. 1,, , ·.~ n·.:;. ....1.:.,.~•:,,.L. .. . . --~~ u: ). •lt i.~- •:., LJ J • 1\( ~ '· . ,. U · ' ' ' ~ -' ,,. ', . ) • .· !' .. ;, ., j..~; . ,.. I i l .. I ... I . . . . •• .,. ,• ~ ,• t ' ·, .. I 1 •• ·~· ~_j.:: ...~·.'-:- ' •__.___ _._ Confidential KOOCOP00000945 521 • . '-.· ' 79812 NOTICE OF CONFIDENTIALITY RIGHTS: IF YOU ARE A NATURAL PER.SON, • YOU MAY REMOVE OR STRIKE ANY OF 1'HE FOLLOWING INFORMATION FROM THIS INSTRUMENT BEFORE IT IS FD.ED FOR RECORD IN THE PUBUC RECORDS: YOUR SOCIAL SECURITY NUMBER OR YOUR DRIVER'S UCENSE NVMllER RATIFICATION OF OIL, GAS AND MINERAL LEASE STATE OF TEXAS § § COUNTY OF DEWIIT § THAT WHEREAS, wrcne H. Koopmann, as Lessor, did exetute lllld deliver to Hawke Enterprises, as Lessee, 11 Paid-Up Oil, Oas and Mineral Lease dated October 22, 2007, a Memorandwn of which is recorded in Volume 243, P•gc 876, Official Records, Dc\Vilt County, Texas, covering (he following descnDed tract ofland: 120 1cra of land, more or less, being a part of ScclJon no. 13, Indianola Railroad Company Survey, A-2n, DeWitt County, Teiw, 1nd being the same land cbc:ribcd as 'Tract No. One' and Tract No. Two' in thaccictaio Deed dated Decembu27, 1996, from Loia Stricbu, individually and as ln~t Executrix of Ute Es1alc of Jerry Strieber, deceased, as Grantor, to Gilbert A. KoopmlllD wd wife. Lorene fl Koopmmn. as Grantee, rD;Orckd in Volume 14, P~ 425, Official Reconls. DeWitt County, Texat. (hc:mnaft.cr refetftd to as tbc "Loa.sc") Reference to the Lease and the record of the MCIJIOra.ndum tbeJcof being hc:e made for all purposes and · WHEREAS, the Le.ase was usigned to Buffinaton Resources Oil & Gas Company, LP in an Assignment dated effective JanlW)' 9, 2008, recorded in Volume 250, Page 822, Official Records, DeWitt County, Texas; WHEREAS, the lease wa.s ext.ended in a Notice of Excn:ise of Options tD Extend Mineral Leases dated March 3rd, 2010, which is recorded in Volwnc 305, Page 12, Official Records, DeWitt CoWJty, Texas; aod WHEREAS, it is the desiie of Lois Strieber hereto to adopt, ratify and confirm said Lease, as amended. NOW, THEREFORE. in consideration of the premises and other valuable consideration, the receipt of which is hereby aclcnowlcdgcd, I, LOIS STRJEBER, do hereby ADOPT, RA TWY and CONFIRM the Lease, u amended. in all of its terms and provisions, and do hereby LEASE, GRANT, DEMISE and LET unto the said Burlington Resources Oil &: Gas Company, LP, its succ.essors and assigns subject to and in accordance with all of the terms and provisions of Slid Lease, as amended, as fully and completely as if I had originally been named as a Lessor in the Leese and had executed, aclcnowlcdged and delivered the same. And l do hereby agm: and declare that the Lease. as amended, in aJI of its tt:rms and provisions is binding on me and is a valid and subsisting oil, g119 and mineral lca!e. Executed this tJ 1 day of 'J""~"12011. Lois Strieber · Ratification of Oil Gas Mineral Lease Confidential KOOCOP00000946 522 .,· . .. • ... • ACJ<NOWLEDGEMENT Stau:ofT~ § County of DeWitt § This instrument was acknowledged before me on lhi'1._-fiiay of0C....0 , 2011, by Loi5 Strieber. S e~SU~orf&m 79812 Ratification ofOil Gas Miaeral LCMC Confidential KOOCOP00000947 523 . •. ; ..·' rlt Al. PROP£R 1'( Al.!t'i!H • .- . -· • '. I 78 8 6 S6 OU 20 11 t '• ' I"! • J • ~ ' ' ·· ··;. • • IJ ! " I•. • o ·' o 'f".: . .. ·1 • ' • • : ~ f1 • I Confidential KOOCOP00000948 524 • • .- . ~·~· ..·_,:.· · · · .· 1424 330 ~ f:IOed. SW 198 . • . Spring, TX'7738e :. . . (281) 2Sl2-1383 ·· 10/30/2007 i ~ ~'fu:~ °[,~E L0tene H. Koopmann I $ ''24.ooo.oo ~ Twenty-Four Thousand-Only""''" ,. DOU.AAS ~ ~ . ~ Lorene H. Koopmann '405FM1011 t; Yonctown, TX 78tS. ~ :s (Bonus Consldenltlon) :; MEMO 120 aae.. DeWitt County, TX/Burl~on/Cuero Wect ' .. ... . . . _. ______ ____ Confidential KOOCOP00000949 525 • 11'2/2007 c. ~ ~~~~E--:Lc;.;Of..;;..ene.;.;;..;.;H.:....;.K.;.: oo.:, :Pc.. m;.; ; an..;. ;n_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _-.JI $ ..6.000.00 ~ Six Thousand Only' .."" OOL.l.ARS la ~ Lorene H. Koopmann 405 FM 108' Yorktown, TX 781&4 (Bonus, Conskl9!3llon-81i.n0e Due) 120 acres, DeWitt County, TX/Surlinglpn/Cuero Wast POD~~~~~ ~~i~~22~55~ O~Q2~87•~i~ ., 0 Confidential KOOCOP00000950 526 ~~=·:::·:;!z~·'''11.u1.1ma;e14;11151s1:pr:1~::::·i:=.•narnamrmm ·~ 1 ' 20501 Katy Freew11y, 1214 Dallas, lX 75201 Kary, ix n .. so 1-800-788-1000 . (832} 83().2404 DATE 1212912010 88-9317/11111 PAV TO THE ORDER OF __K_ar_e_n_M_._K_o_e_n_;ig~------------------ $I *50,400.00 __-~T.~'lli_o_u._~~'AJVD:-:-~-Fi~O~U_R_-ll_UN._~_'Jl£._'D_A.N._'D_._o_a_v_1_o_o_·_·_··_·_·_·_·_·_·_·_·_·_·_·_··_·_·_·_·_·_·_·_·_·_·_··_·_·_·_·_·_·_·_·_·_ _~DOLLARS __F._1_FTY- Karen M. Koenig MEMO Amendment Fee 120 acres 11• b 5 5·2 1: L Ii Ii q q 3 ? ? ti 1: 1.80 L 5 50 ?O? "305 l( 8<o-ooo ~Cft.iJ·l·0'!1.N1tl¢t"RiiJ.ll·l;IH:f.B:iihMl!li·.l7Fi'll.lll3;M4;!iilm!Mrni:!fJii;l.i4MiCBlll4flii.\;1114Mti\7.\iM\?~ . Dolphin Resources LLC JPMorgan Chae Bank. N.A. 6553 20501 Katy F~ ~14 , Katy, nc n•sa (832} 6.30-2404 Dalas, lX 75201 1.:S00-783-7000 ,; . . DATE 12/29/2010 11&-QJn I 1 119 PAY TO THE ORDER OF Karen M. Koenig $ l..__._.3__;,.,o_o_o_.o_o___. __r._'ll_RE __E_-_r._u_o_u._'SAND _ _ _AND __o_a_v._1_00_••____________________•_________________*_____________ _ _ DOLLARS Karen M. Koenig MEMO Miscclianoous Fee 12011cn:s 1.801550?0? -~ . ,. / Confidential KOOCOP0~990951 a f Dolphin Resources LLC 20501 Katy Fle9Way, #214 JPMorgan Chae Bank, N.A. Dallas, TX 75201 6551 Katy, TX 77450 1-800-788-7000 (832) 830-2404 DATE 12129/2010 88-937711119 PAY TO THE ORDER OF Ralph Koopmann 50,400.00 FIFI'Y-THOUSAND FOUR-HUNDRED AND 001100************************************* DOLLARS ------...-.,.----------------~-----------------------------~ Ralph Koopmann MEMO Amendmen1 fee 120 acres CC~b iao is so ?O 1 vcn.cl>eCk Fonn :ux>O Pros119<1 (01i08) DETACH BEFORE DEPOSITING .,_,..,llOilook.aJITI p Dolphin Resources LLC JPMorgan Chase Bank, N.A. l 20501 Katy Freeway, 1214 Dallas, TX 75201 6550 Katy, TX 77450 1-600-788-7000 (832) 830-2404 DATE 1212912010 PAV TO THE ORDER OF Ralph Koopmann $ l.___3_,oo_o_.o_o___, __T._'ll_RE_'E-_T._'Hi_O_USAND ____A_ND__o_o1._1_0_0_·_·_·_·_·_·_·_·_·_·_·_·_·_·_·_·_·_·_·_·_·_·_·_··_·_·_·_·_·_·_·_·_·_·_·_·_·_·_·_·_·_·_·_·_·_·_·_·_·_·_·_·____ DOLLARS Ralph Koopmann MEMO Amendment OGML 29.83 acres cc~i· ~80~550?0? Confidential KOOCOPoq9goss2 p2 a Dolphin Resources LLC JPMorgan Chae Bank, N.A. 1 20501 Katy Freeway, '214 DllH, TX 75201 6548 Katy, TX 77450 1-800-78&-7000 (832) 630-2404 DATE 12129no10 PAY TO THE ORDER OF Lorene H Koopmann $ l..___ _so_,_4_oo_.o_o__, __o_u._~_ND __F._l_l'_l'_r-_TH __Fi_'O_U._'R_-H_UND __u_D_A_N_'D_OtV __1_fJO____••_·_·_·_·_·_·_·_·_·_·_·_·_··_·_·_·_·_·_·_·_·_·_·_•_·_·_·_··_·_·_·___ DOLLARS Lorene H Koopmann MEMO Amendment OOML 120 acn:s 1.80~550?0? VorsnCheck Porm 3~00 P""1ige (01 "'81 DETACH BEFORE DEPOSITING p llJJ·l·IdllQi:llif.\Di·''·';''·''''''3d;l·liid··U'·'?·''4;1·14;iltll:tw:r1;1ta4!iglJij·ilCliill,JJi·i:ili;f@iilYl·ii#.ilj;ll,f.j;f: Dolphin Resources LLC JPJllofpn ChlM Bank, N.A. 20501 Kiiiy Freeway, #214 Darin, TX 75201 6549 Katy, TX 77450 1-81»-78&-7000 (832) 630-2404 DATE 1212912010 PAY TO THE ORDER OF Lorene H Koopmann $l.__••_3_,ooo_.oo _ __. THREE-THOUSAND AND 00/100•••••••••••••••••••••••••••••••••••••••••••••••••••• ~~~~:---~--:-'.'.'":":'"~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~DOLLARS Lorene H Koopmann MEMO Miscellaneous Fee 120 acres lBO~SSO?O? Confidentia I KOOCOP00000953 529 0 0 :J :!I a. Ct» ,.. :J ii' e 1786 ~ Hawke Entarp PAOSP!AITY 8AHJC 330 Rayfonl Road, . REEJC BANKING CENTER, 2828 FM 1950 E. :OUSTON, TX T7013 (211) 443-7800 Spring, TX n3811 1&226511131 (281) 2W.M363 7/18/2008 PAY TO THE ORDER OF ._..,.~ ......... ..,.. ,an ....nn'lliill...U• . $ ..100.00 One Hundred Onl·-- j;;--~--,,--~~~~D91-LARS ~ 1€" Lois WOlpman Slriaber 1743 St Highway 119N Yorktown, TX 78164 (Bonus Consideration) RaVL.orene Koopman/Burlington/Cuero/West e 11•00 • ?B Eau• 1: ~ • :I l. 2 2i; S 51: " 0 0 0 0 "'C 0 c c c c U> C1I .s:. 530 : • Complate Items 1, 2, and 3. Also complete ~ ~em 4 If Restricted Del1Y91y Is ~red, : • Print your name and addnlss on the r8V81'88 ; oo that we can retum the card to you. . 9. F.lecelved by ( Prlnl1td ! • Attach this card to the back of the mallplace, : or on the front tr space permits. D. 19 cllitie!y-hm ~ flom limn 1? 0 'm "YES. . . deto'try ~below: 0 No ! r- · - - - -- ·-·- - - - . - ·· - · ·· ; I LORENE H KOOPMANN J : ~ Lease #: 305466-000 1 1405FM108 : : YORKTOWN TX 78164 I I i I ~ - -- - - - . ________ ,/ 3. ~"fype 6i"Certtflod Mall 0 fteglst8"ld 0 ~Mall ~a1Um ~fOrMen::tlaodlse • ; 0 lnSVl9d Mall 0 C.O.P. : 2. M!d11 Number (Thtnstr hotn ~ ~ PS Foon 3811, February 2004 DomRstlc RelU'1I Allcelpt . . 1~1540· ~- - -~ -~- - - -, - .. ·.· ::.: "'\-. • Sender: Please print your name, address, and ZIP+4 In this box • ... . ... -· . .. . . . . ..... . ConocoPhilllps Company Nicole Marucci - 3W6009 PO Box 2197 Houston, l"X 77252 11 ••• 11 ••• 1•• 1.1.1.1. ti 1.1 •• 1.1 ... 111.1..1... 11.1, ,1 ... 1, ,1.11 Confidential KOOCOPo~g~o955 e. U.S. Posta) Service , o--. ..... ri·, + )> CERTIFIED MAIL .. RECEIPT r IT" rDomes11;: M.111 Only No tn5ur,1nt"t' Cri.N,1<:it' Pr,,.·irJ.odi ....0 -u :;o I r11 . IT' . l..D 0 ""D (\J I I I l..JJ ' <O OFFICIAL USE t ·:::I" t.- r·"": ;:c -1 "-119 I l:J" -< - I~ ~:: c.i91dFM' > c 1-;r · l'l:l!llnonll .r;;- 3: 10 ~~ 10 Htll'I ~ C> . ,c I a (~~ '. ~ ro1a1 Pa•( LORENE H KOOPMANN nJ no=""o=-- Lease #: 3054a6-000 IT' o ~-APi'.i 405 FM 108 o orPt:>eo.~ YORKTOWN TX 78164 ...... iSIY.Siitii."! Confidential KOOCOP00000956 532 .ConpccrPhillips December 4, 2009 CERTIFIED MAIL Lorene H Koopmann 405 FM 108 Yorktown, TX 78164 Re: Tobin Lease No. 305486/000 Oil, Gas and Mineral Lease dated October 22, 2007, between Lorene H. Koopmann, as Lessor and.Hawke Enterprises, as Lessee, recorded in Volume 243, Page·876, official Records of DeWitt County, Texas. Dear Ms. Koopmann: This letter is.in regard to extending the primary term of the Oil, Gas and Mineral Lease reference above. Burlington Resources Oil & Gas Company LP, an affiliate of ConocoPhillips (COPC), acquired this lease from Hawke Enterprises, and is hereby exercising the 2 year extension of the primary"term option ai provided in the Leas~. In accordance therewith, enclosed please find a COPC Check in the amount of $24,000.00 which represents the consideration necessary to extend the primary term. If you have any questions concerning this matter, please feel free to contact me at 918- . 661~0323. . . . . Sincerely yours, CONOCOPHILLIPS COMPANY Tuff B. Alstrom . enclosure 1-66$ Confidential KOOCOPoiqqo957 CONOCOPHILLIPS OOMP~ RENTAL RECEIPT Lease Date !Original Lessor l#MthjMth Begin !Lease Number 10 - 22-2007 !Lorene H KooprnaruJ,- · 100 l12-0l-20lll305486/000 AGENCY LEASE NUMBER: IN PAYMENT OF:Shut - in Royalty Business Unit :GULF COAST REMARKS: shut-i~ payment for the Lackey Unit A Well. RECORDED: Book 243 Page 876 Reception M56287 TRACT: l COUNTRY: US STATE: TX COUNTY : DE WITT NET ACRES Prospect: EAGLE FORD (COTE D'OR) CUERO WEST (BR) 120.000 ASaet A.rea:CENTRAL TX GC . LBGAL (Part of) :I RR co Sl3 ABST/ID# 272 Grantee QQ ALL FOR THE CREDIT OF: PAYMENT KAREN M KOENIG (BA# 0286977001) $3,000.00 3489 STATE RWY 72 W CUERO TX 77954 ACCT: (DPS# 0286977001) TOTAL. BANK SERVICE CHARGE $.00 TOTAL AMOUNT PAID $3,000.00 106964 --- - --~ - ---- - -- ------ - -------- - ---- - ----- - - - --- - --- - - - ---- -- - - -------- - ----- - - - - - --- CONOCOPHILLIPS COMPANY P.O. BOX 7500 106964 BARTLESVILLE, OK. 74005-7500 Prop. No. 305486/000 Serial No. Period covered 00 months BEGINNING 12-01-2011 Check Pate 12-08-2011 ***3,000DOLLARS AND* OOCENTS *** * $3,000 . 00 KAREN M KOENIG V 0 I D 3489 STATE HWY 72 W V0 I D CUERO TX 77954 V 0 I D V 0 I D IJ../<f/11 Af~dVl /ff/~l TBA DEC os zon 01/1J. - ~ ~....J- ~ ~,.otJto e.St.~ 'Y1'/111z Confidential Diane ~ntn. ·CPL .·StiltU.8hilrj1an ; ~or1h .~mefi:ini. ~t Tnm . Gutt~ !91,1111'.i•.• Uni~ . . 3WL-6012 P.O: '80x'2187 ·· HOUiton, TX n262-2197 · Phone: .~--~ Fu: .832.<488..2298 ~al~h ~oopmann, l~dlviduaily and·as A·l-F for Lo~ne Kbc;>pmann 774 ~~~ngfjo~ Rqa~. . · ~prkti;iWTI, ·t x 18164 ' .. ~Rl'J ~· koeo~: !ndividv~lly a~d as ~mey In-Fact for Lorene· K~pmann 31~ stat, HWY 12 w. ·:· . . c~. ·rx n$54 ...... ~~~= Yot1d~. TX 78164 ~e: ·sllut~ln RayattyPaymem ~Y. ~na.A•~ ~II · .. JMtt County, TX Ladle• •iid Gem'8men: ~~(npto,n . Res.QI-!~~ Oil & ~a;1 CC).n.l~~y LP re.ur11ngton1 recently driiled the ca~ wep ~ f?e~ CO.Linty, 'nt 'Tbe we~ Will •Pl!dd~ on Oqto~r ®·· 2011, &l'.ld the ~Ulng ~ waa re~~ apj>n»dmately -~~rri~ 28~ ~~. 1 .W• a~ta _i.g1m1il"G a frac Job on the wajt 0eoel'!lber 11, 2011, ~ wDI last four tlBp. .Sul>i$'9quam·.. "to f~'lng. ht~. . ·we .wtll. flare It for two daya to eetablleh commercial production. The ~P~~!'\9 1,.1r.lt (Qr .~~ ~- 1Q9fL.'des an oil, Q&& and rrilnerai lease from Lorene H. Koopmann to ~awke · Enterpriaee dated October ~2:, ~007, t• · The .deed -<rom S~.r ~o GJiJ:>e.ct '!lod ~ore!1e Koop!l1&'1fl requires. eom.rner.cl.al · p~u~on ·an or before . ~ce}Jl~~ -~1 1 _~_11 .~f. :qu,. ·"'1!!1,.. ~1;1ed by MrS. stnebet reverts to Mrs, t<oopmlii1n, H~ver1 ~e de~ also pn>Vf~· f.or'~ P.•~' Of •~-11'.1 royalHes, Wa •ca ~n~rfng ihut-fn rc>Y(lltleS •o ensure l;hat ~II partleS' lnterea~ If any, In 1he .well IS·rtlilntalhec;t. coriaeq~l#y. w, ~~· •n~~lr ~·for'-" ()f you wh~ conStitute ahutkln royi;aity paym~·ts !Mld Conform to the term~ or ttte deed ~ ~- ~ to Mr. and Mrs. Koopmam. W.e amfclp:a\e that the i..adtey Unit A #1 well Will be producing first quar.fer _2012r ~ _ ly, _ . . .· _ . ., , •. ' Diane Schaenen Encl. Confidential KOOCOP0~9eo959 ~:...~ CONOCOPHILLIPS COMPANY' RENTAL RECEIPT ~;~~~-;;_~~-j~;i~i~i-~~~~~;------------------,;~~~j;~~-~;~1~-1~;~~~-~~~----1 ------------------------------------------------ -------- - - - ~-- --~--------~----, 10-22-2007 !Lorene H Koopmann IOO j12-01-2011j305~86/000 . . --·----------------------------------- ------------ - -·-- -~--- --- --- ----- ------- AGENCY LEASE NUMBER: IN PAYMENT ,OF:Shut-in Royalty Business Unit :GULF COAST REMARKS: Shut-in payment for the Lackey Unit A Well. RECORDED: Book 243 Page 976 Reception # 56287 TRACT: 1 COUNI'RY: US STATE: TX COUNTY: DE WITI NET ACRES Prospect: EAGLE FORD (COTE D'OR) CUERO WEST (BR) 120.000 Asset Area:CENTRAL TX GC , LEGAL (Part of) :1 RR CO Sl3 ABST/ID# 272 Grantee QQ ALL FOR THE CREDIT OF: PAYMENT LOIS STRIEBER (BA# 0347466001) $3,600.00 PO BOX 458 YORKTOWN TX 79164 ACC'I'.: (DPS# 0347466001) '. TOTAL BANK SERVICE CHARGE $.OD TOTAL AMOUNT PAID $3,600.00 106965 CONOCOPHILLIPS COMPANY P.O. BOX 7500 106965 BARTLESVILLE, ·oK. 74005-7500 Prop. No. 305496/000 Serial No. Period covered DO months BEGINNING 12-01-2011 Check Date 12-08-2011 ••••••••3,600•DOLLARS AND• OOCENTS ·········•$3,600.00 LOIS STRIEBER V 0 ID PO BOX 458 V 0 I D YORKTOWN TX 78164 . V 0 ID CLEARED DEC I 4 2011 -tBA ~EC 0 8 2011 Confidential II.,·· l. ./ ,,.. conc>c6Phi11 Diane Sctmenen, CPL &aft Lindman - North EaiJlaford Aaatt Team Gulf'Coat Buafnesa Unlf 3WL-6012 P.O. Box 2197 Houston, TX 77252-2197 Phone~ 832.4'88.3922' Fax: 832.486.2296 December 7. 2011 Ralph Koopmann, lndMduany and as A+F far Lorene Koopmann n 4 stanchos Road Yor1down, TX 78164 Karen M. Koenrg, lndividuany and as Attorney In-Fact for Lorene Koopmann 3489 State H\Vy 72 W. Cuero, lX ne54 Lola Strieber P.O. Box458 YDltda.m, TX 78164 Re: Shut-In Rcyalty Payment l..dey Unft A #1 \WR DeWitt County, TX Lacfl8S and Gentlemen: . Burtfngton Resources 011 & Gas Company LP (9Burllngforn recently drtned the captioned weU rn DeWitt County, TX. The wel was spudded on October 30, 2011, and .the dl'llling rtg was. released appn:>Ximately November 28, 2011 We anticipate beginning a t'rac Job on the well December 11, 2011, Which wlll rast four days. Subsequent to tracing the well, we wfll flare It for two days to ea1abllsh coromerdal production. The spacing unit for said weU Includes an on, gas and mineral lease ·from Lorene H. Koopmann to· Hawke Enterprises dated October 2Z 2007. The deed from Lois Strfeber to Giibert and Lor:ene Koopmann requires commercial producfJon. m or before. December 27. 2011 or the interest retained by Mrs. Strieber reverts to Mrs. Ko0pmann. HOwever, tli& deed also provides for the payment of shut-In royalties. We are tenderihg shut-In royalties to ensure that all parties' interest. If any, In the well IS matntaihed. · Consequently, we are enclosing checks for aR of you which constitute ehut-ln royalty payments and eo11form ~ the terms of the deed from Mrs. Strieberto Mr. and Mrs. Koopmann. We anUClpate that th& Lac:la9y LJnit A#1 wen wtll be producing ftrlt quarter 2012. · · Diane Schaenen Encl. Confidential KOOCOP0~~90961 •4 CONOCOPHILLIP~ COMPANY RENTAL RECEIPT ------·----------------------------------------------~------------------------ Lease Date IOriginal Lessor · l#MthlMth Begin !Lease Number 10-22-2007 !Lorene H Koopmann 100 112-01-20111305486/000 AGENCY LEASE NUMBER: IN PAYMENT OF:Shut - in Royalty , Business Unit :GULF COAST REMJ\RKS: Shut-in payment for the Lackey Unit A Well. RECORDED: Book 243 P~ge 876 Reception # 56287 TRACT: 1 COUNTRY: US STATE: TX COUNTY : DE WITI' NET ACRES Prospect: EAGLS FORD (COTE D'OR) CUERO WEST (BR) 120.000 Asset Area:CENTRAL TX GC - LEGAL (Part of) :I RR CO Sl3 ABST/IDff 272 Grantee QQ ALL FOR THE CREDIT OP: PAYMENT LORENE H KOOPMANN (BAff 0286975001) $3,000.00 RALPH KOOPMANN r. KAREN M KOENIG AIFS 405 FM 1.08 YORKTOWN TX 78164 ACCT: (DPS# 0286975001) TOTAL BANK SERVICS: CHARGE $.00 TOTAL AMOUNT PAID $3,000.00 106963 CONOCOPHILLIPS COMPANY P.O. BOX 7500 106963 BARTLESVILLE, OK. 7400S-7500 Prop . No. 305486/000 Serial No. Period covered 00 months BEGINNING 12-01-2011 Check Date 12 - 08 -2 011 ••••• •••3,000DOLLARS AND• OOCENTS ········•• $3,000.00 V0 I D & KOENIG AIFS V 0 I D \ V 0 I D ~~IJ TX 78164 V 0 I D f' VOID ~ ~~'>~ lo/P}tA ~~/~~ TBA uEC O8 2Dff ?t.,.vl / «-~~~ \1-1w'l"1 . '0/1t1. - prek ~ ~~~ Confidential KOOCOP0~9po962 ~ .. "."':' ~ ··1~[~~.:-:.~:~:-::·: r .·: . , 'I .~ ' .. ... . . . ",.~ .. >~· . : . ·. ·..:~.~ . ~,,:ps ., I ~ .. '• ~ ... ~i"nber 7; 2011 ~aiph KooPtnann, lndlVlduaily ahd as A-1-i= tor Lorene Koopmann Tf4. ~.t~nct10' RQ&d . . Vt1rfd0Wri1 'TX 7(:11:64 ·Karen M. Koenig, in.dlvtdualiy a~ as Attorney in~FaCt for L,~rene ·t<oopmaM 3-4~9 s'~~· l:'twY72 w. C~9·, TX n954 tStrieber. P.o.Boi<~ Y~TX 781&4 ~~~ $1\~-tn R~ P.aym&nt Lackey Uni A "1 well .t>eWitt CoUnty, TX L~ ahd Gefit18fl'.lefl: B""1Yl9l9f1 R~t.ree• Oil .& ~as Cc:!m.pany LP ("Burington") recently drliled the captioned well ~ ~Vf~ . ~.l.CntY,~ TX. "the weH was ipLldded ()11 c;>cto~ 30, 2011, '"d the . ~r111.lng tlg .was releaaeq appr'oidmately ~m~ 2e, ·20~ 1 .We _ atjtldpate beginning a ~Job on the walJ Decembef 11, 2011, which wJJI • foll' ctays. ~ut;seqiJem to frac?'~ ~ well, ·~ will fl~re It for two daya to eatabR1h commeraal producUOn. The ~.~ng \,lnit fQf e~lct ~11 . 1.IJ(;ll,J:des an oil, gas and rritneral lease f~ Lorene H. Koopmann ~- HaWke Em~ etated Odot>er22. 2001. - Th• de~ fr'Ot'ri LOrs ~bet \o :Gl!~!1 ~od k~ ·Koopmann ~ires comrnerdal prQd~. on 0r before ~Wl~(~f'., 2QU Or·ttit, lnfe~ f&~lnad ~ Mr&. Sb1eb8r ~rta i!> ~' f(oopmann. H~r. the <feed also prov1~ ror#ta ~ymer)t or •h~-ln r.:oyaJHes. We ilf8 ten~ng ehirt..{n royaltie5 to ensl.jre tti11t ail parties' Interest, If any, In the well ls matfm!~. C.Of\Sfqu_enify, w, m ~n~~.loq ch~qca fo'r ~of you which constitute 1hut-4h .royaltY piayn,tent. an,d ~ ·ta the tetn'la of the d8ed ~ ~- ·~to Mr. and iwa. Koopmann. We anUcf~ that the l.aCkey Urilt A #1 wen will be produqng first qu&ttM 201·2. · · ~mly,· : ·:< ~ - ,. ~ At~ . Diane Schaenen Encl. Confidential KOOCOP0~990963 I . ! I ! ·' I I .I ·1 .· ... .. ···"" - ····---·-- ·- -- ·~::-- ··· ---~: . ·····- · ·- · --· . . ·. Confidential KOOCOP00000964 540 .. ..' CONOCOPHIL.L IPS COMPANY RENTAL RECEIPT ' I Lease Date joriginal Lessor l#Mth\Mth Begin \Lease Ni.unber 10-22-2007 !Lorene H Koopmann 100 112-01-20111305486/000 --------------- ~ --------------- - -------- -- ------------------ -- ---------------- AGENCY LEASE: NUMBJm : IN PAYMENT OF:Shut - in Royalty Business unit :GULF COAST REMARKS: Shut-in payment for the Lackey Unit A Well. RECORDED: Book 243 Page 876 Reception # 56287 TRACT: l COUNTRY: US STATE: TX COUNTY: DB WITI' NET ACRES Prospect: EAGLE FORD (COTS D'OR) CUERO WEST (BR) 120.000 Asset Area: CENTRAL TX GC . LEGAL (part of) :I RR co Sl3 ABST/~D# 272 Grantee QQ ALL FOR THE CREDIT OF: l?A'iMENT RALPH KOOPMANN (BA# 0286976001) $3,000.00 774 STANCHOS RD YORKTOWN TX 78164 ACCT: (DPS# 0286976001) TOTAL BANK SERVICE CHARGE $.oo· TOTAL AMOUNT PAID $3,000.00 106962 CONOCOPHILLIPS COMPANY P.O. BOX 7500 106962 BARTLESVILLE, OK. 74005-7500 Prop. No. 305486/000 Serial No. Period covered oo months BEGINNING 12-01-2011 Check Date 12-08-2011 · · · · · · · • ••$3,000.00 RALPH KOOPMANN V 0 ID 774 STANCHOS RO V 0 I D YORKTOWN TX 70164 V 0 ID V 0 ID Confidential KOOCOP00000965 541 .. ... . I conocdPhilli ~ . ,,.- p. s . .u , I , Diane 8chaltlfn,.CPL. 81itff ~ ~ .~~ l;egleiont Aaet TUJti ~ulf j:oU~ ~i:1M9 Uni~ 3Wl.-6012 P.O. BoX:2197 Houafon,'1?( "262-2197 Phone: 832.it88.3922 Fmc:· 832."88.2296 Ralph Koopmann, lhdMdUaily and as A-1-F for Lorene Koopmann "174 $l•n¢hQ8 RQ-~. . Y.orklOWti, TX 1£;164 K&reh M. Koenfg, individual~ a·~ a~ Attorney In-Fact for 'Loren~. l<o0pmann 3489 State ·1-iwy 72 W. . . . . . · c~ro. ~ n954 · Lois S1rfeber P:t'.J. Box 458 YQfktQVt'ri, TX 78164 Re: $hut·fn RoyaJtY Payment .~ckey l)~ A #1 well .~Witt O<>untv; T'>( Ladle& lind Gen~esnen: Bu~rigton R'8~t,irces Oii ~ Gas Company LP r&unlngton 9 ) recently driled the c8ptloned we!i 1'1 ~~ County, TX. The iN811. wn spudded on october ~. 2011, and the dr118ng ng was 'raleaaed ·approximateiy November 28, 201' Wa anll•te ~Inning a trac Jdb oi'i th& W9il December 11, 2011. which wjU ~ four days. SubsequenH9 frac1ng th~ ~u. ·we will n~ It for two ~aya .to establ111h commercial productiOn. The spacing unit f~r said well Includes -an oil, gas and rrilnerai ~·,se fr6m Lorene H. Koopmann to Hawke Enterprise& dated October 22, 2007. · The deed frOm Lola Strtabe'r ~o G~\1E!.rt -~~ .~e ·t_<~.opman·n require~. ~mmertial productiol1 ·on or before December.27, 2011 or ttie l"te"'9l retained by Mns. Striebet i'everlS t9 M~. l<90p,mano. However, the c;I~ also provides fo1"the payment of shut-In fOY~· · · · We ate. tendering ~hut-In roy~lties to ens1,.1re th• .-p ~rtle8' Intern~ If any. tn the well ls ni,1~1ried. Consequently, ~ ~ encl®,I~ ~~ tor ._n of you Whlqti constitute shut-in .royaity payments an~ conform to the terms of the deed ffotn ~'l· ~~ to Mr, and Mrs. Kdoprriam. We antlcfpate thaf tM L.ack8y Unit A #1 well wOI be producing first quarter 2012. Olarye Schaenen . -Encl. Confidential KOOCOP00000966 542 EIJ /17/201 2 l•1: 24 JOHN FR ConocoPhHllps Company o.·1t~: 318/1~ Real Property Admlni1tratio11 Requestor, woolrncr Division Order Department To: Conoc..oPhitlips Comparny PO Box 7600 Ba rtles vill e, OK 74005-7800 0Wl tf! f KAREN loll ICOEh'lG Namf;l Owner No,: 02869770!X2 and Add nm>; cui::no. rx 11~' CWO.."OP/\illp• Compai1y '' '•Ii~ natllled, tn wrllirg, of any c.hange In 0\4'Tl(l~til p , decl;nai ln1e r~,1. or P'!ym&f'll udd111u. AJ 1ud1 cn..ngeii tl't!l be ~r~ I d11y of liMi month toltowlno rer.eipl of ~!)Ch notk>:, erfedM'.! Kll.l CQnuc.af' hi~p• Com~~ ny I~ ulhoril: ~~ 10 wlll 1~okl l>iYflW.nl ge11ding 1e• olu1lon or J ti1"' dl~pU!e or ad\Mr~ rlnm 111:1crt t1 r-.;9un:1i"O o.., 1nlo111M In prodlJc.tJon cl~rmotJ Mt•ln Ul'\d!lrslg11od. n., 11\df'n1l(jned •g l'!CH It> in1<lmnlfy nnd roin1bur"1! C<'Mcof'hllJO.i C<lin~ufly for aU dei'rui rll;1nQ by !hd lrorn, md ~rnm;n\~ "ti U' u~ ln. ~ n tll.81111110 wl\kJ1!M Undimi-,)ned 11110( onliUod . Cono~oP111ilp s C41l!PMY rn~y accru6 wa cee~ ,111111 !"'1 llltn1 omou111 aquult. $100. ur pay ,.,Mually, Yihlelttl":r occvro fi1 •I, <H' ... raquinad by .a pp~ ca Qlo ttJ:nta •b h1 t.. Tr.ii DMJolo n iJrd.>I 00.-1' 1101 unend. ;111y k!R~ e O«)W<lliiig ogr£<ome11l llntwoo11 lhe und,.riilgt1cd and !he lcu-ce qr OIJ ~'111l o r 01 riy ot!lftr oonira cu 10< 1h<e purcf\J.se or oil 'Jr \lllll· N1 &ddl!J0(1 lo lM lerrrt4 ~r<Q <;ot><:H01Jn~ al lhi?i Dl~n Orda r. lhll unde ~IQ 11"d MM payor may have CA"Jlf M~1 Mrrlulo;y rlght11Jr1dertN fjlWIJ ol lhe abt;, In 111hl c11 lh!> pr oporty ;,, loelt4~<i. Speclul Clauu: Tri. ln1tr1UI r..'1Jfllld bv the underolg llerl ln c:U:i"tl • II on (do~f'\M ~ i:rude on alld coodt.r<nto) i-1ld prac-tl• ~rill!ld ll'001 ~Hie !Ji' •11 oil lid g;is (d1Jfir •<J QO l'lltl.nil 1;,t 2nd c.ul~1>11d QU) produced, Ir~ •I ~~bOhi.nOU pmd.ie>1d VJlitl lX'.ll Oii Qfl\J \IU), •tliibu(!!lhill lo Ill• ~ ... 1dMcJ1btd h;lr~l11 . Fram 1M etlucll,,;e a~le 11r<:1 w11i furtlli!rwrtuan nol~, ~ ~ull.lllcl lo !hi! pl!>V"SIOMJ h!lmi<i. ConoaiPt1illpa COnil!Brr( or ConocnPnilWps C-Olllpar.y'' d~i!ln• tec1 .a.o•nl, 11 ~u thort1ftd io r.ko or puo;floc SAJch pl"Qdvcl.lor, Gnd µ10Cl\4'da from th& ~~la of oil ~n~ 11••, In • =1\11111"" w1U1 111e dllliolion or inrt reiu dtiac.Ylb~.O h ~rnlri. m:s DIVISION ORDER R6rU:crs OWNERSHIP IN THG. LACKEY UNIT A,, vi/ELL. Owner Signatu re {s ); (Owiler Si<Jn•ture) Owner(s) Tax Id Numtxida l: ~54-04-1211 Ownor Daytime T&lophone M: Owner Fu Tel ~phOM #: ed<iral law requires you lo furnf:;h you ~ Social Sr:cur1ty or Taxpayer ldentificl!ltlon Number. F111iure (o comply wil l r ~l.J! I in a w'l tt1holclln In ccco r n·- 'Mt!~ Fed ro l L4W eind will n 1 IU d b b on ~ P •Iii 11 Cqm '1n c. NioHTl~JOALE ti :~ · 1,:om oo 100486-l 308 03/17/2012 14:24 JOHN FR PAGE 04 Reque~to;: woolmcr Exhibit A • 0/0 <1nd OWnerahlp Deacriptlon Run Date: 318112 Ownor No.: 0200&177002 KAREN M KOENIG OJO Hu111btr tnd Nan,,.: A717076 GQO-O t (GAS) Flil Humbor. 10G466 Oparator: BURLINGTON RESOURC!ill O&G C{) lf' Eo..:llw O•tt.: 2/ ii20i2 hliif•,..1 Ty1\+/0Klm1I: Al 0.00009675 P~ Code: PAY &l Cou nty ..... T"'1' lb>f QUCIM/l.Ql O;IJ~ . OO~""°'lf.lil')iUil , wtO IJ ~ . FUr.::f'Uf'~1 ,W.lni<JOI~ ~•lndilJ!c>'I n - c.. "!'··~ SllV<rt · ~. """<noct 112 ""d . . ~-,~-co""'""" a.-- 1~ . AJ:i•'1ld 'J fl , n 0..\MM C;cil..'l(i. 1h'U, !M!.11'\U tlKJfft ""'>' Ouoi:JOd" !!'..... _ d Ci&• u..."" .... _,.,.,., _u .«<•; UM A"""" - O<iaeOI' I. 20 '1 1, ,,.....0-0t\l •I FM t4l.nQ9f "41D-4 .;¥( 1#1.a Ofli'CMI PuWo fttCi«"rh ()t Oc~J C:oii.rlfl, Tcn.o;t1' 1 tn!l t1,a111g o:imntiMda t~ fl'~'0"1Jht ~ : Tl'l tl. 1 l . l_..,...._..,.or l1uA. 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A~tV'IOl en. In p._Wd Colltltf, UlUI. ~ C>dr.g ll't<lt'ft tvky dtl01~ ti h~ tt::rt•TI 'N•rr~'( 310 03/17(2012 14! 24 PAGE 06 Re.Quo 1or. WOOk'l\C.' Exh ibit 1' • DIO and Ownerahlp Description Run Date: 316/12 t.M«i V1.fll1V6nottrf1.J111 r;t.ilid ~be!" 10 1 IQQ • ( 61>)("94 t i VO._.,WI >$7, POQ0 26 of N i)<9Cl (htb<rio ol D..\\Mt C0tint)t. 'ru.u. tt..n tniYt Hll•• hll!l!"o-• ''' tp..1111 F< . .........,.~. T~ :rt>· 'I A"J I C/tM, ri.ON IM' .. U, bl-.l'\Q •l.t.t f)l)ftllH'I. <JC OJ..V"'f'l'1 J~~~,.......ltl•We:JWm bO'~ 1¥\t (llN~tQ dti401'Ud i()l.ffl lr01l lraa.lf'-d U\i (~ lt•fftl oC C-Guity i.i.~ !I~ I nd~ ·~lh'n fl"I( bauMarl"'" cA 1,.. Ourjrl~ -'"'•QU"tCti Oil A 0.U C-Ol'r"\P.rlY. LP-Lao..-.,.1JNt).:, ..Id 10!' J.n ~• be~-\00\il r:Jf ~c J- •~flllp::i\ ~_, 3'.M'i. ~ Ei l l, In l}t\M:ll I~. T~a,,, s:f\d w.;q JtH,,., "f rfe~ -. 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JOPWV • ..,,,,..., lo.I .. ,,,. !t.c.i .-.d \ht ~n1.otC;o.;;,ty R°' :JQ:l ~ ty"<i ·...-on~ uol.ldJiii • O('llt e,urtt.-i .... m "•to1.1CA·• 0..t A Cu C4tof"""Y· U' .. l.Jitdct)' Ufll l ~ UIO ,.,.Ml WA-1 ~ ... rA ... IOOl~M~ A...uod s".-..y .......... ~H. w.. ~a\VnCountv, Tsua.. ainJ ~t;a mt ~• la.ntt \114(11~ '"II 0-ld d.t'td }ia'MJ'l'b. t 10. W"5 . 1~tibd Jill VU..,.-11 12 N~ d 3-11 o( N QfJdlll Publ11:1 Rwo:>ird"t ;J DllMI\ C\i&J~ . Tt 'lH , if'UJ" C4ftn H_ U~. l ~d"'I E'tWJ1CI trf t.".O e:•\i M QI JCil :.~YI M~' I.? ~~ . l.J 'lttllf'4._. . ~A . lr".Jt\t'- ~ f!I al uid t....a. ~ ~\n OEWTT CC:ilir<r'r' . Tf) ).J). 316 3 12. ConocoPhillips Company Da!e · 5/16/13 Real Property Administration Requestor: Clleal am Division Order Departmen t To : ConocoPhillips Com pany PO Box -1500 IReturn to ConocoPhillips ComY:anYJ Bartlesville. OK 7 ~0 05 - 7 5 00 Ownrn RALPH KOOPMANN Na111e Owner No. : 0206976002 and Addr es.s · 774 STANCHOS ROAD YORKTOWN, TX 781fi.i f11e under~igned certilie~ the ownsr~hip of !heir decin ra l inieresl irr pr oduction or proceeds as described on Exhibii A payable by Co nocoPhillips Cmnpany. CooocoPhrllrps Compr1ny sha ll be no rificd. 111 wn ling, of any change 1n ownership, decm·1 i i11 1ere.;1, or p<l)'menl add r~ss A~ sucrr changes shall be effecliva lhe r1r~t day o ( !tie rnon(h fo Uowrng receipt ol such notice. ConocoPt1illips Cornp~r1Y is <1µ1horized 10 withhold payment p?. nding resolution ol a ti1f - dispu1e 01 adverse cl ain1 asserted regarding I/le interest in production claimed herein by the 11nders1g ned, The urrd ersigned agrer,s to Indemnify and reimburse ConocoPhillip s Company lor all d a.im6 arising frCfT1 . nd amouo l!> attrib utable to , an rnleres t to v.h1c;h l!'l!? uride1signed is not entillM Conoc0P r1jlllps Gornpany ma y accnm proceeos until tho 1oia l amounl eqil als $'100, or p;:iy Annually. Whicheve1 occurs Irr.st. or as required b'/ applicable stale staiu1 fnrs Division Ord er doe ~ 1101 ~rnen~ any luase or opcrnhng agreement be tween trre unrtersigned ano inn rn ssee or operator m any orhei ox11ra ~ 1,, tor the purc.h3se of orl ut g~s . In add ii ion 10 the 1errns ancJ conditio ns of llliG Divisi on Orclf\r , lhe u n d e r~ig n e d and p, yor m ay lr ~ve cer1a !n s 1a1,;1ory rrg11 1s urider 111 0 l a w~ of tn e stale 111 wl 11d 1 lhe p1ope1iy is loca led Speoal " lause : The inlo<e$\ c.e rtifle:d by the unatirsigr1od includes all oil (defined as cnid•, oii ;ind condr;n s at~) <ind rJJ occ e<:Js derived fr om 1he sale of all oil nnd gas (cle(111ed as natural gas and casing l\ead (JDS) orodu ccd . 111cluoi119 ull subslances prCYJuced woih such orl and gils . all ributab!e to lhe inie1es1describ<.<d heroin. Frcrn lho effective dale and unlil fcrH1er wrr1 1~n norice. and subject 10 the provisions hrm1i11. Coooc0Pt111iips Curnp~ny or ConocoP11lli1ps Com p~n Y's designated agent, 1$ au111onzcrJ 10 lake or purchase such production and proceed s lrom !he sa le of oil and gDS, 1rr nr::Gotcl<i nce wiih Ilic divi~ ion nf ir 1tmest described h.irein . Add itional Special Cla1rnes: THrS OJ\/\S ION OR ER COVERS YOUR INl ERE "T IN THE LACKEY UN IT A #2 WELL Co rrecte d Address Own er Signature(s ): (Owner SigrHl luw) (P rini Owner Na•r1u) Own er( s ) Tax Id Nurnber(s): 4 Li4 -04 - 1198 Owner Daytim e Tele phone#: Owner Fax Telephone#: !Federal law req\Jife~ yo u lo (umi s l1 yo ur Soc ial S..:c urity or Taxpayer ld e ntifrcation Number . Failu re lo comply Will result in :lax w1l i1holding, 1n Clcco rdance with Federal L. aw . a nd will nol be refu ndable by Con o coF'hillip5~~-'-'- - -- - - - -- --' T S IMO~l S Return to ConocoPhlllip s Co mpany I DO 110663-L 317 2., \,-, ' '"':) :eq11cstar. chea lam Exhibit A - 010 and Ownership Description Run Dale 5116113 )W!Hl r No .; 028697600') RALPH l<OOPMANN l/O Nur rlJer :and Nama: A71 l 0/ll G0002 (GAS) U\CKEY UNIT I'. 112 'ilu Number: li066:J Oper:i tor : BURLINGT0 r4 RESO\JRCES O&G CO LP Jfo c tlv ~ O;;lc: •11112013 tntorcsl TypclPccima/: !1 1 0.00669675 Pay Godo: PAY fw u 009 00 :lC'U 1 rr.&e tx :u:. Oli1 of J H fhj llttr 91.l(v"·" A11w>:1 'i1J. 1r"" trnil"1'V.A ~ R u ~i i»":l <: ~·n~.,., .,. 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J.l .._i~11 r, •'10l 1t111•1ll4n1ab«it)Q~lr.;'11110C W1n Counh, TE...~ )wner No.: 0206976002 RALPH KOOPMANN 110 ~lumbar and Na 1tm: /\717078 N0002(NGL ) LACK Y UNI T I\ 112 ·Ho Numllci: ·11051;3 Opuralor: BUHLING fON RESOURCES O&G CO LP 'ffoctive Dal.,: .111 no1 :l il>tQro st Type/011c im al : ru 0 ,006139675 Pay Codo: PAY fwp /tna A11m.li~1 :1 County '"" 'X Ol: WITT 6(1!) ro O< f O . fT~HI Ot l~J~•• C>'. JI Of J I i_ fflCl\ l nt !\\II'""!, AM\t a<.\ fl t '.J. lf\t 1Mrl\rio111 H111l1owJ CwnpRny SlntJ11J "J:W !K.1 117 Ut'i"J tr'lll l1-,d1ii1 w-1l11 fl a,lto~J C: on iptt ny ~y 1 ~. J\ti ti ll, Cl ",!7 J !n OOW11 1 Cov111v. h).H. b Plf!Q 100ta 11"1 )' d ~ )O ll}Cd 10 llH:: l>IT''O"'.itl ioo <'II G 1i!t \Jl'l 1l l<;t H'\4! Bunli' UI "" . l. 11 c.kt.\</ U1•11 A 1jal!)<(l 111te-.:11• t 0<: 10t1u ! 10\ '. •uoo16.lltj • • Fi'c ti..Jo'lt•"'f 64W.t nl lha O /'fit•• I flV'LJht f.IK.Oiih cl O u'b H C~)'t't. 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Exhibit A - 010 and Ownership Description Run Dale 5/16/13 vc.i ~.11r~ .t ~ f'.a~e f1i O of me Uf! ., d Necva) at O•Wt1 1 c ~" .,. r .. . u, 111'i1\J1ii>• H·•) 1ti, 1<'> 0·l\\\' ri 1 (.('.1;.rJy, r c ~ .u· U r.I n 1, LP · LAVl!t) Ur\o l /~. "·""' S Yi ?I.\ clOH biil.1()0 (JU1 OI tj\ 11 ""°' :.!1 1 j; il,ttlt c a<l Cif·fi MY Str..11y Sed f'On ' /' 1.u .11&:1 V1. t.'ie: l!'<ltt1'1t.'i 11 ~ · iro.ld C~pllf "l')o ~t,...ny . .:Oc<.lt(ltl 1 -4 Nh1lr I ~-tll. /TI1 0 tr~ lf\d ;aoo1 o'I R:11~tH <J 0 C\)l'fl lHl llY !1 10~ ·, ~~d;OI\ I~, l\bWuir; I 'J. I/ in tJ:;tWl\I Ccvn1y , Tu •:i l) ,;nl bo:firy11Jl0ft1 /ull-, tHl,~lt'Od •fl IJ .:,i\ c. v 1 1.r 1 nW ~1 • u1-t.y P.Yv<» 1J1ttVi l J1•, f'I !fl. ?003 1KU1<.)itiJ ni w~11.11M 1JO , Ph-()6 9'.i.!t ot irwt t )Jfm11t Pub• <. Ru.v''' rJ (h1W1H G<!'.Jil\y. T111. 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Mvi111ut ;11...: ... 10. 1; 111..1 H ~w(l1:41r .l!l 1"11., :ru d fM !ia fi.t1 hO i;w.,, 11tu ,n DEWln COVtHY TEXAS 325 CAUSE NO. 12-07 -22,354 RALPH WADE KOOPl'v1ANN, KAREN § LN 'ffrn DIST!UCT COURT rv1ARIE KOENIG, and LOR.ENE H. § KOOPMANN § § VERSUS § § DEWirr COLJNTY, TEXAS CO NOCOPHILLIPS, BURLlNGTON § RESOURCES OIL & GAS CO., L.P. and LOlS STRIEBER, Individually and As Executrix of the ESTATE JERRY STRJEBER 24TH JUDICIAL DISTIUCT ORDER GRANTTNG PLAINTIFFS' AMENDED MOTfON FOR PARTIAL SUMMARY JUDGMENT On this lhe d?O -tJI"'\ day of L, 2013, the Co u11 heard Plaintiffs ' Amended Motion for Partia l Summary Judgment. Afte.r carefully considering tbe pleadings, Llie motion, the response, the reply, if any, the arguments of counsel, an d other evidence on ti le, lhe Court the GRANTS, l.o al l pans, Plaintiffs' Amended ivlotion for Part ial Summary fodgrnent. It is, therefore, ORDERED, ADJUGED, and DECREED thatPlaintiffs' Amended M.otion fo r Partial Summary Judgment, in the above styled and captioned cause, is GRANTED. As such, it is fUlther ORDERED, ADJUDGED, and DECREED as fol lows: (I) As of December 27, 20 11 (Le., fifteen (.15) years from the date of the Warranty Deed executed by Lois Stricbcr on December 27, 1996, on file wilh the County Clerk of DeWitt County, Texas, and recorded on January 2, 1997, at 8:35 a.m.), [here \Vere no wells on Lackey Unit A (i.e., th e pooled unit) rhal were actually producing in paying or aommercia l quantities; 455 .~· (2) The reserved tenn royalty interest, entitled ''Reservations from and Exceptions to Conveyance and Wananty,'' as contained in the Warranty Deed executed by Lois Strieber on December 27, 1996, on file with the County Clerk of DeWitt County, Texas, and recorded on January 2, l997, at 8:35 a.m., expired on December 27, 2011 in accordance with the express terms of the Wananly Deed, and, U1erefore, is mdl and void ; (3) ConocoPhillips Company's, Burlington Resources Oil & Gas Company, LP. 'sand Lois Strieber's, Individually and as tbe Executrix of the. Estate of Jerry Strieber, rights in or to the tern1 r.oyalty interest reserved in the Warranty Deed executed by Lois Strieber on December 27, l 996, on file with the County Clerk of DeWitt County, Texas, and recorded on January 2, 1997, at 8:35 a.m., are terminated ; and (4) Plaintiffs, Ralph Wade Koopmann, Karen Made Koenig, and Lorene H. Kooprnann, are entitled to the full amount of any royalty payments due under any rninera l lease from the mi_neral estate in question, as set lorlh in the above-described Warranty Deed. It is further ORDERED, ADJUDGED, and DECREED that Plaintiffs, Ralph Wade K.ooprnarm, Karen Marie Koenig, and Loren e H. Koopmann, have Judgment against Defendants, ConcocoPhillips Company and Bmlington Resources Oil & Gas, L P. in an amount tobe detem1ined later for reasonable.and necessary attorneys' fees incurred in the prosecution of this m atter . All other relief not expressly gTanted herein [s denied. /'~ ~ Sigr1ed on thi s the Cl..LJ day of ~v~ , 2013. JOHANSON & FAIRLESS, L.L . P. LAWYERS 1-456 Fial Colony 0oule11ard Sugar Lflnd, Ttx•• 77.479 2.B 1-313-5000 TELECOPIER 281-3-40.~100 MIKE JOHANSON JAY W. CRAOOOCK RAl'IJY L. FAJRLESS • VICKI L. DALEY TOOO TAYLOR • GREG LAUGHLIN BART BASDEN • JOELLE G. NELSON KELLEY J. FRICDMAN TIMOTHY J. NISBET ~IU c~ lt1 Ptf&O~ 1n;vry llel L#W CHRIS M. VOLF T$XU 6ow Cl! L.09.,i 8Pttcitl.ii11tloM TOOO TA YLOFt DIRECT °"'L 2!1-340-6107 OlAtl..: tnx!ord!Arnilm·«im January 10, 2012 Ms. Diane Schaenen Via Certified and regular mail ConocoPhillips Staff Landman - North Eagleford Asset Team 3VVL-5012 P.O. Box 2197 Houston, TX n252-2197 Re: ShLit-ln Royalty Payment Lackey Unit A #1 well DeWitt County, TX Deer Ms. Schaenen: I a m writing you at the request ·Of the Koopmann fam ily regarding correspondence they recetved trom you on December 7, 2011 with regard to the ~shut-In Royalty Payment" of the above referenced well. I have been asked to advise you that the well In question. as of this date. still has not been put in line for production and has not produced any oil or g,as in paying quantities. Further, desprte representat ons in your correspondence to Iha contrary, ttle well was never "Oared for two days to establtsh commercial production". The Koopmanns have also asked me to research why it is that ConocoPhilNps woukl forward shut-in royalty payments (wtlich have not and will not be cashed) and why ft is that ConocoPhilllps quoted language from the Purchase Deed from 1996 in this letter you sent on De<:embef 7, 2011. My research has revealed that you and your company have attempted to obtain a percentage of the 50% royalty Interest which was conveyed to the Koopmanns on December 27, 2011 without revealing same to the Koapmanns. That als-0 means that you are familiar with the language contained in the real estate purci'lase document and are aware that the well In question and ConocoPhillips have fellen short of their attempt to secure a portion of these royalty payments. Specifically, under the terms of the purchase agreement entered into by the Ms. Diane Schaenen January 10, 2012 Page 2 Koopmann family and their representatives on December 27, 1996, 50% of the royalty interests were conveyed to the Koopmanns on the date of purchase. Further, under the purchase agreement, the remaining of the 50% royalty interests on the property in question as referenced above, were to convey to the Koopmanns after the explratk>n of 15 years. The 15 years have now, of course, expired as of December 27, 2011 and as of tnat date there was no well on the property in question capable of, nor producing on and gas in pay·ng quantities. The deed In question of course does allow for shut-In royalty payments however. under specific terms and conditions. To quote the deed specifically, it states: "It is exprassly understood, however, that if any oil, gas, and mineral or mining lease oovering said land or lands pulled therewith is maintained In force and effect by psymtml of shut~ In royalties or any other similar payments made to thEJ Jessers or royalty holder in lieu of ect.ual production while lharo is located on ti1e lease or land pulled therewith a well or mine capable of producing oil or gas or other mln•rals In psylng or commercial quantit/e.s but shuf.ln for l•ck of market or •ny other reuon, thoo for purposes of determining /he lerm of this rese!V9d royalty inlarost ii will be considerod lhst production fn paying commercial qusntitles Is being obtainoo from the land here and conveyed.• I am very confident that you are well aware that the well referenced above does not meet the terms of this shuHn provision. The well has naver produced In paying quantities and even as of today is not capable of producing in paying quantities. Further, despite what your letter suggested and as mentioned previously, this well has never been flared, and In fact the well head has never been connected to a flare or the production facility that is in place today. As this letter is being written to you. there is a crew on the site today whose job ts to drill out the plugs Installed during the tracking procedure. This well, quite simply is not a well "capable of producing oH, gas, or other minerals In paying or cornmerclal quantities and Shut-In for lack of market•. Further, this well is not a well that is ·shut-In". It is a well that Is under constructlon and that ts not yet complete. Accordingly. the well in question is not shut-In and cannot be shut-in, Is not a well capable of producing in paying quantities even as of today and certainty was n<:it as of December 27, 2011, and has never boon flared . As a result. royalty Interest under the tefTT\s and condttions of the deed itself has conveyed lo the Koopmanns and any owners.hip of royatty interest owned by the grantor or ConocoPhillips own has terminated under the term.a and conditions of the deed. Accord· gry, under U1e strict terms of the deed (a copy of which is attached hereto) the Koopmann family, their representatives, and heirs are now the owner of 100% of the royalty interest of the 120 acre tract In question. When and if the well In question ts put on 592 Ms. Diane Schaenen January 10, 20·12 Page 3 line for production, all royalty payments to the mineral intere$t owner consisten1 wtth the otl and gas lease·are ow-ed solely to the Koopmann family, conslstentwtth the mineral interest division afforded each or H1em as on file in the DeWitt County re~I proP'erty records. Please have a. dilfision order is~ued immediately consistent with the terms of the deed, including the conveyance of the remaining 50% royalty internst to the Koopmann famlty. This division shall reflect the feet that the Kooprnanns have 100% ownership of the royalty interest of this 120 acre tract tn question and more par00ularty the well referenced In the reference block above. Please forward a oopy of that division order to each member of the Koopmann family entitled to same, conslstent wtth the mineral Interest divtslon afforded each of them ae on file In the OeWrtt County~ea · I roperty reoord. s. Please also forward a copy of that division order to my attention the address above a1 your earliest convenience. · If you have any other questions or co e s on is Issue please contact me directly at the above referenced number and address. Cordi ty, & FAIRLESS. L.L.P. TT/hs 593 JOHANSON & FAIRLESS, L.L.P. LAVVYERS 1·l56 First Coiony Boulevard Sug ar Land , Texas 774 79 2!.l 1-3 13-5000 TELE COP IER 28 1 ·3~0·5100 MIKE JOHANSON VICK I L. DALEY HANDY L. FAIR LESS · KEVlt• C. KYSER TODD TAYLOR' PAUL GREG LAUGHLIN BART aA.SDEN ' TIMOTHY J. NISBET KELLEY .J FRIEDMAN CHRISM. VOLF 'Ooan:! Certifoed In Per~ona l 1njt11)' Tnal Law T OX.1S H<Jard of Lll{lal Spoc1.all2ation MIKE JOHANSON DiRECT DIAL Wi-340·5109 E-Mail [email protected] June 24, 201 3 4. 193 Elizabeth Tiblets Via Ema il, CMRR LOCKE LORD, L LP 2200 Ross Avenue , Suite 2200 Dal las, TX 75201-6776 Re: Cause No. 12-07-22354: Ralph Wade Koopmann, Karen Marie Koenig, and Lorene H. Koopmann vs. ConocoPJ1illips, Burlington Resources Oil & Ga s Co., L.P. and L.ois Strieber, Individually and as Executrix of the Esta te of Jerry Slrieber, In the 24 1ti Judicial District Court of DeWitt Cou nty, Texas DEMAND TO RETURN ROYALTYPAYMENTS OWED, NOTICE Of DELINQUENCY. AND DEMAND FOR ACCOUNTING Dear Eliz:abe rh: Please cons ider this a formal notice lha! royalty payments owed lo Ra lph Koopmann, Karen Marie Koen ig , and Lorene H. Koopman n are delinquent., and are wrongfull y in the possession and cont rol of Burli ngton Resources Oil & Gas Company , l.P .. and/or ConocoPhil lips Company As such royalty payments are delinquent and being wrongfu lly withheld by your clients , this correspondence shall serve as a demand for the immedia te return of such royal ty payments. Further. tl1is corresponde nce sha ll serve as a continuing demand that future royalties , as they corne due to Ralpt·1 Koopmann, l<aren Marie Koenig, and Lorene H. Koopmann. be rellnquish ed and timely 1 pa id pursuant to the terms of the Lease . Please provide tt1is demand and notice to your clients . Foremost, th rough the discovery conducted in this litigation, 1t is clear that Ralph Koopmann, Ka ren Mane Koen ig , and Lorene H. Koopmann are entitled to be paid the full amount of royalties arising under the 1erms of the Lease (and your clients knew s-eme long before suit was filed) . Nevertheless, your clients have failed to pay such royal ty interests to date , instead withho lding ntty percent (50°/o) of the royal!.les owed . Further, it appears that your clients will continue to fai l to pay future royal ties as they come due . despite the fact they clearly owe the full royalties to my clients . There is no viable reason for your clients to retain these royalty payments (in the past or future), and it is clear they are the wrongfully appropriated property of Ra lph Koopmann. l<aren rvlarie Koenig, and Lorene H . Koopmann. Whil e we have previously demanded the return of the royally payments owed to Ralph Koo pmann. Karen Marie Koenig, and Lorene H. l\ooprnann, we now provide this formal demand, so as there will be no question your clients wi ll be subject to interest on the unpaid royalties as provided under the terms of the Lease sl1ould they fail (and continue to fail) to pay . Specifically. the Lea se stales as foll ows : N . ROYALT r' PAYMENT DUE DATE : All royalty payment s on actual production are due and payable with 60 days after the end of the month in which the production occurred. In the event Lessee becomes dellnquenl in such payment. the Lessor must notify th e Lessee ot the def a ult and if Lessee does not pay the delinquent amount with 15 days after Lessor has sent such notice of the delinquency to Lessee by certified mail at its address set out above, Lessee must pay interest on ttie delinquent royalty amount and on all oth er royalties subsequently becoming delinquent until all de li nquent pa yrnents have be en paid, the interest rate to be 1 2'% per year and computed as to each of lhe delinquen\ amounts beginning with th e date each becomes due .. . As you are aware, fifty percent (50<'1~1) of the royalty payrnenls due to my clie nts are bein g wrongiu ll y witr1held by your cli ents at lh1s time, and they are therefore delinquent in making these paym ents. Please remit the tota l delinquent amount of royalties owed to Ralph l(oopmann. l<:a ren Marie Koenig, and Lorene H. l<~oopmann within fifteen (15) days of th e receipt of thi s certified letter . It my clients 11ave not received lhe full amount of delinquent royalty payments within lhe time period set forth above by the Lease, we ' for th e purposes of' this notice and den1and, "leas e· shall mea n tti a ·011, Gas and Mineral lea se (Paid Up Lease )" t.tia t wa s entered ln \c baiv1een Hawke Enterprises and Loren e H. Ko opmann on or ;about October 26, 2007, which was subsequenlly assigned to 8uf1inglon Resources Oil & Ga s C ompany, L.P., and/or retitled by the "Amendment to Oil. Gas and Mineral Lease (Paid Up Lease)' entered Into between Bur1ington Rssources Oil & Gas Company , L.P., and Ralph Koopmann, Karen Marte K oe nig, and Lorene H . Koopmann on or about December 27, 2010. 2 595 demand interest be paid on such amount at \tie rate of twelve percent ( 12°/o) per year, beginning with the dale any such royalty payment originally became du e. A s the Lease provid es fifteen (15) days lo rem it the owed royalty payments before interest attaches, we expect that a check made payable to our law firm and Ralph Koopmann, Karen Mane l<oenig, and Lorene H. Koop mann will be delivered lo our fi rm. address above, no later 0-1an July 10. 2013. Pl ease contact us for any additional drafting instruction s or information you may require. Stiould the unpaid royalty payments not be rece ived by the above deadllne. we will consider the failure to pay such owed royalties an affirmation of your clients' co ntinuing refusal to return property owned by Ra lpll Koopmann, Karen Marie Koe nig. and Lorene H. Koopmann , but wrongfully held In their posse ss ion and control. W e will seek the full amount of interest owed under the Lease, and any add itional remedies available. Dem and for Accounting Plaintiffs request a specific accounting, through the present date, of all payments an d/or amount r1eld in "suspense", represen ting fifty precent (50% ) of the royalty interest that is the subjecl of lhe above re ferenced lawsuit. It is undea r whether these monies are simply being "withheld" and/or whethe r monies are being paid into a specific, interest bearing account. We need clarification regard ing this issue along with an accounting for all payments withheld or suspended through the present date. Finally . thi correspondence does no t address the additional clea r damages that Ralph Koopmann, Karen Marie Koenig, and Loren e H . Koopmann are en titled to, including tort damages. attorneys· fees. or exemplary damages We will continue to pursue lhese damages through the pending litiga tion. Sl1ould you have any questions, please don't hesitate to contact me_ Very truly yours , MJ/kck Mike Johanson cc: Errol John Dietze Michael Powell Clint Schumacher f<evin Cullen Todd Taylor Chris Volf Ron Walker 596	{ "pile_set_name": "FreeLaw" }
129 N.W.2d 519 (1964) 177 Neb. 542 Eliza WOODS, Appellee, v. George WOODS, Appellant. No. 35564. Supreme Court of Nebraska. July 10, 1964. 520 Stern, Harris & Feldman, Omaha, for appellant. Jerome Grossman, Omaha, for appellee. Heard before WHITE, C. J., and CARTER, MESSMORE, YEAGER, SPENCER, BOSLAUGH, and BROWER, JJ. WHITE, Chief Justice. Defendant, George Woods, in November and December 1957, received a total sum of approximately $2,408.10 in money from Eliza Woods, his mother. This is an action by the mother, Eliza Woods, to recover that sum. Defendant admits receiving the money, from cashing an endorsed check and the sale of some livestock. As a defense, he seeks to establish that he had a contract with plaintiff under which he was to receive the money in return for an agreement to support and care for the plaintiff. He pleaded this defense by an unverified 521 answer. The plaintiff filed a reply and the parties proceeded to trial. The court, on its own motion, struck the answer on the grounds that it was unverified. The plaintiff by filing a reply, thus pleading over, waived any objection as to verification thereto. Northup v. Bathrick, 80 Neb. 36, 113 N.W. 808; Blodgett v. Swanson Bros., 105 Neb. 191, 179 N.W. 1011. This was error and the answer should not have been stricken. Plaintiff's husband had been ill for about a year and died on October 22, 1957, at Little Rock, Arkansas, near Forrest City where plaintiff and her deceased husband farmed and rented out two small acreages. Several of the children who lived in Omaha, Nebraska, had gone to Arkansas to help during their father's illness. George, the defendant, had gone from Omaha to Arkansas in May 1957, and stayed there until his return to Omaha late in December 1957. Augusta Bowers, a daughter, lived in Arkansas. The defendant offered to prove, by Augusta's testimony, over objection, that on October 28, 1957, the day after the father's funeral, his mother, Augusta, and defendant were driving in his car to Forrest City, Arkansas; that Augusta told her mother there had been a meeting of the family the previous evening; that they agreed it would be best for the mother to go to Omaha and live with George; that if it was all right with the plaintiff George should use whatever funds were then available or became available for the care and support of plaintiff; that while in the car George agreed to assume this responsibility; and that the plaintiff agreed to this arrangement in the presence of George and Augusta as they were in the car driving to Forrest City. The evidence shows that the plaintiff went to Omaha and began living with the defendant in February 1958, and lived with him for about a month. Sometime during this period of time she began demanding the return of her money. The court, on its own motion, rejected the offer of proof as to the contract and refused permission for either Augusta or George to testify as to the conversation and agreement during the automobile trip. The court, therefore, directed a verdict for the plaintiff and entered judgment accordingly. This was prejudicial error. A binding mutual understanding or meeting of the minds sufficient to establish a contract requires no precise formality, or express utterance from the parties themselves as to all of the details of the proposed agreement. It may be established by the parties assenting to the proposal drawn, or uttered by a third party to which they assent or to which they agree, and it may be implied from conduct and circumstances and may be shown by circumstantial evidence and the admissions of the parties sought to be charged. Evidence of facts and circumstances, together with the words of the parties used at the time, from which reasonable persons in conducting the ordinary affairs of business, but with special reference to the particular matter on hand, would be justified in inferring such a contract or promise, is sufficient. Citizens State Bank v. State Bank, 111 Neb. 571, 197 N.W. 607; In re Estate of McKeon, 227 Iowa 1050, 289 N.W. 915; Kladivo v. Melberg, 210 Iowa 306, 227 N.W. 833; Restatement, Contracts, s. 22, comment (a), p. 27. Plaintiff argues that there is a presumption of a gift when a child renders service to parents, that the offer of proof didn't refer to any specific contract for the use of the mother's money, and that the offer of proof does not cover all of the necessary elements or details of such a contract for services. Part of these arguments are based on an acceptance of plaintiff's testimony and version of the facts. Defendant, however, was entitled to have the testimony presented supporting his theory of defense. The offer of proof was sufficient. It need not state with precision every detail of the proposed testimony of the witnesses establishing the agreement or contract. It is sufficient if it directs the court's attention to material testimony establishing or supporting defendant's theory of *522 defense. It is not asserted that the defendant's pleading in this respect is insufficient. For the reasons given, the judgment is reversed and the cause remanded for a new trial. Reversed and remanded.	{ "pile_set_name": "FreeLaw" }
670 F.2d 1235 216 U.S.App.D.C. 416 Mazaleskiv.Schweiker 79-2470 UNITED STATES COURT OF APPEALS District of Columbia Circuit 9/30/81 D.C.D.C., 481 F.Supp. 696 AFFIRMED	{ "pile_set_name": "FreeLaw" }
In The Court of Appeals Ninth District of Texas at Beaumont ____________________ NO. 09-06-208 CR ____________________ STEPHEN PAUL BORDAGES, Appellant V. THE STATE OF TEXAS, Appellee On Appeal from the 359th District Court Montgomery County, Texas Trial Cause No. 04-07-05428-CR MEMORANDUM OPINION We have before the Court an appeal by Stephen Paul Bordages from a sentence pronounced January 31, 2006. The notice of appeal was filed with the trial court on May 3, 2006, more than ninety days from the date of sentencing. We notified the parties that the appeal did not appear to have been timely filed. The appellant did not supply an affidavit or otherwise establish that notice of appeal was filed within the time permitted for perfecting appeal. The court finds the notice of appeal was not timely filed. Tex. R. App. P. 26.2. No extension of time was timely requested pursuant to Tex. R. App. P. 26.3. It does not appear that appellant obtained an out-of-time appeal. The Court finds it is without jurisdiction to entertain this appeal. Accordingly, the appeal is dismissed for want of jurisdiction. APPEAL DISMISSED. ___________________________ DAVID GAULTNEY Justice Opinion Delivered July 26, 2006 Do Not Publish Before Gaultney, Kreger and Horton, JJ.	{ "pile_set_name": "FreeLaw" }
Fourth Court of Appeals San Antonio, Texas JUDGMENT No. 04-18-00910-CR Jermaine Thomas WITTY, Appellant v. The STATE of Texas, Appellee From the 226th Judicial District Court, Bexar County, Texas Trial Court No. 2017CR13722 Honorable Mark R. Luitjen, Judge Presiding BEFORE CHIEF JUSTICE MARION, JUSTICE MARTINEZ, AND JUSTICE ALVAREZ In accordance with this court’s opinion of this date, this appeal is DISMISSED. SIGNED January 16, 2019. _________________________________ Sandee Bryan Marion, Chief Justice	{ "pile_set_name": "FreeLaw" }
375 F.3d 1021 Timothy GAMBLE, Petitioner-Appellant,v.Sam CALBONE, Warden, Respondent-Appellee.Kenneth Popejoy, Petitioner-Appellant,v.Ron Ward, Warden; The Attorney General of the State of Oklahoma, Respondents-Appellees. No. 03-6057. No. 03-6150. United States Court of Appeals, Tenth Circuit. July 13, 2004. COPYRIGHT MATERIAL OMITTED Submitted on the briefs: Timothy Gamble, Pro Se. W.A. Drew Edmondson, Attorney General of Oklahoma, Jennifer J. Dickson, Assistant Attorney General, Keeley L. Harris, Assistant Attorney General, Oklahoma City, OK, for Respondents-Appellees. Kenneth Popejoy, Pro Se. Before EBEL, HENRY, and MURPHY, Circuit Judges. MURPHY, Circuit Judge. 1 Timothy Gamble and Kenneth Popejoy, Oklahoma state inmates appearing pro se, appeal from the district court's denial of their habeas petitions brought pursuant to 28 U.S.C. § 2241. The petitions alleged violation of the inmates' Due Process rights because respondent revoked their earned credits in prison disciplinary proceedings for criminal acts they did not commit. In each case, we granted a certificate of appealability (COA) on the issue whether some evidence supports their disciplinary convictions for violation of Okla. Stat. tit. 21, § 1541.1. In Mr. Popejoy's case, we also granted COA on the issue whether copy fees charged by a district court to obtain a criminal record and transcript to be used in preparing and filing an application for post-conviction relief are "fees or costs" within the meaning of Okla. Stat. tit. 57, § 549(A)(5) that may be paid from an inmate's mandatory savings. Because the facts and law in each case are virtually identical, we have combined the cases for judicial economy. And because we determine that no evidence supports the disciplinary convictions, we reverse and remand for issuance of the writ in both cases.1 I. Relevant facts and proceedings 2 The following facts, many of which were found by the district court, are undisputed in the record. Both inmates are incarcerated at the Great Plains Correctional Facility, a private prison.2 Section 549(A)(5),3 in pertinent part, requires that at least twenty percent of an inmate's wages derived from prison employment 3 shall be placed in an account, payable to the prisoner upon his or her discharge or upon assignment to a prerelease program. Funds from this account may be used by the inmate for fees or costs in filing a civil or criminal action as defined in Section 151 et seq. of Title 28 of the Oklahoma Statutes. 4 This account is referred to as the "mandatory savings account." The correlative Oklahoma Department of Correction's (DOC) policy states: 5 Except for fees incurred by an inmate filing any state or federal action, statutory savings cannot be drawn upon until the inmate discharges, paroles, or upon assignment to a community based supervision program. (57 O.S. Section 549). The allowable fees are defined in O.S. 28, Section 151 et seq .... Attorney fees are not an allowable fee. Disbursements for filing fees must be made payable to the applicable county or federal court clerk. Any court order to release funds from statutory savings for any purpose other than filing fees will be referred immediately to the legal division. 6 DOC policy OP-120230 (1999-2001). In 1999, Travis Smith, who at that time was the business manager at Great Plains (and who later became a deputy warden) sent a memo to the general inmate population briefly stating his interpretation of section 549(A)(5) and OP-120230. In a footnote, the memo quoted the portion of OP-120230 set forth above, but Mr. Smith informed the inmates that, "OP 120230 ... states that only court-ordered filing fees may be paid from mandatory savings." R. No. 03-6057, Doc. 2, Ex. K. The memo instructed inmates who desired a qualifying disbursement to complete a request to staff at the DOC, and to include a copy of the court order with an envelope addressed to the court "you will be paying." Id. 7 On October 17, 2001, Mr. Gamble sent a written "Request to Staff" to the DOC asking staff to withdraw $500.00 from his mandatory savings account. The check was to be made payable, and sent directly, to the Canadian County Clerk. He included a letter to the clerk authorizing payment of the costs to obtain certified copies of the transcript and record in his criminal case so that he could prepare and file an application for state post-conviction relief. 8 On October 10, 2001, Mr. Popejoy sent a similar request, asking that $170.00 be sent to the Oklahoma County Court Clerk to obtain court documents and transcripts relating to his criminal conviction. He demonstrated that he had previously filed a motion with the district court in Oklahoma County on August 3, 2001, requesting copies of his criminal record and transcript, along with an affidavit claiming pauper status, but had received no response after almost three months. R. No. 03-6150, Doc. 2, Ex. A. 9 Both petitioners assert that prison law clerks told them that, under the statute and DOC policy, they could request money from their mandatory savings to pay for the copy costs. The DOC did not issue a check in response to either request. Instead, on October 24, Great Plains prison officials commenced disciplinary proceedings against them, charging both inmates with violating section 1541.1 of the Oklahoma criminal statutes, which prohibits "[o]btaining money under false pretense." R. No. 03-6057, Doc. 2, Ex. A; R. No. 03-6150, Doc. 2, Ex. E. The sole evidentiary basis for each charge was a copy of the inmate's request. Both inmates challenged the charges. 10 At a November 1 hearing, both inmates admitted requesting money from their mandatory savings to pay for certified copies of their court records but contended they did not violate the law. Quoting Mr. Smith's memo, the disciplinary hearing officer who presided over both cases maintained that prison policy "states that only court ordered filing fees may be paid from mandatory savings." R. No. 03-6057, Doc. 2, Ex. E; R. No. 03-6150, Doc. 2, Ex. L. He concluded that Mr. Gamble's behavior was "an attempt to obtain money under false pretense," R. No. 03-6057, Doc. 2, Ex. E, and that Mr. Gamble had therefore violated section 1541.1 and committed a class X offense.4 The officer imposed punishment of thirty days' disciplinary segregation and 365 days of lost earned credits. See id. 11 The officer made no comments about Mr. Popejoy's alleged misconduct other than to also find him guilty of the class X offense for violating section 1541.1. R. No. 03-6150, Doc. 2, Ex. E, L. He imposed thirty days of disciplinary segregation and a loss of 180 days' earned credits as punishment. Id. Ex. L. Mr. Popejoy complains that he was also punished with seven additional administrative disciplinary sanctions not imposed in his misconduct decision, including loss of telephone, visitation, canteen, recreation and exercise privileges; loss of wages; demotion from classification level 4, where he was earning forty-four days of credit per month toward reduction of his sentence to level 1 where he could earn no credits; and removal from his level-four honor pod to a level-one pod. 12 Both inmates administratively appealed their misconduct convictions. Both argued (1) they could not prepare and file applications for post-conviction relief without copies of their criminal record and transcript to support the petitions; (2) Travis Smith's memo misinterpreted section 549(A)(5) and OP-120230; (3) Oklahoma statutes specifically define copy costs as "fees" that may be paid from mandatory savings; (4) Oklahoma case precedent provided for payment of copies of the criminal record from their mandatory savings account; (5) they used the proper method in requesting the money from the DOC; (6) they had no intent to defraud or cheat anyone by asking for money from their own savings; and (7) no evidence supported a disciplinary conviction for violation of section 1541.1. 13 In Mr. Gamble's case, the designee for the Director deciding the appeal responded, "Oklahoma State Statute 57 O.S. Section 549 states, `Except for fees incurred by an inmate filing any state or federal action, statutory savings cannot be drawn upon until the inmate discharges, paroles, or upon assignment to a community based supervision program.'" R. No. 03-6057, Doc. 2, Ex. I. Contrary to the designee's statement, the quoted language she attributed to section 549 does not appear in the statute, and it has not been amended since 1996.5 In Mr. Popejoy's case, the designee properly attributed that language to DOC policy OP-120230. R. No. 03-6150, Doc. 2, Ex. P. But in both cases, she interpreted the words "fees incurred by an inmate filing any state ... action" to mean that only "filing fees" could be paid from a mandatory savings account. She determined that Mr. Gamble had failed to prove that he requested the money to pay for filing fees; that Mr. Popejoy had failed to prove he requested and intended to use the money to pay for court-ordered filing fees; and that there was no indication that either inmate owed money for filing fees. See id.; R. No. 03-6057, Doc. 2, Ex. I. She further concluded that section 549 "prohibited" using mandatory savings to pay for certified copies of a criminal record. R. No. 03-6057, Doc. 2, Ex. I. Without addressing their claims that there was no evidence of an intent to cheat or defraud anyone, the Director's designee concluded there was sufficient evidence to support the charges that both inmates violated § 1541.1, and denied the appeals. See id.; R. No. 03-6150, Doc. 2, Ex. P. 14 Both inmates filed habeas petitions in federal district court. In both cases, the district court denied the petitions, concluding that the disciplinary actions based on violation of § 1541.1 were supported by "some evidence." R. No. 03-6057, Doc. 16 at 1-2; R. No. 03-6150, Doc. 16 at 1 (adopting magistrate judge's report and recommendation) & Doc. 14 at 8 (magistrate judge's report concluding that "some evidence" supported conviction). II. Exhaustion of state-court remedies 15 Generally, before a habeas petition may be granted, a petitioner must demonstrate exhaustion of state court remedies unless "there is an absence of available State corrective process," 28 U.S.C. § 2254(b)(1)(B)(i), or "circumstances exist that render such process ineffective to protect the rights of the applicant." 28 U.S.C. § 2254(b)(1)(B)(ii). Both magistrate judges assigned to the cases noted that respondent admitted there appeared to be no state-court remedy recognized in Oklahoma for immediate judicial review of the sufficiency of the evidence to support a prison disciplinary conviction. R. No. 03-6057, Doc. 14 at 4-6; R. No. 03-6150, Doc. 14 at 4 & n. 4. 16 We have previously held that an inmate seeking speedier, but not immediate, release due to alleged errors in calculating earned or good-time credits does not have an adequate habeas remedy under Oklahoma law, and that requiring state exhaustion would be futile. Wallace v. Cody, 951 F.2d 1170, 1172 (10th Cir.1991); see also Johnson v. Dep't of Corr., 916 P.2d 264, 266 (Okla.Crim.App.1996) (holding that claims of due process violations were not proper subjects of state habeas relief because inmate could not show entitlement to immediate release). In 1996, the Oklahoma Court of Criminal Appeals further held that, although state mandamus relief is available to force a prison to provide an inmate with "minimum procedural due process" before revoking earned credits, mandamus is not available to review the actual decision of the disciplinary authority. Canady v. Reynolds, 880 P.2d 391, 396-97 & n. 4 (Okla.Crim.App.1994). The court has subsequently stressed that an inmate "cannot challenge the merits of, or appeal from, the prison officials' administrative decision that [the inmate] is guilty of prison infractions and that she should be punished by the revoking of earned credits" through mandamus because mandamus relief does not apply "to the full panoply of due process rights" in Oklahoma. Dunn v. Ramsey, 936 P.2d 347, 348-49 (Okla.Crim.App.1997). 17 Nor does an Oklahoma inmate have the right to a direct judicial appeal from a disciplinary board or DOC decision to revoke credits. Canady, 880 P.2d at 398-99. In short, the Canady court held that "an inmate does not have a right to an interlocutory determination of the status of his earned credits in a situation where he is not entitled to immediate release," stating that it "refuse[d] to believe the [Oklahoma] Legislature intended this Court or any district court to become involved in the earned credits business." Id. at 400. We continue to follow our ruling in Wallace that there is no state-exhaustion requirement for Oklahoma inmates challenging the merits of a disciplinary board revocation of earned credits where the inmate is seeking only speedier, and not immediate, release. III. Standard of review 18 On review of the denial of a petition for habeas corpus, we review the district court's legal conclusions de novo. See Patterson v. Knowles, 162 F.3d 574, 575 (10th Cir.1998). When determining whether a disciplinary board decision should be upheld upon a challenge to the sufficiency of the evidence, we do not examine the entire record or weigh the evidence; we simply determine "whether there is any evidence in the record that could support the conclusion reached by the disciplinary board." Superintendent v. Hill, 472 U.S. 445, 455-56, 105 S.Ct. 2768, 86 L.Ed.2d 356 (1985). The conclusion reached by the disciplinary board is that both inmates violated a state criminal law, thereby committing a class X offense that could be punished by revocation of earned credits. IV. Analysis of issues on appeal 19 There is no dispute that the inmates requested a disbursement from their savings accounts to pay court copy costs associated with the prospective filing of their state petitions for post-conviction relief. The ultimate legal question in these two cases is whether, by making this request, the inmates violated section 1541.1. We must first, however, ascertain the answers to two preliminary questions: what was the crime charged for the disciplinary conviction, and what are the elements of that crime? 20 A. Crime charged. Respondent states that Mr. Gamble "was found guilty of a misconduct for attempting to obtain money from his prison savings account for an improper purpose," which violated prison policy OP-120230. Aplee. Br. No. 03-6057, at 6. Respondent states that Mr. Popejoy's "misconduct report was written" because he "sought withdrawal of money from his account for an improper purpose." Aplee. Br. No. 03-6150, at 3. But, as previously mentioned, the record conclusively shows that the inmates were charged, convicted, and disciplined for violating a state criminal law prohibiting obtaining money under false pretense. Neither inmate was charged with violating OP-120230. 21 Further, OP-120230 does not impose any requirements on an inmate to ensure that his request is for an allowable expenditure or warn that an attempt to obtain money in savings by making a request that may be disapproved is a rule violation subject to prison discipline. Indeed, the 2001 policy provided that, after an inmate makes a request for disbursement, the "appropriate staff will approve or disapprove the disbursement request and forward to trust fund officer, or return to inmate if not approved." OP-120230(VII)(B)(1) (attached as Ex. C to respondent's brief in No. 03-6150). In addition, submitting a disapproved disbursement request is not an act that constitutes a rule violation under OP-060125; and only acts falling within this policy may provide the basis for discipline or the loss of earned credits.6 22 Just as section 549 "enumerates the powers and duties of the State Board of Corrections," Webb, 907 P.2d at 1057, OP-120230 simply sets forth the DOC's policy on use of inmate accounts in accordance with the statute. Thus, we must examine the actual basis of the inmates' disciplinary convictions, which is violation of section 1541.1, and determine whether "some evidence" supports a finding that the inmates committed that crime. 23 B. Elements of the crime charged. Section 1541.1 provides, in relevant part: 24 Every person who, with intent to cheat and defraud, shall obtain or attempt to obtain from any person, firm or corporation any money, property or valuable thing, of a value less than Five Hundred Dollars ($500.00) by means or by use of any trick or deception, or false or fraudulent representation or statement or pretense ... shall be guilty of a misdemeanor and upon conviction thereof shall be punished by a fine not to exceed One Thousand Dollars ($1,000.00) or by imprisonment in the county jail for not more than one (1) year, or by both such fine and imprisonment. 25 In order to affirm a conviction for obtaining money by false pretense, there must be evidence that the inmates attempted to obtain money by means of a trick, deception, or false representation. It is necessary that they knew it was a trick, deception, or false representation, and that they had the intent to cheat and defraud. See OUJI-CR 5-41. If, as here, the defendant is accused of making a false representation, it must be about "past or existing facts by one person to another with intent to defraud; such statement must be reasonably calculated to deceive that other." Bartlett v. State, 733 P.2d 1350, 1352 (Okla. Crim.App.1987) (quotation omitted) (interpretation of holding limited on other grounds in Broadway v. State, 818 P.2d 1253, 1255 n. 1 (Okla.Crim.App.1991)). Intent to defraud is defined as a "[s]cheme to take property so as permanently to deprive the owner." OUJI-CR 5-56; see also Warren v. State, 93 Okla.Crim. 166, 226 P.2d 320, 321 (1950) (noting that "if the owner parts with the possession and title [of property], due to the deception and artifice of the taker, then the offense constitutes obtaining property by false pretenses"). "Fraudulent intent ... [may] be inferred from a series of acts and pertinent circumstances." Ross v. State, 572 P.2d 1001, 1003 (Okla.Crim.App.1977). But absent evidence of an intent to defraud, a conviction under section 1541.1 must be reversed. Hixson v. State, 598 P.2d 268, 268-69 (Okla.Crim.App.1979) (interpretation of holding limited on other grounds in Broadway, 818 P.2d at 1255). 26 C. The district court's analysis. Respondent does not discuss the elements of section 1541.1. Instead, he argues, both here and below, that the act of making application for the disbursement, in and of itself, violates section 1541.1. 27 The district court agreed, adopting the two magistrates' reports and recommendations. In arriving at this conclusion in both cases, the magistrate judges first noted that section 549(A)(5) provides that funds from an inmate's mandatory savings account "may be used by the inmate for fees or costs in filing a civil or criminal action as defined in Section 151 et seq. of Title 28...." R. No. 03-6057, Doc. 14 at 7 (quoting section 549(A)(5)); R. No. 03-6150, Doc. 14 at 7. Then the judges noted that, under the prison policy, "[f]unds in an inmate's mandatory savings account may only be used `to pay court costs payable to a county clerk.'" R. No. 03-6057, Doc. 14 at 8 (quoting OP-120230(V)(A)(2)); R. No. 03-6150, Doc. 14 at 7. Without further analysis, the magistrate judges concluded that copying costs imposed by a court clerk for supplying a criminal record to be used to prepare a post-conviction application for relief do not qualify as costs or fees for filing a civil or criminal action under section 549(A)(5). Both magistrate judges then concluded that the inmates attempted to obtain the funds for a personal purpose that is not allowed under statute or DOC policy, and that this provided "some evidence" of an intent to use funds for an impermissible purpose through trick or deception and, therefore, provided sufficient proof of violation of section 1541.1. R. No. 03-6057, Doc. 14 at 9; R. No. 03-6150, Doc. 14 at 8. 28 The magistrate judge in Mr. Popejoy's case also found persuasive that, in Hammons v. Ward, No. 02-6326, 62 Fed. Apx. 899, 2003 WL 1849344 (10th Cir. April 10, 2003) (unpublished), a panel of this court denied a COA to review the district court's denial of a habeas petition in a case involving similar facts and charges. And on appeal, respondent also cites Farrow v. Ward, No. 02-6318 (10th Cir. June 13, 2003) (unpublished order), as persuasive authority. But "unpublished decisions are not binding authority." Duran-Hernandez v. Ashcroft, 348 F.3d 1158, 1162 (10th Cir.2003). We further note that certain facts are different in the Farrow case, and it is sufficiently distinguishable that we do not regard it as persuasive authority. See United States v. Salzano, 158 F.3d 1107, 1112 (10th Cir.1998). In denying COA, Hammons did not fully address the statutes and case law we are concerned with here, nor did it discuss the issue of intent to cheat and defraud. For these reasons, we decline to follow it. See Shayesteh v. City of South Salt Lake, 217 F.3d 1281, 1285 n. 6 (10th Cir.2000); Day v. Maynard, 200 F.3d 665, 667 n. 1 (10th Cir.1999). 29 D. Section 549(A)(5). As Mr. Gamble and Mr. Popejoy point out, section 549(A)(5) specifically provides for payment of "fees or costs," as defined by Okla. Stat. tit. 28, § 151, and not just "filing fees." Section 151(A) provides that district court clerks shall charge and collect fees, fines, costs, and assessments imposed by "this title," i.e., title 28. 30 Okla. Stat. tit. 28, § 31 provides, in relevant part: 31 the clerk of the district court ... shall charge and collect the following fees for services by them respectively rendered and none others, except as otherwise provided by law: 32 .... Making copy of an instrument of record 33 or on file, first page..................................... $1.00 subsequent pages (each).....................................$0.50 Certifying to any instrument (each) ....................................$0.50 34 Thus, the term "fees or costs," as defined in section 549(A)(5), reasonably appears to include photocopy charges imposed by a court clerk for obtaining official records and transcripts. 35 Respondent argues that, because section 549(A)(5) limits inmate use to fees or costs "in filing" their civil or criminal actions, the term "fees or costs" is limited to only "filing fees." Respondent, however, fails to address the express language specifically allowing disbursement for "costs," and interpreting "fees or costs" to mean only "filing fees" would seemingly eliminate other types of expenditures incurred under title 28 "in filing" a suit. 36 The inmates' understanding that requesting disbursement from their mandatory savings for the costs of obtaining their transcripts was a legal request is justified under Oklahoma case precedent and legislative history. In 1985, section 549 did not expressly provide for any pre-discharge use of an inmate's mandatory savings account. See Cumbey v. State, 699 P.2d 1094, 1095 (Okla.1985) (quoting former statute, then codified as Okla. Stat. tit. 57, § 549.5 as providing, "that not less than twenty percent ... of such wages shall be placed in an account payable to the prisoner upon his discharge"). The inmates in Cumbey challenged as unconstitutional the apparent prohibition on withdrawing money from their mandatory savings for personal and family purposes "and to pay court costs and filing fees." Id. at 1096. The court held that the inmates did not have a constitutional or legal right to immediate use of the money in their savings because the former statute gave them only a conditional right to receive the savings upon their discharge. See id. at 1097-98. 37 But the Cumbey court denied the inmates' applications to proceed in forma pauperis on appeal and directed the DOC to release money from their mandatory savings to pay not only for the costs of filing the appeal, but also "for costs of assembling the record on appeal," i.e., for the costs of copying the record. Id. at 1096. The court held that the inmates were not indigent by virtue of their mandatory savings accounts, and that money from those accounts could be released as costs were incurred "upon proper application and court order" notwithstanding the fact that section 549.5 provided only for payment of the funds to the inmates upon discharge. See id. The rationale for this holding was to 38 curb the indiscriminate filing of prisoner civil rights actions, by prompting inmates to confront the initial dilemma which faces most other potential civil litigants: is the merit of the claim worth the cost of pursuing it? 39 Id. 40 In response to Cumbey, in 1985 the Oklahoma legislature passed a new law providing that, "[i]n determining whether or not an inmate shall be allowed to use an affidavit in forma pauperis, a court shall consider the amount of funds an inmate has on deposit with the Department of Corrections." Okla. Stat. tit. 57, § 565. The legislature also concurrently amended section 549 to specifically provide an inmate the right to use mandatory savings during incarceration to pay "for any fees or court costs incurred by an inmate filing any civil action." Daniels v. Kaiser, 851 P.2d 529, 531 (Okla.1993) (quoting the November 1, 1985 amendment); see also Foust v. Pearman, 850 P.2d 1047, 1051 (Okla.1992) (Hodges, J., concurring in part and dissenting in part) ("Two days after the Cumbey decision, the Legislature amended title 57 to conform to that holding.") The legislature amended section 549 again in 1990 to limit "any fees or court costs" to those "as defined in Section 151 of Title 28 of the Oklahoma Statutes." Daniels, 851 P.2d at 531 n. 1 (quoting the 1990 amendment). 41 Until 1995, section 549 specifically limited the use of inmates' mandatory savings accounts to costs and fees associated with civil cases. See id. at 531. Accordingly, in a case decided in 1993, the Oklahoma Supreme Court held that, although mandatory savings funds could be used to pay for "costs and expenses" associated with prosecuting a civil matter, they could not be used to prosecute an inmate's criminal appeal. McMullin v. Dep't of Corr., 863 P.2d 1187, 1188-89 (Okla.1993) (stating that, "§ 549.A.5 authorizes prisoners to use their trust funds, prior to release, only for costs in civil matters"). The court affirmed the district court's refusal to order the DOC to release money from the inmate's savings account "to pay costs and expenses associated with the appeal of a conviction." Id. at 1189. But the court also held that the district court could not even consider the amount in the inmate's mandatory savings accounts in deciding whether the inmate was indigent and unable to pay "filing fees, other court costs, transcript costs, [and] other expenses" associated with prosecuting his criminal appeal. Id. The court held that the inmate could file a pauper's affidavit to force the state to pay for a transcript and other costs in either a criminal appeal or when seeking post-conviction relief7 in order to guarantee his access to the courts. Id. 42 In 1995 the Oklahoma legislature responded to McMullin by again amending section 549(A)(5) to include fees and costs associated with the inmate filing criminal cases. 1995 Okla. Sess. Law Serv. Ch. 266 § 4 (emerg. eff. May 25, 1995) (West). In addition, the legislature passed Okla. Stat. tit. 12, § 2003.1(C). That statute provided that all inmates desiring to proceed in forma pauperis had to submit certificates stating the amount of money on deposit to the inmate's credit "in any account in the institution," and further provided that a court may deny leave to proceed in forma pauperis if the total account values exceed $200. See 1995 Okla. Sess. Law Serv. Ch. 141 § 1 (eff.Nov.1, 1995) (West) (emphasis added); Smith v. Moore, 50 P.3d 215, 218 n. 4 (Okla.2002) (quoting language of section 2003.1 as codified in 19958). These legislative amendments expressed Oklahoma's policy of "compelling a prisoner to weigh the validity of a lawsuit against the cost of pursuing it," Smith, 50 P.3d at 218, and forcing inmates to pay for all costs incurred in preparing and filing the case from the inmate's draw or mandatory savings accounts. Cf. Williams v. Austin, 890 P.2d 416, 418-19 & n. 2 (Okla.Ct.App.1994) (implicitly holding, in Open Records Act case, that mandatory savings account funds could be used to pay for the costs of obtaining copies of an inmate's criminal record needed in anticipation of filing an application for post-conviction relief). 43 Mr. Gamble and Mr. Popejoy established that their request for a disbursement from mandatory savings for fees charged by a court to copy and send their criminal records and transcripts was reasonable under section 549(A)(5) and OP-120230, thus negating any inference that they knew they were requesting money for an illegal purpose or that they had the intent to cheat or defraud anyone by making such a request. The act of making such a request simply does not provide "some evidence" to support a conviction for violating section 1541.1. 44 E. Intent to cheat and defraud. Citing Hill, 472 U.S. at 455-56, 105 S.Ct. 2768, respondent makes the novel argument that, because our review is limited to determining only whether "some evidence" supports the disciplinary conviction, mens rea (even if an element necessary to establish a violation of § 1541.1) is irrelevant. We disagree. In Hill, the Supreme Court held that, "[r]evocation of good time credits is not comparable to a criminal conviction, and neither the amount of evidence necessary to support such a conviction, nor any other standard greater than some evidence applies in this context." 472 U.S. at 456, 105 S.Ct. 2768 (citation omitted). But the Court further held that, to satisfy due process, there must be "some evidence to support the findings made in the disciplinary hearing." Id. at 457, 105 S.Ct. 2768. The Court's holding is directed toward the qualitative and quantitative character of evidence necessary to support a disciplinary conviction; it rejects the "clear and convincing" or "beyond a reasonable doubt" standards. But the Court did not imply that there need not be "some evidence" for each element necessary to establish a violation of the particular criminal statute used as the basis of a disciplinary conviction. 45 Alternatively, respondent argues that the mens rea element is supported by some evidence because Mr. Smith's 1999 memo "informed the inmate population that `only court ordered filing fees may be paid from mandatory savings.'" Aplee. Br. No. 03-6057, at 10; Aplee. Br. No. 03-6150, at 13. Mr. Smith's interpretation of section 549(A)(5) and OP-120230, however, is not necessarily correct and is certainly not the only reasonable interpretation. The statutory language, legislative history, and case precedent discussed above justify an interpretation of section 549(A)(5) that would allow use of petitioners' mandatory savings accounts consistent with their requests to withdraw funds. As a consequence, those requests are not evidence supporting a finding that petitioners intended to "cheat and defraud." Because no other evidence was presented, there was a complete failure of proof. V. Conclusion 46 We hold that no evidence supports a finding that either Mr. Gamble or Mr. Popejoy violated section 1541.1. Accordingly, no findings or evidence support a conclusion that either inmate committed a class X misconduct that could be sanctioned or disciplined. The misconduct convictions must be reversed and expunged from the inmates' records, and all earned credits revoked as a result of the convictions, and their former statuses in earning credits, must be restored. 47 The judgment of the district court is REVERSED and this matter is REMANDED for issuance of the writ. Notes: 1 After examining the briefs and appellate record, this panel has determined unanimously that oral argument would not materially assist the determination of these appealsSee Fed. R.App. P. 34(a)(2); 10th Cir. R. 34.1(G). The cases are therefore ordered submitted without oral argument. 2 Mr. Calbone, warden of Great Plains, was named as the respondent by both Mr. Gamble and Mr. Popejoy. In Mr. Popejoy's case, because the Oklahoma DOC bears responsibility for the custody and supervision of inmates housed in private prisons, the magistrate judge substituted Ron Ward, the Director of the DOC, as the proper respondent. R. No. 03-6150, Doc. 14 at 1 n. 1. The Oklahoma Attorney General represented both respondents, and we refer only to "respondent" in this opinion 3 Section 549 "enumerates the powers and duties of the State Board of Corrections,"Webb v. Maynard, 907 P.2d 1055, 1057 (Okla. 1995), and creates statutory limits on the collection, apportionment, and disbursement of wages paid for inmate employment. See id. 4 Class X offenses form the most serious class of prison misconduct and, besides disciplinary convictions for violation of specific city, state, or federal laws, include offenses like rioting; taking over a part of the prison; resisting apprehension within the prison; selling drugs; threatening prison security; killing, raping, or intentionally harming others; setting fires; possessing weapons, firearms or drugs; and escape. OP-060125 Attach. A. Only class X offenses may result in the maximum 365-day loss of earned creditsId. at p. 8. 5 The designee apparently was quoting the language from Mr. Smith's memo, which quotes the 1999-2001 version of DOC policy OP-120230 at paragraph C.2. Aplee. Br. No. 03-6150, Ex. C. That paragraph explains the methodology for cash disbursements and is similar to the current versionSee OP-120230, found at http://www.doc.state. ok.us/Offtech/op120230.htm. 6 OP-060125 provides that, "`Acts Constituting Rule Violation' (Attachment A ...) of this procedure defines all inmate/offender disciplinary rule violations and specifies the allowable range of disciplinary sanctions authorized by the Oklahoma Department of Corrections for each violation." http:// www.doc.state.ok.us/Offtech/op060125.htm 7 "Actions brought pursuant to the Oklahoma Uniform Post Conviction Procedure Act are criminal actions."Moore v. Gibson, 27 P.3d 483, 485 (Okla.Crim.App.2001). 8 Section 2003.1(C) was amended in 2002 to delete the language specifying which accounts could be considered for pauper status, but, in the same legislation, the legislature concurrently passed another law that specifically sets forth what income and assets a court may consider in determining pauper status, including inmate trust fund accounts. 2002 Okla. Sess. Law Serv. Ch. 402, §§ 6 & 10 (eff. July 1, 2002); Okla. Stat. tit. 57, § 566.3(B)(3)(h) 48 HENRY, Circuit Judge, concurring. 49 I fully concur in the majority opinion: Great Plains Correctional Facility has failed to provide any evidence that Mr. Gamble or Mr. Popejoy acted with the requisite "intent to cheat and defraud." OKLA. STAT. tit. 21, § 1541.1. Mr. Gamble and Mr. Popejoy seem to have quite honestly, and I suggest, reasonably, believed that their disbursement requests were permissible under OKLA. STAT. tit. 57, § 549(A)(5). As the panel acknowledges, "the inmates' understanding that requesting disbursement from their mandatory savings for the costs of obtaining their transcripts was a legal request is justified under Oklahoma case precedent and legislative history." Maj. Op. at 1030; see also OKLA. STAT. tit. 28, § 31 (listing the charge for "[m]aking [a] copy of an instrument of record or on file" as an example of a "fee" to be collected by the district court); Cumbey v. State, 699 P.2d 1094, 1096 (Okla. 1985) (denying inmates' request to proceed IFP and directing "the Department of Corrections to release the sum of fifty ($50) dollars for the costs of filing this appeal; and the sum of thirty ($30) dollars ... for costs of assembling the record on appeal") (emphasis added). After all, paying court costs is a good thing, as is reinforcing the reality that one must, by and large, pay one's own way. 50 The lack of intent to cheat and defraud is further highlighted by the fact that prison officials could simply have rejected the inmates' requests for disbursements to cover copying and transcript fees. Oklahoma Department of Corrections policy states that "[t]he appropriate staff will approve or disapprove the disbursement request and forward to [the] trust fund officer, or return to [the] inmate if not approved." OP-120230(VII)(B)(1). The panel notes that "submitting a disapproved disbursement request is not an act that constitutes a rule violation under OP-060125." Maj. Op. at 1027. I question why the staff did not simply reject the inmates' disbursement requests rather than charging them with obtaining money under false pretenses. 51 Finally, I believe that the Great Plains Correctional Facility's interpretation of the statute is simply wrong. I fail to see the harm in allowing prisoners to spend their funds on court costs and fees, whether they are associated with the filing of a case or the prosecution of it. It would make little sense to allow savings account monies to be used to file a case and then forbid their use to provide courts with materials useful in resolving that case. Indeed, it is possible that interpretations this far off the mark could raise constitutional implications concerning access to the courts. But as Mr. Gamble and Mr. Popejoy did not adequately raise the constitutionality of this interpretation, and keeping in mind that "[i]t is not the habit of the court to decide questions of a constitutional nature unless absolutely necessary to a decision of the case," Burton v. United States, 196 U.S. 283, 295, 25 S.Ct. 243, 49 L.Ed. 482 (1905), I rest my decision with the majority on the clear lack of evidence of intent in these two cases.	{ "pile_set_name": "FreeLaw" }
329 Md. 1 (1992) 616 A.2d 1275 RICKY R. WILLIAMS v. STATE OF MARYLAND. No. 7, September Term, 1992. Court of Appeals of Maryland. December 23, 1992. Thomas C. Hill (Shaw, Pittman, Potts and Trowbridge, and Lori V. Gagne, on brief), Washington, D.C., for petitioner. David P. Kennedy, Asst. Atty. Gen. (J. Joseph Curran, Jr., Atty. Gen., on brief), Baltimore, for respondent. Argued before MURPHY, C.J., and ELDRIDGE, RODOWSKY, McAULIFFE, CHASANOW, KARWACKI, and ROBERT M. BELL, JJ. MURPHY, Chief Judge. This case involves Maryland's "Drug Kingpin Act" enacted by ch. 287 of the Acts of 1989, now codified within the provisions of Maryland Code (1992 Repl.Vol.), Art. 27, § 286. Section 286(a)(1) makes it unlawful for any person "[t]o manufacture, distribute, or dispense, or to possess a controlled dangerous substance in sufficient quantity to reasonably indicate under all circumstances an intent to manufacture, distribute, or dispense, a controlled dangerous substance." Section 286(g)(2) provides that if any person violates § 286(a)(1), the violation involves inter alia "448 grams or more of cocaine," and the person is a "drug kingpin," that individual is subject to the penalties set forth in § 286(g). That section defines a "drug kingpin" as a person "who occupies a position of an organizer, supervisor, financier, or manager as a coconspirator in a conspiracy to manufacture, distribute, dispense, bring into, or transport in the State controlled dangerous substances." Section 286(g)(2) provides that "[a] drug kingpin who conspires to manufacture, distribute, dispense, bring into, or transport in the State controlled dangerous substances" in amounts proscribed by § 286(f)(1) is guilty of a felony and on conviction is subject to: "(i) Imprisonment for not less than 20 nor more than 40 years without the possibility of parole, and it is mandatory on the court to impose no less than 20 years' imprisonment, no part of which may be suspended; and (ii) A fine of not more than $1,000,000." I. In late February 1990, the Maryland State Police launched an undercover narcotics investigation in Salisbury. It targeted the activities of one Gary Williams (Gary), the suspected head of a drug distribution network in Salisbury, who was the older brother of petitioner Ricky Williams (Ricky). In the conduct of its investigation, the police operated from a fictitious pawnshop storefront known as "Big Bubba's." State Trooper Ike Jackson (Jackson) posed as a drug dealer and purchaser at Big Bubba's; the shop was equipped with video surveillance cameras. On February 28, 1990, by arrangement of a third party, Jackson met Gary at Big Bubba's. Gary identified himself as head of a local drug organization, named one Maurice ("Sincere") Bomar as his lieutenant, and indicated that he employed several others. Gary told Jackson that he could supply him with cocaine, while expressing an interest in buying guns and marijuana from Jackson. Jackson offered to purchase two ounces of cocaine from Gary, and they agreed to complete the sale by March 7. On March 2, Gary and Jackson met again at Big Bubba's. Gary produced slightly more than two ounces of cocaine "to show his good faith," for which Jackson paid $2,000. Their relationship thus established, Jackson told Gary he wanted to purchase four more ounces. On March 15, Gary phoned Jackson to offer the four ounces that Jackson desired. He told Jackson that the cocaine was of "top shelf quality," and that on March 17 he would send Sincere to Big Bubba's to consummate the sale. Gary also suggested that it was time to plan some serious purchases, and in that vein he called Jackson the next day from New York City to say that he could sell Jackson two kilos of cocaine. The following day, March 17, Sincere delivered the four ounces of cocaine to Jackson at Big Bubba's. Gary, phoning Jackson from New York to determine whether Sincere had arrived, again expressed interest in obtaining marijuana. Jackson reiterated his willingness to trade guns and marijuana for cocaine. Jackson and Gary tentatively agreed to yet another deal, their third, in which Jackson would receive one kilo of cocaine in exchange for ten pounds of marijuana, five guns, and $12,000. Meanwhile, Jackson and Sincere haggled over the purchase price of the four ounces and found it necessary to call Gary in New York. After Gary resolved the dispute, he and Jackson agreed to complete the third sale by March 24. On March 22, Gary stopped at Big Bubba's to inquire whether Jackson had liked the four ounces. Jackson answered affirmatively, and they renegotiated the third sale to Jackson to encompass two kilos of cocaine in return for fifteen pounds of marijuana, five weapons, and $23,000. On March 23, Gary explained to Jackson at Big Bubba's that he was having some difficulty obtaining the cocaine; he offered to purchase a lesser quantity of the guns and marijuana for cash. Jackson rejected this proposal, making the guns and marijuana available only as part of a sale of cocaine. On March 30, not having heard from Gary, Jackson and Edward Toatley (Toatley), a second undercover officer posing as Jackson's lieutenant, located Gary in Salisbury, at which time Gary said that while he still wanted to buy guns, he was no longer interested in purchasing marijuana. Jackson, Toatley, and Gary then undertook to renegotiate the terms of the transaction. Gary suggested to Jackson that Toatley, Sincere, and a female drug carrier of Jackson's choice travel by train to New York, where at Penn Station the female "mule" would be outfitted with one kilo of cocaine in return for $28,000. Jackson rejected this proposal. Gary then offered that, for an additional $5,000 "turnpike tax," his younger brother Ricky would bring the "sugar" to Salisbury. Jackson accepted this offer, at which point Gary called New York and left a message for Ricky to call him back at Big Bubba's. Ricky returned Gary's call within a half hour. After he and Gary spoke, Gary told Jackson that Ricky wanted $34,000 to bring the cocaine to Salisbury. Jackson agreed. For the next six or seven hours, Jackson, Toatley, Gary, and Sincere awaited Ricky's arrival. Ricky entered Big Bubba's at approximately 1:37 a.m. on March 31. He asked for an additional $500 to pay Keith Walker, an individual who had driven him from New York. Ricky dropped this demand when Gary instructed him to "chill out." Toatley then handed Ricky $34,000 in cash, which Ricky counted and hid in his car. Ricky returned with the kilo of cocaine, which he handed to Gary. At that time, he told Jackson that in the future Jackson could buy cocaine directly from him. With the assistance of a SWAT team hidden in the back of the store, Jackson and Toatley then arrested Ricky, Gary, Sincere, and Walker. On April 25, 1990 Ricky was indicted in a ten-count indictment, including two conspiracy counts and two counts of being a "drug kingpin" under the Maryland Drug Kingpin statute. On June 8, Ricky moved to dismiss the two kingpin counts on the ground that the kingpin statute was unconstitutionally vague. The motion was denied. On August 21, the State responded to Ricky's motion for a bill of particulars, naming Gary and Ricky as the only conspirators in the conspiracy and drug kingpin counts. Ricky was tried before a jury in the Circuit Court for Wicomico County on September 24 and 25, 1990. The court (Simpson, J.) granted Ricky's motion for acquittal on two of the ten counts, including the second kingpin count (the conspiracy to transport), on the ground that they were duplicative of other counts (e.g., the conspiracy to distribute). The jury convicted Ricky on the other eight charges, including the remaining kingpin and conspiracy counts.[1] Consistent with the provisions of § 286(g)(2), the court sentenced Ricky to twenty-five years' imprisonment, without the possibility of parole, and ordered him to pay a $10,000 fine. The court also sentenced Ricky to a concurrent thirty-year sentence on his convictions under the remaining counts. Ricky appealed to the Court of Special Appeals, contending only that Maryland's Drug Kingpin Act was unconstitutionally vague and, secondly, that the evidence at trial was legally insufficient to sustain his drug kingpin conviction. That court affirmed. Williams v. State, 89 Md. App. 685, 599 A.2d 848 (1991). We granted certiorari to consider the significant issues raised in the case. II. Ricky first argues that the statute is unconstitutionally vague for failure to define who qualifies as an "organizer, supervisor, financier, or manager" in a drug conspiracy. He also posits that even if the statute is adequately clear on its face, it is vague as applied to the facts of this case because it is legally impossible under the statute for both persons in a two-person conspiracy to be drug kingpins. As classically stated, the void-for-vagueness doctrine requires that a penal statute "be sufficiently explicit to inform those who are subject to it what conduct on their part will render them liable to its penalties." Connally v. General Const. Co., 269 U.S. 385, 391, 46 S.Ct. 126, 127, 70 L.Ed. 322 (1926). The vagueness doctrine, rooted in the fourteenth amendment's guarantee of procedural due process, stems from two ideas. The first is that one should not "be required at peril of life, liberty, or property to speculate as to the meaning of penal statutes. All are entitled to be informed as to what the State commands or forbids." Lanzetta v. New Jersey, 306 U.S. 451, 453, 59 S.Ct. 618, 619, 83 L.Ed. 888 (1939). We have said that this is the "fair notice principle, ... that persons of ordinary intelligence and experience be afforded a reasonable opportunity to know what is prohibited, so that they may govern their behavior accordingly." Bowers v. State, 283 Md. 115, 121, 389 A.2d 341 (1978). In determining whether a statute satisfies this principle, the touchstone is whether persons "of common intelligence must necessarily guess at [the statute's] meaning." Broadrick v. Oklahoma, 413 U.S. 601, 607, 93 S.Ct. 2908, 2913, 37 L.Ed.2d 830 (1973). The second rationale for the vagueness doctrine, which the Supreme Court deems "more important," Kolender v. Lawson, 461 U.S. 352, 358, 103 S.Ct. 1855, 1858, 75 L.Ed.2d 903 (1983), is to ensure that criminal statutes provide "legally fixed standards and adequate guidelines for police, judicial officers, triers of fact and others whose obligation it is to enforce, apply and administer the penal laws." Bowers, supra, 283 Md. at 121, 389 A.2d 341. Without such standards, penal laws would "impermissibly delegate[] basic policy matters to policemen, judges, and juries for resolution on an ad hoc and subjective basis, with the attendant dangers of arbitrary and discriminatory application." Grayned v. City of Rockford, 408 U.S. 104, 108-09, 92 S.Ct. 2294, 2299, 33 L.Ed.2d 222 (1972). In order to satisfy this second rationale, therefore, a statute must eschew arbitrary enforcement in addition to being intelligible to the reasonable person. In contending that the Maryland Drug Kingpin Act violates these principles, and is therefore unconstitutionally vague, Ricky argues that it is unclear who qualifies as an "organizer, supervisor, financier, or manager" in a drug conspiracy. He suggests that, by giving an accomplice a trivial order or by taking the slightest initiative, even the lowliest of coconspirators could be deemed a "manager," "supervisor," or "organizer" in the conspiracy and could thus qualify as a "drug kingpin." He says that the average person cannot ascertain the upper limit of one's conduct before becoming a drug kingpin, and that the statute invites law enforcement officials to wield its enhanced penalties selectively. We do not agree. Relative to the usual vagueness challenge, Ricky's assertion is clearly without merit. The Supreme Court "has long recognized that the constitutionality of a vague statutory standard is closely related to whether that standard incorporates a requirement of mens rea." Colautti v. Franklin, 439 U.S. 379, 395, 99 S.Ct. 675, 685, 58 L.Ed.2d 596 (1979). This is because "the requirement of a specific intent to do a prohibited act ... relieve[s] the statute of the objection that it punishes without warning an offense of which the accused was unaware." Screws v. United States, 325 U.S. 91, 101-02, 65 S.Ct. 1031, 1035, 89 L.Ed. 1495 (1945) (plurality opinion). While the Maryland Drug Kingpin Act does not expressly require a specific intent to "wilfully" or "purposefully" occupy a position as an "organizer, supervisor, financier, or manager" in a drug conspiracy, the statute does, of course, impliedly necessitate a deliberate foray into some threshold of criminal drug involvement before one can reach the brink of drug kingpin status. Thus, in the same manner as specific intent statutes, the drug kingpin statute can in no way be "a trap for those who act in good faith." United States v. Ragen, 314 U.S. 513, 524, 62 S.Ct. 374, 379, 86 L.Ed. 383 (1942). See also Boyce Motor Lines v. United States, 342 U.S. 337, 340, 72 S.Ct. 329, 331, 96 L.Ed. 367 (1952) (It is not "unfair to require that one who deliberately goes perilously close to an area of proscribed conduct shall take the risk that he may cross the line."). Put another way, Ricky alleges that the Maryland Drug Kingpin statute is vague as to when a low-level drug dealer becomes a high-level kingpin. But vagueness as between degrees of illegality seems less objectionable than vagueness at the margin of legality, for the former cannot snare the unsuspecting. Ricky knew his drug dealings were proscribed; the statute did not force him to speculate at his peril as to the propriety of his conduct. Ricky's defense is therefore less compelling than the historical vagueness challenges of defendants for whom the very stigma of a criminal conviction hung in the balance. As the Supreme Court has said, "A mind intent upon willful evasion is inconsistent with surprised innocence." Ragen, supra, 314 U.S. at 524, 62 S.Ct. at 379. Ricky proceeded not uninformed of the criminality of his behavior, but merely unaware of the number of counts he might face and the number of years he might spend in prison. In any event, we conclude that the Maryland Drug Kingpin statute is not vague. In Bowers, supra, 283 Md. 115, 389 A.2d 341, we upheld against a vagueness challenge a statutory definition of child abuse as "cruel or inhumane treatment." We observed that "[a] statute is not vague when the meaning of the words in controversy can be fairly ascertained by reference to judicial determinations, the common law, dictionaries, treatises or even the words themselves, if they possess a common and generally accepted meaning." See also Rose v. Locke, 423 U.S. 48, 50, 96 S.Ct. 243, 244, 46 L.Ed.2d 185 (1975) ("Even trained lawyers may find it necessary to consult legal dictionaries, treatises, and judicial opinions before they may say with any certainty what some statutes may compel or forbid."). The Maryland Drug Kingpin statute satisfies this standard at its most basic level, for the meanings of the statute's operative words can be "fairly ascertained by reference to ... the words themselves." The terms "organizer," "supervisor," "financier," and "manager" are not vague. They are not technical terms; rather, they are common words with well understood meanings. As these words are defined by Webster's Third New International Dictionary (1981), an "organizer" is "one who organizes" (to "organize" is "to unify into a coordinated functioning whole; ... to arrange by systematic planning and coordination of individual effort"). A "supervisor" is "one that supervises a person, group, department, organization, or operation" ("supervise" is "to ... oversee with the powers of direction and decision the implementation of one's own or another's intentions"). A "financier" is "a large scale investor." A "manager" is "one that manages, a person that conducts, directs, or supervises something." Because these definitions comport with everyday understandings of the words they define, the drug kingpin statute employs language accessible to persons of common intelligence; they need not guess at the statute's meaning. The statute makes clear, in ordinary language, that those who occupy positions of importance in drug conspiracies will be subject to heightened punishment. Nor does the statute foster selective prosecution, since its terms are as plain to law enforcement officials as to the general public. The statute does not become unconstitutionally vague merely because it may not be perfectly clear at the margins who qualifies as an "organizer," "supervisor," "financier," or "manager." See Eanes v. State, 318 Md. 436 at 459, 569 A.2d 604 (1990) ("A law is not vague simply because it requires conformity to an imprecise normative standard."). Rather, the drug kingpin law plainly provides fair warning of serious consequences to drug conspirators who would assume the posture of "an organizer, supervisor, financier, or manager," as those words are understood in common parlance. Ricky argues that the statute is vague when considered against the corresponding federal drug kingpin law and those of other states. The federal statute provides in part: "[A] person is engaged in a continuing criminal enterprise if (1) he violates any provision of this subchapter or subchapter II of this chapter the punishment for which is a felony, and (2) such violation is part of a continuing series of violations of this subchapter or subchapter II of this chapter (A) which are undertaken by such person in concert with five or more other persons with respect to whom such person occupies a position of organizer, a supervisory position, or any other position of management, and (B) from which such person obtains substantial income or resources." 21 U.S.C. § 848(c) (1992). Ricky points to the federal requirements that the manager, organizer, or supervisor act in concert with at least five others and derive substantial income from the enterprise as evidence of the specificity with which a statute must be drawn to pass constitutional muster. Ricky claims that the federal statute, by adding these further requirements to modify and refine the statute's operative terms, demonstrates the vagueness of Maryland's sole requirement that a person be an "organizer, supervisor, financier, or manager." This argument mistakes breadth for vagueness. By stiffening the penalties for those who act in the management ranks of drug conspiracies, without regard to the number or income of coconspirators, the Maryland statute simply constructs a wider net than that enacted by Congress. While the breadth of the Maryland formulation necessarily forfeits some of the precision of the narrower federal statute, this does not render the Maryland law vague. Otherwise, all broad laws attempting to punish a range of criminal conduct could be susceptible to vagueness challenges insofar as they could be drawn more narrowly and precisely. As the Supreme Court said in Colten v. Kentucky, 407 U.S. 104, 110, 92 S.Ct. 1953, 1957, 32 L.Ed.2d 584 (1972): "The root of the vagueness doctrine is a rough idea of fairness. It is not a principle designed to convert into a constitutional dilemma the practical difficulties in drawing criminal statutes both general enough to take into account a variety of human conduct and sufficiently specific to provide fair warning that certain kinds of conduct are prohibited." In other words, the vagueness doctrine does not require absolute precision or perfection. See United States v. Powell, 423 U.S. 87, 94, 96 S.Ct. 316, 321, 46 L.Ed.2d 228 (1975) ("The fact that Congress might, without difficulty, have chosen `[c]learer and more precise language' equally capable of achieving the end which it sought does not mean that the statute which it in fact drafted is unconstitutionally vague."). Since the Maryland Drug Kingpin Act makes its proscriptions readily discernible to both the general public and law enforcement officials, then even though it may be broad and imperfect, it is not for that reason unconstitutionally vague. Ricky next suggests that the statute is vague, as applied to the facts in this case, because as only he and Gary were named as conspirators in the conspiracy underlying his drug kingpin conviction, it is impossible for both to be an "organizer, supervisor, financier, or manager" in the conspiracy. This is so, he argues, because both parties in a two-person conspiracy cannot meaningfully "organize", "supervise," or "manage" each other.[2] The flaw in Ricky's argument is that it assumes that one must be an organizer, supervisor, or manager of elements in the conspiracy in which one is charged to satisfy the drug kingpin statute. This is not the case. Under the statute, a "`drug kingpin' means a person who occupies a position of an organizer, supervisor, financier, or manager as a coconspirator in a conspiracy to ... distribute ... or transport in the State controlled dangerous substances." There is nothing in this language requiring a defendant to organize, supervise, or manage those in the central conspiracy in order to qualify as a drug kingpin. In the instant case, even though Ricky and Gary were identified in the indictment as the sole conspirators in the central conspiracy, a jury could reasonably find, if legally sufficient evidence existed, that Ricky had organized, supervised, or managed the operation, perhaps involving others not fully apprised as to the central conspiracy and hence not central conspirators. In this manner could Ricky fall within the purview of the statute. For all of these reasons, we find no merit in Ricky's constitutional argument. See also Anderson v. State, 89 Md. App. 712, 599 A.2d 861 (1991); Allen v. State, 89 Md. App. 25, 597 A.2d 489 (1991). III. Finally, Ricky contends that even if the Maryland statute survives constitutional review, there was insufficient evidence as a matter of law to prove beyond a reasonable doubt that he served as an "organizer, supervisor, financier, or manager" in a drug conspiracy. When assessing the sufficiency of the evidence to support a jury conviction in a criminal case, "the relevant question is whether, after viewing the evidence in the light most favorable to the prosecution, any rational trier of fact could have found the essential elements of the crime beyond a reasonable doubt." Jackson v. Virginia, 443 U.S. 307, 319, 99 S.Ct. 2781, 2789, 61 L.Ed.2d 560 (1979) (emphasis in original); quoted in McMillian v. State, 325 Md. 272, 290, 600 A.2d 430 (1992); Tichnell v. State, 287 Md. 695, 717, 415 A.2d 830 (1980). This standard of review, while affording considerable deference to a jury's verdict, necessitates our focusing upon whether a rational jury could have found, based on the evidence presented, that Ricky's actions satisfied the elements which the General Assembly intended to constitute the crime of being a drug kingpin. As we have stated so often before, "in the event that ambiguity clouds the precise application of [a] statute, the cardinal rule of statutory construction is to ascertain and effectuate legislative intent." State v. Bricker, 321 Md. 86, 92, 581 A.2d 9 (1990). See also Taxiera v. Malkus, 320 Md. 471, 480, 578 A.2d 761 (1990); Harford County v. University, 318 Md. 525, 529, 569 A.2d 649 (1990); Jones v. State, 311 Md. 398, 405, 535 A.2d 471 (1988). "The language of the statute itself is the primary source of this intent; and the words used are to be given `their ordinary and popularly understood meaning, absent a manifest contrary legislative intention.'" Privette v. State, 320 Md. 738, 744, 580 A.2d 188, (1990), quoting In re Arnold M., 298 Md. 515, 520, 471 A.2d 313 (1984). See also State v. In re Patrick A., 312 Md. 482, 487, 540 A.2d 810 (1988); Tucker v. Firemen's Fund Insur. Co., 308 Md. 69, 73, 517 A.2d 730 (1986). In looking to the language of a statute, moreover, we read the words "in light of the full context in which they appear, and in light of external manifestations of intent or general purpose available through other evidence." Cunningham v. State, 318 Md. 182, 185, 567 A.2d 126 (1989). We attempt to divine legislative intent from the entire statutory scheme, as opposed to scrutinizing parts of a statute in isolation. Forbes v. Harleysville Mutual, 322 Md. 689, 697, 589 A.2d 944 (1991); Jones, supra, 311 Md. at 405, 535 A.2d 471. We may also consider "a bill's title and function paragraphs ... and other material that fairly bears on the fundamental issue of the legislative purpose or goal...." Kaczorowski v. City of Baltimore, 309 Md. 505, 515, 525 A.2d 628 (1987); see also Wynn v. State, 313 Md. 533, 539, 546 A.2d 465 (1988). The operative words of the drug kingpin statute, arguably applicable in Ricky's case, are as follows: "`drug kingpin' means a person who occupies a position of an organizer, supervisor, financier, or manager as a coconspirator in a conspiracy to ... distribute ... in the State controlled dangerous substances." The words "organizer," "supervisor," "financier," and "manager," as we have already explained, have common meanings which require no elaboration. Undeniably, however, some ambiguity creeps into the statutory terms at the margins; thus, to determine just how broadly they are to be construed, we look to the larger context of the statute and to other relevant materials to ascertain legislative intent. The operative terms "organizer, supervisor, financier, or manager" define the concept of the "drug kingpin." Indeed, the 1989 amendments to § 286 were entitled by the legislature as the "Drug Kingpin Act." Because the "Drug Kingpin" heading is the statute's focus of definition and elaboration, it is, of itself, pregnant with meaning. In bowling, the "kingpin" is the lead or front pin. The metaphor of the "drug kingpin" is therefore commonly understood to indicate one who fronts a drug trafficking network or conspiracy. The original version of the statute, as proposed, although later amended before its enactment, shared this understanding, for the "drug kingpin" label evolved from the blander statutory formulation of "a leader of a drug trafficking network." See Bill Analysis, Senate Bill 400, Senate Judicial Proceedings Committee. Another legislative source refers to "a leader or a kingpin of a drug trafficking network." Governor's Office, Briefing Document and Synopsis of the Drug Kingpin Act, Senate Bill 400/House Bill 502, 1989, 5 (emphasis added). Still another describes a "drug kingpin" as a "large-scale drug trafficker." Department of Legislative Reference, Legislative Session Review, 1989, 66-67. It is plain to us that the phrase "drug kingpin" was intended by the legislature to apply to a leader of a drug trafficking network. It thus follows that the words "organizer," "supervisor," "financier," and "manager," read in the context of the statute, were not intended to encompass a person occupying a role substantially less than that of a large-scale drug trafficker. In other words, in looking to the larger context of the statute (which prescribes lesser penalties for non-kingpins); at the bill's title; and at external evidence in order to chart the blurry perimeters of the statute's operative terms, we believe that the legislature intended the statute's heightened penalties for "drug kingpins," or leaders, to have limited application to those acting as organizers, supervisors, financiers, or managers of large-scale drug trafficking operations. We glean this construction from an attempt to harmonize the drug kingpin provisions with the statutory scheme as a whole. Forbes, supra, 322 Md. at 697, 589 A.2d 944; Scott v. State, 297 Md. 235, 245, 465 A.2d 1126 (1983) ("[A] statute should be construed so that all of its parts are given effect and harmonized if possible...."). A. In affirming Ricky's conviction of being a drug kingpin, the Court of Special Appeals noted his argument that his only involvement in the drug conspiracy was to transport the cocaine from New York to Salisbury and that this was legally insufficient evidence to permit the jury to consider the drug kingpin count that he conspired with Gary to distribute the illegal drugs. The intermediate appellate court noted Ricky's further argument that he was not involved in the conspiracy until a month after it began; that his brother Gary was the kingpin and the target of the police investigation; and that his participation was limited to the role of a courier. The Court of Special Appeals first observed that Ricky was mistaken in believing that he could not be convicted as a kingpin if his role was subordinate to that of another actor in the conspiracy. The court said that nothing in the statute "dictates that a conspiracy can have only one kingpin." 89 Md. App. at 700, 599 A.2d 848. In this regard, the court noted that the statutory language encompassed "the possibility of a joint endeavor: among the definition section's meanings is a `manager as a coconspirator.'" Id. (emphasis in original). The intermediate appellate court concluded as follows: "The evidence amply supports the idea that Ricky acted in concert with Gary as a coconspirator. Jackson and Toatley gave the purchase money directly to Ricky; Ricky counted it; Ricky told Jackson and Toatley that they could deal directly with him; Ricky took the money and hid it in the car in which he transported the drugs. Gary's assertions also support the conclusion that Ricky was his coconspirator and an important participant in the conspiracy: Ricky set the sale price; Gary told Jackson and Toatley that he (Gary) was the intermediary in arranging an exchange between them and Ricky, and that he did not control the deal. Moreover, as an expert witness in narcotics enforcement, Jackson testified that mules have no control over the drugs they carry, and are paid $500 to transport drugs from New York. Because Ricky had complete dominion and control over the $34,000 paid to him for the drugs, Jackson concluded that Ricky was not merely a mule. Jackson also testified that Gary told him that Gary wasn't profiting from this transaction: `[h]e just made the arrangements for me to purchase the kilo of cocaine from or through his brother.' "In sum, the evidence readily supports the theory that Ricky managed or supervised an illicit drug operation. This operation could have been orchestrated by Gary's organization and limited to arranging to bring the cocaine from New York to Maryland. Alternatively, it could be inferred that Ricky was Gary's New York connection, prepared to assist in the transfer Gary initially proposed to Jackson in which Toatley and Sincere would travel to New York to pick up the drugs. In either case, the jury reasonably could conclude that Ricky was responsible for an important and necessary phase of the operation: moving the cocaine from New York and delivering it to its Maryland purchaser. We therefore affirm Ricky's conviction under the drug kingpin statute." Id. at 700-01, 599 A.2d 848. B. At argument before us, the State espoused the view that the statute should apply to anyone whom the words "organizer, supervisor, financier, or manager" can possibly be construed to reach, i.e., not merely to "drug kingpins" but to any "non-menial drug conspirator." This construction, we think, is plainly at odds with the legislatively intended reach of the statute. We must read the words "organizer," "supervisor," "financier," and "manager" in light of the independent connotations of the word "kingpin." To do otherwise would be to impermissibly render surplusage the crucial words "Drug Kingpin," by which the statute is entitled, as well as the concept the disputed words purport to modify. See Scott, supra, 297 Md. at 245-46, 465 A.2d 1126. We thus must consider whether Ricky's actions, viewing the evidence in the light most favorable to the State, amount to participation as an organizer, supervisor, financier, or manager in the drug conspiracy with Gary in the sense contemplated by the legislature. Before Ricky involved himself in the conspiracy underlying his drug kingpin conviction, the State Police had been targeting Gary, Ricky's brother, for over a month. Gary had told Jackson that he was the head of the drug distribution organization and that he employed others in the organization. He had spoken or met with State Trooper Jackson no fewer than ten times before Jackson heard of Ricky. Gary and Jackson had arranged and completed two independent drug deals, without Ricky's participation, and had agreed upon terms of a third. Without first consulting Ricky, Gary volunteered Ricky's services to transport the drugs to Salisbury from New York as to which Ricky agreed by return phone call. Ricky's role then consisted, in its entirety, of the following: (1), agreeing to and transporting the drugs for Gary and Jackson's third deal to Salisbury; (2) negotiating the final purchase price of $34,000; (3) engaging a driver to transport him and the drugs to Salisbury; (4) receiving and counting Jackson's money; (5) secreting that money in his car; and (6) advising Jackson that he could be directly contacted for further sales. On the record before us, we think the trial court erred in submitting the case to the jury on the drug kingpin count. The evidence showed that Ricky was more than a "mule" or mere courier of the drugs from New York to Salisbury. While he was an important cog in effectuating the third cocaine sale which Gary had arranged with Jackson, the evidence simply does not permit a rational factfinder to conclude, beyond a reasonable doubt, that Ricky's participation amounted to that of an organizer, a supervisor, or manager within the contemplation of the statute. On the contrary, the evidence showed that Gary, who was later convicted of being a drug kingpin, orchestrated the transaction in the course of which he offered Ricky's assistance to transport the drugs even before he had consulted with Ricky. According to the direct evidence, Ricky's involvement was limited to approximately six hours in which he obtained the drugs in New York and had them driven to Salisbury where he completed the sale and accepted the money. That Ricky may have, in Gary's presence, negotiated the final purchase price and accepted the money does not, without more, elevate his status to that of an "organizer," "supervisor," or "manager" in the conspiracy. It was Gary, not Ricky, who the evidence showed arranged the third sale, as well as the earlier sales. That Gary, not Ricky, was the sole "kingpin" in the criminal episode is supported by the evidence that Gary instructed Ricky to "chill out" when Ricky tried to extract a larger final purchase price. As we see it, the jury could not, beyond a reasonable doubt, rationally infer from the direct evidence that because Ricky may have acted as Gary's source, and procured Walker to drive him to Salisbury, that he was a coconspirator in a conspiracy to distribute drugs, either as an organizer, supervisor, or manager. Nor did the evidence that Ricky told Jackson that Jackson could deal directly with him, and that Gary told Jackson that he was not profiting from the third sale, permit the jury to draw a rational inference that Ricky was a "drug kingpin" under the statute. As a convicted criminal conspirator, drug courier, drug possessor, and drug dealer, Ricky was lawfully sentenced to thirty years in prison. His conviction for being a "drug kingpin," however, was improper and must be reversed. JUDGMENT OF THE COURT OF SPECIAL APPEALS AS TO COUNT 1 OF THE INDICTMENT REVERSED; CASE REMANDED TO THAT COURT WITH INSTRUCTIONS TO REMAND THE CASE TO THE CIRCUIT COURT FOR WICOMICO COUNTY WITH DIRECTIONS TO VACATE THE PETITIONER'S CONVICTION FOR BEING A "DRUG KINGPIN" UNDER COUNT 1 OF THE INDICTMENT. COSTS IN THIS COURT AND IN THE COURT OF SPECIAL APPEALS TO BE PAID BY WICOMICO COUNTY. NOTES [1] The drug kingpin count of the indictment under which Ricky was convicted charged that from February 28 through March 31, 1990, Ricky occupied "a position of an organizer, supervisor, [and] financier" in a conspiracy with Gary Williams to distribute cocaine in the amount of 448 grams or greater. The conspiracy count of which Ricky was convicted charged that between these dates Ricky conspired with Gary Williams to distribute cocaine. The gist of a conspiracy is an agreement between two or more persons to commit a crime. The crime is complete when the unlawful agreement is reached, and no overt act in furtherance of the agreement need be shown. See Apostoledes v. State, 323 Md. 456, 461-62, 593 A.2d 1117 (1991). [2] Gary Williams was also indicted for being a drug kingpin in connection with the same transactions that resulted in Ricky's conviction for the same offense. Gary was convicted at a separate trial a week following Ricky's conviction.	{ "pile_set_name": "FreeLaw" }
80 N.J. Super. 339 (1963) 193 A.2d 697 HUDSON COUNTY NATIONAL BANK, A NATIONAL BANKING ASSOCIATION, PLAINTIFF, v. THE PROVIDENT INSTITUTION FOR SAVINGS IN JERSEY CITY, A NEW JERSEY SAVINGS BANK, THE HOWARD SAVINGS INSTITUTION AND PLAINFIELD SAVINGS BANK, DEFENDANTS AND DEFENDANTS-INTERVENORS. Superior Court of New Jersey, Chancery Division. Decided September 9, 1963. 341 Messrs. Milton, Keane & DeBona (Mr. John Milton, Jr. of counsel), attorneys for plaintiff. Mr. Israel Spicer, attorney for amicus curiae New Jersey Bankers Association. Messrs. Wilentz, Goldman & Spitzer (Mr. Frederick R. Becker of counsel), attorneys for defendant The Provident Institution for Savings in Jersey City. Messrs. Pitney, Hardin & Kipp (Messrs. Roger C. Ward and William H. Osborne, Jr. of counsel), attorneys for defendants-intervenors The Howard Savings Institution and Plainfield Savings Bank. Messrs. Darby & McDonough (Mr. Robert F. Darby of counsel), attorneys for amicus curiae Savings Bank Association. PASHMAN, J.S.C. Plaintiff The Hudson County National Bank, a national bank doing business in New Jersey, instituted this action against defendant The Provident Institution for Savings in Jersey City, a mutual savings bank, seeking to permanently enjoin and restrain Provident from offering or maintaining demand accounts subject to withdrawal by check by its depositors. In addition, plaintiff also sought an adjudication declaring the practice of maintaining demand accounts, engaged in by certain mutual savings banks, to be ultra vires 342 for all savings banks under the Banking Act of 1948, N.J.S.A. 17:9A-1 et seq. Shortly after this action was commenced, defendant Provident was joined by The Howard Savings Institution and the Plainfield Savings Bank (defendants-intervenors), both mutual savings banks. The three "defendants" contended that the practice of the state mutual savings banks in maintaining demand accounts subject to withdrawal by check was and is "necessary and convenient" to the carrying out of the business of savings banks, and that the maintenance of demand accounts was a "usual custom" of savings banks. Defendants then pointed to the following sections of the Banking Act, arguing that the conclusion was inescapable that the defendants' practice of maintaining demand accounts was legislatively condoned: "Every bank and savings bank shall, subject to the provisions of this act, have the following powers, whether or not such powers are specifically set forth in its certificate of incorporation: * * * * * * * * (12) to exercise all incidental powers, not specifically enumerated in this act, which shall be necessary or convenient to carry on the business of the bank or savings bank. * * " (Emphasis added) N.J.S.A. 17:9A-24 (12) "In addition to the powers specified in [17:9A-24], every savings bank shall, subject to the provisions of this act, have the following powers, whether or not such powers are specifically set forth in its certificate of incorporation: (1) to receive money on deposit, to be repaid, upon such terms, not inconsistent with this act, as may be agreed upon between the depositor and the savings bank, according to the usual custom of savings banks." (Emphasis added) N.J.S.A. 17:9A-26(1). Plaintiff, together with the New Jersey Bankers Association which filed a brief as amicus curiae, contended, inter alia, that the "necessary or convenient" clause of N.J.S.A. 17:9A-24(12) refers to incidental powers which do not include the maintenance of checking accounts and, therefore, the mere necessity or convenience for demand accounts cannot provide the justification for the savings banks' maintaining them. Additionally, plaintiff maintained that the practice of 343 the defendant and other savings banks in offering demand accounts to their customers was not a "usual custom" of savings banks, and that in any case a comprehensive study of the Banking Act discloses a manifest legislative intent to prohibit savings banks from providing demand deposits subject to withdrawal by check. From an historical standpoint, defendant Provident, which received its charter in 1839 and commenced business in 1843, is the oldest mutual savings bank still in existence in this State. Only the Newark Savings Fund Association, which was incorporated in 1828 and which is no longer in business, is older than Provident in terms of initial legislative creation. Two thirds of all mutual savings banks in the county and in the State of New Jersey were chartered between 1850 and 1880. The last charter to be issued in this State was to the Germania Association of Elizabeth in 1900 which, on July 31, 1947, converted from a savings association to a savings bank, taking the name of Elizabeth Savings Bank, which it bears today. All of the parties agree that mutual savings banks, which are managed by a board of trustees and owned by their depositors, were originally designed to serve as a depository for the earnings and savings of the working people and to encourage thrift and conservation among the members of that class. As our highest court noted as recently as 1960 in the case of Application of Howard Savings Institution of Newark, 32 N.J. 29 (1960): "A mutual savings bank is a different type of financial institution from a commercial bank. Its purpose has frequently been stated as encouragement of thrift by mutuality of ownership. It has no stockholders. The profits from its operations not retained for surplus are divided among its depositors in the form of percentage dividends periodically declared, popularly referred to as `interest.'" (32 N.J., at p. 39) See also Commercial Trust Co. of N.J. v. Hudson Bd. of Taxation, 86 N.J.L. 424 (Sup. Ct. 1914), ("Savings banks are quite different from ordinary banks of discount and deposit, 344 and trust companies. They are engaged in a different business, not primarily for the making of money, but rather for the purpose of enabling people of small means to combine their small wages and by careful investments in restricted securities earn a moderate rate of interest. * "); and Mercantile National Bank of New York v. Mayor, etc., of the City of New York, 121 U.S. 138, 7 S.Ct. 826, 30 L.Ed. 895 (1887), ("No one can suppose for a moment that savings banks come into any possible competition with the national banks of the United States. They are, what their name indicates, banks of deposit for the accumulation of small savings belonging to the industrious and thrifty."). Despite the relatively narrow nature of early mutual savings banks, the passage of the years has tended to change and broaden the banking services offered by these banks to their depositors. Indeed, the testimony of the various banking experts during the trial of this matter very clearly established that at the time of the Banking Act revision in 1948, six of this State's 24 mutual savings banks (Bloomfield Savings, Howard Savings, Hudson Savings, Montclair Savings, Plainfield Savings and United States Savings) maintained demand deposits of different types for their depositors in the following amounts: Name Number of Branches Amount (in thousands) Bloomfield Savings 1 $2,676 Howard Savings 2 346 Hudson City Savings 2 2,127 Montclair Savings - 891 Plainfield Savings - 217 United States Savings - 112 _____________________ ____ ______ Totals 6 main offices 5 branches $6,369 By 1960 the number of mutual savings banks with demand deposit liabilities increased to ten, as reflected in the following schedule: 345 Name Number of Branches[]Amount (in thousands) Bloomfield Savings 2 $5,381 Howard Savings 6 512 Hudson City Savings 3 6,083 Montclair Savings - 1,512 Orange Savings - 167 Plainfield Savings 1 1,149 Provident Savings 3 198 Somerville Savings - 134 Union County Savings 1 204 United States Savings 5 1,569 _____________________ _____ _______ Totals 10 main offices 21 branches $16,909 To reiterate, in 1948 there were 24 mutual savings banks in New Jersey having an aggregate of seven branch offices. Of these 31 offices, 11 offered a checking account service of some nature. Of the 24 main banking institutions, six offered checking accounts, and of those six, three had one or more branches. Thus, 25% of the 24 savings banks offered this service and, with their branches, 35% of the total mutual savings bank facilities did so. The question remains, however, does this percentage support the conclusion that the maintenance of demand accounts subject to withdrawal by check was a "usual custom" of savings banks within the purview of N.J.S.A. 17:9A-26(1), supra? The testimony of the expert witnesses for both sides did not, in my opinion, provide any conclusive basis upon which to resolve the main issue of "usual custom." As might be expected, plaintiff proposed that any activity having less than 50% bank participation could not be the basis for a usual custom. Plaintiff did feel, however, that 75% was a more realistic measuring rod for determining whether or not a banking practice was in accord with the statutory concept. Defendant, on the other hand, took a different approach, arguing that familiarity of the practice was the keynote; that 346 it was neither rare nor unique and that it was an appreciable and substantial characteristic of savings banks in this State. Defendant also maintained that the mere fact that a majority of savings banks did not provide checking accounts did not detract from its "customary" character, since this was merely a matter of personal choice and was not due to any assumed unlawfulness. Neither plaintiff nor defendant offered any evidence tending to establish that the Legislature's use of the word "custom" in N.J.S.A. 17:9A-26(1) was made with a conscious knowledge that a numerical minority of mutual savings banks in this State maintained checking account services. Furthermore, to engage in supposition as to whether the Legislature considered the practice in the light of the several well-entrenched judicial definitions of "custom" is virtually impossible, if not unpermissive. The utter absence of judicial precedent in this State, both prior and subsequent to the promulgation of the Banking Act, on the question of a custom's being given legislative recognition is a serious obstacle to any inquiry into legislative intent. The detailed discussion of Chief Justice (then Judge) Weintraub in Jantausch v. Borough of Verona, 41 N.J. Super. 89 (Law Div. 1956), affirmed 24 N.J. 326 (1957), was argued by both sides. The question there involved was whether beauty culture was a "customary" home occupation under a municipal zoning ordinance which permitted "home occupations incidental to * * * use as a residence," and is of little aid in the instant context if only for the reason that the Jantausch case must be considered in the light of its particular circumstances. Whether four out of ten beauty salons in a particular municipality, being located in a residential zone, makes such use "customary" has no bearing upon an inquiry as to whether the use of the words "usual custom" in N.J.S.A. 17:9A-26(1) encompasses the practice of savings banks in maintaining demand deposits subject to withdrawal by check. Even the apparent subordination of numerical prevalency in Jantausch, supra, 41 N.J. Super., at p. 100, does not, 347 of itself, support the proposition that the practice of 6 out of 24 (or 11 out of 31) savings bank facilities constitutes a "usual custom of savings banks." On the other hand, the court does not feel that the absence of imposing proof tending to demonstrate the legality of a custom compels a negative conclusion as to its existence. The basic attributes of a custom are usually stated to be: (1) antiquity or duration, see, e.g., Albright v. Cortright, 64 N.J.L. 330 (E. & A. 1900); (2) general or universal character, see, e.g., City Electric Street R. Co. v. First Nat. Exch. Bank, 62 Ark. 33, 34 S.W. 89, 31 L.R.A. 535 (Sup. Ct. 1896); (3) certainty, continuity and uniformity, see, e.g., Federal Reserve Bank v. Malloy, 264 U.S. 160, 44 S.Ct. 296, 31 A.L.R. 1261 (1924); (4) reasonableness, see, e.g., Cowles v. Sgobel & Day, 105 Misc. 561 (Sup. Ct. 1919), 173 N.Y.S. 752; (5) legality, see, e.g., Allen v. St. Louis Nat. Bank, 120 U.S. 20, 7 S.Ct. 460, 30 L.Ed. 573 (1887); (6) harmony with public policy as defined by common law, by statute or by constitutional provision, see, e.g., Zimmern v. Southern R. Co., 209 Ala. 284, 96 So. 226, 29 A.L.R. 1237 (Sup. Ct. 1923); and (7) general acquiescence in the practice. See, generally, Unkovich v. N.Y. Central R.R., 128 N.J. Eq. 377, 380, 382 (Ch. 1934). In the vast majority of cases which have dealt with the legality of a supposed custom, the courts have considered the question in a context involving a change in a rule of law, be it contract or otherwise, which would apply ordinarily in the absence of the proffered custom. Even the few cases which deal directly with a statutory recognition or use of the word "custom" are confined to recognized practices in a narrow and limited context. See, e.g., Lichter v. Land Title Guarantee & Trust Co., 150 N.E.2d 53 (Ohio C.P. 1955), affirmed 150 N.E.2d 70 (Ohio Ct. App. 1957); Polich v. Anderson-Robinson Coal Co., 227 Iowa 553, 288 N.W. 650 (Sup. Ct. 1939); Millage v. Canton Twp., 73 S.D. 26, 38 N.W.2d 755 (Sup. Ct. 1949). A comparison of the statutory law of our sister states, for the purpose of ascertaining the meaning of the term "usual 348 custom" as it is used in N.J.S.A. 17:9A-26(1), is not conclusive. Even if it be assumed, for purposes of analysis, that in using the phrase "according to the usual custom of savings banks" our Legislature meant savings banks throughout the United States (as plaintiff contends), scrutinization of the evidence offered by plaintiff reveals little in the way of interpretive aid. Plaintiff offered the official reports of the banking authorities of eight states which had, in 1948, mutual savings banks, and four states which prohibited their mutual savings banks from offering checking accounts. It also asked the court to take judicial notice of portions of the statutes of those 12 states, five others (including Alaska, which was not, of course, a state in 1948) and the United Kingdom. Of the eight states in which the practice might be controlled by custom, three definitely condoned the practice (Indiana, Maryland and Vermont), one probably did so (Connecticut), three definitely did not do so (Delaware, Maine and New Hampshire), and one could not be definitely determined (Massachusetts). With no more than the bare statutory sections and official reports, the sketchy testimony and the absence of judicial interpretation, I believe it to be presumptuous to conclude that our Legislature consciously considered the practice of other jurisdictions when enacting the Banking Act of 1948, at least insofar as N.J.S.A. 17:9A-26(1) is concerned. There is no evidence, in any event, that the Legislature did so. It appears inescapable that in order to ascertain what was meant by "usual custom," and particularly whether checking accounts were meant to be included therein, it is necessary to enlist the aid of certain recognized rules of statutory interpretation. Initially, it is quite clear that the legislative intent is not to be fractionalized, and a statute which purports to encompass such a large and vital area as the business of banks and banking should be read as a whole with reference to the system of which it is a part. See, e.g., Alexander v. N.J. Power & Light Co., 21 N.J. 373 (1956). As our Supreme 349 Court recently said in Febbi v. Bd. of Review, Div. of Employment Security, 35 N.J. 601 (1961): "It is a cardinal rule of statutory construction that the intention of the Legislature is to be derived from a view of the entire statute and that all sections must be read together in the light of the general intent of the act so that the auxiliary effect of each individual part of a section is made consistent with the whole. 2 Sutherland, Statutory Construction, 3d ed. 4812, §§ 4702, 4704 (1943); Trugman v. Reichenstein, 27 N.J. 280, 288 (1958); Petition of Sheffield Farms Co., 22 N.J. 548, 554 (1956). When the Legislature has clearly defined a term, the courts are bound by that definition. 2 Sutherland, Statutory Construction, §§ 3002, 4814 (3d ed. 1943); Eagle Truck Transport, Inc. v. Board of Review, etc., 29 N.J. 280, 289 (1959)." (at p. 606) See also Abrams v. Dept. of Civil Service of N.J., 70 N.J. Super. 559, 563 (App. Div. 1961); Walsh v. Dept. of Civil Service, 32 N.J. Super. 39, 48 (App. Div. 1954). The Banking Act of 1948 is explicit on the payment of interest on deposits. As the plaintiff points out, banks have been given express authority to receive non-interest-bearing demand deposits. N.J.S.A. 17:9A-25(4). Nowhere in the act is there any such express power given to savings banks. They may receive money on deposit, to be repaid upon agreed terms, according to their usual custom. N.J.S.A. 17:9A-26(1). They may classify depositors according to their dealings and regulate payment of interest according to the classification. N.J.S.A. 17:9A-186(A)(2). It is true, as plaintiff argues, that there are no statutory sections dealing with savings banks which can be equated with the language found in N.J.S.A. 17:9A-25(4). Is the absence of such express language indicative of a legislative intent to deny savings banks the power now exercised by a minority? Furthermore, can the present practice be reconciled with the provision of the act which apparently compels savings banks to pay interest upon deposits so that, as nearly as possible, all profits are received by the depositors? See N.J.S.A. 17:9A-186(A) (1). 350 If the Banking Act is to be read as a homogeneous whole, it would appear that the above provisions are inconsistent with the maintenance by savings banks of non-interest-bearing demand deposits. Absence of express statutory approval, in view of the other provisions noted by plaintiff, casts some serious doubt upon any assertion that the omission can be ascribed to mere oversight. The Banking Act of 1948 was the result of a comprehensive redrafting of the scope of commercial and savings bank activities. Detail and particularity are evident throughout. On the other hand, the omission of an express provision is a two-edged sword. The directness with which the Legislature dealt with commercial bank practice as to non-interest-bearing demand deposits does not stand as authority for the proposition that savings banks could not do so. An affirmative authorization to commercial banks is not, per se, a negative prohibition against savings banks. Nowhere is there any express prohibition against maintenance by the latter of demand deposits. Quite the contrary. Various sections encompass savings banks in treating demand deposits. See, e.g., N.J.S.A. 17:9A-18, 19, 27, 28, 216 to 219. Similarly, the Bank Collection Code, N.J.S.A. 17:9A-230 to 246, which was repealed in 1961 and reinstated in large part by N.J.S.A. 12A:4-101 et seq. refers to savings banks (banking institutions) in connection with demand deposits. There is an absence, in the Banking Act of 1948 and its amendments, of any clear-cut distinction between banks and savings banks from which it can be accurately concluded that the Legislature clearly pronounced a prohibition against demand deposits, interest- or non-interest bearing, in savings banks. Absent this language, the court, in construing the act, may properly utilize another very important interpretive aid, namely, legislative acquiescence in a long-standing administrative interpretation. See, e.g., In re Glen Rock, 25 N.J. 241, 250 (1957); 2 Sutherland, Statutory Construction (Harack, 3d ed.) § 5109, pp. 525-6. To apply this canon of construction, it is first necessary to review the history of the 351 savings bank practice in issue in the light of the treatment accorded it by the Department of Banking and Insurance, the agency whose responsibility it is to administer banking legislation and to regulate banking activities. Apparently, the first savings bank to offer a checking account service in this State was Hudson City Savings Bank, which inaugurated the practice about the beginning of this century. By 1929 five other savings banks offered the service, some restricted to savings depositors only and some restricted to the amount which could be deposited. Varying rates of interest were paid. In the latter part of 1928 the Deputy Commissioner of Banking and Insurance, Mr. Hilson, wrote to the president of the Bloomfield Savings Institution to inquire about a newspaper advertisement placed by that bank to the effect that a checking account service was being offered to its depositors. Mr. Hilson wanted to know "just where in the law it is provided that a savings bank is permitted to do a checking account business." In reply, the president of Bloomfield Savings informed the Deputy Commissioner that several other savings banks had such accounts and that Bloomfield had acted upon legal advice which referred to those sections of the then existing Savings Bank Act which permitted classification of depositors and payment of deposits in accordance with regulations duly adopted by the bank's board of managers. No response to this reply was forthcoming from the Bureau of Banking. In 1937 the then Deputy Commissioner, Mr. Compton, requested an opinion from the Attorney General's office "defining the right of savings banks to receive demand deposits subject to withdrawal by check." An Assistant Attorney General replied by letter that the statute, as he read it, did not empower savings banks to engage in the practice. Despite this opinion no action was taken by the Department to stop the practice. For the next 20 years, during which time the Banking Act of 1948 was enacted, the Department acquiesced in the practice. 352 In 1958 the Hudson City Savings Bank sought permission to acquire, as an incident to a merger, the demand deposits of the North Bergen Trust Company. At that time the plaintiff's chairman, Mr. Ferguson, inquired of the Deputy Commissioner whether this acquisition was proper since it meant the acceptance by a savings bank of demand deposits subject to withdrawal by check. The Department then instituted its own inquiry, seeking the opinion of the Attorney General's Office. That office submitted a memorandum opinion to the Deputy Commissioner which stated, in its essential part, that: (1) "it would not be unreasonable to conclude that the bank [Hudson City Savings] is empowered to accept demand deposits"; and that (2) "in view of the long standing administrative construction by the Department of Banking and Insurance the problem might be better resolved by an appropriate study directed to possible legislative changes rather than by legal ruling at this time." It was suggested that if an immediate legal ruling was desired, then the Commissioner should make a formal request for an opinion of the Attorney General. There is no evidence that any such formal opinion was requested. The importance of the foregoing chronology is self-evident. In Bd. of Ed. of Manchester Tp. v. Raubinger, 78 N.J. Super. 90, 97 (App. Div. 1963), the court noted that a "longstanding statutory interpretation by an administrative agency is entitled to great weight * * ." In Lane v. Holderman, 23 N.J. 304 (1957), the court said "that resort may be had to long usage and practical interpretation in construing statutes to ascertain their meaning, to explain a doubtful phrase or to illuminate any obscurity." (23 N.J., at p. 322.) See also State Dept. of Civil Service v. Clark, 15 N.J. 334 (1954); Swede v. City of Clifton, 39 N.J. Super. 366 (App. Div. 1956), affirmed 22 N.J. 303 (1956). In In re Glen Rock, 25 N.J. 241 (1957), the court held that an administrative agency's interpretation of its own powers and responsibilities, when long-standing, is entitled to great weight where the statutory provisions that it is called upon to administer are ambiguous, and especially where that 353 interpretation is, "inferentially at least, concurred in by the Legislature." (25 N.J., at p. 250.) See also Harper v. New Jersey Mfrs. Cas. Ins. Co., 1 N.J. 93, 98-99 (1948); Mayoros v. Board of Review, 49 N.J. Super. 74, 77 (App. Div. 1958); 2 Sutherland, Statutory Construction (3d ed. 1943), § 5109. For a period of at least 20 years prior to the 1948 Banking Act the Department of Banking and Insurance knew of the demand deposit practice of certain savings banks. In the 12 years between that act and the institution of this suit the practice was still condoned. The Legislature, both prior to 1948 and ever since that time, must be presumed to have known of the demand deposit practice since the annual reports of the Commissioner of Banking and Insurance included that information. Our Supreme Court has also noted the practice, albeit quite passively. In Application of Howard Savings Institution of Newark, supra, 32 N.J. 29, the court affirmed the Commissioner's approval of the establishment by Howard Savings of a branch office within the county where its main office was located. In scrutinizing the services to be offered the community in light of the statutory direction that establishment of a branch office be designed to serve to the advantage of the public interest, the court remarked that among the services offered by the new branch was that of personal checking accounts. (32 N.J., at p. 41.) Thus, at least inferentially, the Commissioner's approval of the establishment of the branch office and, consequently, his approval of Howard Savings' checking account service, were adopted by our Supreme Court. Continued approval by the Commissioner of the maintenance by savings banks of demand deposits subject to withdrawal by check as a proper practice bespeaks a lack of power to disapprove. When, in 1929, Howard Savings merged with the Security Savings Bank it was agreed that interest was to be allowed on "accounts subject to check." The merger was approved by the Commissioner. In 1958, as noted earlier, the Commissioner approved the establishment by Hudson 354 City Savings Bank of a branch office as an incident of its acquisition of a trust company. The new branch was to be located in the main office of the trust company and included the assumption by Hudson of the Trust company's demand deposit liabilities and maintenance of checking accounts. The acquisition, transfer and branch office establishment was approved despite certain known objections to the assumption by Hudson of the demand deposit liabilities. In July 1962, 14 years after the 1948 act and nearly two years after the institution of this suit, the Commissioner approved the establishment of a branch office by Provident with knowledge that it would offer the checking account service to its depositors. The afore-mentioned events, combined with the long-standing administrative acquiescence, is at least tacit approval by the Department of Banking and Insurance of the demand deposit activity engaged in by some of the savings banks in this State. The Legislature's failure to make an express pronouncement in opposition to the Department's consistent approval thus takes on great significance. In Walsh v. Dept. of Civil Service, supra, the court held: "The practical construction of the statute by the Commission over a period of years without interference by the Legislature is evidence of its conformity with the legislative intent and strongly inclines the courts to concurrence therein. * * The fact that the particular interpretation was adopted as part of the routine administration of the law rather than following a formal hearing in an adversary proceeding * * * does not prevent this concurrence." 32 N.J. Super., at pp. 48, 49. There can be no doubt that the course of administrative treatment of the instant problem is heavily in favor of the validity of the practice. Both prior and subsequent to the 1948 act some savings banks provided checking account services, to the knowledge of the Commissioner and the Legislature. Neither took any contrary action. There is no doubt that the various provisions of the 1948 act which have critical relevance to the main issue in this case are not so clear, precise and unambiguous as to 355 eliminate the propriety of investigating and considering administrative construction. See, e.g., Loveladies Property, etc. v. Barnegat City, etc., Co., 60 N.J. Super. 491, 504 (App. Div. 1960), certification denied 33 N.J. 118 (1960). Whether the practice is ultra vires the powers of savings banks is a question which the statute, on its face, does not expressly answer. This being so, the practical construction accorded the practice under the 1948 act which was substantially contemporaneous with the adoption thereof should be accorded great weight. See, e.g., North Central Counties Retail Liquor, etc. v. Edison Tp., 68 N.J. Super. 351, 359 (App. Div. 1961); Essex Co., etc., Stores Ass'n v. Newark Board of Alcoholic Beverage Control, 64 N.J. Super. 314, 322 (App. Div. 1960); Presbyterian Church, etc. v. Div. of Alcoholic Beverage Control, 53 N.J. Super. 271 (App. Div. 1958), certification denied 29 N.J. 137 (1959). No formal directive has issued from the Commissioner concerning the particular practice. One of the latest official statements directly in point (and which was placed in evidence) was a letter from Acting Deputy Commissioner Prosser to Mr. Ferguson, chairman of the plaintiff, dated July 18, 1958, in which the latter was advised that the Department was going to "make a study of the situation" in regard to "the right of savings banks of New Jersey to accept demand deposits withdrawable by check." Whether that "study" was ever completed, no less initiated, does not appear. In December 1958 the question was still under advisement. Be that as it may, the Department's subsequent action in approving branch office establishments which provided checking account services and in promulgating savings bank statutory regulations which expressly recognized demand checking accounts, reveals no change in attitude. It should also be mentioned that in the latter part of 1958 a bill was introduced in the Senate to prohibit and abolish the checking account practice engaged in by mutual savings banks, but this bill was never acted upon for reasons not made known to the court. 356 From a reading of the applicable statutory provisions and in light of well recognized canons of construction heretofore adverted to, this court concludes that under the Banking Act of 1948 savings banks in the State of New Jersey may accept demand deposits subject to withdrawal by check. While only a numerical minority of such banking institutions have engaged in the practice, this fact does not automatically remove it from consideration as a usual custom of savings banks. The evidence overwhelmingly demonstrated that the Department of Banking and Insurance knew of the practice, informed the Legislature of its existence, took no action to halt it and, in fact, approved it after careful consideration. Had the Legislature intended to prohibit the practice, it could and would have done so in express language either in the Banking Act of 1948 or by amendment thereafter. The language of N.J.S.A. 17:9A-24(12) regarding the exercise by savings banks of "incidental powers," not specifically enumerated, which shall be "necessary or convenient" to the carrying on of business of a savings bank buttresses this conclusion. This section was, I believe, fully intended to be accorded a broad scope, especially in view of the more restrictive phraseology of its predecessor which referred only to "corporate powers necessary to the exercise of the powers" of a savings bank. R.S. 17:6-17(b) (repealed). Plaintiff's contention that the words "incidental powers" greatly limit the words "necessary or convenient," and that the additional powers must therefore be implemental or supplemental of specifically enumerated powers, is not, in my opinion, a correct interpretation. While I agree that the section cannot give independent vitality to a proscribed activity, however, the checking account practice is, in fact, incidental to the power of savings banks to maintain classes of depositors and to regulate interest according to each class within the rules laid down by the Commissioner. See N.J.S.A. 17:9A-186(A)(2). So, too, the fact that no interest is paid on demand deposits does not violate the terms of N.J.S.A. 17:9A-186(A). 357 Had subsection (A)(1) so clearly compelled payment of interest on all deposits, there would have been no need for the various inquiries to and from the office of the Commissioner. The fact is that the subsection, when considered in light of subsection (A)(2) regarding classification of depositors, leaves a good degree of doubt on the question. This doubt has been resolved accordingly and need not be repeated. Plaintiff has offered a technical argument based upon the effect which the maintenance by savings banks of demand deposits has or will have upon our economy. In its simplest form the argument starts with the premise that since national banks use their "free" reserves to stimulate credit financing, and savings banks cannot do so (due to the restriction on the type of investments which they may make), for every dollar deposited in a demand deposit in a savings bank, the economy is deprived of five dollars. Secondly, plaintiff contends that demand deposits are and will be diverted from commercial banks in small communities to savings banks and thus deprive local industry and business of the advantage of the commercial bank's lending power. Defendants, in response, attacked the spectre of the economic day of doom indicated by plaintiff and offered statistics of their own. It is not necessary for the court to embark upon an evaluation of the conflicting statistics and theories offered. While the court is not expert in national monetary management in particular or economics in general, the portent of economic chaos presented by plaintiff has not occurred. In any event, the proper forum before which these economic theories should be offered is the legislative branch, not the judiciary. Plaintiff has also criticized the fact that the various checking account services of the savings banks are not uniform and that some were "hermaphrodite arrangements" which were essentially time deposits subject to withdrawal by draft. While it is true that the regulations utilized by these banks vary in nature, such as to time of advance notice of withdrawal, limits on total monthly withdrawals, presentation of 358 a passbook, and restriction to established time depositors, these conditions were known to the Commissioner and were not objected to. Moreover, some have never been enforced. In short, each of the various services is, in essence, what can be accurately considered as "checking accounts," and the individual distinctions have no bearing upon the basic question of power to maintain the service which I have determined in favor of defendants. One final point should be mentioned although it was not raised by either side either in the pleadings, pretrial order, at trial or in the briefs. I refer to the question of whether, considering the role of the Commissioner of Banking and Insurance in relation to the Banking Act of 1948 in particular and the banking business in general, the institution of this suit was violative of the exhaustion of remedies doctrine and R.R. 4:88. Throughout the course of this case repeated emphasis has been placed upon the role of the Commissioner and his Department, and especially their conduct in regard to various inquiries concerning the checking account practice of the savings banks. Plaintiff maintained that no construction of the Banking Act was taken by the Department; rather, that it was and still is preparing a study. Defendants contended, and I so found, that the Department had both tacitly and expressly condoned the practice through knowledge, acquiescence and failure to object. With the close and obvious relationship between the basic question and the Department, through the Commissioner, why does not the latter have jurisdiction over the issue, with appeal by any aggrieved party to be made in accordance with R.R. 4:88-8 and -10 and subject to R.R. 4:88-14? This question, it seems to me, is relevant to this case and should have been considered. The Commissioner is vested with broad discretionary powers. For example, if he finds that a bank or savings bank is violating its certificate of incorporation or conducting its business in violation of any law of this State, or in an unsafe manner, he may order it to cease such practice, in 359 which case the violator may seek relief in the Superior Court. See N.J.S.A. 17:9A-267. The Commissioner may take possession of the property and business of any bank which violates his order, or is insolvent, or which, in his opinion, is in an unsound or unsafe condition to transact business. See N.J.S.A. 17:9A-269(A). With broad and drastic powers such as these, might not one expect the Commissioner to have jurisdiction over the question of whether the practice of savings banks in maintaining checking accounts subject to withdrawals by check is a violation of the Banking Act or an ultra vires activity? I believe that strong arguments may be made on both sides. Since the question of exhaustion of remedies was not raised by the litigants, and since I have already determined the issues on their merits, the point is, for present purposes, purely academic. It may be that R.R. 4:88 is not applicable at all. It may be that even though plaintiff has not exhausted its administrative remedies, the question is solely one of law, see Nolan v. Fitzpatrick, 9 N.J. 477 (1952); Loboda v. Clark Tp., 74 N.J. Super. 159 (Law Div. 1962), or where the jurisdiction of the administrative tribunal is doubtful, or where the administrative remedy is illusory. See Naylor v. Harkins, 11 N.J. 435 (1953). See, generally, Jorgensen v. Pennsylvania R.R. Co., 25 N.J. 541, 556-568 (1958). The "exhaustion" doctrine has been held to be of "limited application," a rule of convenience and not an indispensable condition precedent. Swede v. City of Clifton, 22 N.J. 303 (1956). Furthermore, the instant case, involving statutory construction, is one in which initial application to administrative officials before the courts is usually not mandatory. See, e.g., Deaney v. Linen Thread Co., 19 N.J. 578, 581 (1955). In any event, under R.R. 4:88-14 the trial court may determine that notwithstanding the availability of administrative review, the exhaustion of that remedy need not be required where it is manifest that the interests of justice require 360 otherwise. Thus, as was recently reiterated by our Supreme Court in Durgin v. Brown, 37 N.J. 189, 202-203 (1962): "The requirement for the exhaustion of the administrative remedy is neither jurisdictional nor absolute in its terms. * * * The cited rule [R.R. 4:88-14] which reflects prior decisional law, vests discretion in the trial court to determine whether the interests of justice require that the administrative process be by-passed. There is no rigid formula for the exercise of that discretion. * * * The public interest in a speedy determination may be considered." The court finds that the invocation of the judicial forum to determine (by way of declaratory judgment) the issues in this case was proper. The public importance of the issues and the overriding need for statutory construction justify the course of action taken. Plaintiff's demand for injunctive relief is denied. I should add, finally, that the public importance of the case disposes of defendants' contention that plaintiff is barred by laches. Cf. Schultz v. Wilson, 44 N.J. Super. 591, 605 (App. Div. 1957). A form of judgment may be submitted in accordance with this opinion. NOTES [*] (Note: In 1960 the remaining 11 banks, and their two branches did not offer the service. In terms of total banking facilities, 31 out of 44 banks offered the services of demand deposit subject to withdrawal by check.)	{ "pile_set_name": "FreeLaw" }
263 N.W.2d 863 (1978) 200 Neb. 472 William J. HUBBELL, Appellant, v. The FARMERS INSURANCE GROUP, Appellee. No. 41401. Supreme Court of Nebraska. March 29, 1978. 864 James P. Miller, Omaha, for appellant. John K. Green of Kennedy, Holland, DeLacy & Svoboda, Omaha, for appellee. Heard before WHITE, C. J., and McCOWN, CLINTON, and BRODKEY, JJ., and HENDRIX, District Judge. BRODKEY, Justice. William J. Hubbell, plaintiff and appellant herein, brought this action against defendant, The Farmers Insurance Group, to recover $4,200 for the theft of his car, which he alleged was insured by the defendant under an insurance policy providing for theft coverage. Defendant denied liability under the policy, and moved for summary judgment. After a hearing, the trial court concluded that no genuine issue of fact existed, sustained defendant's motion, and dismissed the petition with prejudice. Plaintiff's motion for new trial was overruled, and plaintiff has appealed to this court, contending that the District Court erred in granting summary judgment in favor of the defendant. We affirm the judgment of the District Court. The insurance policy in question covered loss of plaintiff's automobile caused by "theft," and had an effective date of May 7, 1975. In his petition plaintiff alleged that on or about May 7, 1975, he had suffered a theft loss of his automobile. He then alleged: "A subsequent investigation by Mr. William J. Hubbell revealed that said automobile had been repossessed by Gilbert Gibreal, an Omaha car dealer, and subsequent investigation revealed that Mr. Gilbert Gibreal had a superior title due to the fact that Mr. Hubbell had purchased the car from an individual who had been able to secure a valid Nebraska title based on foreign title i. e. from the District of Columbia." At the hearing on the motion for summary judgment, the defendant offered in evidence several exhibits relevant to the issue of whether the automobile was taken by theft, or repossessed by a person with superior title to the plaintiff. Relying solely on statements in the briefs of the parties, it appears that Gilbert Gibreal had sold the car to one Donald Branch, retaining title to the vehicle. Branch then somehow obtained a District of Columbia title, and used it to secure a second, Nebraska, title which did not reflect Gibreal's interest in the vehicle. The plaintiff purchased the automobile from Branch, who gave plaintiff the second, Nebraska, title. Gibreal then repossessed the car, and plaintiff brought a replevin action against Gibreal to recover the car. As stated in plaintiff's brief, "the issue of possession was decided against Mr. Hubbell in a replevin action by the Omaha, Nebraska, Municipal Court." Plaintiff then filed this action against the defendant. The exhibits offered and received in evidence at the hearing on the motion for summary judgment, however, are not before this court because the plaintiff did not have a bill of exceptions prepared and filed in this court. 865 The law is that the moving party is not entitled to summary judgment except where there exists no genuine issue as to any material fact in the case and where under the facts he is entitled to judgment as a matter of law. The trial court examines the evidence, not to decide any issue of fact, but to discover if any real issue of fact exists. See, Barnes v. Milligan, 196 Neb. 50, 241 N.W.2d 508 (1976); Green v. Village of Terrytown, 189 Neb. 615, 204 N.W.2d 152 (1973). In the absence of a proper bill of exceptions, however, any assignment of error that requires an examination of evidence cannot prevail on appeal. In such a case, the only question presented on appeal is the sufficiency of the pleadings to sustain the judgment of the trial court. Boosalis v. Horace Mann Ins. Co., 198 Neb. 148, 251 N.W.2d 885 (1977); State v. Jacobsen, 194 Neb. 105, 230 N.W.2d 219 (1975). Depositions, affidavits, answers to interrogatories, and requests for admissions offered in evidence on a motion for summary judgment must be included in a bill of exceptions to be reviewed in this court on appeal. See, Brown v. Shamberg, 190 Neb. 171, 206 N.W.2d 846 (1973); Lange v. Kansas Hide & Wool Co., 168 Neb. 601, 97 N.W.2d 246 (1959). In the present case the plaintiff has not filed a bill of exceptions in this court containing the exhibits received at the hearing on the motion for summary judgment; therefore, the only question presented on appeal is the sufficiency of the pleadings to sustain the judgment of the trial court. Boosalis v. Horace Mann Ins. Co., supra. Plaintiff alleged in his petition that his automobile was repossessed by a person who had superior title to the vehicle. This repossession was the basis for plaintiff's claim that the loss of his automobile had been caused by "theft." In Raff v. Farm Bureau Ins. Co., 181 Neb. 444, 149 N.W.2d 52 (1967), this court stated that the term "theft" as used in an insurance policy "is not necessarily synonymous with larceny, but may have a much broader and more inclusive meaning. It could cover pilferage, swindling, embezzlement, conversion, and other unlawful appropriations as well as larceny." See, also, Modern Sounds & Systems, Inc. v. Federated Mut. Ins. Co., 200 Neb. 46, 262 N.W.2d 183 (1978). In the latter case we stated: "Automobile theft insurance is uniformly viewed as furnishing protection only against losses arising from criminal takings of the insured vehicle and there is apparently no judicial dissent from that proposition. * * * There can be no recovery under such a policy for a loss asserted to amount to a theft in the absence of proof of the existence of a criminal intent on the part of the taker." It is apparent that automobile theft insurance does not furnish protection against the lawful repossession of a vehicle by a person with superior title to the insured. Repossession by a person with superior title cannot be said to be a criminal taking. See Modern Sounds & Systems, Inc. v. Federated Mut. Ins. Co., supra. Since plaintiff's loss, as alleged in his pleadings, was the result of repossession of his automobile by a person with superior title, we conclude the District Court was undoubtedly correct in concluding that summary judgment should be granted to the defendant. The pleadings support the judgment of the trial court, and therefore the judgment is affirmed. AFFIRMED.	{ "pile_set_name": "FreeLaw" }
60 Wn.2d 372 (1962) 374 P.2d 177 ARNOLD THOMPSON, Appellant, v. TITUS MOTOR COMPANY, Respondent.[] No. 36051. The Supreme Court of Washington, Department One. August 16, 1962. Comfort, Dolack & Hansler (Robert A. Comfort, of counsel), for appellant. Burkey, Marsico & Burkey, for respondent. HILL, J. The sole issue on this appeal is whether an instruction on last clear chance should have been given to the jury. The plaintiff was painting an emblem on an advertising panel above the high fence which separated the defendant's used car lot from an alley. He was standing on an aluminum plank (fourteen inches in width), one end of which rested on the ten-foot rung of a three-legged ladder, one leg of which ladder the plaintiff had placed between the right rear fender and the bumper of one of the used cars on the lot. An employee of the defendant moved the car and, in so doing, pulled the ladder down, which resulted in the plaintiff sustaining the injuries for which he seeks damages in this action. Preliminary to moving the car, the defendant's employee approached it and entered it from the left side. There is no contention that he saw the leg of the ladder between the right fender and the bumper. The negligence, if any, is based on the proposition that he should have seen it. The negligence of the plaintiff, in placing a leg of the supporting ladder in such a position, is unquestioned; and that it contributed to his injury cannot be gainsaid. The trial court submitted the case to the jury on the issues of negligence and contributory negligence, and the jury brought in a verdict for the defendant. From the judgment of dismissal, entered on that verdict, the plaintiff appeals, urging that the trial court erred in refusing to instruct the jury on last clear chance. 374 We have very recently, in Glasper v. Westbo (1962), 59 Wn. (2d) 596, 599, 369 P. (2d) 313, pointed out that: "The doctrine [last clear chance] has two phases as applied in this state. In the first phase, the plaintiffs' negligence may continue up to the time of the injury if the defendants actually see the peril; in the second, the plaintiffs' negligence must have terminated or culminated in a situation of peril from which the plaintiffs could not, by the exercise of reasonable care, extricate themselves if the defendants did not actually see the peril but, by the exercise of reasonable care, should have seen it. Leftridge v. Seattle, 130 Wash. 541, 228 Pac. 302 (1924)." (Italics ours.) [1] There is no testimony from which the jury could have found that the man who moved the car either knew or appreciated the danger of the situation; and the first phase of the doctrine is not applicable to the present case. Jess v. McNamer (1953), 42 Wn. (2d) 466, 255 P. (2d) 902; Coins v. Washington Motor Coach Co. (1949), 34 Wn. (2d) 1, 208 P. (2d) 143. The plaintiff argues that prior to moving the car the defendant's employee should have seen the plaintiff's perilous situation and, therefore, the second phase of the doctrine should apply because the plaintiff's negligence had terminated or he was in a position of peril from which he could not extricate himself. [2] We cannot agree that either his negligence had terminated, or that he was in a position of peril from which he could not extricate himself. His remaining on the plank, supported by a ladder placed as this one was, constituted continuing negligence. Not until the defendant's employee entered the car, for the purpose of moving it, was plaintiff in a position of peril from which he could not have extricated himself by getting down off the plank, and even then he could have shouted a warning to the person entering the car. See Coins v. Washington Motor Coach Co., supra. [3] An answer to the plaintiff's contention that he was painting and was oblivious to the danger caused by the approach of defendant's employee, who moved the car, is that 375 ignorance of the situation is not the equivalent of actually being in a position from which one cannot escape. Prosser in his Law of Torts (2d ed.), pages 293, 294, says: "In another group of cases, the plaintiff's situation is not one of helplessness and he is still in a position to escape, but his negligence consists of failure to pay attention to his surroundings and discover his own peril.... "If the defendant does not discover the plaintiff's situation, but merely might do so by proper vigilance, it is obvious that neither party can be said to have a `last clear' chance. The plaintiff is still in a position to escape, and his lack of attention continues up to the point of the accident, without the interval of superior opportunity of the defendant which has been considered so important. The plaintiff may not demand of the defendant greater care for his own protection that he exercises himself...." It seems to us that the facts of this case do not fit the formula of last clear chance, as we have applied it in this state, no matter how much the plaintiff tries to stretch it. The primary negligence is that of the plaintiff in the placing of the ladder; he thereafter took no precautions for his own safety. The negligence of the defendant's employee, if any, is that he failed to see what he should have seen, i.e., that a leg of the ladder was between the fender and the bumper of the car he was going to move. He could have seen the plaintiff painting the sign and never have appreciated that the plaintiff was in a position of peril, unless, and until, he saw the ladder leg between the right rear fender and the bumper of the car which he approached and entered from the left side. [4] It is pointed out in one of the late texts: If an inattentive defendant negligently fails to see an inattentive (but not helpless) plaintiff, the case falls into the category where both plaintiff and defendant are negligently unaware of an impending peril; the plaintiff could have saved himself as long as defendant could have saved him. Under such circumstances, most American courts and the the American Law Institute rule[1] out last clear chance. 2 Harper and James, Law of Torts § 22.13, p. 1252. 376 The trial court properly refused to give a last clear chance instruction. The judgment is affirmed. FINLEY, C.J., WEAVER, ROSELLINI, and FOSTER, JJ., concur. October 8, 1962. Petition for rehearing denied. NOTES [*] Reported in 374 P. (2d) 177. [1] 2 Restatement of Torts § 480.	{ "pile_set_name": "FreeLaw" }
120 Ill. App.3d 282 (1983) 458 N.E.2d 54 BARBARA E. MURPHY, Plaintiff-Appellee, v. UNITED STATES FIDELITY AND GUARANTY COMPANY, Defendant-Appellant. No. 83-74. Illinois Appellate Court Fifth District. Opinion filed December 8, 1983. 283 John E. Jacobsen and Carl L. Favreau, both of Campbell, Furnall, Moore & Jacobsen, P.C., of Mt. Vernon, for appellant. Donald R. Brandon, of Craig, Brandon and Murphy, of Herrin, for appellee. Judgment affirmed. JUSTICE JONES delivered the opinion of the court: At issue in the instant appeal is whether the plaintiff's action to compel arbitration of her uninsured motorist claim against the defendant insurance company is governed by the two-year statute of limitations applicable to personal injury actions (Ill. Rev. Stat. 1981, ch. 83, par. 15, now Ill. Rev. Stat. 1981, ch. 110, par. 13-202) or by the 10-year statute of limitations applicable to contract actions (Ill. Rev. Stat. 1981, ch. 83, par. 17, now Ill. Rev. Stat. 1981, ch. 110, par. 13-206). The trial court ruled that the plaintiff's action was not barred by the two-year statute of limitations for personal injury actions and ordered the defendant to submit the plaintiff's claim to arbitration as provided by the insurance contract between the parties. We affirm. 284 On September 10, 1979, the plaintiff, Barbara Murphy, was involved in an automobile accident with Delores Mulkins, who was later certified by the Illinois Department of Transportation as an uninsured motorist. At the time of the accident the plaintiff was covered by a policy of insurance issued by the defendant, United States Fidelity and Guaranty Company. Under the policy the defendant was obligated "to pay all sums which the insured * * * shall be legally entitled to recover as damages from [an uninsured motorist] because of bodily injury sustained by the insured * * ." The policy further provided that a determination as to whether the insured was legally entitled to recover such damages and the amount thereof was to be made by agreement between the insured and the company or, if they failed to agree, by arbitration. The policy contained no provision as to when such a demand for arbitration should be made. The parties were unable to agree regarding the plaintiff's claim for uninsured motorist benefits, and, on September 23, 1981, the plaintiff made a written demand to the defendant for arbitration of her claim. When the defendant refused to submit to arbitration, the plaintiff, on December 1, 1981, filed a petition to compel arbitration against the defendant in the circuit court of Williamson County. The defendant filed a motion to dismiss the plaintiff's petition because the petition was filed more than two years after the accident in question. The defendant contended that since it was obligated to pay to its insured only such sums as the insured was legally entitled to recover from the uninsured motorist, and since the plaintiff's claim against the uninsured motorist was barred by the two-year statute of limitations for personal injury actions, the plaintiff could no longer seek to recover from the defendant under the uninsured motorist provisions of her policy. The defendant's motion to dismiss was denied by the trial court, and the cause proceeded to trial. At the close of the plaintiff's case the defendant filed a motion for judgment in its favor in which it again raised the statute of limitations issue. The court denied the motion, ruling that the case was governed by the statute of limitations for contract actions because the plaintiff's cause of action arose out of the contractual obligation of the defendant insurer to pay damages caused by the negligence of an uninsured motorist. The court entered judgment for the plaintiff, and the defendant has appealed from that judgment. On appeal the defendant contends that the policy language obligating it to pay those amounts that the plaintiff was "legally entitled to recover" from an uninsured motorist effectively precluded the 285 plaintiff from seeking recovery from the defendant once the two-year period for filing an action against the uninsured motorist had passed. Since, the defendant asserts, the plaintiff's claim for uninsured motorist benefits under the policy depended upon her ability to recover against the uninsured motorist for injuries sustained in the accident, the instant action by the plaintiff must be governed by the statute of limitations applicable to personal injury actions rather than that applicable to contract actions. The defendant urges that this result is not only mandated by the essential nature of the claim involved but is also consistent with the legislative purpose behind the statute providing for uninsured motorist coverage (Ill. Rev. Stat. 1981, ch. 73, par. 755(a)) and is necessary to protect the subrogation rights of an insurer against an uninsured motorist. In other jurisdictions where courts have considered the applicable statute of limitations for making a claim based upon uninsured motorist insurance, it has been generally held that such claims are governed by the contract rather than the tort statute of limitations. (See Annot., 28 A.L.R.3d 580, 584-87 (1969 & Supp. 1983); Widiss, A Guide to Uninsured Motorist Coverage sec. 2.25 (1969 & Supp. 1981); Booth v. Fireman's Fund Insurance Co. (1968), 253 La. 521, 218 So.2d 580; Schleif v. Hardware Dealer's Mutual Fire Insurance Co. (1966), 218 Tenn. 489, 404 S.W.2d 490; DeLuca v. Motor Vehicle Accident Indemnification Corp. (1966), 17 N.Y.2d 76, 215 N.E.2d 482, 268 N.Y.S.2d 289; Lemrick v. Grinnell Mutual Reinsurance Co. (Iowa 1978), 263 N.W.2d 714; Pickering v. American Employers Insurance Co. (1971), 109 R.I. 143, 282 A.2d 584; Franco v. Allstate Insurance Co. (Tex. 1974), 505 S.W.2d 789; North River Insurance Co. v. Kowaleski (1976), 275 Or. 531, 551 P.2d 1286; Sahloff v. Western Casualty & Surety Co. (1969), 45 Wis.2d 60, 171 N.W.2d 914; contra, Vaughn v. Collum (1976), 236 Ga. 582, 224 S.E.2d 416; Brown v. Lumbermens Mutual Casualty Co. (1974), 285 N.C. 313, 204 S.E.2d 829.) The Illinois appellate court has likewise held that, in the absence of a specific statutory provision regarding the period within which uninsured motorist claims must be brought, the statute of limitations to file contract actions must govern. (Burgo v. Illinois Farmers Insurance Co. (1972), 8 Ill. App.3d 259, 290 N.E.2d 371; see Hartford Accident & Indemnity Co. v. Holada (1970), 127 Ill. App.2d 472, 262 N.E.2d 359; Witkowski v. Covenant Security Insurance Co. (1971), 1 Ill. App.3d 1074, 275 N.E.2d 709.) The defendant contends, however, that these latter cases can be distinguished on their facts from the case at bar (cf. Holada (insured had filed timely suit against uninsured motorist so still an open question as to whether he was "legally entitled" to 286 recover from uninsured motorist); Witkowski (insurer was put on notice that plaintiff demanded arbitration less than month after accident)) and should not control the result here. 1 Upon consideration of the issue of the applicable statute of limitations in the instant case, we find persuasive the reasoning of the majority view that the phrase "legally entitled to recover," as used in the policy to denote a condition of the insured's right to recover from the insurer, was designed to indicate fault and not to bar recovery from the insurer merely because the tort-feasor, in an action against him by the insured, could have asserted a statute of limitations defense. (See DeLuca v. Motor Vehicle Accident Indemnification Corp.; Selected Risks Insurance Co. v. Dierolf (1975), 138 N.J. Super. 287, 350 A.2d 526; Edwards v. State Farm Insurance Co. (Mo. App. 1978), 574 S.W.2d 505.) As such, this language means simply that the insured must be able to establish fault on the part of the uninsured motorist that gives rise to damages and prove the extent of those damages. (Allstate Insurance Co. v. Elkins (1978), 63 Ill. App.3d 62, 381 N.E.2d 1, aff'd (1979), 77 Ill.2d 384, 396 N.E.2d 528; Booth v. Fireman's Fund Insurance Co.; contra, Brown v. Lumbermens Mutual Casualty Co.) We therefore find no merit in the defendant's contention that this provision served to incorporate the two-year statute of limitations for tort actions into the parties' insurance contract. In dealing with a similar argument that an arbitration demand filed more than two years after the occurrence in question was untimely, the court in Hartford Accident & Indemnity Co. v. Holada stated: " * * [I]n the nature of a true statute of limitations, such as the one for personal injuries involved in this case, a defense based thereon must be affirmatively raised to be successful, and, if not so raised, the insured could still be `legally entitled' even though his lawsuit were filed after the running of the statute." (127 Ill. App.2d 472, 482, 262 N.E.2d 359, 364.) The court thus indicated that the statute of limitations defense, being personal to the uninsured motorist tortfeasor (see 25 Ill. L. & Prac. Limitations secs. 8, 164 (1956); Conley v. Rust (1973), 12 Ill. App.3d 26, 297 N.E.2d 397), could be raised only by that party and did not affect the insurer's obligation under its contract to pay those amounts which the insured would otherwise be legally entitled to recover from the tortfeasor. (See Schulz v. Allstate Insurance Co. (1968), 17 Ohio Misc. 83, 244 N.E.2d 546; Booth v. Fireman's Fund Insurance Co.; see also Witkowski v. Covenant Security Insurance Co.) Similarly, in the instant case, since the insurer's obligation derived not from the 287 uninsured motorist but from its insurance contract, the insurer did not stand in the shoes of the uninsured motorist (Allstate Insurance Co. v. Elkins) and could not raise that party's statute of limitations defense on its own behalf. 2 We likewise reject the defendant's contention in the same vein that the plaintiff's claim against the defendant insurer was essentially an action to recover for personal injuries and thus should be governed by the statute of limitations applicable to such actions. The plaintiff's action here was based solely upon her contract with the insurer for uninsured motorist coverage for which she paid an additional premium. Absent that contract, the plaintiff would have had no claim against the insurer and the defendant would have had no liability to the plaintiff to indemnify her for damages resulting from the tortious actions of the uninsured motorist. (See Selected Risks Insurance Co. v. Dierolf; Schleif v. Hardware Dealer's Mutual Fire Insurance Co.) The plaintiff's suit, brought to enforce the terms of a contractual obligation, was thus essentially a contract action to be governed by the statute of limitations for such actions. If, within the framework of its contractual obligation, the defendant had desired to limit the time for making an arbitration demand to a period of two years after the accident, it could have inserted this condition into the parties' insurance contract. (See Schulz v. Allstate Insurance Co.) Such a limitation provision has been held to be valid and not against public policy, as it places the accident victim in at least as good a position as he would have been had the tortfeasor obtained the minimum insurance required by the Illinois Safety Responsibility Law (Ill. Rev. Stat. 1981, ch. 95 1/2, par. 7-203). (Coyne v. Country Mutual Insurance Co. (1976), 39 Ill. App.3d 279, 349 N.E.2d 485.) In the absence of a provision to the contrary, we conclude, as did the court in Hartford Accident & Indemnity Co. v. Holada, that "the [insurer] itself did not wish to be bound by any statute of limitations (other than the 10-year limitation for contract actions) in working out a settlement before proceeding with arbitration." Hartford Accident & Indemnity Co. v. Holada (1970), 127 Ill. App.2d 472, 480-81, 262 N.E.2d 359, 363. The defendant's further contention that the legislative purpose behind the statute providing for uninsured motorist coverage (Ill. Rev. Stat. 1981, ch. 73, par. 755(a)) requires that the plaintiff have no longer time to bring suit than if the uninsured motorist had been insured is not well taken. While it is established that the purpose of the uninsured motorist statute is to protect the victim of an uninsured motorist at least to the extent that compensation would be available 288 to one injured by a motorist insured within the minimum legal limits (Severs v. Country Mutual Insurance Co. (1982), 89 Ill.2d 515, 434 N.E.2d 290; Putnam v. New Amsterdam Casualty Co. (1970), 48 Ill.2d 71, 269 N.E.2d 97), this rationale has not been extended by the courts of this State to limit an insured's right to recover from his insurer in the absence of a specific limitation period contained in the policy. (Cf. Coyne v. Country Mutual Insurance Co. (two-year policy limitation period upheld as not in contravention of public policy); Burgo v. Illinois Farmers Insurance Co. (one-year limitation period struck on public policy grounds and 10-year contract statute of limitations held applicable); but cf. Brown v. Lumbermens Mutual Casualty Co. (court held application of tort statute of limitations consistent with objective of placing insured in same position as if other motorist had been insured).) In view of other considerations expressed in this opinion, we decline to hold that the public policy of this State requires that the plaintiff's claim in the instant case be barred by the two-year tort statute of limitations. 3 The defendant contends finally that to allow the plaintiff to assert her claim against the defendant for uninsured motorist benefits after the time for filing suit against the uninsured motorist had run would effectively deprive the defendant of its subrogation rights against the uninsured motorist, which would arise upon payment of the plaintiff's claim. While this argument appears compelling on its face, the loss of the insurer's subrogation rights in these circumstances must be considered in light of the insurer's ability to protect its subrogation rights prior to the running of the statute against the uninsured motorist. (See Widiss, A Guide to Uninsured Motorist Coverage sec. 2.23 (1969 & Supp. 1981); Widiss, Perspectives on Uninsured Motorist Coverage, 62 Nw. U.L. Rev. 497, 508-11 (1967).) Under the standard uninsured motorist endorsement of the instant policy, the insured was required to give the defendant insurer written notice of the particulars of her accident "as soon as practicable." Following such notice, the insurer, under the cooperation provision of the policy, was entitled to require the plaintiff "to take such action as may be necessary or appropriate to preserve [her] right [and the insurer's right by subrogation] to recover damages from any person * * * alleged to be legally responsible for the bodily injury." Thus, by virtue of this provision, the insurer had the right to compel the plaintiff to such action as would preserve all rights against the uninsured motorist, which included the instituting of a legal action to toll the statute of limitations and preserve the defendant's subrogation rights. (Widiss, A Guide to Uninsured Motorist Coverage sec. 2.23, at 49 (1969).) 289 As stated by the court in Selected Risks Insurance Co. v. Dierolf (1975), 138 N.J. Super. 287, 296, 350 A.2d 526, 531: "One of the functions of the notice provision of an insurance policy is to bring to the insurer's attention the possible existence of subrogated rights. By virtue of the Cooperation provision of the endorsement * * the initial responsibility to act to protect subrogated rights is upon the insurer. To hold otherwise would penalize a claimant for his insurer's failure to act under its own cooperation provision." (Emphasis added.) See also American States Insurance Co. v. Williams (1972), 151 Ind. App. 99, 278 N.E.2d 295; Booth v. Fireman's Fund Insurance Co. The defendant in the instant case has made no claim that it failed to receive notice of the plaintiff's accident in time for it to act to protect its subrogation rights against the uninsured motorist. Thus, any prejudice to the defendant's rights resulting from the timing of the plaintiff's arbitration demand has been occasioned by its own neglect and should not dictate the use of the shorter tort statute of limitations. (See La Marsh v. Maryland Casualty Co. (1962), 35 Misc.2d 641, 231 N.Y.S.2d 121.) Further, while the defendant asserts that the plaintiff's demand for arbitration should have been filed within the two-year period for tort actions so as to alert the defendant to the necessity of protecting its subrogation rights, this is not the function of an arbitration demand, which is to be resorted to only if the insurer and its insured fail to agree as to fault or damages. (Selected Risks Insurance Co. v. Dierolf.) We therefore find no merit in the defendant's contention that the plaintiff's action must be governed by the two-year tort statute of limitations in order to preserve the defendant's rights against the uninsured motorist. For the reasons set forth in this opinion, we hereby affirm the trial court's ruling that the plaintiff's action to compel arbitration against the defendant is governed by the 10-year statute of limitations applicable to contract actions. Affirmed. HARRISON and KASSERMAN, JJ., concur.	{ "pile_set_name": "FreeLaw" }
732 N.W.2d 887 (2007) IN RE ESTATE OF RANSCHAU. No. 06-0640. Court of Appeals of Iowa. March 14, 2007. Decision without published opinion. Affirmed.	{ "pile_set_name": "FreeLaw" }
281 S.W.2d 330 (1955) T. B. McDONALD et al., Petitioners, v. J. C. ALVIS et ux., Respondents. No. A-5230. Supreme Court of Texas. July 20, 1955. Carney & Mays, Atlanta, Woodrow Edwards, Mt. Vernon, for petitioners. R. T. Wilkinson and Leonard Passmore, Mt. Vernon, for respondents. CULVER, Justice. In October of 1951 Alvis and wife brought this suit to cancel a certain mineral deed executed by them to one Kelley on May 14, 1937, alleging fraud. The trial court withdrew the case from the jury and rendered judgment that the plaintiffs take nothing. On appeal, by Alvis and wife, the Court of Civil Appeals reversed and remanded for another trial, holding on its own motion that all necessary parties were not before the court and despite a motion for rehearing joined in by both parties, plaintiff and defendant, requesting the court to consider the case on its merits. 276 S.W.2d 957. In this we think the Court of Civil Appeals was in error. It appears that negotiations leading up to the execution of the 1937 deed to Kelley were conducted between Alvis and Dove McDonald. In 1940 Kelley conveyed all of his interest by warranty deed to T. B. and Claude McDonald, trustees. On the trial the evidence showed that Dove and Charlie 331 McDonald were beneficiaries of the trust in the deed from Kelley to the trustees. All four of the McDonalds were brothers and owned the property in common. Dove McDonald appeared and testified in the case. Kelley, a brother-in-law of Dove McDonald, died prior to the institution of this suit. His unknown heirs are not necessary parties, for the reason that Kelley had conveyed all of his interest to the McDonalds and no relief of any kind or character was sought against the estate of Kelley or his unknown heirs. Antwine v. Reed, 145 Tex. 521, 199 S.W.2d 482. "A `necessary party' to a suit, according to the general understanding of that term, is one who is so vitally interested in the subject-matter of the litigation that a valid decree cannot be rendered without his presence as a party." Commonwealth Bank & Trust Co. v. Heid Bros., Inc., 122 Tex. 56, 52 S.W.2d 74, 75; First National Bank v. Pierce, 123 Tex. 186, 69 S.W.2d 756. Grelling and Moran were not necessary parties. At one time they owned an oil and gas lease covering the property but by its terms this lease had expired prior to the institution of this suit. Both of these parties expressly disclaimed any interest. The beneficiaries for whom T. B. and Claude McDonald took title as trustees were not necessary parties. Article 7425b-25, Vernon's Ann.Civ.St., reads in part: "In the absence of contrary or limiting provisions in the instrument creating the trust, or a subsequent order or decree of a court of competent jurisdiction, the trustee of an express trust is authorized: * * "B. To grant options and to sell real or personal property at public auction or at private sale for cash, or upon credit secured by a lien upon the property sold or upon such property or a part thereof and/or other property. * * * "E. To compromise, contest, arbitrate, or settle any and all claims of or against the trust estate or the trustee as such. * * * "G. Generally to execute and deliver any deed or other instrument and to do all things in relation to such trust necessary, desirable, or advisable for carrying out any of the above powers or those considered incident to the purposes of such trust. * * *." While in the general rule in suits affecting trust property the beneficiary is a necessary party, the general rule is limited by many exceptions. Cavers v. Sioux Oil & Refining Co., Tex.Com.App., 39 S.W.2d 862; Ebell v. Bursinger, 70 Tex. 120, 8 S.W. 77. In Slay v. Burnett Trust, 143 Tex. 621, 187 S.W.2d 377, the court cites with approval Bogert's Trust & Trustees, Vol. 3, Sec. 593, to the effect that a trustee may represent cestui que trust in all actions when there is no conflict of interest between cestui que trust and the trustee or between the several cestuis que trust. The deed from Kelley to McDonald, Trustee, did not indicate how many or who the beneficiaries were. In our opinion the beneficiaries, Dove and Charlie McDonald, undisclosed in the deed, were not necessary parties to this suit. David v. Carter, Tex. Civ.App., 222 S.W.2d 900; Lower Colorado River Authority v. Chemical Bank & Trust Co., Tex.Civ.App., 185 S.W.2d 461. The judgment of the Court of Civil Appeals is reversed and the cause remanded to that court for decision on the merits of the appeal.	{ "pile_set_name": "FreeLaw" }
United States Court of Appeals FOR THE EIGHTH CIRCUIT ___________ No. 06-2320 ___________ United States of America, * * Appellee, * * Appeal from the United States v. * District Court for the * District of Nebraska. Tiloe C. Williams, * * Appellant. * ___________ Submitted: October 19, 2006 Filed: February 13, 2007 ___________ Before WOLLMAN, RILEY, and GRUENDER, Circuit Judges. ___________ WOLLMAN, Circuit Judge. A jury found Tiloe Williams guilty of being a felon in possession of a firearm in violation of 18 U.S.C. § 922(g). Williams argues on appeal that the district court1 erred by failing to suppress firearms evidence resulting from a search warrant in which the affiant officer omitted material facts concerning the reliability of a confidential informant. We affirm. 1 The Honorable Joseph F. Bataillon, United States District Judge for the District of Nebraska. I After receiving a citizen’s complaint that drugs were being sold on the premises, Omaha police officers Wells and Milone directed a confidential informant, Randy Conway, to purchase crack cocaine from the residence of Tiloe Williams on April 11, 2005. Although the officers watched Conway approach the house, they lost sight of him as he reached its entrance. Conway was not equipped with any recording device or transmitter. Soon after, they received a cell-phone call from Conway. He was “excited, talking really fast, [and] breathing heavily.” Conway stated that he spoke to a man at the doorway about buying crack; he told the man that he knew him a long time ago, whereupon the man pointed a rifle at Conway, who immediately fled the residence. The officers met up with Conway in person and observed that he was still “excited, breathing heavily, and talking a mile a minute.” Conway repeated the same story, described the man he encountered, and identified the man as Williams when presented with Williams’s mug shot. Subsequent to this encounter, Officer Wells learned of Williams’s status as a convicted felon. He and Officer Milone submitted an affidavit that included the information provided by Conway in an application for a search warrant of Williams’s residence. Their affidavit also mentioned that Conway had been utilized by the police unit in several prior narcotics operations, and that his assistance had resulted in search warrants and several felony narcotics arrests. It further averred that Conway had experience making controlled purchases of illegal narcotics for which preliminary field tests of the purchases had positively indicated cocaine. Finally, the affidavit stated that Conway was not on any terms of parole, probation, or work release at the time he approached Williams. The affidavit did not mention that Conway had been arrested for providing false information to a police officer in 2003. At that time, Conway knew of an outstanding warrant for his arrest when a police officer pulled over the car in which he was riding. -2- When the officer asked the passengers for their respective names, Conway identified himself with a false name to avoid being arrested and losing his job. The officer discovered Conway’s deceit, and Conway subsequently pled guilty to a misdemeanor offense for lying to the officer and was sentenced to a single day in jail. The affidavit also failed to mention that Conway had been convicted for two felonies and had been arrested on a charge of felony theft for receiving stolen property. Finally, the affidavit did not mention Conway’s financial arrangement with the police under which he received payment for his confidential informant services depending on the type of service he provided and the outcome of the investigation. Citing these omissions, Williams moved for a hearing to suppress the entry of the firearms into evidence. A magistrate judge2 granted the hearing but limited the scope of the inquiry to the omissions of Conway’s conviction for lying to a police officer and Conway’s financial relationship with the police department. At the conclusion of the hearing, the magistrate judge found that Officer Wells had intentionally omitted the information at issue, but that even had the information not been omitted, the affidavit would still have provided probable cause for the warrant. Accordingly, the magistrate judge recommended a denial of Williams’s suppression motion. The district court reviewed the magistrate judge’s recommendations and likewise considered the omitted information material and relevant. After reviewing all of the evidence de novo, and even after assuming, arguendo, the truth of the full extent of Conway’s criminal history, the district court concluded that probable cause would have existed had the omitted information been part of the affidavit and accordingly denied the motion to suppress. 2 The Honorable F.A. Gossett, III, United States Magistrate Judge for the District of Nebraska. -3- Williams appeals from his conviction, arguing that the district court erred (1) by not remanding the case to the magistrate judge for further inquiries into Conway’s criminal history in light of the limitations that the magistrate judge imposed on the scope of the hearing and (2) by finding that probable cause would still have existed even with the inclusion of the omitted information. The government responds that Williams was not even entitled to a hearing because he failed to make a substantial preliminary showing that Officer Wells omitted facts with an intent to make, or in reckless disregard of whether they made, the affidavit misleading. It further contends that even had Williams made such a showing, he failed to show that the omitted facts would have altered the probable cause finding; therefore, any procedural errors that might have occurred during the hearing were harmless. II We review factual findings supporting the denial of a suppression motion for clear error, and we review de novo the legal conclusions pertinent to the ultimate question of whether the Fourth Amendment has been violated. United States v. Allen, 297 F.3d 790, 794 (8th Cir. 2002). The Fourth Amendment requires a showing of probable cause before a search warrant may be issued. Determinations of probable cause must be premised on the totality of the circumstances. “The task of the issuing magistrate is simply to make a practical, common-sense decision whether, given all the circumstances set forth in the affidavit before him . . . there is a fair probability that contraband or evidence of a crime will be found in a particular place.” Illinois v. Gates, 462 U.S. 213, 238 (1983). Where an issuing judge’s probable cause determination was premised on an affidavit containing false or omitted statements, the resulting search warrant may be invalid if the defendant can prove by a preponderance of evidence “(1) that the police omitted facts with the intent to make, or in reckless disregard of whether they thereby made, the affidavit misleading . . . and (2) that the affidavit, if supplemented by the -4- omitted information would not have been sufficient to support a finding of probable cause.” United States v. Reivich, 793 F.2d 957, 961 (8th Cir. 1986) (citations omitted); see also United States v. Jacobs, 986 F.2d 1231, 1234 (8th Cir. 1993). To be entitled to a hearing on this issue (“Franks hearing”) a defendant must make a substantial preliminary showing that includes allegations of deliberate falsehood or of reckless disregard for the truth[.] [T]hose allegations must be accompanied by an offer of proof. They should point out specifically the portion of the warrant affidavit that is claimed to be false; and they should be accompanied by a statement of supporting reasons. Affidavits or sworn or otherwise reliable statements of witnesses should be furnished, or their absence satisfactorily explained. Allegations of negligence or innocent mistake are insufficient. The deliberate falsity or reckless disregard whose impeachment is permitted . . . is only that of the affiant, not of any nongovernmental informant. Franks v. Delaware, 438 U.S. 154, 171 (1978). While clear proof of these elements is not required at the stage at which the defendant is demonstrating an entitlement to an evidentiary hearing, United States v. Owens, 882 F.2d 1493, 1498 (10th Cir. 1989), the defendant still must make a “substantial preliminary showing” comprised of specific allegations along with supporting affidavits or similarly reliable statements. Cf. Franks, 438 U.S. at 171 (describing the showing requirements for false statements in warrant affidavits). Because “[t]here is . . . a presumption of validity with respect to the affidavit supporting the search warrant[, t]o mandate an evidentiary hearing, the challenger's attack must be more than conclusory and must be supported by more than a mere desire to cross-examine.” Id. The substantiality requirement is not lightly met. United States v. Wajda, 810 F.2d 754, 759 (8th Cir. 1987). -5- III In its order granting the Franks hearing, the magistrate judge found that the defendant made a substantial preliminary showing that fficer Wells may have omitted information from the search warrant affidavit with a reckless disregard for the truth. Such a finding alone is legally insufficient to justify a Franks hearing absent a determination that the intentionally or recklessly omitted information may have rendered the affidavit misleading and may have otherwise made a probable cause finding unsupportable. Because neither the magistrate judge nor the district court fully addressed whether a Franks hearing was even justified, we now consider the sufficiency of Williams’s preliminary showing. In support of his motion for a Franks hearing, Williams alleged that Officer Wells omitted the following facts from his affidavit: (1) the details of the financial arrangement between the police department and Conway and (2) Conway’s criminal background, which includes a conviction for lying to officers in 2003. Williams offered support for his contention that Officer Wells was aware of each and suggests that they would have made a probable cause finding improbable if they had been included in the original affidavit. A. Omission of the Confidential Informant Agreement Omitting the details and existence of the bargaining agreement between Conway and Wells was not misleading. We have held that an affidavit is not robbed of its probative effect by its failure to mention that the informant “was a paid informant who avoided prosecution by virtue of her testimony. . . .” United States v. Milton, 153 F.3d 891, 896 n.3 (8th Cir. 1998); see also Reivich, 793 F.2d at 962-63; United States v. Wold, 979 F.2d 632, 635 (8th Cir. 1992); United States v. Furlong, 844 F. Supp. 624, 628 (D. Mont. 1994), rev’d in part on other grounds sub nom. United States v. Hand, 61 F.3d 913 (9th Cir. 1995) (unpublished table decision) -6- (stating that it was reasonable for the affiant to assume that the issuing justice would have supposed that the informant had an ulterior motive, such as a reward, for providing the information). In fact, a properly developed pay-based incentive system with appropriate consequences for invalid information may even bolster reliability. Nothing in Williams’s Franks hearing motion, brief in support of the motion, or attached affidavits suggests that the omission of Conway’s agreement with the police renders the warrant application misleading. Williams cites United States v. Medina-Reyes, 877 F. Supp. 468, 475 (S.D. Iowa 1995), in which a district court granted the defendant’s suppression motion after a Franks hearing in part because the affiant officers failed to disclose details of the cooperation and plea agreement. The district court emphasized the relevance of an unusual incentive system in which the informant stood to benefit from a suspended sentence or parole only if he succeeded in making a prosecutable case against specifically named defendants within a fixed period of time. Id. at 475 (“in an allegorical sense, [he had to] deliver the head[] of ‘Medina-Reyes’ . . . to the prosecutor on a silver platter.”).3 Nothing in Williams’s Franks motion, supporting affidavits, or showing of proof suggests that Conway’s agreement or associated behavior might adversely impact his reliability, unlike the powerful incentive in the Medina-Reyes agreement for the informant to submit unreliable information.4 Without more, the omission of the terms of Conway’s agreement does not materially 3 Furthermore, the omission of the agreement’s terms was considered even more egregious when coupled with the affiant officer’s concomitant failure to state that the informant had a history of violating the agreement – a fact with direct bearing on the informant’s reliability. Medina-Reyes, 877 F. Supp. at 475. 4 In fact, the resulting Franks hearing established that Conway would be blacklisted as an informant by the entire police department if he provided unreliable information, and that leading up to his participation in the Williams operation, Conway had received only nominal payments in the $20-$80 range if his information yielded tangible results. Nothing about this system encourages unreliable behavior. -7- change Conway’s apparent reliability or otherwise render the warrant application misleading. B. Omission of Conway’s Criminal Background The Supreme Court has indicated that a misstatement must be the product “of deliberate falsehood or of reckless disregard for the truth . . . . Allegations of negligence or innocent mistake are insufficient.” Franks, 438 U.S. at 171. Franks offers little guidance in determining whether an omission-based misrepresentation was made with reckless disregard for the truth or merely out of negligence. See United States v. Namer, 680 F.2d 1088, 1094 (5th Cir. 1982). We have acknowledged that recklessness may be “inferred from the fact of omission of information from an affidavit . . . when the material omitted would have been ‘clearly critical’ to the finding of probable cause.” Reivich, 793 F.2d at 961-62 (citing United States v. Martin, 615 F.2d 318, 329 (5th Cir. 1980)); see also United States v. Jacobs, 986 F.2d 1231, 1235 (8th Cir. 1993) (stating that officers act with reckless disregard if they knowingly withhold facts that “[a]ny reasonable person would have known . . . was the kind of thing the judge would wish to know.”). Assuming that Officer Wells’s omission of Conway’s prior misdemeanor conviction and the remainder of Conway’s criminal background was made with reckless disregard of whether it rendered the warrant application misleading, we conclude that in light of Conway’s extensive history as a reliable police informant and Officer Wells’s personal observations of his demeanor, the supplementation of the affidavit with Conway’s criminal background would not alter the probable cause finding and therefore would not warrant a Franks hearing. “The core question in assessing probable cause based upon information supplied by an informant is whether the information is reliable.” United States v. Williams, 10 F.3d 590, 593 (8th Cir. 1993) (citing Draper v. United States, 358 U.S. 307, 313 (1959)). We have held that probable cause is not defeated by a failure to inform the magistrate judge of an informant's criminal history if the informant's information is at least partly corroborated, see, e.g., Wold, 979 F.2d at 635; United -8- States v. Flagg, 919 F.2d 499, 501 (8th Cir. 1990) (per curiam); United States v. Parker, 836 F.2d 1080, 1083 (8th Cir. 1987); United States v. Dennis, 625 F.2d 782, 791-92 (8th Cir. 1980). Probable cause is likewise not found wanting where the affiant establishes the information’s reliability through some other means. Williams, 10 F.3d at 593 (“Information may be sufficiently reliable to support a probable cause finding if the person providing the information has a track record of supplying reliable information, or if it is corroborated by independent evidence.”); see also United States v. Wright, 145 F.3d 972, 974-75 (8th Cir. 1998) (“The reliability of a confidential informant can be established if the person has a history of providing law enforcement officials with truthful information ”); United States v. Goodson, 165 F.3d 610, 614 (8th Cir. 1999); United States v. Lucca, 377 F.3d 927, 933 (8th Cir. 2004). Despite the lack of independent corroboration, the judicial officer issuing the warrant knew that Conway had provided truthful and useful information and had made controlled drug purchases for the police department on five previous occasions.5 See, e.g., United States v. Gabrio, 295 F.3d 880, 883 (8th Cir. 2002) (finding that the informant’s provision of reliable information on at least two occasions, coupled with his return of stolen property, established his reliability). This represents an extensive history of reliable assistance that postdated Conway’s dishonesty-related conviction. Furthermore, although Conway initially related the events by phone, Officer Wells met with Conway soon after the incident and had ample opportunity to directly assess Conway’s credibility by observing his demeanor as he recounted the events that had occurred and as he identified Williams as the man involved when presented with Williams’s mug shot. See id. at 883 (citing the affiant officer’s direct observations of the informant subsequent to a criminal incident as pertinent to a credibility determination). Taken as a whole, and balanced against Conway’s criminal history, these considerations more than suffice to validate Conway’s status as a sufficiently 5 In fact, every single time Conway served as a confidential informant, the police considered his contributions valuable enough to reward him for his efforts. -9- reliable informant to justify a finding of probable cause based upon the information he provided. Williams suggests that Conway’s track record as a reliable informant should be disregarded because Conway’s prior assistance involved drug crimes, not gun crimes. We assume from this that Williams believes Conway’s lack of expertise with guns renders suspect his information pertaining to a gun crime. It does not; one needs no special expertise in gun crimes to be aware that a gun is pointed at one’s face. In this case, were we to consider Conway’s reliability as a historically trustworthy informant diminished by his lack of experience with guns, we would be exercising “excessively technical dissection of [the] informant’s tips, with undue attention being focused on isolated issues that cannot sensibly be divorced from the other facts presented to the magistrate.” Gates, 462 U.S. at 234-35. This we will not do. IV We conclude that Williams failed to make a substantial preliminary showing sufficient to justify a Franks hearing. Every fact allegedly omitted was either not misleading because it could have been assumed by the warrant-issuing judicial officer or otherwise would not have altered the probable cause determination. Accordingly, any errors that may have occurred during the Franks hearing were necessarily harmless, given that the hearing ultimately resulted in the denial of Williams’s suppression motion. The judgment is affirmed. ______________________________ -10-	{ "pile_set_name": "FreeLaw" }
30 Kan. App.2d 889 (2002) 53 P.3d 1232 STATE OF KANSAS, Appellee, v. DANIEL W. ALVIS, Appellant. No. 86,471[1] Court of Appeals of Kansas. Opinion filed April 26, 2002. Randall L. Hodgkinson, assistant appellate defender, and Jessica R. Kunen, chief appellate defender, for the appellant. Richard A. Olmstead, assistant district attorney, Nola Foulston, district attorney, and Carla J. Stovall, attorney general, for the appellee. Before, PIERRON, P.J., JOHNSON, J., and BUCHELE, S.J. BUCHELE, J.: Daniel Alvis appeals his sentence. He claims the trial court improperly classified two prior convictions as person felonies for the purpose of determining his criminal history score. We affirm in part and reverse in part. Alvis pled guilty to four counts of aggravated indecent liberties, all contrary to K.S.A. 21-3503(a)(3)(A). Before sentencing, Alvis objected to his criminal history as set forth in his presentence investigation report. Specifically, Alvis argued that two convictions of burglary and one conviction of attempted burglary were improperly classified as person felonies. The trial court heard evidence at the sentencing hearing about the prior convictions at issue. The State conceded that one burglary conviction should have been counted as a nonperson felony. The other two convictions involved houses that were not yet occupied, as they were still under construction. The court found that the houses were "substantially completed" and the State had proved by a preponderance of the evidence that the houses were dwellings. 890 Accordingly, the court found the prior convictions had been properly classified as person felonies. On December 8, 2000, the trial court, using a criminal history score of B, imposed a prison sentence of 216 months for Count I, and concurrent prison sentences of 59 months for each of counts II-IV. On appeal, Alvis argues the two convictions at issue should have been classified as nonperson felonies because the houses involved were still under construction and "not yet suitable for human habitation." The State counters that the houses, while not yet occupied, were clearly intended for human habitation; therefore, the convictions were properly classified as person felonies. This issue involves the interpretation of statutes, thus providing this court with unlimited review. See Herrick v. State, 25 Kan. App.2d 472, 474-75, 965 P.2d 844, rev. denied 266 Kan. 1108 (1998). For the purpose of determining criminal history, a prior burglary is scored as a person felony if the prior conviction was classified as a burglary as described in K.S.A. 21-3715(a). K.S.A. 2001 Supp. 21-4711(d)(1). K.S.A. 21-3715(a) defines burglary as "knowingly and without authority entering into or remaining within any: Building, manufactured home, mobile home, tent or other structure which is a dwelling, with intent to commit a felony, theft or sexual battery therein." A dwelling is "a building or portion thereof, a tent, a vehicle or other enclosed space which is used or intended for use as a human habitation, home or residence." K.S.A. 21-3110(7). Both parties look to Herrick to support their respective arguments. Herrick filed a motion to correct an illegal sentence, arguing his prior attempted burglary conviction was improperly classified as a person felony for the purpose of calculating his criminal history score. The attempted burglary was of a house in the same residential area in which Herrick lived. Importantly, Herrick knew it was a house and that no one lived there. When he broke in, there were doors, windows, and pieces of wood lying all over the house. The police report indicated that the house was being used for storage. The district court granted Herrick's motion and ruled the conviction should have been classified as a nonperson felony. The State 891 appealed, raising the question of whether an unoccupied house that was being used for storage at the time of a burglary constituted a dwelling under K.S.A. 21-3110(7). This court reversed the district court and held that the house was, indeed, a dwelling: "The definition of dwelling used in the Kansas burglary statute is particularly broad. A dwelling is not only a building which is used as a human habitation, home, or residence, but one that is intended for use as one. This would seem to indicate that the building does not have to be presently used as human habitation, home, or residence for it to be considered a dwelling." 25 Kan. App.2d at 478. In the present case, both structures at issue were unoccupied houses. The record reveals scant information regarding the condition of the houses. Though still under construction, each house had doors, windows, and locks. The owner of the first house testified that he had planned to move into the house 5 days after the attempted burglary had occurred. The evidence also showed there was some drywall up in the second house at the time of the burglary. Alvis maintains that the evidence failed to show the houses were habitable at the time of the offenses and, therefore, it cannot be said they were dwellings as defined in K.S.A. 21-3110(7). For support, Alvis notes the lack of evidence showing that either of the houses had such things as electricity, running water, and toilets. Alvis' arguments appear to be derived from the following language used by the Herrick court: "There seems to be no serious argument denying that the building in question was intended for use as a home, although it was not being used that way at the time of the burglary. Neither does it appear that it was so dilapidated as to raise the issue of whether it could be used as a human habitation." 25 Kan. App.2d at 478-49. As previously mentioned, the definition of dwelling is quite broad. Herrick, 25 Kan. App.2d at 478; see State v. Kirkland, 23 Kan. App.2d 530, 530-31, 933 P.2d 160, rev. denied 262 Kan. 966 (1997)(held prior juvenile adjudication for burglary of funeral home was properly scored as person felony where first floor was used for business and second floor was used as residence; although room burglarized was a self-contained storage room, there remained *892 a possibility of contact with people because part of building was used as a residence "regardless of whether the burglar had direct access to that part of the building"). Regarding Alvis' conviction for attempted burglary, we are convinced there was sufficient evidence presented that the subject house was a dwelling. See K.S.A. 21-3110(7). The evidence that the owner was to move in 5 days later compels such a finding. Accordingly, the trial court did not err in classifying the attempted burglary as a person felony. See K.S.A. 21-3715(a); K.S.A. 2001 Supp. 21-4711(d)(1). However, the same cannot be said for the burglary conviction. We know the house was under construction and had not yet been lived in. Whether the house was capable of human habitation is unknown. The record is so lacking in information regarding the house's condition that we cannot conclude the house qualified as a dwelling under K.S.A. 21-3110(7). The State simply failed to carry its burden in this regard. Therefore, we hold that the trial court erred in classifying Alvis' burglary conviction as a person felony. On remand, the trial court must classify the burglary conviction as a nonperson felony for the purpose of redetermining Alvis' criminal history score. See K.S.A. 21-3715(b); K.S.A. 2001 Supp. 21-4711(d)(2). We note that the purpose for making a burglary involving a dwelling a person felony is to prevent contact with people. Herrick, 25 Kan. App.2d at 477. We believe our holding in this case comports with this objective and the reasoning set forth in Herrick. Affirmed in part, reversed in part, and remanded with directions. NOTES [1] REPORTER'S NOTE: Previously filed as an unpublished opinion, the Supreme Court granted a motion to publish by an order dated July 11, 2002, pursuant to Rule 7.04 (2001 Kan. Ct. R. Annot. 46).	{ "pile_set_name": "FreeLaw" }
91 F.3d 132 1996-2 Trade Cases P 71,469 NOTICE: Fourth Circuit Local Rule 36(c) states that citation of unpublished dispositions is disfavored except for establishing res judicata, estoppel, or the law of the case and requires service of copies of cited unpublished dispositions of the Fourth Circuit.Urvashi B. PATEL, an Individual, Plaintiff-Appellant,v.SCOTLAND MEMORIAL HOSPITAL, A North Carolina Corporation;W. Harley Davidson; Gregory C. Wood, Defendants-Appellees. No. 95-2704. United States Court of Appeals, Fourth Circuit. Argued April 3, 1996.Decided July 10, 1996. Appeal from the United States District Court for the Middle District of North Carolina, at Rockingham. William L. Osteen, Sr., District Judge. (CA-94-284-3). ARGUED: Clifford Neil Ribner, Tulsa, Oklahoma, for Appellant. Peter J. Covington, SMITH, HELMS, MULLISS & MOORE, L.L.P., for Appellees. ON BRIEF: Denise S. Cline, MOORE & VAN ALLEN, Raleigh, North Carolina, for Appellant. James H. Guterman, Maurice O. Green, SMITH, HELMS, MULLISS & MOORE, L.L.P.; George C. Covington, KENNEDY, COVINGTON, LOBDELL & HICKMAN, L.L.P., Charlotte, North Carolina, for Appellees. Before WIDENER, MURNAGHAN, and WILLIAMS, Circuit Judges. OPINION PER CURIAM: 1 Urvashi B. Patel, plaintiff-appellant, filed a lawsuit against Scotland Memorial Hospital ("SMH"), Harley Davidson, SMH's Chief of Staff during most of the time the events at issue occurred, and Gregory Wood, who was promoted to be SMH's Chief Administrator during the relevant time period, (collectively "the defendants"), alleging a violation of the Sherman Antitrust Act § 1, 15 U.S.C. § 1 (1988). Additionally, she raised numerous state law claims--namely, a violation of North Carolina's antitrust laws, tortious interference with contractual relations, intentional infliction of severe emotional distress, and breach of contract. The district court dismissed four of the five claims for failure to state a claim upon which relief could be granted and subsequently dismissed the remaining claim for lack of subject matter jurisdiction. Patel appeals the district court's dismissal of her claims as well as its refusal to allow her to amend her complaint a second time. Federal jurisdiction is based both on federal question jurisdiction, 28 U.S.C. § 1331 (1988), and diversity-of-citizenship jurisdiction, 28 U.S.C. § 1332 (1988). For the following reasons, we affirm. I. 2 In 1988, Patel entered into the first of a series of contracts with SMH. Under her contract, she agreed to serve as the Medical Director of the Department of Anesthesiology at SMH, to provide 24-hour anesthesiology services to SMH, and to direct SMH's certified registered nurse anesthetists ("CRNAs"). In return, SMH agreed not to enter into any other similar contracts.1 With the help of CRNAs, Patel was able to supervise anesthesiology services in multiple operations simultaneously and to build a lucrative practice, earning as much as $750,000 per year. 3 As a condition of her contract, Patel agreed to pass her medical boards in anesthesiology within two years. Patel, however, failed to pass her boards within two years. Consequently, SMH notified her in October 1990 of its intent to terminate her contract, but allowed her temporarily to maintain her privileges under the contract. Subsequently, on March 27, 1991, SMH terminated the contract and withdrew Patel's contract privileges. While SMH allowed Patel to maintain staff privileges and to practice anesthesiology at the hospital, it forbade all CRNAs from working with her. CRNAs were allowed, however, to work with all other doctors with staff privileges. 4 The loss of the use of CRNAs meant that Patel could not maintain the practice she had built by superving the anesthesiology in numerous operations simultaneously. She was forced to cancel contracts she had with other physicians to provide anesthesiology services and she experienced a dramatic loss of income in her practice. 5 Patel filed a lawsuit against SMH, Davidson, and Wood alleging: (1) a Sherman Antitrust Act § 1 violation, 15 U.S.C. § 1; (2) a violation of North Carolina's antitrust laws; (3) tortious interference with contractual relations; (4) intentional infliction of severe emotional distress; and (5) breach of contract. Patel asked for and was granted permission to amend her complaint once. 6 The district court dismissed all claims against the defendants under Federal Rule of Civil Procedure 12(b)(6) for failure to state a claim upon which relief could be granted, with the exception of the breach of contract claim against SMH. Patel subsequently requested permission to amend her complaint a second time. The district court denied her motion to file a second amended complaint on the grounds that the amendment would be futile. The district court also dismissed the remaining contract claim for lack of subject matter jurisdiction, and dismissed the lawsuit. Patel appealed. II. 7 Patel argues that the district court erred by: (1) dismissing her Sherman Antitrust Act, state antitrust, tortious interference with contract, and intentional infliction of emotional distress claims for failure to state a claim upon which relief could be granted; (2) refusing to allow her to amend further her complaint; and (3) refusing to exercise its supplemental jurisdiction over her breach of contract claim against SMH. We address each argument in turn. A. Rule 12(b)(6) Dismissals 8 We review dismissals pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure de novo. Estate Constr. Co. v. Miller & Smith Holding Co., 14 F.3d 213, 217 (4th Cir.1994). In conducting our review of a Rule 12(b)(6) dismissal, we construe the factual allegations in the nonmoving party's complaint as true. We will affirm "only if it appears that the plaintiff[ ] would not be entitled to relief under any facts which could be proved in support of[her] claim." Id. at 218 (citation omitted). Thus, we do not evaluate whether Patel has established any facts in comparison to those alleged by the defendants, but rather examine whether, if all the facts she alleged were true, she could make out her claims. 1. Sherman Act § 1 Claim 9 Patel argues that Davidson, Wood, and SMH conspired in violation of the Sherman Antitrust Act § 1, 15 U.S.C. § 1, to prevent her from using CRNAs, which were essential to her practice. She concedes that SMH, Davidson, and Wood had a right to terminate her contract based on her failure to pass the Boards. Her claim is based, thus, only on the defendants' decision to disallow CRNAs from working with her, which she contends was motivated by a malicious intent to destroy her practice. 10 Section one of the Sherman Antitrust Act prohibits combinations or contracts in restraint of trade.2 In order to survive the defendants' Rule 12(b)(6) motion on a § 1 claim, Patel must allege facts which, if proven true, would establish the necessary elements of a Sherman Act § 1 violation: (1) an agreement between at least two legally distinct persons or entities; and (2) that the agreement imposed an unreasonable restraint on trade. Estate Constr., 14 F.3d at 220-21. Patel's amended complaint fails to allege adequately those two elements. 11 a. Agreement to Conspire 12 Unilateral action is not considered actionable under § 1 of the Sherman Act. Thus § 1 applies only to concerted action. Monsanto Co. v. Spray-Rite Serv. Corp., 465 U.S. 752, 761 (1984). "Proof of concerted action requires evidence of a relationship between at least two legally distinct persons or entities." Oksanen v. Page Memorial Hosp., 945 F.2d 696, 702 (4th Cir.1991) (en banc), cert. denied, 502 U.S. 1074 (1992). Under the doctrine of intraenterprise immunity, courts generally find that a company cannot conspire with its officers or employees because of the unity of economic interest between the company and its employees. Copperweld Corp. v. Independence Tube Corp., 467 U.S. 752, 769-71 (1984). 13 We have previously found that where the hospital staff acts as an agent of the hospital, the Board of Trustees of a hospital and the medical staff comprise a single entity and, therefore, are immune from Sherman Act § 1 lawsuits. Oksanen, 945 F.2d at 699, 703. Contra Bolt v. Halifax Hosp. Medical Ctr., 891 F.2d 810, 818-19 (11th Cir.), cert. denied, 495 U.S. 924 (1990) (rejecting the rule that a hospital cannot conspire with its medical staff for purposes of § 1 liability).3 We reasoned that a hospital and its staff have a unity of interest in seeking to provide and upgrade the quality of patient care. Oksanen, 945 F.2d at 703. "Far from being a competitor with the hospital, the medical staff [i]s in fact a natural component of the hospital's management." Id. Similarly, here, we conclude that SMH and its medical staff could not conspire with one another in violation of Sherman Act § 1 where the staff acted as the hospital's agent. 14 Patel seeks to distinguish Oksanen by arguing that Davidson and Wood did not act as agents of the hospital when they conspired to direct SMH's CRNAs not to work with her. We are not convinced. Members of the hospital staff, especially those with administrative positions, such as Chief Administrator, clearly have responsibilities to ensure adequate and quality care by the staff at the hospital, protect against malpractice, ensure efficient operation, cut costs, and the like. Staffing decisions and directives by the staff, and particularly the Chief of Staff or Chief Administrator, to that end are made as agents of the hospital. Patel had failed to meet the conditions of her contract. Thus, SMH and its agents had reasons to terminate her contract and to restrict her access to hospital resources. 15 Patel also argues that an exception to the intraenterprise immunity doctrine applies. Where the individuals on the medical staff have an independent personal stake in obtaining the objectives of the alleged conspiracy, intraenterprise immunity does not apply. Id. at 705. In Oksanen we explicitly limited the personal stake exception, however, to include only instances where the individual conspiring has a personal financial interest in the conspiracy independent of the principal--here SMH. Id.; see also Siegel Transfer, Inc. v. Carrier Express, Inc., 54 F.3d 1125, 1136-37 (3d Cir.1995) (exception to intraenterprise conspiracy doctrine arises "only where an agent acts to further his own economic interest in a marketplace actor which benefits from the alleged restraint and causes his principal to take the anticompetitive actions"); Pink Supply Corp. v. Hiebert, Inc., 788 F.2d 1313, 1318 (8th Cir.1986) (personal stake exception applies only where agent of employer has "an economic stake in the gain to be realized from the anticompetitive conspiracy"). None of the defendants had a direct economic interest in Patel's status at SMH or competed with her. Thus, the personal stake exception does not apply. 16 Finally, Patel attempts to limit the holding in Oksanen to the peer review process only--the process by which the doctor in Oksanen had been excluded from practicing at a hospital and through which the doctor alleged the hospital and its staff had effected an illegal restraint of trade. We find the peer review distinction unhelpful. Where hospital staff acts as an agency of the hospital--whether it is through peer review or mere staffing decisions regarding efficiency, safety, quality, or similar issues--there is a unity of interests. That unity is only destroyed where the staff acts for a personal economic motive outside of its agency. 17 b. Antitrust Injury 18 Patel has also failed to allege adequately facts necessary to demonstrate an antitrust injury. Mere economic injury to Patel alone is insufficient. Instead, Patel must demonstrate an impact on the competition as a whole within the relevant market. Oksanen, 945 F.2d at 708.4 There are two methods of demonstrating economic injury. The first is to demonstrate per se illegal agreements whose effects are so plainly anticompetitive that no elaborate study of the industry is needed. National Soc'y of Professional Eng'rs v. United States, 435 U.S. 679, 692 (1978). Patel concedes in her brief that she does not allege a per se Sherman Act violation. 19 The second approach is termed "the rule of reason." Id. at 692-93. Under a rule of reason analysis, the plaintiff must demonstrate an unreasonable restraint of trade. That requires Patel to allege in her complaint a relevant market, facts demonstrating that trade was restrained in that market, and that the defendants played a significant role in restraining trade. Oksanen, 945 F.2d at 708-09. 20 Patel alleges that the defendants' actions, which prohibited her from using CRNAs, destroyed her medical practice. The district court found, however, that her complaint was completely void of any allegations as to the effect of the defendants' actions on competition in the market for anesthesiology services, effect on the price of anesthesiology services, or effect on the availability of anesthesiology services to the public. Rather, it found her complaint focused on the injuries she incurred, not those the competitive market incurred. We agree. 21 All Patel has alleged is a staffing decision, allegedly based on malice, which the court is not in a position to second guess. Only where the anticompetitive effects were obvious could Patel rely on her meager pleadings. Oksanen, 945 F.2d at 79. Furthermore, there were legitimate grounds for the staffing decision--Patel failed to pass her Boards as required by her contract. Thus, the defendants had reason to limit Patel's access to the hospital's resources. Repeatedly, courts have found that a staffing decision by a single hospital as to a single practitioner, in the absence of harm to the relevant market, does not constitute an antitrust injury. Oksanen, 945 F.2d at 708-10; BCB Anesthesia Care, Ltd. v. Passavant Memorial Area Hosp. Ass'n, 36 F.3d 664, 667-69 (7th Cir.1994) (listing numerous cases). Personal economic injury alone, e.g., loss of income, is simply not enough to support a claim under § 1 of the Sherman Act. There must be some cognizable effect on the competitive market. Thus, we affirm the district court's dismissal of Patel's Sherman Antitrust Act § 1 claim. 2. Remaining State Claims 22 The district court also dismissed Patel's state antitrust claim, her tortious interference with contractual relations, and her intentional infliction of emotional distress claims for failure to state a claim upon which relief could be granted. We have reviewed those claims and the record and adopt the reasoning of the district court as to those claims. B. Rule 12(b)(1) Dismissal 23 The district court dismissed Patel's one remaining claim against SMH for lack of subject matter jurisdiction. Patel alleged breach of contract against the defendants for failure to reimburse her for expenditures she incurred on their behalf. Patel conceded that the claim applied only to SMH. After the dismissal of Patel's Sherman Act claim, no federal question jurisdiction remained. After the dismissal of three of the four remaining state claims, diversity jurisdiction no longer applied because the sole remaining claim was for $45,000--an amount insufficient to meet the jurisdictional requirements of diversity jurisdiction. 28 U.S.C. § 1332(a). SMH therefore moved to dismiss the breach of contract claim under Rule 12(b)(1) of the Rules of Federal Civil Procedure for lack of subject matter jurisdiction. 24 The district court refused to exercise its supplemental jurisdiction over the breach of contract claim and dismissed it without prejudice. Where the district court has dismissed all claims that conferred federal jurisdiction, it may decline to exercise its supplemental jurisdiction. 28 U.S.C. § 1367(c)(3). Patel contends on appeal, however, that the district court should have exercised its supplemental jurisdiction over the breach of contract claim. 25 We review a refusal to exercise supplemental jurisdiction for abuse of discretion. Shanaghan v. Cahill, 58 F.3d 106, 112-13 (4th Cir.1995). Courts generally refuse to exercise supplemental jurisdiction where the claims conferring jurisdiction were dismissed at a very early stage and there is no overriding interest in economy or convenience dictating that the federal court retain jurisdiction. Carnegie-Mellon Univ. v. Cohill, 484 U.S. 343, 350 n. 7 (1988); Stetka v. Hunt Real Estate Corp., 859 F.Supp. 661, 668-69 (W.D.N.Y.1994). Indeed, dismissal in such a case is the preferred course of action unless there are overriding factors in favor of retaining federal jurisdiction. Here, no factors dictated that the court retain its jurisdiction. Therefore, we conclude that the district court did not abuse its discretion. 26 C. Refusal to Allow Further Amendments to Complaint 27 The district court allowed Patel to amend her complaint once. It, however, refused to allow Patel to amend her complaint a second time. We review the district court's denial of Patel's second motion to amend her complaint for abuse of discretion. New Beckley Mining Corp. v. International Union, United Mine Workers of America, 18 F.3d 1161, 1164 (4th Cir.1994). 28 Rule 15(a) of the Federal Rules of Civil Procedure provides that "a party may amend the party's pleading only by leave of the court or by written consent of the adverse party" after a responsive pleading had been served. "[L]eave shall be freely given when justice so requires." Fed.R.Civ.P. 15(a). Leave, however, need not be granted where the proposed amendment would be futile. New Beckley Mining, 18 F.3d at 1164. We have reviewed Patel's proposed second amended complaint and conclude that the district court's finding that the amendment would be futile and resulting refusal to allow the amendment were not an abuse of discretion. For the foregoing reasons, we 29 AFFIRM. 1 As alleged in her complaint, Patel's contract provided that she was "to serve as the Medical Director of the Department of Anesthesiology at SMH, supervise its certified registered nurse anesthetists ("CRNAs") and provide twenty-four hour per day three-hundred-sixty-five days-per-year coverage of anesthesiology services for SMH, in exchange for which SMH agreed not to make any similar contractual agreement to any other anesthesiologist 'for the medical direction of CRNAs.' " Complaint p 7, amended complaint p 7, and proposed second amended complaint, p 7 2 Section 1 provides, in pertinent part: Every contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce among the several States, or with foreign nations, is declared to be illegal. 3 The Eleventh Circuit has rejected expressly our holding in Oksanen, reasoning that the agency relations in the corporate context are different from those in a hospital where it finds that staff members are distinct and independent from the hospital. See also Oltz v. St. Peter's Community Hosp., 861 F.2d 1440, 1450 (9th Cir.1988) (rejecting application of intraenterprise immunity doctrine to the hospital context) 4 Patel argues that the exclusion of a single doctor from the market is sufficient to allege an antitrust injury. We first note that Patel has not necessarily even been excluded from the relevant market. She has only been denied the use of CRNAs at SMH. She may still practice anesthesiology at SMH by herself (although her ability to compete is somewhat hampered because of her inability to use CRNAs). There are no allegations that she has been unable to practice elsewhere because of SMH's actions. Furthermore, the case law she relies on, Summit Health, Ltd. v. Pinhas, 500 U.S. 322 (1991), addresses the jurisdictional prerequisite for filing an antitrust lawsuit. Oksanen, 945 F.2d at 702 n. 1. In Oksanen, a summary judgment ruling, we found that while the jurisdictional prerequisite had been met, the plaintiff still failed to demonstrate an antitrust injury for purposes of surviving a motion for summary judgment. 945 F.2d at 702 n. 1, 709. Patel's reliance on Pinhas asks the court, in essence, to adopt a more lenient standard on a motion to dismiss than is required on a motion for summary judgment. See Bracken v. Allegheny General Hosp., 64 F.3d 869, 875-78 (3d Cir.1995). In effect, she requests that the court adopt a standard for alleging an antitrust injury that is similar, if not identical, to the jurisdictional requirement. The question of federal jurisdiction, however, is distinct from that of whether the underlying claim which supports jurisdiction fails to state a claim upon which relief can be granted. Re/Max Internat'l v. Realty One, Inc., 900 F.Supp. 132, 150 n. 10 & 150 (N.D.Ohio 1995). Thus, we have held that when confronted with a Rule 12(b)(6) motion to dismiss a Sherman Antitrust Act § 1 claim, "we must determine whether allegations covering all the elements that comprise the theory for relief have been stated as required." Estate Constr., 14 F.3d at 220 (citation omitted). In an antitrust lawsuit, we require that the plaintiff plead facts in terms that are neither vague nor conclusory. Id. at 220-21. We, therefore, conclude that to survive a 12(b)(6) motion the plaintiff must allege sufficiently a cognizable antitrust injury, which includes allegations of negative impact on the relevant market	{ "pile_set_name": "FreeLaw" }
76 F.3d 377 NOTICE: Fourth Circuit Local Rule 36(c) states that citation of unpublished dispositions is disfavored except for establishing res judicata, estoppel, or the law of the case and requires service of copies of cited unpublished dispositions of the Fourth Circuit.Danny Lamont YARBOROUGH, Plaintiff--Appellant,v.J.E. SETZER, Jr., Judge, Defendant--Appellee. No. 95-7681. United States Court of Appeals, Fourth Circuit. Submitted Jan. 11, 1996Decided Jan. 25, 1996 Appeal from the United States District Court for the Eastern District of North Carolina, at Raleigh. Terrence W. Boyle, District Judge. (CA-95-851-5-CT-BO) Danny Lamont Yarborough, Appellant Pro Se. E.D.N.C. AFFIRMED. Before RUSSELL, HALL and WILKINSON, Circuit Judges. PER CURIAM: 1 Appellant appeals from the district court's order denying relief on his 42 U.S.C. § 1983 (1988) complaint. We have reviewed the record and the district court's opinion and find no reversible error. Accordingly, we affirm on the reasoning of the district court. Yarborough v. Setzer, No. CA-95-851-5-CT-BO (E.D.N.C. Oct. 11, 1995). We dispense with oral argument because the facts and legal contentions are adequately presented in the materials before the court and argument would not aid the decisional process. AFFIRMED	{ "pile_set_name": "FreeLaw" }
NOT FINAL UNTIL TIME EXPIRES TO FILE REHEARING MOTION AND, IF FILED, DETERMINED IN THE DISTRICT COURT OF APPEAL OF FLORIDA SECOND DISTRICT DANIEL WESNER, d/b/a FISH TALES, ) ) Appellant, ) ) v. ) Case No. 2D16-4646 ) JMS MARINAS, LLC, d/b/a MAXIMO ) HARBORAGE MARINA, a Delaware ) limited liability company, ) ) Appellee. ) ___________________________________ ) Opinion filed August 25, 2017. Appeal pursuant to Fla. R. App. P. 9.130 from the Circuit Court for Pinellas County; Thomas H. Minkoff, Judge. Kathleen Sweeney Ford, of Ford & Ford, P.A., St. Petersburg, for Appellant. Samuel J. Heller, of Heller Goldberg, P.A., St. Petersburg, for Appellee. SILBERMAN, Judge. Daniel Wesner, d/b/a Fish Tales ("Wesner"), seeks review of the partial summary judgment awarding JMS Marinas, LLC, d/b/a Maximo Harborage Marina ("JMS"), possession of the leased premises that are the subject of this action for eviction and related damages. We conclude that the trial court erred in granting summary judgment because there is a genuine issue of material fact regarding JMS's standing to seek possession of the leased premises. We therefore reverse and remand for further proceedings. The underlying action arose from a dispute over the payment of percentage rents under a commercial lease agreement. The lease was executed by Wesner as tenant and Maximo Harborage Marina, LLC ("Maximo Harborage"), as landlord. The lease requires the tenant to pay the landlord a base rent or percentage of its gross annual revenues, whichever is greater. Wesner was current on the base rents, but Maximo Harborage asserted that since January 2008, Wesner failed to provide financial information necessary to calculate percentage rents. Maximo Harborage filed its complaint and a motion to determine rents in July 2014. At that time, however, Maximo Harborage was not entitled to "maintain any action, suit, or proceeding in any court" in Florida because it had not complied with Florida's registration requirements. See § 865.09(9)(a), Fla. Stat. (2014). Maximo Harborage eventually acknowledged this deficiency and was granted leave to file an amended complaint substituting JMS as the plaintiff. The lease defines the landlord as "the current owner or owners of the fee title to the Demised Premises or the leasehold estate under a ground lease of the Demised Premises at the time in question." It also provides that in the event the landlord transfers its title or interest in the property to a third party, the third party will be recognized as the landlord. Both the original and amended complaint contain allegations that the plaintiff is the landlord and owner of the real property that is the subject of the eviction action. -2- Since the inception of the action, Wesner has been asserting that he is unsure of the identity of the proper plaintiff. In his answer to the amended complaint, Wesner denied the material allegations. Wesner also challenged JMS's claim that it was the owner of the demised premises and raised the issue of the identity of the landlord or its agent. Additionally, Wesner challenged JMS's assertions that it had entered into a lease with Wesner and was entitled to maintain any action against Wesner. Wesner tried to assert that JMS was not his landlord at a March 25, 2015, pretrial hearing, but the court refused to allow the argument because it was not properly noticed. And Wesner again questioned JMS's standing to sue in opposing JMS's motion for partial summary judgment of possession. Wesner also filed a supplemental response to JMS's motion to determine rents in which he asserted, among other things, that JMS was not the owner of the property in question. Wesner asserted that original landlord Maximo Harborage changed its name to Harborage Marina, LLC ("Harborage Marina"), and that Wesner paid rent to Harborage Marina from January 2008 to June 2009. In June 2009, Harborage Marina conveyed the real property including the demised premises to Harborage Land, LLC ("Harborage Land"). Since that time, Wesner has been paying rent to nonparty Harborage Land. Wesner also filed a certified copy of the warranty deed in the record. At the June 16, 2015, hearing on JMS's motion to determine rents, Wesner asserted, "I was hoping that the plaintiffs would clarify who exactly was suing." The court responded, "That sounds to me like you're leading up to ground[s] we've -3- hashed over at previous hearings, [counsel]. I think it's pretty clear who's suing your client." The court prohibited Wesner from making any further standing arguments. In an apparent response to Wesner's assertions, JMS elicited testimony from John Stanford Johnson, one of its owners, that JMS is the "successor landlord to the entity that originally signed the lease." During cross-examination, Wesner inquired into the basis for this assertion. Defense counsel showed Johnson a copy of the June 2009 warranty deed in which Harborage Marina (f/k/a Maximo Harborage) conveyed the real property to Harborage Land. Johnson testified that the warranty deed was executed when "we split the marina from the wet portion to—and the dry portion into two portions that are in turn held by Harborage Marina, LLC. So you've got Harborage Land, LLC. It split that off into a separate LLC." Counsel asked Johnson whether the warranty deed conveyed all the land owned by Harborage Marina, but the court interrupted and told counsel to focus on the amount of rents due.1 Wesner placed the standing issue squarely before the court by filing three affidavits challenging JMS's standing in response to the motion for partial summary judgment of possession. In the first affidavit, Wesner himself asserted that JMS is not and has never been his landlord. Wesner said that several years after he signed the lease, the marina managers told him that Maximo Harborage changed its name to Harborage Marina and directed him to pay the rent to Harborage Marina. Some years later, the managers told him that the property had been transferred to Harborage Land and directed him to pay the rent to Harborage Land. Wesner asserted that Harborage 1 The trial court seemed to believe that the standing issue had been previously resolved, but it is evident from the record that the issue had not been fully addressed in earlier proceedings. -4- Land was his current landlord. Wesner also claimed that Harborage Land had contacted him to discuss his use of the property while the eviction proceedings were pending. In the second affidavit, attorney Kathleen Ford confirmed Wesner's recent contact with Harborage Land. In the third affidavit, attorney Martin Awerbach asserted that he had conducted a title search which confirmed that Harborage Land was the current record title holder of the property and that JMS had no interest in the property. He also asserted that the Pinellas County Official Records and Sunbiz.org revealed that JMS's only connection with the property is that it executed the 2009 deed as manager for Harborage Marina, the grantor. These sources do not identify JMS as the manager of grantee Harborage Land or as having authorization to act on its behalf. JMS filed a motion to strike Awerbach's affidavit as improper opinion testimony and inadmissible hearsay. The court granted JMS's motion to strike Awerbach's affidavit as inadmissible hearsay and entered an order granting JMS partial summary judgment for possession. The court determined that Johnson's testimony at the previous hearing on the motion to determine rents established that JMS "is the 'successor' to the record owner of the leased premises."2 Thus, the court concluded that any facts suggesting that JMS was not the record owner were not material to the issue of JMS's entitlement to a judgment for possession. 2 The court also found that Johnson's testimony was unsuccessfully challenged on appeal of the order granting JMS's motion to determine rents. However, as we stated previously, the issue of JMS's standing to sue was not fully argued or ruled upon until it was raised in opposition to JMS's motion for partial summary judgment of possession. -5- On appeal, Wesner first argues that the trial court erred in striking the Awerbach affidavit. We conclude that the court properly struck the Awerbach affidavit as hearsay based on the failure to attach certified copies of the public records on which he relied. See Fla. R. Civ. P. 1.510(e) ("Sworn or certified copies of all documents or parts thereof referred to in an affidavit must be attached thereto or served therewith."); see also Zoda v. Hedden, 596 So. 2d 1225, 1226 (Fla. 2d DCA 1992); Coleman v. Grandma's Place, Inc., 63 So. 3d 929, 933 (Fla. 4th DCA 2011). Wesner's second argument is that the trial court erred in determining there was no genuine issue of material fact regarding JMS's entitlement to a judgment for possession. This court conducts a de novo review of a summary judgment. Buck-Leiter Palm Ave. Dev., LLC v. City of Sarasota, 212 So. 3d 1078, 1081 (Fla. 2d DCA 2017) (citing Volusia County v. Aberdeen at Ormond Beach, L.P., 760 So. 2d 126, 130 (Fla. 2000)). Summary judgment is proper if the moving party establishes entitlement to judgment as a matter of law and there is no genuine issue of material fact. Id. "In reviewing a summary judgment ruling, we must consider the evidence in the light most favorable to the nonmoving party, and if the record raises the slightest doubt that an issue might exist, we must reverse the summary judgment." Id. We conclude that partial summary judgment was improper because, even without the Awerbach affidavit, there is a genuine issue of material fact regarding JMS's standing to seek possession. When the amended complaint was filed, the plaintiff was changed from named landlord Maximo Harborage to JMS. There is nothing in the record establishing the relationship between Maximo Harborage and JMS except Johnson's testimony that JMS is the "successor landlord to" Maximo Harborage. -6- In opposition to JMS's motion for partial summary judgment, Wesner presented evidence that Maximo Harborage changed its name to Harborage Marina after the lease was executed. And Harborage Marina conveyed the real property including the demised premises to Harborage Land in 2009. Under the plain language of the lease, it is arguable that Harborage Land is the current landlord because it owns the fee title to the demised premises. In addition, Wesner presented evidence that Harborage Land had been acting as his landlord since 2009 by sending him rent invoices and accepting his rent payments. Harborage Land also contacted him to discuss his use of the property while the eviction proceedings were pending. We recognize that a landlord or its agent may file a complaint seeking removal of a tenant. See § 83.21, Fla. Stat. (2014). However, JMS did not assert it was acting as the agent of original landlord Maximo Harborage or any subsequent landlord. Instead, it asserted that it owned the property and was the successor landlord. The evidence presented by Wesner thus raises a question of fact regarding whether JMS has standing to seek possession as the landlord. Accordingly, we reverse the partial summary judgment for possession and remand for further proceedings. Reversed and remanded. NORTHCUTT and SLEET, JJ., Concur. -7-	{ "pile_set_name": "FreeLaw" }
timeframe for the offenses, the district court impermissibly modified the murder charge, and the judgment of conviction did not contain statutory subsections for the offenses. To the extent that appellant claimed that his sentence should be modified, he failed to demonstrate that the district court relied on mistaken assumptions regarding his criminal record that worked to his extreme detriment. See Edwards v. State, 112 Nev. 704, 708, 918 P.2d 321, 324 (1996). Appellant also failed to demonstrate that his sentence was facially illegal or that the district court lacked jurisdiction. See id. Appellant's claims regarding the validity of his judgment of conviction fell outside the narrow scope of claims permissible in a motion to modify or correct a sentence. See id. We therefore conclude that the district court did not err in denying appellant's motions. Accordingly, we ORDER the judgment of the district court AFFIRMED. 2 / J. H ardesty P C0.4.0$1 Parraguirre 2 We have reviewed all documents that appellant has submitted in proper person to the clerk of this court in this matter, and we conclude that no relief based upon those submissions is warranted. To the extent that appellant has attempted to present claims or facts in those submissions which were not previously presented in the proceedings below, we have declined to consider them in the first instance. SUPREME COURT OF NEVADA 2 (0) 1947A mrf-wir,t 5e,...vA - cc: Hon. Jerome Polaha, District Judge Steven Floyd Voss Attorney General/Carson City Washoe County District Attorney Washoe District Court Clerk SUPREME COURT OF NEVADA 3 (0) 1947A	{ "pile_set_name": "FreeLaw" }
FILED United States Court of Appeals UNITED STATES COURT OF APPEALS Tenth Circuit FOR THE TENTH CIRCUIT May 22, 2019 _________________________________ Elisabeth A. Shumaker Clerk of Court WAYNE PENN SCHAFER, Trustee of the Wayne Penn Schafer Separate Property Trust Established October 5, 1982, as Amended and Restated on July 9, 2007, Plaintiff - Appellant, v. No. 18-5054 (D.C. No. 4:17-CV-00365-GKF-FHM) CENTERPOINT ENERGY (N.D. Okla.) OKLAHOMA GAS, d/b/a CenterPoint Energy Resources Corp, Defendant - Appellee. _________________________________ ORDER AND JUDGMENT * _________________________________ Before HOLMES, BACHARACH, and PHILLIPS, Circuit Judges. _________________________________ This appeal stems from a property dispute. The landowner alleges that a pipeline is being operated on his land without an easement, and the * Oral argument would not materially help us to decide this appeal. We have thus decided the appeal based on the briefs and the appendix. See Fed. R. App. P. 34(a)(2); 10th Cir. R. 34.1(G). This order and judgment does not constitute binding precedent except under the doctrines of law of the case, res judicata, and collateral estoppel. But the order and judgment may be cited for its persuasive value if otherwise appropriate. Fed. R. App. P. 32.1(a); 10th Cir. R. 32.1(A). pipeline owner insists that it has an easement. The district court granted summary judgment to both sides on some issues and denied summary judgment on other issues. The landowner was dissatisfied with these rulings and appealed, but we lack appellate jurisdiction. The landowner asserted three claims (unjust enrichment, trespass, and nuisance) against the pipeline owner, seeking damages and a permanent injunction. Both sides moved for partial summary judgment, and the district court granted the pipeline owner’s motion on  the applicability of state law to the part of the trespass claim arising after the pipeline owner had obtained a certificate of competency 1 and  the unavailability of unjust enrichment and punitive damages. The court also granted partial summary judgment to the landowner on multiple affirmative defenses. But the court denied the landowner’s request for a permanent injunction, concluding that the landowner had not shown actual success on the trespass claim. Generally, appellate jurisdiction is confined to a district court’s final decisions. 28 U.S.C. § 1291. But the rulings here did not constitute a final decision because the district court has not yet conducted a trial on  the landowner’s claims for trespass and nuisance and  some of the pipeline owner’s affirmative defenses. 1 The federal government issued the certificate in 1950, removing federal restrictions on alienation of the land. 2 In the absence of a final decision, a party can appeal under 28 U.S.C. § 1292(a)(1) for orders “granting, continuing, modifying, refusing, or dissolving injunctions.” 28 U.S.C. § 1292(a)(1). But even when an injunction is involved, a party cannot appeal the denial of summary judgment based on unresolved factual issues. Switzerland Cheese Ass’n, Inc. v. E. Horne’s Market, Inc., 385 U.S. 23, 25 (1966). 2 This limitation applies here: The district court denied the landowner’s request for a permanent injunction because the landowner had not proven actual success on the merits. And factual issues remain on the defense of a prescriptive easement. We thus conclude that appellate 2 In Tri-State Generation & Transmission Association, Inc. v. Shoshone River Power, Inc., we used broad language when referring to the scope of appellate jurisdiction for denials of injunctive relief: “We agree with the Eleventh Circuit in Cable Holdings of Battlefield, Inc. v. Cooke [citation omitted], that an interlocutory order expressly granting or denying injunctive relief fits squarely within the plain language of section 1292(a)(1).” 874 F.2d 1346, 1351 (10th Cir. 1989). But this broad language “must be interpreted with reference to the circumstances of the particular case and the question under consideration.” Bryan Garner, et al., The Law of Judicial Precedent 80 (2016) (citation omitted). In Tri-State, we didn’t address the applicability of § 1292(a)(1) when the district court denied summary judgment on an injunction claim based on the existence of unresolved factual issues. There the district court had denied a summary- judgment motion for injunctive relief based on interpretation of a contract rather than the presence of a factual issue. Tri-State, 874 F.2d at 1350. 3 jurisdiction cannot be based on § 1292(a)(1). Given the absence of appellate jurisdiction, we dismiss the appeal. Entered for the Court Robert E. Bacharach Circuit Judge 4	{ "pile_set_name": "FreeLaw" }
646 S.E.2d 77 (2007) The STATE v. EVANS. No. S07A0033. Supreme Court of Georgia. June 4, 2007. 78 Paul L. Howard Jr., Dist. Atty., Marc A. Mallon, Bettieanne C. Hart, Asst. Dist. Attys.; Thurbert E. Baker, Atty. Gen., Department of Law, Atlanta, for Appellant. Averick Walker, Walker Law Office, Atlanta, for Appellee. HINES, Justice. The State seeks to appeal the trial court's judgment acquitting Jason Evans on charges of malice murder, felony murder, and aggravated assault. Finding that the State cannot appeal such a judgment and that this Court is therefore without jurisdiction to address this matter, we dismiss the appeal. Evans, together with Sovensky Maddox, was indicted for malice murder, felony murder, and two counts of aggravated assault, in connection with the death of LaFayette Smith. Evans moved to sever his trial from that of Maddox, and, before jury selection began, argued in the alternative that the trial court conduct a bench trial for him simultaneously with Maddox's jury trial. The court did so over the State's objection. Following the trial, the court pronounced Evans not guilty on all counts, and entered an appropriate order of acquittal. The State filed a notice of appeal. The circumstances of the appeal require that this Court inquire into its jurisdiction. See Collins v. State, 277 Ga. 586, 591 S.E.2d 820 (2004). "In OCGA § 5-7-1(a), the General Assembly has set forth only a limited right of appeal for the State in criminal cases. [Cits.]" Howard v. Lane, 276 Ga. 688, 581 S.E.2d 1 (2003). If the State attempts an appeal outside the ambit of OCGA § 5-7-1(a), the appellate courts do not have jurisdiction to entertain it. Id. OCGA § 5-7-1(a) does not purport to authorize the State to appeal a judgment of acquittal, nor is a trial court's decision to proceed with a bench trial over the State's objection one of the statutorily-enumerated rulings that the State can appeal.[1] In fact, in Howard, id., the State wished to prevent a bench trial in lieu of a jury trial, and this Court specifically noted that, under OCGA § 5-7-1(a), the State has "no right" to directly appeal the trial court's ruling that a bench trial would occur. Id. at 689, 581 S.E.2d 1. While OCGA § 5-7-1(a) has been amended since this Court's decision in Howard, the General Assembly did not include any provision that would embrace this situation. Nonetheless, the State asserts that the trial court's order is appealable under OCGA § 5-7-1(a)(5), which empowers the State to take an appeal from a judgment "where the court does not have jurisdiction or the order is otherwise void under the Constitution or laws of this state." The State contends that the acquittal is void, likening a bench trial over its objection to a jury trial in which the 79 jurors were not sworn, in which instance, the proceeding is a nullity. See Spencer v. State, 281 Ga. 533, 640 S.E.2d 267 (2007); Slaughter v. State, 100 Ga. 323, 28 S.E. 159 (1897). But, here there is no question of the trial court's oath of office and concomitant authority, only the proper exercise of that authority. In a prior case, this Court has determined that a trial court cannot conduct a criminal bench trial over the State's objection. See Zigan v. State, 281 Ga. 415, 638 S.E.2d 322 (2006). However, that decision does not create a right of appeal for the State; creation of any such right is a function for the General Assembly, not this Court. Nor is it the case that any improper exercise of a trial court's authority renders a judgment void. In the specific situation of an adjudication on the question of guilt in a criminal bench trial when a bench trial is erroneously conducted over the State's objection, the result of such bench trial is an ineffective waiver of the right to a trial by jury, not a void judgment. See Zigan, supra at 416-417, 638 S.E.2d 322. Rather, the judgment following an ineffective waiver may be reviewed on its merits on appeal, if one is available. See, e.g., Balbosa v. State, 275 Ga. 574, 571 S.E.2d 368 (2002). But, the question of whether an appeal is available to the State from the decision of a trial court to proceed with a bench trial over the State's objection has been decided by the General Assembly, and it has decided that the answer is "no." The decision below does not implicate the trial court's subject matter jurisdiction, or its jurisdiction over the person of the defendant. See Collins, supra. The judgment was entered by a court of competent jurisdiction. See State v. Glover, 281 Ga. 633, 641 S.E.2d 543 (2007). It is not void, no appeal was available to the State, and consequently this appeal must be dismissed. Appeal dismissed. All the Justices concur. NOTES [1] OCGA § 5-7-1(a) provides that: (a) An appeal may be taken by and on behalf of the State of Georgia from the superior courts, state courts, City Court of Atlanta, and juvenile courts and such other courts from which a direct appeal is authorized to the Court of Appeals of Georgia and the Supreme Court of Georgia in criminal cases and adjudication of delinquency cases in the following instances: (1) From an order, decision, or judgment setting aside or dismissing any indictment, accusation, or petition alleging that a child has committed a delinquent act or any count thereof; (2) From an order, decision, or judgment arresting judgment of conviction or adjudication of delinquency upon legal grounds; (3) From an order, decision, or judgment sustaining a plea or motion in bar, when the defendant has not been put in jeopardy; (4) From an order, decision, or judgment suppressing or excluding evidence illegally seized or excluding the results of any test for alcohol or drugs in the case of motions made and ruled upon prior to the impaneling of a jury or the defendant being put in jeopardy, whichever occurs first; (5) From an order, decision, or judgment of a court where the court does not have jurisdiction or the order is otherwise void under the Constitution or laws of this state; (6) From an order, decision, or judgment of a superior court transferring a case to the juvenile court pursuant to subparagraph (b)(2)(B) of Code Section 15-11-28; (7) From an order, decision, or judgment of a superior court granting a motion for new trial or an extraordinary motion for new trial; (8) From an order, decision, or judgment denying a motion by the state to recuse or disqualify a judge made and ruled upon prior to the defendant being put in jeopardy; or (9) From an order, decision, or judgment issued pursuant to subsection (c) of Code Section 17-10-6.2.	{ "pile_set_name": "FreeLaw" }
642 F.2d 441 Cuppv.Kurtz 79-2761 UNITED STATES COURT OF APPEALS Third Circuit 1/19/81 1 W.D.Pa. AFFIRMED	{ "pile_set_name": "FreeLaw" }
777 A.2d 446 (2001) R.M. v. Barbara S. BAXTER, Guardian Ad Litem for T.M., Huntingdon County Children's Services, M.E.M., Mother, N.M.M., Father, John and Jane Doe, Foster Parents. Appeal of Barbara S. Baxter, Guardian Ad Litem for T.M. and Huntingdon County Children's Services. Supreme Court of Pennsylvania. Argued December 4, 2000. Decided August 21, 2001. 447 Barbara S. Baxter, Huntingdon, for guardian ad litem, Peter McManamon, Huntingdon, for Huntingdon County Child Services. Robert Ferguson, Lewistown, for E.M., Elaine J. Novacco, Warriors Mark, for R.M. Before FLAHERTY, C.J., and ZAPPALA, CAPPY, CASTILLE, NIGRO, NEWMAN and SAYLOR, JJ. OPINION ZAPPALA, Justice: We granted allocatur to determine whether 23 Pa.C.S. § 5313 confers standing upon a grandparent to file a complaint for custody and/or visitation of a grandchild after the child has been adjudicated dependent. The trial court held that a grandparent lacks standing under these 448 circumstances and dismissed the complaint. The Superior Court reversed and remanded, holding that the statute confers automatic standing upon a grandparent to seek physical and legal custody of a grandchild. For the reasons that follow, we affirm. T.M. was born on March 9, 1996. The child resided with his biological parents from the date of his birth until June 26, 1996, when he was seriously injured as a result of shaken baby syndrome. While T.M. was hospitalized, Huntingdon County Children's Services (the Agency) obtained an emergency protective order to prevent T.M. from being returned to his parents' home. T.M.'s mother subsequently pled guilty to the offense of endangering the welfare of a child. With the consent of his parents, T.M. was declared to be a dependent child and was placed in the legal custody of the Agency on July 16, 1996. T.M. was subsequently placed with foster parents. The goal in the dependency action is adoption.[1] On September 2, 1997, T.M.'s paternal grandmother, R.M. (Grandmother), filed a Complaint for Custody or Partial Custody and/or Visitation.[2] Therein, she alleged that she has genuine care and concern for her grandson and that it was in his best interests to be in her care and custody. Grandmother asserted that her relationship with T.M. began with the consent of both of his parents and that she has continuously visited him when she was permitted to do so. She further asserted that she deems it necessary to assume responsibility for T.M. due to his mother's criminal conviction for endangering his welfare. T.M.'s guardian ad litem and the Agency (hereinafter Appellants)[3] filed preliminary objections to the complaint. They contended that Grandmother failed to satisfy the standing requirements of Section 5313, which provides as follows § 5313. When grandparents may petition. (a) Partial custody and visitation.If an unmarried child has resided with his grandparents or great-grandparents for a period of 12 months or more and is subsequently removed from the home by his parents, the grandparents or great-grandparents may petition the court for an order granting them reasonable partial custody or visitation rights, or both, to the child. The court shall grant the petition if it finds that visitation rights would be in the best interest of the child and would not interfere with the parent-child relationship. (b) Physical and legal custody.A grandparent has standing to bring a petition for physical and legal custody of a grandchild. If it is in the best interest of the child not to be in the custody of either parent and if it is in the best interest of the child to be in the custody 449 of the grandparent, the court may award physical and legal custody to the grandparent. This subsection applies to a grandparent (1) who has genuine care and concern for the child; (2) whose relationship with the child began with the consent of a parent of the child or pursuant to an order of court; and (3) who for 12 months has assumed the role and responsibilities of the child's parent, providing for the physical, emotional and social needs of the child, or who assumes the responsibility for a child who has been determined to be a dependent child pursuant to 42 Pa.C.S. Ch. 63 (relating to juvenile matters) or who assumes or deems it necessary to assume responsibility for a child who is substantially at risk due to parental abuse, neglect, drug or alcohol abuse or mental illness. The court may issue a temporary order pursuant to this section. 23 Pa.C.S. § 5313 (emphasis added). The trial court sustained Appellants' preliminary objections and dismissed Grandmother's complaint. It held that subsection (a) of Section 5313 did not confer standing because T.M. never resided with Grandmother. It found that Grandmother met the criteria of subsections (b)(1) and (b)(2) because she pled that she had genuine care and concern for the child and that her relationship began with the consent of the child's parents. It held, however, that Grandmother failed to plead the existence of one of the three sets of circumstances conferring standing in subsection (b)(3). Specifically, the court held that T.M. was not "substantially at risk due to parental abuse" because he had already been declared dependent and was outside of the abusive parental home. The Superior Court reversed and remanded. R.M. v. Baxter, 725 A.2d 775 (Pa.Super.1999). It agreed that subsection (a) did not apply and that Grandmother satisfied the requirements of subsections (b)(1) and (b)(2). The court held, however, that the fact that T.M. had been declared dependent did not prevent Grandmother from satisfying the language in subsection (b)(3) regarding T.M. being "substantially at risk due to parental abuse." The court reasoned that otherwise, anytime an agency sought dependent status for a child, a grandparent's ability to seek custody of his grandchild would be negated. The court concluded that such result would be in clear opposition to the mandate of the statute, which unequivocally states that a "grandparent has standing to bring a petition for physical and legal custody of a grandchild." Id. at 779. In ruling on whether preliminary objections should have been granted, an appellate court must determine whether it is clear from doubt from all the facts pleaded that the pleader will be unable to prove facts legally sufficient to establish a right to relief. Pennsylvania AFL-CIO v. Commonwealth of Pennsylvania, 563 Pa. 108, 757 A.2d 917 (2000). Here, the facts are undisputed. The issue of whether the statute confers standing upon a grandparent to seek custody and/or visitation is purely one of law, over which our review is plenary. Phillips v. A-Best Products Co., 542 Pa. 124, 665 A.2d 1167 (1995). Initially, we note that prior to the 1996 enactment of Section 5313(b), a grandparent had no right to seek visitation or partial custody of a grandchild unless a parent was deceased, 23 Pa.C.S. § 5311, the parents' marriage was dissolved or the parents separated, id. at § 5312, or the child had resided with the grandparent for 12 months or more and was subsequently removed from the home by his parents, id. 450 at § 5313. See also Herron v. Seizak, 321 Pa.Super. 466, 468 A.2d 803 (1983) (grandparents have no right to visit child where neither parent was deceased, parents' marriage was not dissolved, and child had not resided with grandparent for 12 months or more). The 1996 amendment changed the heading title of Section 5313 (from "When child has resided with grandparents" to "When grandparents may petition"), designated the former text as subsection (a) and added the text set forth in subsection (b). The new subsection (b) recognized a grandparent's claim for "physical and legal custody" of a grandchild, rather than the previous reference to "partial custody and visitation." Thus, the 1996 legislation expanded grandparents' rights and specifically addressed the issue of grandparent standing in a custody matter. In previous case law discussing third-party suits for visitation or partial custody, a stringent test for standing arose out of a respect for the traditionally strong right of parents to raise their children as they see fit. Ken R. v. Arthur Z., 438 Pa.Super. 114, 651 A.2d 1119 (1994). The courts generally found standing in third-party visitation and custody cases only where the legislature had specifically authorized the cause of action. Id. We must determine whether section 5313 serves as such authority in this case. Appellants argue that the legislature did not authorize Grandmother to petition for visitation and/or custody at any time after T.M. was adjudicated dependent. They assert that standing could not arise from 23 Pa.C.S. § § 5311 and 5312 because Grandmother's son, T.M.'s father, was not deceased, nor did T.M.'s parents separate or divorce. They also assert that Section 5313(a) does not confer standing because T.M. never resided with Grandmother. These conclusions are undisputed. The crux of the argument lies with Section 5313(b). Contrary to the holding of the Superior Court, Appellants contend that this section does not give all grandparents automatic standing, but instead only confers standing to those grandparents who satisfy the specific requirements stated therein. According to Appellants, there are three requirements to afford a grandparent standing to petition for physical and/or legal custody of his/her grandchild: (1) the grandparent has genuine care and concern for the child; (2) the relationship began with the consent of a parent or pursuant to a court order; and (3) any one of the following: (I) the grandparent has in loco parentis status; (ii) the grandparent assumes responsibility for a grandchild who has been adjudicated a dependent child under 42 Pa.C.S. Ch. 63; or (iii) the grandparent assumes or deems it necessary to assume responsibility for a grandchild who is substantially at risk because of parental abuse, neglect, drug or alcohol abuse or mental illness. Thus, Appellants view the circumstances set forth in subsection (b) as setting forth conditions that must be satisfied before a grandparent has standing to pursue his/ her custody claim. Specifically, as they argued before the lower courts, Appellants contend that the third scenario in subsection (b)(3) has not been met because T.M. is not a child "who is substantially at risk" because he had been adjudicated dependent at the time the complaint for custody was filed. They maintain that for Grandmother to have standing under the circumstances of this case, she would have had to petition for custody prior to the Agency's involvement in the case and prior to the adjudication of T.M. as a dependent child. To the contrary, Grandmother contends that Section 5313(b) confers automatic standing upon a grandparent to file for custody of her grandchild simply by virtue 451 of the familial relationship. She asserts that the new legislation was added to address the increasing need for grandparents to obtain physical and legal custody of grandchildren they perceive are at risk due to parental abuse or neglect, whether due to alcohol abuse, drug abuse or mental illness. Grandmother maintains that Section 5313(b) permits a grandparent who is aware of such a situation to petition the court for temporary physical or legal custody until such time as his/her child or partner obtains the counseling they require and the grandchild is no longer at risk. She asserts that, unfortunately, she did not become aware of the parental abuse until after the Agency became involved. Grandmother maintains that she utilized the new legislation in an attempt to obtain temporary custody of her grandson after his mother had pled guilty to the criminal offense of endangering his welfare. We find that Grandmother's interpretation of the statute is more consistent with the plain text of the provision. The unqualified language of the statute states, "A grandparent has standing to bring a petition for physical and legal custody of a grandchild." This clear and unambiguous pronouncement cannot be ignored or modified by the subsequent reference to whom the provision, as a whole, is intended to apply. It is well settled that words and phrases contained in a statute shall be construed according to rules of grammar and according to their common and approved usage. Commonwealth v. Burnsworth, 543 Pa. 18, 669 A.2d 883 (1995); 1 Pa.C.S. § 1903(a). When the words of a statute are clear and free from ambiguity, the letter of it is not to be disregarded under the pretext of pursuing its spirit. Id. at § 1921(b). The language providing that, "This subsection applies to a grandparent who ...," refers to the requirements a grandparent must establish to prevail on the merits of the custody claim. This is evidenced by the fact that "this subsection" is entitled, "Physical and legal custody," rather than "Standing." As cogently stated by the Superior Court, [t]he circumstances set forth in subsections (1), (2) and (3) are questions of fact to be resolved by the trial court after a hearing held to determine "[I]f it is in the best interests of the child not to be in the custody of either parent and if it is in the best interests of the child to be in the custody of the grandparent...." 23 Pa.C.S. § 5313(b). 725 A.2d at 778. Here, however, Grandmother was never given the opportunity to prove her claim on the merits because the trial court sustained Appellant's preliminary objections and dismissed Grandmother's claim based on lack of standing.[4] Accordingly, we affirm the order of the Superior Court, reversing the trial court's dismissal of the custody complaint, and remand to the trial court for further proceedings consistent with this opinion. Mr. Justice SAYLOR files a dissenting opinion in which Mr. Justice CASTILLE joins. SAYLOR, Justice, dissenting: As the majority emphasizes, Section 5313(b) of the Domestic Relations Code 452 provides that "[a] grandparent has standing to bring a petition for physical and legal custody of a grandchild." 23 Pa.C.S. 5313(b). Immediately following this conferral of standing, the General Assembly set forth the substantive standard that must be satisfied in order for custody to be obtained: "If it is in the best interest of the child not to be in the custody of either parent and if it is in the best interest of the child to be in the custody of the grandparent, the court may award physical and legal custody to the grandparent." Id. In the same subsection, however, the General Assembly expressly qualified both the conferral of standing and the ability to invoke the substantive standard for obtaining custody as follows: "This subsection applies to a grandparent" who meets three specific threshold criteria (genuine care and concern; existing relationship pursuant to parental consent or court order; and 12 months in the role of a parent, or assumption of responsibility for a child deemed dependent or in danger). Id. The understanding that the legislative qualification serves as a limitation upon standing is supported by the heading of Section 5313, "When grandparents may petition," id. 23 Pa.C.S. § 5313; see also 1 Pa.C.S. § 1924 (prescribing that headings may be considered as aids in the construction of a statute); and by the application of the precept that courts are to give effect to all of the provisions of a statute, see 1 Pa.C.S. § 1922(a). To the extent that there is any ambiguity, further support for the above can be found in the legislative history of Section 5313. Initial versions of legislation contained fewer restrictions on a grandparent's right to seek custody than Section 5313(b).[1] Various legislators, however, expressed concern that such proposals failed to impose adequate limitations upon interference by grandparents in a parent's right to control his or her child's upbringing. One Senator observed that the legislation: establishes bases upon which grandparents could initiate custody litigation seeking custody of their grandchildren over and against the children's parents under certain circumstances. I just want to note my concern that the potential is for litigation which will be too broad in nature. The bill, I think needs some further limiting and I am confident there will be further consideration of it in the House. Statement of the Honorable David W. Heckler, Pa. Legis. JournalSenate, p. 544 (May 23, 1995). A Representative stated: We would not want grandparents disrupting or invading the privacy and home life of their children seeking custody of their grandchildren if in fact it was not absolutely necessary. The words "over an extended period of time" [indicate that] where a debilitating instance exists with the natural parents [it] might be appropriate to give them standing in court. Statement of the Honorable Kevin Blaum, Pa. Legis. JournalHouse, p.2033 (June 28, 1996) (emphasis added). These comments are clearly phrased in terms of imposing restrictions upon which grandparents 453 may seek custody, as opposed to which grandparents may ultimately obtain custody; they plainly reflect the concern of at least two legislators that third-party challenges to parental rights should be closely regulated. The additional restrictions that were ultimately included in the final enactment as signed into law further support the conclusion that the General Assembly sought to carefully limit the situations in which a petition could be filed by grandparents. The legislative history of the statute dovetails with the well-settled restrictions upon standing in the child custody arena. See J.A.L. v. E.P.H., 453 Pa.Super. 78, 86-87, 682 A.2d 1314, 1318-19 (1996)(explaining that, in matters regarding child custody, standing requirements are designed not only to assure that actions are litigated by appropriate parties, but also to prevent interference with parental rights by outsiders). Both reinforce a restrictive conception of the circumstances in which parents will be haled into court to defend custody of their children. Both provide additional support for the conclusion that Section 5313, on its face, evidences a clear intention of the Legislature to balance the need to protect the right of parents to raise their children with a desire to afford grandparents a statutory basis upon which to seek custody in limited situations in which children are in special need and/or the grandparents have firmly established themselves in the role of primary caregiver.[2] The majority's conclusion that Section 5313 confers a general right of standing upon all grandparents, regardless of whether they satisfy any of the criteria of Section 5313(b), subjects parents to legal proceedings seeking to deprive them of custody of their children despite having done nothing to suggest that they are unfit. Although such an effort by grandparents who do not meet the statutory criteria must ultimately fail, according to such a construction, parents must nonetheless endure a full-blown custody proceeding. See Majority Op. at 451 ("the circumstances set forth in subsections (1), (2) and (3) are questions of fact to be resolved by the trial court after a hearing held to determine `[i]f it is in the best interests of the child not to be in the custody of either parent and if it is in the best interests of the child to be in the custody of the grandparent'" (citations omitted)). I find such a result inimical to the Legislature's intent as conveyed by its choice of words and to application of principles of statutory construction. It may be unfortunate (at least in some circumstances) that, in fashioning Section 5313(b), the General Assembly has not distinguished between situations in which a grandparent's custody petition would challenge custody reposited in biological parents from those in which the state has undertaken the parental role. While the majority's decision ameliorates the effects of any imprecision in legislative drafting as applied to the circumstances of this case, I would leave it to the General Assembly to make appropriate adjustments where it has evinced its intent to regulate challenges to custody by third parties, and the 454 guiding policy considerations are at least mixed. In such circumstances, it is my view that the legislative branch represents the superior forum in which to perform the necessary balancing of relevant concerns.[3] The remaining question is whether Grandmother can satisfy the statutory requirement that she is seeking to assume responsibility for a child who is "at risk." See 23 Pa.C.S. § 5313(b)(3). Again, I believe that the plain language of the statute should control. Pursuant to the requirements of Section 5313(b)(3), a child who has been removed from a dangerous environment, placed in a secure situation, and whose parents' rights have been terminated, cannot be considered at risk from parental abuse or neglect. Again, there may be a legitimate concern in the circumstances of the case regarding the best interests of the child as it relates to the environment established by a Children's Services placement versus the grandparents' claim to a superior bond based upon the familial relationship. Again, however, in terms of the conferral of third-party standing to challenge an established and ongoing caregiver relationship, I believe that the General Assembly is best suited to balance the salient policies and provide the necessary direction. In this case, T.M. was no longer at risk at the time Grandmother sought custody; he had been living for well over a year with a stable foster family who wished to adopt him. I would therefore conclude that Grandmother lacks the requisite standing, as she has failed to allege facts sufficient to satisfy the requirements to seek custody of T.M. pursuant to Section 5313(b)(3). Hence this dissent. CASTILLE, Justice, joins this dissenting opinion. NOTES [1] The Agency and T.M.'s guardian assert in their brief that T.M.'s mother executed a consent for adoption on November 24, 1997, and that the trial court confirmed the consent and terminated mother's parental rights on January 30, 1998. Appellee's Brief at 6. They further submit that T.M.'s father executed a consent for adoption and that the trial court confirmed the consent and terminated father's parental rights on August 19, 1998. Id. at 6-7. As these matters are not of record, they will not be considered by our Court in resolution of this appeal. [2] Grandmother has been afforded the opportunity to visit her grandson since the adjudication of dependency. Trial court opinion at 3. It is unclear from the record, however, whether the court directed such visitation or whether the parties merely agreed to allow the same. [3] T.M.'s biological parents and foster parents are also named appellants, although they have not participated in this appeal. [4] It must be recognized, however, that the legislature's conferral of automatic standing to seek the physical and legal custody of a grandchild does not affect a grandparent's evidentiary burden to prove his/her custody claim on the merits. It merely eliminates the preliminary standing requirement that a party establish a direct and substantial interest in the custody proceeding before the court. [1] For example, Section 5313(b)(3), as originally passed by the Senate, granted the right to seek custody to a grandparent: (3) who has assumed the role and responsibilities of the child's parent, providing for the physical, emotional and social needs of the child, or who deems it is necessary to assume the role and responsibilities of the child's parent due to physical or sexual abuse or neglect, or parental dysfunction, such as drug or alcohol abuse or emotional or mental illness or instability. Senate Bill 434 of 1995 (Printer's No. 453). [2] It is questionable whether a statute granting to grandparents a general right to seek custody of their grandchildren would survive constitutional challenge. In Troxel v. Granville, 530 U.S. 57, 120 S.Ct. 2054, 147 L.Ed.2d 49 (2000), a plurality of the United States Supreme Court invalidated a Washington statute granting a general right to petition for visitation regardless of the parents' fitness, finding the sweeping breadth of the law violative of a parent's fundamental right to care, custody, and control of his children as guaranteed by the Due Process Clause of the United States Constitution. See id. at 75, 120 S.Ct. at 2066. [3] This would also avoid the creation of controlling authority elevating the substantive terms of a statute ("A grandparent has standing to bring a petition for physical and legal custody of a grandchild") over express qualifying provisions ("This section applies to a grandparent who...."). I strongly disfavor this sort of precedent, as I believe that its application to other instances of legislative drafting is bound to yield idiosyncratic results; further, I believe that it complicates the already difficult task of legislative drafting.	{ "pile_set_name": "FreeLaw" }
IN THE COURT OF CRIMINAL APPEALS OF TENNESSEE AT NASHVILLE FILED NOVEMBER 1998 SESSION January 7, 1999 Cecil W. Crowson Appellate Court Clerk MARVIN K. MASSEY, ) ) C.C.A. No. 01C01-9711-CR-00520 Appellant, ) ) Davidson County V. ) ) Honorable J. Randall Wyatt, Jr., Judge ) STATE OF TENNESSEE, ) (Post-Conviction) ) Appellee. ) FOR THE APPELLANT: FOR THE APPELLEE: Thomas Edward Nelson John Knox Walkup 211 Third Ave., N. Attorney General & Reporter Nashville, TN 37201 Kim R. Helper Assistant Attorney General Criminal Justice Division 425 Fifth Avenue North Nashville, TN 37243-0493 Victor S. (Torry) Johnson III District Attorney General Lila Statom Assistant District Attorney General Washington Square, Suite 500 222 Second Ave., N. Nashville, TN 37201-1649 ORDER FILED: ___________________ AFFIRMED PURSUANT TO RULE 20 PAUL G. SUMMERS, Judge ORDER The petitioner pled guilty to second-degree murder in exchange for a twenty-two year sentence. No direct appeal was taken. The petitioner subsequently filed the instant petition alleging that he received ineffective assistance of counsel. After a hearing the trial court denied relief, finding that the petitioner received “sound advice from counsel [and] detailed instruction by the Court.” Upon our review of the record, we find that the evidence does not preponderate against the trial court's findings. We further find that no error of law requiring reversal or other action is apparent on the record. Accordingly, the judgment of the trial court is affirmed in accordance with Rule 20 of the Court of Criminal Appeals of Tennessee. It is so ordered. __________________________ PAUL G. SUMMERS, Judge CONCUR: _____________________________ JOE G. RILEY, Judge _____________________________ L. T. LAFFERTY, Senior Judge -2-	{ "pile_set_name": "FreeLaw" }
679 F.Supp.2d 1034 (2010) CATHEDRAL SQUARE PARTNERS LIMITED PARTNERSHIP; West Park, Ltd.; 46th Street Partners Limited Partnership; and Riverview Properties, Ltd., Plaintiffs, v. SOUTH DAKOTA HOUSING DEVELOPMENT AUTHORITY, Defendant and Third-Party Plaintiff, v. Roy Bernardi, Acting Secretary, United States Department of Housing and Urban Development, Third-Party Defendant. No. Civ. 07-4001. United States District Court, D. South Dakota, Southern Division. March 30, 2009. 1035 Joel D. Vos, Heidman Law Firm, Sioux City, IA, for Plaintiffs. 1036 Michael L. Luce, Murphy Goldammer & Prendergast, LLP, Sioux Falls, SD, for Defendant. MEMORANDUM OPINION AND ORDER LAWRENCE L. PIERSOL, District Judge. Plaintiffs, Cathedral Square Partners Limited Partnership, West Park, Ltd., 46th Street Partners Limited Partnership, and Riverview Properties, Ltd., have sued Defendant and Third-Party Plaintiff, South Dakota Housing Development Authority ("SDHDA"), alleging that SDHDA breached their Housing Assistance Payment ("HAP") contracts which were established and are administered pursuant to Section 8 of the United States Housing Act of 1937. SDHDA's alleged breach stems from administering these HAP Contracts in accordance with the 1994 Amendments made by Congress to the statutes governing Section 8 and in accordance with Notice H 95-12, issued by the Housing Development Authority ("HUD") implementing the Congressional amendments. In turn, SDHDA sued Roy Bernardi ("the Secretary"), Acting Secretary of the United States Department of Housing and Urban Development in his official capacity. SDHDA contends that this Court has subject matter jurisdiction over its Third-Party Complaint by invoking the Court's general federal question jurisdiction under 28 U.S.C. § 1331 together with the waivers of sovereign immunity provided by the Administrative Procedures Act ("APA"), 5 U.S.C. § 701, et seq., or in the alternative, Section 1404a of the United States Housing Act of 1937, 28 U.S.C. § 1404a. The Secretary has moved to dismiss the Third-Party Complaint, alleging that these claims are within the exclusive jurisdiction of the Federal Court of Claims pursuant to the Tucker Act, 28 U.S.C. § 1491, and in the alternative, that this Court lacks jurisdiction to hear these claim as they fall outside the APA's and the United States Housing Acts's limited waivers of sovereign immunity. (Doc. 43.) BACKGROUND Pursuant to Section 8 of the United States Housing Act of 1937, as amended, the United States, acting through the U.S. Department of Housing and Urban Development ("HUD"), subsidizes the rents of low-income tenants of privately-owned dwellings. 42 U.S.C. § 1437f. The rent subsidy is provided in one of two ways: either HUD enters into a Housing Assistance Payments contract ("HAP contract") directly with a private landlord or HUD enters into an Annual Contributions Contract ("ACC") with a public housing agency and the public housing agency enters into a HAP contract with the landlord. In either case, the HAP contract specifies a monthly contract rent for particular housing units. The contract rent is initially set by HUD to approximate the fair market value of the rental property for the local area, taking into account certain adjustments to reflect additional costs associated with complying with Section 8 requirements. The tenant pays the landlord a portion of the contract rent based on the tenant's income, and either HUD or the public housing agency pays the landlord the difference between the tenant's payment and the contract rent. In addition to setting initial contract rents, HUD is responsible for adjusting the contract rents on at least an annual basis to reflect changes in the fair market rentals. The means by which HUD adjusts rents under its contracts are as follows: "The adjusted monthly amount of the Contract Rent of a dwelling unit shall be determined by multiplying the Contract Rent in effect on the anniversary date of the contract by the applicable Automatic 1037 Annual Adjustment Factor. . . ." 24 C.F.R § 888.203(b). HUD publishes these Adjustment Factors at least annually by notice in the Federal Register. HUD entered into ACCs with Defendant/Third-Party Plaintiff, South Dakota Housing Development Authority ("SDHDA"), and SDHDA entered into HAP contracts with Plaintiffs Cathedral Square Partners Limited Partnership, West Park, Ltd., 46th Street Partners Limited Partnership, and Riverview Park, Ltd. Each of the HAP contracts that SDHDA entered into with Plaintiffs provided that "[o]n each anniversary date of the Contract, the Contract Rents shall be adjusted by applying the applicable annual adjustment factor most recently published by the Government." In 1994, Congress amended Section 8 in two relevant respects. First, the Amendments provided that, "[w]here the maximum monthly rent, for a unit in a new construction, substantial rehabilitation, or moderate rehabilitation project, to be adjusted using an annual adjustment factor exceeds the fair market rental for an existing dwelling unit in the market area, the Secretary shall adjust the rent only to the extent that the owner demonstrates that the adjusted rent would not exceed the rent for an unassisted unit of similar quality, type, and age in the same market area, as determined by the Secretary." 42 U.S.C. § 1437f(c)(2)(A) (1994). Second, the amendments provided that "[f]or any unit occupied by the same family at the time of the last annual rental adjustment, where the assistance contract provides for the adjustment of the maximum monthly rent by applying an annual adjustment factor and where the rent for the unit is otherwise eligible for an adjustment based on the full amount of the annual adjustment factor, 0.01 shall be subtracted from the amount of the factor, except that the annual adjustment factor shall not be reduced to less than 1.0" Id. As part of its effort to implement the 1994 amendments, HUD issued Notice H 95-12 requiring owners to file timely rent comparability studies containing at least three examples of unassisted housing in the same market area of similar age, type and quality in order to receive a rent increase. According to the directive, any adjustment to the contract rent would be limited to the lesser of (1) the "adjusted comparable rent," determined by adding to the comparable rent the initial difference (the amount by which the original contract rent exceeded the original comparable rent), or (2) the rent level adjusted by the appropriate annual adjustment factor. As it was bound to do so under law, SDHDA administered its HAP contracts with the Plaintiffs in accordance with Congress's Amendments and HUD's Notice H 95-12. Plaintiffs allege that by administering its HAP contracts with Plaintiffs in accordance with the 1994 Congressional Amendments and Notice H 95-12, SDHDA breached Plaintiffs' rights under the HAP Contracts and wrongly deprived them of rent increases for many years. In their Second Amended Complaint which was filed on June 24, 2008, Plaintiffs allege that SDHDA breached their HAP contracts on three grounds: (1) by failing to increase contract rents or by increasing contract rents less then the amount called for in the HAP contracts; (2) by reducing the annual adjustment factor by .01 for units occupied by the same family in consecutive years; and (3) by requiring plaintiffs to submit rent comparability studies. Plaintiffs request that the Court award compensatory damages for SDHDA's alleged breaches of contract as well as reimbursement for costs and expenses incurred in pursuing this matter in court. Additionally, Plaintiffs 1038 asks the Court to order SDHDA to increase the contract rents at Plaintiff's rental housing project to reflect the rent increases to which Plaintiffs are entitled under their HAP Contracts with SDHDA. On June 10, 2008, SDHDA filed a Third-Party Complaint against Roy Bernardi, Acting Secretary, United States Department of Housing and Urban Development in which it alleges three claims for relief. First, SDHDA alleges that "[i]f HUD has caused SDHDA to breach Plaintiffs' HAP Contracts and to apply incorrect requirements and procedures to the adjustment of contract rents for other HAP Contracts to which SDHDA is a party, HUD's actions are arbitrary, capricious, an abuse of discretion, contrary to law, and contrary of constitutional right, in violation of 5 U.S.C. § 706." Accordingly, SDHDA contends that "HUD must provide any additional housing assistance payments, retroactive or prospective, to which plaintiffs or other Section 8 housing owners are entitled when adjustments to the contracts rents are calculated correctly and in conformance with applicable legal requirements." Second, SDHDA claims that if HUD has caused SDHDA to breach its HAP Contracts with Plaintiffs, HUD has breached the related ACCs with SDHDA and SDHDA is "entitled to indemnification by HUD for all costs and expenses it has sustained or will sustain to remedy those breaches." Third, SDHDA "seeks a declaration of its rights and responsibilities in applying the 1994 amendments and Notice H 95-12 with respect to future adjustments of Contract Rents for the HAP Contracts to which it is a party, and its right to have such rent adjustments funded by HUD pursuant to the related ACCs." The Secretary contends that the Court lacks jurisdiction over all claims asserted against him as they fall outside the waivers of sovereign immunity under the Administrative Procedures Act ("APA"), 5 U.S.C. § 701, et. seq., and Section 8 of the United States Housing Act of 1937, 42 U.S.C. § 1404a. The Secretary asserts that pursuant to the Tucker Act, 28 U.S.C. §§ 1491, 1346(a)(2), these claims are within the proper jurisdiction of the Court of Federal Claims. The Secretary has thus moved to dismiss the Third-Party Complaint in its entirety. STANDARD OF REVIEW To sue the United States, a plaintiff must show both a waiver of sovereign immunity and a grant of subject matter jurisdiction. V.S. Ltd. P'ship v. HUD, 235 F.3d 1109, 1112 (8th Cir.2000) (citing Presidential Gardens Assocs. v. United States, 175 F.3d 132, 139 (2d Cir.1999)). "It is axiomatic that the United States may not be sued without its consent and that the existence of consent is a prerequisite to jurisdiction." United States v. Navajo Nation, 537 U.S. 488, 502, 123 S.Ct. 1079, 1089, 155 L.Ed.2d 60 (2003) (citation omitted). Even when the federal government does waive its immunity from suit, "limitations and conditions upon which the Government consents to be sued must be strictly observed, and exceptions thereto are not to be implied." Lehman v. Nakshian, 453 U.S. 156, 161, 101 S.Ct. 2698, 69 L.Ed.2d 548 (1981) (citation omitted). In considering the Secretary's challenge to its jurisdiction, the Court is not limited to the pleadings, but may consider the complaint, other undisputed facts in the record, and may make its own determination of disputed factual issues that bear on its jurisdiction. Harris v. P.A.M. Transport, Inc., 339 F.3d 635, 637 n. 4 (8th Cir.2003). DISCUSSION SDHDA invokes the waiver of sovereign immunity provided by the Administrative 1039 Procedures Act ("APA"), 5 U.S.C. § 701, et seq. together with the Court's general federal question jurisdiction under 28 U.S.C. § 1331.[1] SDHDA asserts that its claims fall within the waiver of sovereign immunity under Section 702 and 704 of the APA because it is challenging the legitimacy of an agency action. 5 U.S.C. § 702. Specifically, SDHDA contends that HUD's implementation of Congress's 1994 Amendments and issuance of Notice H 95-12 caused it to breach its ACC Contracts with SDHDA and in turn, caused SDHDA to breach its HAP Contracts with Plaintiffs and that such actions are "arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with the law." 5 U.S.C. § 702. SDHDA also contends that its claims fall within Section 8 of the United States Housing Act of 1937's waiver of sovereign immunity which provides that "[t]he Secretary of Housing and Urban Development may sue and be sued only with respect to its functions under the United States Housing Act of 1937." 42 U.S.C. § 1404a. SDHDA argues that federal courts have held that when Congress authorizes and agency to "sue and be sued," it is presumed that Congress has fully waived sovereign immunity for such suits, provided that the funds to satisfy any judgment come from funds under HUD's control, as SDHDA argues they do here, rather than general treasury revenue funds. The Secretary, however, argues that SDHDA's claims do not fall within either the APA's waiver of sovereign immunity or within the waiver of sovereign immunity under Section 8 of the United States Housing Act of 1937 and that under the Tucker Act such actions are within the exclusive jurisdiction of the Court of Federal Claims. Accordingly, the Secretary has moved to dismiss all the claims asserted by SDHDA in its Third Party Complaint. I. Has sovereign immunity been waived in this Court under the APA? The Secretary contends that these claims are within the exclusive jurisdiction of the Court of Federal Claims pursuant to the Tucker Act and in the alternative, that the district court lacks jurisdiction to hear these claims as they fall outside the APA's waiver of sovereign immunity. "The Tucker Act gives the Court of Federal Claims jurisdiction to hear monetary claims against the United States founded either upon an express or implied contract or upon a provision of the Constitution, or any Act of Congress, or any regulation of the executive department that `can fairly be interpreted as mandating compensation by the Federal Government for the damages sustained.'" Cartwright Int'l Van Lines v. Doan, 525 F.Supp.2d 187, 194 (D.D.C.2007) (quoting United States v. Mitchell, 463 U.S. 206, 217, 103 S.Ct. 2961, 77 L.Ed.2d 580 (1983)). The Tucker Act consists of two parts: 28 U.S.C § 1491 and 28 U.S.C. § 1346(a)(2), which is commonly known as the "Little Tucker Act." The Little Tucker Act makes the jurisdiction of the Court of Federal Claims concurrent with the district court for civil actions or claims against the United States for $10,000 or less. 28 U.S.C. § 1346(a)(2). 1040 The parties dispute whether claims founded upon a contract exceeding $10,000 are within the exclusive jurisdiction of the Court of Federal Claims. The Secretary states that every Circuit Court of Appeals to address the issue has concluded that the Tucker Act gives the Court of Federal Claims exclusive jurisdiction over all claims founded on a contract, a provision of the Constitution, a statute or executive regulation exceeding $10,000 and `impliedly forbids' an award of declaratory and injunctive relief in a district court under the APA. (Sec'y Br. in Supp. of Mot. To Dismiss at 8-9.) SDHDA contends that "[a]lthough some circuit courts have ruled that the Tucker Act does impliedly forbid district courts from exercising jurisdiction over contract claims under the APA, those rulings find no support in the language of the Tucker Act, itself, and they are at odds with the Supreme Court's decision in Bowen." The Court need not address this issue because, as discussed below, the claims SDHDA asserts in its Third-Party Complaint fall outside the waivers of sovereign immunity under the APA and Section 8. The Supreme Court has explained that a litigant may invoke the APA's waiver of sovereign immunity to challenge the legitimacy of agency actions[2] in district court if the litigant can satisfy the several limitations Congress has placed on the waiver of sovereign immunity pursuant to both 5 U.S.C § 702 and 5 U.S.C. § 704. Bowen v. Massachusetts, 487 U.S. 879, 891-92, 108 S.Ct. 2722, 2730-31 101 L.Ed.2d 749 (1988). In order to establish a waiver of sovereign immunity under the APA, a plaintiff must prove all of the following: (1) that it is seeking relief other than money damages, 5 U.S.C. § 702; (2) that no other statute that grants consent to suit expressly or impliedly forbids the relief which is sought, 5 U.S.C. § 702; and (3) that there is no adequate remedy available elsewhere, 5 U.S.C. § 704. See also Transohio Sav. Bank v. Dir., Office of Thrift, 967 F.2d 598, 607 (D.C.Cir.1992). The Secretary argues that all three limitations on the APA's waiver of sovereign immunity apply in this case and has thus moved to dismiss SDHDA's Third-Party Complaint for lack of subject matter of jurisdiction. Specifically, the Secretary argues that SDHDA primarily seeks compensatory, monetary damages. Additionally, the Secretary asserts that the Tucker Act impliedly forbids relief under the APA in this case because SDHDA's claims against the Secretary are based on allegations of breach of contract exceeding $10,000 over which, the Secretary argues, the Court of Federal Claims has exclusive jurisdiction. Finally, the Secretary claims that the Tucker Act provides an adequate remedy because pursuant to the Act, SDHDA may sue the Secretary in the Court of Federal Claims to recover indemnification for any retroactive or prospective increases in contract rents for which SDHDA may be found liable. "[I]n determining whether a plaintiffs suit is to be heard in district court or the Court of Federal Claims, [a Court] must look beyond the form of the pleadings to the substance of the claim." Suburban Mortgage Assoc., Inc. v. HUD, 480 F.3d 1116, 1125 (Fed.Cir.2007); Reconstruction Fin. Corp. v. MacArthur Mining Co., 184 F.2d 913, 918 (8th Cir.1950). Courts "will not tolerate a litigant's attempt to artfully recast its complaint to circumvent the jurisdiction of the Court of Federal Claims." Consol. Edison Co. v. U.S. Dept. of Energy, 247 F.3d 1378, 1385 (Fed.Cir.2001); 1041 Sellers v. Brown, 633 F.2d 106, 107-08 (8th Cir.1980) (per curiam). The Court finds that the best place to begin in determining whether this Court has jurisdiction to hear the claims presented by SDHDA in its Third-Party Complaint is by analyzing whether the Court of Federal Claims can provide an adequate remedy under the Tucker Act for the alleged wrong. Except in limited circumstances not applicable in the present case,[3] the Court of Federal Claims has no power to grant equitable and prospective relief. Bowen v. Massachusetts, 487 U.S. 879, 905, 108 S.Ct. 2722, 2737, 101 L.Ed.2d 749 (1988); see also Noot v. Heckler, 718 F.2d 852, 858 (8th Cir.1983). However, when a plaintiff's claims, regardless of the form in which the complaint is drafted, may be satisfied by a money judgment, then the proper forum for resolution of the dispute is not a district court under the APA but the Court of Federal Claims under the Tucker Act. Suburban Mortgage Assoc., Inc. v. HUD, 480 F.3d 1116, 1126 (Fed.Cir.2007). In its Third-Party Complaint, SDHDA alleges three causes of action against the Secretary. First, SDHDA alleges that "[i]f HUD has caused SDHDA to breach Plaintiffs' HAP Contracts and to apply incorrect requirements and procedures to the adjustment of contract rents for other HAP Contracts to which SDHDA is a party, HUD's actions are arbitrary, capricious, an abuse of discretion, contrary to law, and contrary of constitutional right, in violation of 5 U.S.C. § 706." Accordingly, SDHDA states that HUD "must provide additional housing assistance payments, retroactive or prospective, to which plaintiffs or other Section 8 housing owners are entitled when adjustments to the Contract Rents are calculated correctly and in conformance with applicable legal requirements." Second, SDHDA claims that if HUD has caused SDHDA to breach its HAP Contracts with Plaintiffs, HUD has breached the related ACCs with SDHDA and SDHDA is "entitled to indemnification by HUD for all costs and expenses it has sustained or will sustain to remedy those breaches." Third, SDHDA "seeks a declaration of its rights and responsibilities in applying the 1994 amendments and Notice H 95-12 with respect to future adjustments of Contract Rents for the HAP Contracts to which it is a party, and its right to have such rent adjustments funded by HUD pursuant to the related ACCs." The Secretary argues that a money judgment by the Federal Court of Claims provides SDHDA an adequate remedy in this case. (Sec'y Br. in Supp. of Mot. to Dismiss at 7.) In particular, the Secretary states that any retroactive payments due to SDHDA under its ACC contracts or to Plaintiffs under their HAP contracts are satisfied by a money judgment. Moreover, the Secretary contends that res judicata principles address any concerns about obtaining prospective relief from potential disputes regarding future rent adjustments. (Id. at 8.) While "[t]he availability of an action for money damages under the Tucker Act or Little Tucker Act is presumptively an `adequate remedy' for Section 704 purposes," Telecare Corp. v. Leavitt, 409 F.3d 1345, 1349 (Fed.Cir.2005), SDHDA argues that a money judgment in the Court of Federal Claims is insufficient under the unique 1042 facts of this case. In support of its position, SDHDA discusses at length the United States Supreme Court's decision in Bowen v. Massachusetts, 487 U.S. 879, 108 S.Ct. 2722, 101 L.Ed.2d 749 (1988). In Bowen, the Commonwealth of Massachusetts brought a suit challenging a decision by the Secretary of Health and Human Services that certain services provided in part by the state for the mentally retarded did not qualify for reimbursement under Medicaid regulations. The Court concluded that a money judgment against the United States in the Court of Federal Claims was an inadequate remedy in the case in "light of the rather complex ongoing relationship between the parties." Id. at 905, 108 S.Ct. at 2738. Specifically, the Court in Bowen noted that "the interaction between the State's administration of its responsibilities under an approved Medicaid plan and the Secretary's interpretation of his regulations may make it appropriate for judicial review to culminate in the entry of declaratory or injunctive relief that requires the Secretary to modify future practices." Id. The Court also doubted whether the Court of Federal Claims even had jurisdiction to entertain the action or to enter a specific money judgment against the United States. Id. SDHDA argues that as in Bowen, it is seeking interpretation of regulations and statutes[4] which may result in modifying the ongoing and allegedly complex contractual relationships between it and HUD and as such, a monetary judgment in the Court of Federal Claims is an inadequate remedy. Specifically, SDHDA contends that: [T]he alleged breaches of plaintiffs' HAP and ACC Contracts affect not only past rent increases that were denied, but also future annual rent increases during the remaining terms of the contracts, which range from 5 to 11 years. Moreover, SDHDA is a party to similar HAP Contracts which cover 77 properties and 2385 housing units, SDHDA cannot properly and uniformly administer these contracts on an ongoing basis without prospective relief that establishes, for all these properties, (a) SDHDA's obligations with respect to calculating annual rent increases, and (b) HUD's obligations with respect to calculating and funding annual rent increases. (SDHDA Br. in Resp. to Supplemental Authority at 4.) SDHDA argues further that under Bowen, this Court has jurisdiction to award the monetary relief it seeks because such relief is incidental to the prospective, equitable relief it seeks under various statutes and 1043 regulations which allegedly govern HUD's funding obligations under Section 8. In Bowen, the Court recognized that the waiver of immunity under Section 702 is confined explicitly to claims seeking "other than money damages." Bowen, 487 U.S. at 900, 108 S.Ct. at 2735. The Court concluded that the State's suit to overturn a decision by the Secretary disallowing reimbursement under the Medicaid Act was not seeking money "in compensation for the damage sustained by the failure of the Federal Government to pay as mandated; rather, it [was] a suit seeking to enforce the statutory mandate itself, which happens to be one for the payment of money." The Court therefore concluded that the substance of the State's suit was one for specific relief, not money damages, and thus the suit fell within Section 702's waiver of immunity. Id. at 900-01, 108 S.Ct. at 2735-36. The Court finds that contrary to the Court's holding in Bowen, a money judgment in the Court of Federal Claims is an adequate substitute for the prospective relief that SDHDA seeks in this case. The facts of this case are actually quite different from that in Bowen. The allegation in Bowen was that the Secretary of Health and Human Services was interpreting Medicaid regulations contrary to what Congress had intended. A decision by the district court on the interpretation issue in Bowen could therefore affect future reimbursement payments under the Medicaid program. The claim in this case, however, is not that HUD is improperly administering the 1994 Congressional Amendments, but rather that the Amendments and HUD's subsequent implementation of those regulations through Notice H 95-12 are themselves unlawful because they violate the Constitution and various statutes and regulations which mandate funding by the Government of the Section 8 contracts. The statutes and regulations cited by SDHDA, unlike those in Bowen, may not serve to modify the future rights and responsibilities of the parties because there is no dispute that the 1994 Amendments are the supreme law of the land. Cuyahoga Metro. Hous. Auth. v. United States, 65 Fed.Cl. 534, 544 (2005) ("There is no real debate that the 1994 Act is the law of the land."). There is no evidence in the record of anything in the ACC and HAP contracts which purportedly barred the Government from changing the way in which it regulated Section 8. United States v. Winstar Corp., 518 U.S. 839, 868, 116 S.Ct. 2432, 2452, 135 L.Ed.2d 964 (1996). Such contracts, the United States Supreme Court has concluded, should be "interpreted as one to pay damages if performance is prevented rather than one to render a performance in violation of law." Id. at 869, 116 S.Ct. at 2452 (quoting Restatement (Second) of Contracts § 264). For these reasons, the argument by SDHDA that the Court has jurisdiction to hear its claims because it primarily seeks prospective relief pursuant to various statutes and regulations governing the rights and responsibilities of the parties under Section 8 is without merit. The fact that the statutes and remedies do not provide SDHDA a right to relief in this case does not mean SDHDA is without a remedy, as the Government will still be responsible for any breach of contract which may result from the new legislation. Cuyahoga Metro Housing Auth. v. United States ("Cuyahoga II"), 57 Fed.Cl. 751, 779 (Fed.Cl.2003) (stating that the unmistakability doctrine was not applicable to shield the government from liability for breach of HAP contracts which occurred when Congress passed 1994 amendments to the United States Housing Act because such legislation deliberately targeted HUD's contractual obligations under preexisting HAP contracts in an effort to reduce outlays under the Section 8 program.). The Court finds, however, that a 1044 money judgment in the Court of Federal Claims for any such breach will be adequate. With regard to the retroactive payments SDHDA seeks under the ACC and HAP Contracts, a money judgment in the Court of Federal Claims will give the parties the exact relief sought. The Court understands that the Court of Federal Claims does not have the power to grant future payments to which SDHDA and Plaintiffs may be entitled under the terms of their contracts. However, the Court finds that as in Consol. Edison Co. v. U.S. Dept. of Energy, 247 F.3d 1378, 1384-85 (Fed.Cir.2001), that any such prospective relief will be satisfied by the res judicata effect of a money judgment. See also Bowen, 487 U.S. at 926-27, 108 S.Ct. at 2749 (Scalia J., dissenting) (disagreeing with majority that there was no adequate remedy in the Claims Court since a successful claims for money damages in the Claims Court would have precedential as well as collateral estoppel effect and therefore would be as effective in establishing the state's future "rights as would a declaratory judgment in district court."). The Court understands that the unfortunate result of its decision is that SDHDA will have to engage in piecemeal litigation first in this Court as a Defendant and then, if Plaintiffs are successful, seek relief from the Secretary in the Court of Federal Claims. However, inconvenience is simply an insufficient reason to circumvent the jurisdiction of the Court of Federal Claims. II. Has sovereign immunity been waived in this Court under the Section 8 of the United States Housing Act of 1937? SDHDA contends that sovereign immunity is waived under Section 1404a of the United States Housing Act of 1937. 42 U.S.C. § 1404a. Section 1404a provides that the "[t]he Secretary of the Housing and Urban Development may sue and be sued only with respect to its functions under the United States Housing Act of 1937." 42 U.S.C. § 1404a. The Secretary argues that he is only a nominal party and that the suit is in reality a suit against the United States because any judgment would be satisfied from the public treasury and therefore sovereign immunity bars jurisdiction in this Court. While SDHDA names the Secretary rather than the United States as a party to this action, "the nominal classification attached to a party is not dispositive for sovereign immunity inquiries." 5th Bedford Pines Apartments, Ltd. v. Brandon, 262 F.Supp.2d 1369, 1375-76 (N.D.Ga.2003) (citing Land v. Dollar, 330 U.S. 731, 738, 67 S.Ct. 1009, 91 L.Ed. 1209 (1947)). "Instead, the nature of the relief sought is the guiding factor in determining whether a suit is against an agency or the United States itself. To avoid the bar of sovereign immunity, `any judgment for the plaintiff must be recoverable from funds in the possession and control of the Secretary that are severed from Treasury funds and Treasury control.'"[5]Id. (quoting Indus. 1045 Indent. Inc. v. Landrieu, 615 F.2d 644, 646 (5th Cir.1980)); see Weeks Constr., Inc. v. Oglala Sioux Hous. Auth., 797 F.2d 668, 676 n. 9 (8th Cir.1986) (stating that resolving questions of Tucker Act jurisdiction requires a court to distinguish between suits against the United States and suits against federal instrumentalities. "Drawing this distinction requires a determination whether any recovery of damages may be had only from funds in the possession and control of the agency or whether recovery may be had from public funds in the United States Treasury."). As discussed above, the statutes and regulations cited by SDHDA may not serve to modify the future rights and responsibilities of the parties as SDHDA seeks to do, and its only avenue of relief against the Secretary is for breach of its ACC contracts. All of the cases that have examined the issue have concluded that funds from ACC contracts come from the public treasury, not from funds within the control of HUD. Portsmouth Redevelopment & Hous. Auth. v. Pierce, 706 F.2d 471, 473 (4th Cir.1983) ("The funds appropriated to HUD for payment of operating subsidies clearly originate in the public treasury, and they do not cease to be public funds after they appropriated."); 5th Bedford Pines Apartments, Ltd. v. Brandon, 262 F.Supp.2d 1369 (N.D.Ga. 2003) (evaluating whether terms of a contract between landlord and HUD required HUD to pay housing assistance payments into state magistrate court's registry to make up the difference between tenant's subsidized rent amount and full amount of rent that was being required by court for tenant); Fryar v. Kemp, 774 F.Supp. 1033 (W.D.La.1991); Carlyle Gardens Co. v. Del. State Hous. Auth., 659 F.Supp. 1300 (D.Del.1987); 1610 Corp. v. Kemp, 753 F.Supp. 1026 (D.Mass.1991); Greenleaf Ltd. P'ship v. Ill. Hous. Dev. Auth., Nos. 08-2480, 08-3446, 2009 WL 449100 (N.D.Ill. Feb. 23, 2009). For the foregoing reasons, the Court finds that the claims asserted by SDHDA in its Third-Party Complaint are against the United States, as the real party in interest. The United States has not waived its immunity as to these claims 1046 under 42 U.S.C. § 1404a and the claims are therefore dismissed for lack of jurisdiction.[6] It is hereby ORDERED that the Secretary's Motion to Dismiss SDHDA's Third Party Complaint, Doc. 43, is GRANTED. SDHDA's claims fall outside the waivers of sovereign immunity under the APA and the United States Housing Act of 1937 and thus this Court lacks subject matter jurisdiction over these claims. SDHDA's claims against the Secretary are dismissed without prejudice. NOTES [1] In the Court's Order of December 15, 2008, the Court asked the parties to respond to whether the claims of Plaintiffs, Cathedral Square Partners Limited Partnership, West Park, Ltd., 46th Street Partners Limited Partnership, and Riverview Park, Ltd., arose under federal law such that this Court has jurisdiction over the case. The Court appreciates the parties' response to this matter and after reading briefs submitted by both parties as to this issue, the Court is satisfied that it has jurisdiction over the claims brought by Plaintiffs. The focus of this opinion will therefore be on whether the Court has jurisdiction over the claims asserted by SDHDA in this Third-Party Complaint. [2] Section 702 of the APA provides in relevant part: "A person suffering legal wrong because of agency action, or adversely affected or aggrieved by the agency action within the meaning of a relevant statute, is entitled to judicial review thereof." [3] 28 U.S.C. § 1491(a)(2) provides that "[t]o provide an entire remedy and to complete the relief afforded by the judgment, the [Court of Federal Claims] may, as an incident of and collateral to any such judgment, issue orders directing restoration to office or position, placement in appropriate duty or retirement status, and correction of applicable records.. . ." [4] For example, SDHDA cites 42 U.S.C. § 1437f(c)(5) which provides that "[t]he Secretary shall take such steps as may be necessary. . . to assure that assistance payments are increased on a timely basis to cover increases in maximum monthly rents or decreases in family incomes." Furthermore, SDHDA states that HUD regulation 24 C.F.R. § 883.604(b)(1), provides that a segregated project account will be established and maintained by HUD from each project from which payments will be made for housing assistance payments and fees for SDHDA administration, if appropriate, when needed to cover increases in contract rents and for other costs approved by the Secretary. SDHDA cites further HUD regulation 24 C.F.R. § 883.604(b)(2), which provides that whenever a HUD-approved estimate of required payments under an ACC for a fiscal year exceeds the maximum annual commitment, HUD will take such additional steps as may be necessary to assure that payments under the ACC will be adequate to cover increase in contract rents. (SDHDA Br. in Opp'n to Sec'y Mot. To Dismiss at 14.) SDHDA also Cherokee Nation of Okla. v. Leavitt, 543 U.S. 631, 646, 125 S.Ct. 1172, 161 L.Ed.2d 66 (2005) for the proposition that the 1994 Congressional Amendments and Notice 95-12 may violate the Constitution because they retroactively repudiate the Government's contractual obligations. (SDHDA Br. in Resp. to Supplemental Authority at 4.) [5] In reading the parties' briefs in support of and in opposition to the Secretary's motion to dismiss, it appeared that they were in agreement that whether a claim for relief is considered as against the United States for purposes of a waiver of sovereign immunity under 42 U.S.C. § 1404a depends on whether recovery of damages will be had from the public treasury. However, in its response to the Secretary's Notice of Supplemental Authority, SDHDA appears to contradict its first assertion by arguing to the Court that under the Eighth Circuit's opinion in Bor-Son Bldg. Corp. v. Heller, 572 F.2d 174, 180-81 (8th Cir.1978), the Court need not look at the source of funds in deciding the sovereign immunity question, but just at whether the claims at issue relate to acts performed by the Secretary in carrying out his functions under the United States Housing Act of 1937. (Response to Supplemental Authority at x.) While the Supreme Court has recognized that "sue-and-be-sued waivers are to be `liberally construed,' notwithstanding the general rule that waivers of sovereign immunity are to be read narrowly in favor of the sovereign," FDIC v. Meyer, 510 U.S. 471, 480, 114 S.Ct. 996, 127 L.Ed.2d 308 (1994), the Court finds the Eighth Circuit's decision in Weeks Constr., Inc. v. Oglala Sioux Hous. Auth., 797 F.2d 668, 676 n. 9 (8th Cir.1986) to be controlling in this case. As a result, the resolution of this jurisdictional issue requires the Court to determine the source of funds that will be used to pay a judgment in this case. Bor-Son Bldg. Corp. concerned the applicability of the "sue and be sued" provision under the National Housing Act, 12 U.S.C. § 1702, which is not at issue in this case, whereas Weeks focused on the precise question that is before the Court. In Weeks, the Eighth Circuit examined whether jurisdiction was proper in the district court under Section 1404a of the United States Housing Act of 1937, 42 U.S.C. § 1404a, or whether jurisdiction properly lay in the Court of Federal Claims pursuant to the Tucker Act, 28 U.S.C. § 1491. The Court held that resolving questions of Tucker Act jurisdiction requires a court to distinguish between suits against the United States and suits against federal instrumentalities. Id. at 676 n. 9. The jurisdiction of the Federal Court of Claims under the Tucker Act is limited to claims "against the United States, founded either upon the Constitution, or any Act of Congress or any regulation of an executive department, or upon any express or implied contract with the United States. . . ." 28 U.S.C. § 1491(a)(1), whereas a waiver of sovereign immunity under 42 U.S.C. § 1404a will be found only for claims that are not considered to be against the United States. "Drawing this distinction," the Court in Weeks stated, "requires a determination whether any recovery of damages may be had only from funds in the possession and control of the agency or whether recovery may be had from public funds in the United States." Weeks, 797 F.2d at 676 n. 9. [6] The Court also notes that if the Secretary and not against the United States is deemed as the real party in interest for Section 1404a purposes, jurisdiction may not lie in the Court of Federal Claims under the Tucker Act. Tucker Act jurisdiction is limited to claims "against the United States founded either upon the Constitution, or any Act of Congress or any regulation of an executive department, or upon any express or implied contract with the United States." 28 U.S.C. § 1491. This view is further supported by Weeks, 797 F.2d at 676 n. 9, in which the Eighth Circuit explicitly stated that whether jurisdiction is proper in the district court under Section 1404a of the United States Housing Act of 1937, 42 U.S.C. § 1404a, or whether jurisdiction properly lay in the Court of Federal Claims pursuant to the Tucker Act, 28 U.S.C. § 1491, depends on whether the action is one against the United States or a federal instrumentality. It does not appear in the briefs that SDHDA argues that the Court of Federal Claims lacks jurisdiction under the Tucker Act to hear the claims presented by SDHDA in its Third-Party Complaint. SDHDA contends, rather, that a monetary judgment in the Court of Federal Claims is an inadequate remedy in this case and that the district court also has jurisdiction to hear these claims pursuant to the waivers of immunity found in the APA and Section 1404a of the United States Housing Act of 1937.	{ "pile_set_name": "FreeLaw" }
582 N.W.2d 264 (1998) Ka Ying VUE, et al., Respondent, v. STATE FARM INSURANCE COMPANIES, petitioner, Appellant. No. C1-97-632. Supreme Court of Minnesota. August 6, 1998. Meagher & Geer, P.L.L.P., William M. Hart, Katherine A. McBride, Leatha G. Wolter, Minneapolis, for appellant. Katz & Manka, Ltd., Scott A. Teplinsky, Cameron M. Parkhurst, Minneapolis, for respondent. Heard, considered, and decided by the court en banc. OPINION GARDEBRING, Justice. In this case, an automobile insurer challenges the presumption, created by statute and case law, that the person named on an automobile title as buyer is the vehicle's owner. Instead, the insurer, relying on the theories of joint ownership arising out of marital dissolution laws, asks us to establish a presumption that the spouse of the individual named on the vehicle title is also an owner. Because we find no basis in the Minnesota 265 No-Fault Act or in our previous cases for such a position, we reject the insurer's claim and affirm the court of appeals. Respondent Ka Ying Vue was a passenger in a 1985 Buick Skylark driven by her husband Ker Vang on January 22, 1996, when the car was involved in a collision with an uninsured stolen motor vehicle.[1] The Buick Skylark title named only Vang as the buyer of the vehicle; it was not insured at the time of the collision. However, appellant State Farm Insurance Companies ("State Farm") had issued an insurance policy covering Vang's other vehicle, a 1979 Chevrolet van, and Vue was an additional insured under that policy. Vue filed suit against State Farm, claiming uninsured motorist benefits under the State Farm policy covering the Chevrolet van, based on the uninsured status of the stolen vehicle. State Farm filed a motion for summary judgment against Vue, claiming that Vue was not covered under the policy because she was occupying an owned but uninsured vehicle at the time of the accident. The district court granted State Farm's motion for summary judgment, concluding that there was no coverage because: (1) the Buick Skylark was not an "uninsured vehicle" under the policy, which excluded uninsured motorist coverage if the uninsured vehicle was one "[o]wned by or furnished or available for the regular use of you or any family member;" and (2) the Buick Skylark was a "family vehicle," and therefore the exclusion for injury "to any insured while occupying a motor vehicle owned or leased by the insured if it is not insured for uninsured motor vehicle coverage" was applicable to Vue's claim. On appeal, the court of appeals reversed. See Vue v. State Farm Ins. Companies, 568 N.W. 2d 527 (Minn.App.1997). The court held that Vang, who held legal title to the Buick Skylark, was the vehicle owner, and not Vue. Id. at 529. Since Vue was not an owner of the Buick Skylark, the court held that the exclusion for injury "to any insured while occupying a motor vehicle owned or leased by the insured" did not apply to Vue. Id. The court also held that, to the extent the trial court based its decision on the uninsured status of the Buick Skylark, the court erred in granting summary judgment, since the claim for coverage was based on the uninsured status of the other vehicle involved in the collision, and not on the uninsured status of the Buick Skylark. Id at fn. 3. State Farm now appeals. On appeal from summary judgment, this court must determine whether there are any genuine issues of material fact and whether the trial court erred in its application of the law. Vesta State Bank v. Independent State Bank, 518 N.W.2d 850, 853 (Minn.1994). Questions of statutory construction are questions of law, and thus subject to de novo review. Hibbing Educ. Ass'n v. Public Employment Relations Bd., 369 N.W.2d 527, 529 (Minn.1985). Interpretation of an insurance policy, and its application to the facts of the case, are likewise questions of law. Meister v. Western Nat'l Mut. Ins. Co., 479 N.W.2d 372, 376 (Minn.1992). Although State Farm concedes that Vue has alleged facts sufficient to establish a prima facie case of coverage for uninsured motorist benefits, the insurer argues that Vue is nevertheless precluded from receiving benefits because of an exclusionary clause in the policy.[2] The policy on the Chevrolet van 266 provides that "there is no [uninsured motorist] coverage * * * for bodily injury to any insured while occupying a motor vehicle owned or leased by the insured if it is not insured for uninsured motor vehicle coverage." State Farm argues that Vue is a co-owner of the Buick Skylark that she was occupying at the time of the accident and was therefore "occupying a motor vehicle owned or leased by the insured." Thus, it is State Farm's position that she is barred from recovering uninsured motorist benefits under the policy. Both parties agree that the sole issue on review is whether Vue is an owner of the uninsured Buick Skylark. If Vue is an owner, the exclusionary clause would apply to preclude coverage for her injuries; if Vue is not an owner, then the exclusionary clause would not apply and Vue would be entitled to receive uninsured motorist benefits as an "insured" under her husband's policy on the Chevrolet van.[3] The State Farm policy does not define the "owner" of a motor vehicle. However, the legislature has provided guidance on this issue. The Minnesota No-Fault Automobile Insurance Act, Minn.Stat. §§ 65B.41-.71 (1996) (hereinafter, "No-Fault Act") defines an "owner" of a motor vehicle as "a person, other than a lienholder or secured party, who owns or holds legal title to a motor vehicle or is entitled to the use and possession of a motor vehicle." Minn.Stat. § 65B.43, subd. 4. Vue's husband Vang is listed on the title as the sole buyer of the vehicle. This court has previously established that the certificate of title creates a rebuttable presumption of ownership for purposes of both the No-Fault Act and the Motor Vehicle Certificate of Title Act, Minn.Stat. ch. 168A (1996). Arneson v. Integrity Mut. Ins. Co., 344 N.W.2d 617, 618 (Minn.1984). We have also made clear that a party may introduce extrinsic evidence to rebut the presumption and prove that someone else actually owns the vehicle in question. Id. State Farm, however, argues that as the spouse of the owner named on the title, Vue is a presumptive co-owner of the vehicle. To support its argument, State Farm points to the statutory presumption in marital dissolution that any property acquired during a marriage "by the parties * * * to a dissolution, legal separation, or annulment" is presumed to be marital property "regardless of whether title is held individually or by the spouses in a form of coownership." Minn.Stat. § 518.54, subd. 5 (1996). State Farm argues that the same deference accorded to the marital relationship in the context of property division for dissolution purposes should be constructively applied to the marital relationship in the context of motor vehicle insurance. As additional support for its general argument that Vue is not entitled to received uninsured motorist benefits, State Farm directs our attention to the policy enunciated in Hanson v. American Family Mut. Ins. Co., 417 N.W.2d 94 (Minn.1987). In Hanson and its progeny, this court recognized that the 1985 amendments to the Minnesota No-Fault Act "reflect a broad policy decision to tie uninsured motorist * * * coverage to the particular vehicle involved in an accident." Id. at 96. Hanson interpreted the 1985 amendments to preclude uninsured motorist coverage where the injured claimant was driving his own uninsured vehicle but owned another insured motor vehicle.[4]Id. The amendments provided in part: (7) The uninsured and underinsured motorist coverages required by this subdivision 267 do not apply to bodily injury of the insured while occupying a motor vehicle owned by the insured, unless the occupied vehicle is an insured motor vehicle. Minn.Stat. § 65B.49, subd. 3a(7). In the present case, however, this statutory provision does not apply, for the same reason that the policy provision that mirrors it does not applybecause, based on the present state of the record, there is no indication that Vue was occupying a motor vehicle she owned. State Farm also argues that Minn.Stat. § 65B.49, subd. 3a(5) should operate to preclude benefits for Vue in this case. That section provides that (5) If at the time of the accident the injured person is occupying a motor vehicle, the limit of liability for uninsured and underinsured motorist coverages available to the injured person is the limit specified for that motor vehicle. However, if the injured person is occupying a motor vehicle of which the injured person is not an insured, the injured person may be entitled to excess insurance protection afforded by a policy in which the injured party is otherwise insured. Minn.Stat. § 65B.49, subd. 3a(5). Vue was certainly occupying a motor vehicle at the time of the accident. Ordinarily, subdivision 3a(5) would operate to require the injured occupant to look first and exclusively to the policy limits on the occupied vehicle for uninsured motorist benefits. However, the statute allows an injured occupant to look to another policy that might provide coverage, if the injured person is not an "insured" of the motor vehicle occupied. Since no insurance policy, as required by the No-Fault Act, existed for the Buick Skylark at the time of the accident, Vue was not an "insured" of that vehicle and can look to the policy on the Chevrolet van, under which she is an insured. We also find the trial court's reliance on Petrich ex rel Lee v. Hartford Fire Ins. Co., 427 N.W.2d 244 (Minn. 1988) to be misplaced. The issue in Petrich was whether an insured stepson could collect uninsured motorist benefits from his stepfather's policy after a single-car collision in an uninsured motor vehicle owned by the stepfather. Id. at 245. The key difference between Petrich and this case is that in Petrich it was the uninsured status of the occupied vehicle that was asserted in order to claim uninsured motorist benefits. However, in this case the other vehicle involved in the collision was uninsured, forming the basis of Vue's claim for uninsured motorist benefits. In the face of applicable statutory language, our previous cases and even the provisions of its own policy, State Farm urges this court either to recognize a new rebuttable presumption, that the spouse of the person named on the title as the vehicle's owner is also a co-owner of the vehicle, or to read into the statute and contract at issue prohibitions that simply do not exist. We decline to do either. No-fault automobile insurance is not judicially created, but the product of statute and contract. We recognize the legislative interest in requiring owners of motor vehicles in this state to maintain insurance policies to compensate for losses associated with maintenance or use of a motor vehicle. See Minn. Stat. § 65B.42(1). We also recognize the policy argument that "a family owning two motor vehicles should not be permitted to pay for insurance on only one and recover benefits for injuries sustained while operating the other." Nygaard v. State Farm Mut. Auto. Ins. Co., 301 Minn. 10, 18-19, 221 N.W.2d 151, 156 (1974). However, there is no provision in either the No-Fault Act or the State Farm insurance policy before us that precludes uninsured motorist coverage on the facts of this case, as presently developed. Further, we think that to import into the tightly drafted statutory scheme of no-fault insurance, property concepts from marital dissolution, another statutory creature, is to risk disrupting both areas of the law and creating significant unintended consequences. Finally we note that State Farm is not without a remedy. Both the statute and the contract provide a mechanism by which State Farm can rebut the statutory presumption that Vang, as the sole owner listed on the title, is the sole owner of the Buick Skylark. We cannot attribute to Vue ownership of the Buick Skylark when State Farm has not even inquired into the factual basis for its claim 268 that she is an owner of the Buick. On remand, State Farm may yet delve into the factual questions behind the naked title to establish "use or possession" of the Skylark by Vue to prove that Vue is an owner of the Buick Skylark. On summary judgment, however, we are limited to the record before us, which is devoid of any such extrinsic evidence to rebut the presumptive evidence of the title that Vang is the sole owner of the Buick Skylark. We emphasize that our holding today is limited to the issue before us. We simply hold that, in the absence of extrinsic evidence to rebut the presumption that the injured claimant is not an owner of the vehicle she was occupying at the time of the accident, the exclusionary clauses in the policy and Minn.Stat. § 65B.49, subds. 3a(5), (7) do not preclude uninsured motorist benefits. Accordingly, we affirm the decision of the court of appeals, reversing the trial court's grant of summary judgment in favor of State Farm. Affirmed and remanded for proceedings consistent with this opinion. NOTES [1] Since the vehicle that collided with the Buick Skylark was a stolen vehicle, it was uninsured for purposes of this litigation. The driver of the stolen vehicle ran through a stop sign while attempting to elude police. [2] In an action to determine insurance coverage, the insured bears the initial burden of proof to establish a prima facie case of insurance coverage and entitlement to benefits. SCSC Corp. v. Allied Mut. Ins. Co., 536 N.W.2d 305, 311 (Minn.1995). Once the insured has established a prima facie case of coverage, the burden shifts to the insurer to prove the applicability of any exclusionary clause asserted as an affirmative defense to the insured's claim of coverage. Id. at 313. The policy covering the Chevrolet van provided that State Farm "will pay damages for bodily injury an insured is legally entitled to collect from the owner or driver of an uninsured motor vehicle. The bodily injury must be caused by accident arising out of the operation, maintenance or use of an uninsured motor vehicle." In the present case, Vue is an insured under the Chevrolet van policy, which defines an insured, in relevant part, as "1. the first person named in the declarations; [and] 2. his or her spouse." Vang was the insured under the van policy; thus, his spouse Vue is also an insured. Further, the Minnesota No-Fault Act, Minn.Stat. §§ 65B.41.71 (1996) (hereinafter, "No-Fault Act"), provides that an insured, for purposes of the act, includes "the named insured and the following persons not identified by name as an insured while (a residing in the same household with the named insured and (b) not identified by name in any other contract * * * as an insured: (1) a spouse." Minn.Stat. § 65B.43, subd. 5. [3] At oral argument, State Farm conceded that under our prior holdings, "the insured" in the exclusionary clause must be construed as the same person as "any insured" earlier in the clause. See Hogs Unlimited v. Farm Bureau Mut. Ins. Co., 401 N.W.2d 381, 384-85 (Minn.1987). Thus, the exclusionary clause would apply to Vue only if Vue owns the Buick Skylark. [4] In Hanson, we expressly reserved the question of "what effect section 65B.49, subd. 3a(7), might have on a claimant who does not own the [vehicle] involved in the accident." Hanson, 417 N.W.2d at 96, n. 2.	{ "pile_set_name": "FreeLaw" }
Filed 4/30/18 CERTIFIED FOR PUBLICATION COURT OF APPEAL, FOURTH APPELLATE DISTRICT DIVISION ONE STATE OF CALIFORNIA THE PEOPLE, D071983 Plaintiff and Respondent, v. (Super. Ct. No. MH110895) JOSEPH BOCKLETT, Defendant and Appellant. APPEAL from a judgment of the Superior Court of San Diego County, Howard H. Shore, Judge. Affirmed. Rudy Kraft, under appointment by the Court of Appeal, for Defendant and Appellant. Xavier Becerra, Attorney General, Gerald A. Engler, Chief Assistant Attorney General, Julie L. Garland, Assistant Attorney General, Arlene A. Sevidal and Minh U. Le, Deputy Attorneys General, for Plaintiff and Respondent. Joseph Bocklett appeals from a jury verdict adjudicating him a sexually violent predator (SVP) under the Sexually Violent Predators Act (the Act) (Welf. & Inst. Code, 1 § 6600 et seq.). On appeal, he challenges the constitutionality of Penal Code section 3000, subdivision (a)(4) (hereafter Penal Code section 3000(a)(4)), which tolls the parole period for an SVP on equal protection and ex post facto grounds. He also asserts that the procedure for obtaining conditional release under the Act violates equal protection. We disagree and affirm the judgment. FACTUAL AND PROCEDURAL BACKGROUND In November 2014 the San Diego County District Attorney filed a petition seeking to commit Bocklett as an SVP under the Act. Bruce Yanofsky, Ph.D., a clinical and forensic psychologist, evaluated Bocklett to determine whether he is an SVP. Dr. Yanofsky interviewed Bocklett three times—in 2014, 2015 and 2016. He reviewed Bocklett's criminal records, medical records, probation reports, and police reports for two of Bocklett's crimes. Dr. Yanofsky read a police report regarding the offense Bocklett committed in 1976, and then talked to Bocklett about that conviction. In 1976, when Bocklett was 31 years old, he molested his nine-year old stepdaughter for several months. He then started molesting his five-year-old stepdaughter. Bocklett explained that he started molesting his stepdaughters for sexual gratification and found their innocence appealing. He pleaded guilty to a single count of committing a lewd or lascivious act on his younger stepdaughter in violation of Penal Code section 288. Bocklett was placed on probation 1 Undesignated statutory references are to the Welfare and Institutions Code. 2 and received treatment. He did not find the treatment to be effective and did not "care for it." In 1983, when he was 38 years old, Bocklett married a woman and then began molesting his four-year-old stepson by having the child play with his penis, engaging in mutual oral copulation and then sodomizing the boy. Bocklett admitted to Dr. Yanofsky that he enjoyed molesting the boy, had fantasies about him, and acted out or experimented with some of his fantasies with the boy. The molestation continued for approximately a year, on an almost weekly basis. Bocklett pleaded guilty to sodomy (Pen. Code, § 286, subd. (c)) and was sentenced to 13 years in prison. He was released from prison in 1990 and received treatment. He stopped receiving treatment because he did not want to hear about other people's problems. Bocklett also told Dr. Yanofsky that in 1994 he molested the four-year-old daughter of a woman he had met through a dating service and eventually married. He saw the child naked and became excited. He started "rubbing her." He later orally copulated and digitally penetrated the child. He found the molestation difficult to stop and believed that the conduct was "okay" as long as it was consensual or the child went along with it. He eventually pleaded guilty to a lewd or lascivious act on a child under 14 years old (Pen. Code, § 288, subd. (a)). Dr. Yanofsky determined that Bocklett had three qualifying prior convictions for sexual offenses and thus met the first SVP criteria. Bocklett also satisfied the second SVP criteria, the presence of a mental health condition that predisposes a person to commit sexual crimes. Specifically, Dr. Yanofsky diagnosed him with pedophilic 3 disorder, mixed type and nonexclusive in that Bocklett is sexually attracted to both male and female individuals, young children, and adults. Dr. Yanofsky also determined that Bocklett was likely to engage in violent sex offenses if released, the third SVP criteria. Dr. Yanofsky testified that Bocklett's reoffense would be predatory in nature because Bocklett has a history of forming relationships with vulnerable woman to gain access to their children to gratify his sexual needs. Harry Goldberg, Ph.D., a forensic psychologist, also interviewed Bocklett three times over three years to determine if Bocklett met the criteria for commitment as an SVP. Dr. Goldberg also reviewed Bocklett's records, including police reports. Dr. Goldberg opined that Bocklett met the criteria for commitment as an SVP. Brian Abbott, Ph.D., a licensed clinical psychologist, testified for the defense. He interviewed Bocklett three times—in March 2015, April 2016 and January 2017. Dr. Abbott testified that Bocklett does not currently suffer from pedophilic disorder. Dr. Abbott found that Bocklett "may have continued to have pedophilic arousal through 2008," but there was no evidence that Bocklett suffered from the disorder after 2008. Dr. Abbott did not believe that Bocklett posed a serious and well-founded risk of engaging in sexually violent predatory acts. Dr. Abbott reviewed the evaluations prepared by Drs. Yanofsky and Goldberg. Dr. Abbott criticized the clinically adjusted actuarial approach utilized by Drs. Yanofsky and Goldberg to evaluate Bocklett. Although such an approach identifies sources of risk, Dr. Abbott testified that an SVP evaluation is concerned with the probability or 4 likelihood of risk. Thus, in Dr. Abbott's opinion, the approach utilized by Drs. Yanofsky and Goldberg is not relevant in addressing the substantial danger threshold. DISCUSSION I. THE ACT An SVP is defined as "a person who has been convicted of a sexually violent offense against one or more victims and who has a diagnosed mental disorder that makes the person a danger to the health and safety of others in that it is likely that he or she will engage in sexually violent criminal behavior." (§ 6600, subd. (a)(1).) Whenever the director of the Department of Corrections and Rehabilitation determines that a defendant serving a prison term may be an SVP, a screening is conducted in accordance with an assessment protocol developed by the Department of State Hospitals (DSH). (People v. Hurtado (2002) 28 Cal.4th 1179, 1183.) " 'If that screening leads to a determination that the defendant is likely to be [an SVP], the defendant is referred to the [DSH] for an evaluation by two psychiatrists or psychologists. (§ 6601, subds. (b) & (c).) If both find that the defendant "has a diagnosed mental disorder so that he or she is likely to engage in acts of sexual violence without appropriate treatment and custody" (§ 6601, subd. (d)), [DSH] forwards a petition for commitment to the county of the defendant's last conviction (ibid.). If the county's designated counsel concurs with the recommendation, he or she files a petition for commitment in the superior court. (§ 6601, subd. (i).)' " (Ibid.) The trial court reviews the petition and determines "whether the petition states or contains sufficient facts that, if true, would constitute probable cause to believe that the 5 [alleged SVP] is likely to engage in sexually violent predatory criminal behavior upon his or her release." (§ 6601.5.) If the trial court determines the petition, on its face, supports a finding of probable cause, then the court orders that the offender be kept in a secure facility until a probable cause hearing under section 6602 is conducted. (§ 6601.5.) If the trial court finds probable cause, it orders a trial to determine whether the offender is an SVP under section 6600. (§ 6602, subd. (a).) The offender must remain in a secure facility between the time probable cause is found and the time trial is completed. (Ibid.) At trial, the trier of fact determines whether, beyond a reasonable a doubt, the offender is an SVP. (§ 6604.) To establish a person is an SVP, the government must prove the following: (1) the offender has been convicted of a qualifying sexually violent offense against at least two victims, (2) the offender has a diagnosed mental disorder, (3) the disorder makes it likely the offender would engage in sexually violent conduct if released, and (4) this sexually violent conduct will be predatory in nature. (Cooley v. Superior Court (2002) 29 Cal.4th 228, 246 & fn. 9.) The government must establish these elements beyond a reasonable doubt and the jury must unanimously agree before finding the defendant is an SVP. (Reilly v. Superior Court (2013) 57 Cal.4th 641, 648.) If the trier of fact determines the offender is an SVP, the offender is committed for an indefinite term to the custody of the DSH for appropriate treatment and confinement in a secure facility. (§ 6604.) Persons undergoing the commitment process as an SVP and persons committed as an SVP have their parole periods tolled until they are discharged from their SVP commitment. (Pen. Code, § 3000(a)(4).) 6 II. ALLEGED EVIDENTIARY ERROR A. Additional Background The People sought the admission of three exhibits—one relating to each of Bocklett's qualifying offenses. Two of these exhibits contained redacted police reports relating to his 1983 and 1994 qualifying offenses. Defense counsel objected to the admission of the police reports as unreliable hearsay and not admissible under section 6600 and People v. Sanchez (2016) 63 Cal.4th 665 (Sanchez). She contrasted the police reports with probation reports, which are subject to correction should a defendant object to the accuracy of their content. The trial court admitted the exhibits into evidence, explaining that the reports were admissible under section 6600, subdivision (a)(3). B. Analysis Bocklett contends that the admission of the police reports regarding his 1983 and 1994 qualifying offenses violated his right to due process. He claims that the admission of the police reports was highly prejudicial as these reports provided the only real source of information describing his most recent qualifying offense. Even assuming, without deciding, that admission of the police reports was error, we conclude that the assumed error was harmless. " 'Hearsay evidence' is evidence of a statement that was made other than by a witness while testifying at the hearing and that is offered to prove the truth of the matter stated. [¶] . . . Except as provided by law, hearsay evidence is inadmissible." (Evid. Code, § 1200, subds. (a), (b).) On direct examination, experts may testify regarding the matters on which they relied in forming their opinion, but they may not testify as to the 7 details of such matters if they are otherwise inadmissible. (People v. Coleman (1985) 38 Cal.3d 69, 92, disapproved on another point in People v. Riccardi (2012) 54 Cal.4th 758, 824, fn. 32.) "The rule rests on the rationale that while an expert may give reasons on direct examination for his opinions, including the matters he considered in forming them, he may not under the guise of reasons bring before the jury incompetent hearsay evidence." (Coleman, at p. 92.) We apply "the abuse of discretion standard of review to any ruling by a trial court on the admissibility of evidence, including one that turns on the hearsay nature of the evidence in question." (People v. Waidla (2000) 22 Cal.4th 690, 725.) An error regarding the admission of evidence requires reversal if "it is reasonably probable that a result more favorable to the appealing party would have been reached in the absence of the error." (People v. Watson (1956) 46 Cal.2d 818, 836.) In Sanchez, supra, 63 Cal.4th 665, our Supreme Court held that an expert cannot "relate as true case-specific facts asserted in hearsay statements, unless they are independently proven by competent evidence or are covered by a hearsay exception." (Id. at p. 686.) The court nevertheless reaffirmed the principle that an "expert may still rely on hearsay in forming an opinion, and may tell the jury in general terms that he did so." (Id. at p. 685.) The Sanchez rule applies to civil SVP proceedings. (People v. Roa (2017) 11 Cal.App.5th 428, 448-449; People v. Burroughs (2016) 6 Cal.App.5th 378, 403 (Burroughs).) "The existence of any prior convictions [in an SVP proceeding] may be shown with documentary evidence . . . including, but not limited to, preliminary hearing transcripts, trial transcripts, probation and sentencing reports, and evaluations by the 8 [DSH]." (§ 6600, subd. (a)(3).) Our high court later explained that "[b]y permitting the use of presentence reports at the SVP proceeding to show the details of the crime, the Legislature necessarily endorsed the use of multiple-level-hearsay statements that do not otherwise fall within a hearsay exception." (People v. Otto (2001) 26 Cal.4th 200, 208 (Otto), italics added.) The expansive hearsay exception accorded by section 6600, subdivision (a)(3) was intended to relieve victims of the burden of testifying about the details of crimes committed many years ago. (Otto, at p. 208.) The Otto court concluded that the statutory authorization regarding the admission of such evidence did not violate a defendant's right to due process. (Id. at p. 203.) In Burroughs, the court held that police reports were admissible under the Otto hearsay exception. (Burroughs, supra, 6 Cal.App.5th at p. 410.) Bocklett argues that the analysis in Burroughs was flawed. We need not address this issue because, even if the trial court erroneously admitted the police reports, the assumed error was harmless based on the expert testimony that relayed substantially all the conduct stated in the police reports. First, Bocklett tacitly conceded that admission of the police report regarding his 1983 conviction was harmless. The police report for that crime relayed the victim's statement to his mother that Bocklett had " 'stuck his penis up [my] butt.' " Bocklett, however, admitted this conduct to both Drs. Yanofsky and Goldberg. Bocklett told Dr. Yanofsky that he had engaged in mutual oral copulation with and sodomized the victim. Bocklett admitted essentially the same conduct to Dr. Goldberg. 9 The 1994 police report for Bocklett's 2000 conviction contains the victim's statement to her mother that Bocklett had touched her private parts while she was naked. She also told the police that she and Bocklett had put their " 'bodies' " and " 'privacies' " together. Regarding this conviction, Bocklett told Dr. Yanofsky that he rubbed, orally copulated, and digitally penetrated the victim. He also told Dr. Goldberg that he would have the victim "sit on his lap and rock back and forth, and that led him to other incidents in which he would take his clothes off, would place lotion on [the victim] and fondle and penetrate her vagina, and then he also engaged in acts of oral copulation of her." Bocklett does not contest that these statements were admissible under the hearsay exception for a party admission under Evidence Code section 1220. (People v. Hovarter (2008) 44 Cal.4th 983, 1007-1008.) Based on this overwhelming admissible evidence of qualifying sexually violent offenses, any error in receiving the police reports in evidence was harmless. For the same reason, there is no basis for Bocklett's contention that his due process right to a fair trial was violated. III. ALLEGED CONSTITUTIONAL VIOLATIONS A. Alleged Equal Protection Violation Regarding Tolling 1. General background California provides for the involuntary civil commitment of several classes of offenders, either after or in lieu of a term of criminal incarceration, based on the risk of danger that they present to others or to themselves. These include SVP's (§ 6600 et seq.) and mentally disordered offenders (MDO's) (Pen. Code, § 2960 et seq. (the MDO Act)). 10 Under the MDO Act, "offenders who have been convicted of violent crimes related to their mental disorders, and who continue to pose a danger to society, receive mental health treatment during and after the termination of their parole until their mental disorder can be kept in remission. [Citation.] Although the nature of an offender's past criminal conduct is one of the criteria for treatment as [an MDO], the MDO Act itself is not punitive or penal in nature. [Citation.] Rather, the purpose of the scheme is to provide MDO's with treatment while at the same time protecting the general public from the danger to society posed by an offender with a mental disorder." (In re Qawi (2004) 32 Cal.4th 1, 9.) The MDO Act provides that an MDO may be involuntarily committed at three different stages: as a condition of parole (Pen. Code, § 2962), in conjunction with the extension of parole (Pen. Code, § 2966, subd. (c)), and following release from parole (Pen. Code, §§ 2970 & 2972). (Lopez v. Superior Court (2010) 50 Cal.4th 1055, 1061- 1063, disapproved on other grounds by People v. Harrison (2013) 57 Cal.4th 1211, 1230, fn. 2.) 2. Equal protection and the Act "Equal protection requires the state to treat similarly situated persons alike, with some exceptions in which the disparate treatment is sufficiently related to the purpose of the [law] in question." (People v. Jacobs (1992) 6 Cal.App.4th 101, 103.) The equal protection clause applies to civil commitment statutes "to ensure that a particular group of civil committees is not unfairly or arbitrarily subjected to greater burdens." (People v. McKee (2010) 47 Cal.4th 1172, 1199 (McKee I).) The similarly situated inquiry 11 examines whether two groups are similarly situated for purposes of the law challenged, not whether they are similarly situated for all purposes. (Id. at p. 1202.) The threshold question is "whether two classes that are different in some respects are sufficiently similar with respect to the laws in question to require the government to justify its differential treatment of these classes under those laws." (Ibid.) "If persons are not similarly situated for purposes of the law, an equal protection claim fails at the threshold." (People v. Buffington (1999) 74 Cal.App.4th 1149, 1155.) The McKee I court concluded that MDO's and SVP's were similarly situated for purposes of equal protection analysis regarding the length of their commitment and the burden to prove release. (McKee I, supra, 47 Cal.4th at pp. 1202-1203.) The case was remanded to the trial court to determine whether the People could demonstrate "the constitutional justification" (id. at p. 1208) for the indefinite commitment provisions of the Act and imposing on SVP's a greater burden than is imposed on MDO's in order to obtain release from commitment. (McKee I, at pp. 1208-1209.) On remand, the trial court in McKee I, supra, 47 Cal.4th 1172 held an evidentiary hearing and then issued a statement of decision finding that the People established, by a preponderance of the evidence, that the disparate treatment of SVP's "under the Act was based on a reasonable perception of the greater and unique dangers they pose compared to" MDO's. (People v. McKee (2012) 207 Cal.App.4th 1325, 1332 (McKee II).) On review, the appellate court affirmed the trial court's decision: "We, like the trial court, conclude the disparate treatment of SVP's under the Act is reasonable and factually based and was adequately justified by the People at the evidentiary hearing on remand. 12 Accordingly, we conclude the Act does not violate McKee's constitutional equal protection rights." (McKee I, at p. 1348.) The Supreme Court denied review of McKee II. 3. Additional background Under the current version of Penal Code section 3000(a)(4), persons undergoing the commitment process as an SVP and persons committed as an SVP have their parole periods tolled until they are discharged from their SVP commitment. (Pen. Code, § 3000(a)(4)(A).) If the person is ultimately determined not to be an SVP, the parole period is retroactively untolled and the person gets credit for the entire time spent in custody as a prospective SVP. (Pen. Code, § 3000(a)(4)(B).) In contrast, under the MDO Act a state prisoner may be civilly committed for involuntary treatment as a condition of parole if statutorily enumerated criteria are met. (Pen. Code, §§ 2962, 2966.) If the state wishes to continue the committee's involuntary treatment past the expiration of his or her period of parole, the appropriate district attorney must file a petition in the superior court and prove at a hearing that the person continues to qualify for involuntary treatment, in which case treatment will be continued for one year, unless extended again under the same process. (Pen. Code, §§ 2970, 2972.) 4. Analysis Bocklett argues that Penal Code section 3000(a)(4), which tolls the parole period for an SVP, violates his right to equal protection because he is similarly situated to MDO's who do not have a similar tolling provision. Bocklett concedes that he failed to raise this issue below, but claims it is cognizable on appeal because he was not adversely 13 affected by the statutory provisions until he was actually committed as an SVP; thus, there was no point in raising the issue in the trial court. If we determine that trial counsel should have raised this issue, then he claims counsel provided ineffective assistance by failing to do so. The People respond that we should decline to address Bocklett's equal protection argument because the issue is not ripe for review. Assuming the issue is ripe for adjudication, the People claim Bocklett forfeited the issue by failing to raise it once the trial court concluded that he met the SVP criteria. For the sake of argument, we assume that the People's ripeness challenge to this argument is not well taken. We also exercise our discretion to address the argument on its merits to avoid Bocklett's alternative ineffective assistance of counsel claim. (In re Spencer S. (2009) 176 Cal.App.4th 1315, 1323 [we "have discretion to address constitutional issues" raised for the first time on appeal].) Because we find no equal protection violation, we will assume, without deciding, that these two groups are similarly situated for purposes of the restrictions to be placed upon them when they are returned to the community post-commitment and proceed to the second step of the equal protection analysis. (Id. at p. 1325.) Once it is determined that two groups are similarly situated for the purposes of a statute, we next must determine what level of analysis to apply to the distinction. Bocklett asserts that strict scrutiny is the correct standard for disparate involuntary civil commitment schemes because liberty is a fundamental right. The People disagree, arguing that rational basis review applies because the Penal Code section 3000(a)(4) 14 tolling provisions applicable to SVP's do not significantly infringe upon a fundamental right. The People, however, also analyze the issue under the strict scrutiny standard. We need not dwell on this issue because, as we shall explain, Bocklett's disparate treatment argument fails under the strict scrutiny standard. Under "the strict scrutiny standard, the state has the burden of establishing it has a compelling interest that justifies the law and that the distinctions, or disparate treatment, made by that law are necessary to further its purpose. [Citation.] Alternatively stated, applying the strict scrutiny standard, a law 'is upheld only if it is necessary to further a compelling state interest.' " (McKee II, supra, 207 Cal.App.4th at p. 1335.) We conclude that California has shown a compelling interest to toll the parole period for SVP's so that SVP's receive parole supervision after they have been fully discharged from their commitment. Notably, this is not a situation where MDO's are treated differently. Rather, it is a legal impossibility to toll the parole period for an MDO because mental health treatment for an MDO is imposed as a condition of parole. (Pen. Code, §§ 2962, 2966.) On its original enactment, the Act "narrowly target[ed] 'a small but extremely dangerous group of [SVP's] that have diagnosable mental disorders [who] can be identified while they are incarcerated.' " (Cooley v. Superior Court, supra, 29 Cal.4th at p. 253.) In McKee II, the court concluded "that the nature of the trauma caused by sex offenses is generally more intense or severe than the trauma caused by nonsex offenses and is sometimes unique to sex offenses" (McKee II, supra, 207 Cal.App.4th at p. 1343), and thus substantial evidence supported "a reasonable perception by the electorate, as a 15 legislative body, that the harm caused by child sexual abuse and adult sexual assault is, in general, a greater harm than the harm caused by other offenses and is therefore deserving of more protection." (Id. at pp. 1343-1344.) Additionally, SVP's "pose a higher risk of sexual reoffending than do MDO's." (Id. at p. 1342, italics omitted.) While MDO's are "overwhelmingly treated with psychotropic medications, resulting in their stabilization and amenability to psychosocial support" (id. at p. 1344), SVP "treatment plans are not based on medications, but rather on giving them the tools to limit their risk of sexually reoffending." (Id. at p. 1345.) " '[A]s a class, SVP's are clinically distinct from MDO's . . . and . . . those distinctions make SVP's more difficult to treat and more likely to commit additional sexual offenses than . . . MDO's . . . .' In particular, SVP's are less likely to participate in treatment, less likely to acknowledge there is anything wrong with them, and more likely to be deceptive and manipulative." (Id. at p. 1347.) The Legislature added the current version of the tolling provision to the Act by amendment (the 2011 Amendment). (Stats. 2011, ch. 359, § 3, operative Jan. 1, 2012.) Before the 2011 Amendment, Penal Code section 3000 provided that " 'the parole period of any person found to be a [SVP] shall be tolled until that person is found to no longer be [an SVP], at which time the period of parole, or any remaining portion thereof, shall begin to run.' " (Assem. Com. on Public Safety, Analysis of Sen. Bill No. 179 (2011- 2012 Reg. Sess.) July 5, 2011, p. 2.) The amendment was drafted to "close[] a loophole in the law to ensure that sex offenders serve their court-ordered parole time. It does not expand or extend parole—it simply corrects the timing of the parole. [¶] Due to an inconsistency in the law, the parole time for these offenders begins as soon as they are 16 released from prison, and continues while the offender is being assessed in the state hospital under full security—thus receiving overlapping supervision services. As a consequence, some offenders run out the clock on their three year court-ordered parole time and are released into the community with no supervision—contrary to the intent of the law. [¶] [This bill] would instead require that the parole time occur after the offender is released from hospital custody." (Ibid.) An argument made in support of the bill noted that '' '[u]nder current law, the parole period begins to run as soon as the offender is released from prison. This means that an offender believed to be an SVP can effectively complete his or her mandated parole period while confined in a state mental hospital awaiting an often delayed judicial determination of SVP status. As a result, offenders can be released into community with no supervision upon release from the state mental hospital.' " (Id. at p. 4.) Bocklett does not address these concerns. Rather, Bocklett challenges the parole tolling provision that applies to SVP's, arguing that it does not serve a compelling governmental interest for SVP's to remain on parole after they have been fully discharged from their commitment. He maintains that once an SVP has been unconditionally discharged, the person is no longer an SVP and thus the risks identified in McKee II are no longer present. We disagree. The Legislature pointed out that the tolling provision impacts when parole starts; it does not change the length of time an SVP spends on parole. Before the amendment at issue, parole started immediately when an individual's prison sentence ended, before the individual was even determined to be an SVP. Due to the time needed to adjudicate an 17 individual as an SVP, the individual's parole period could expire before the person was even adjudicated an SVP. Thus, an individual could be released into the community from SVP commitment with no parole supervision. The evidence presented in McKee II shows a compelling governmental interest exists for SVP's to receive parole supervision after they have been fully discharged from their commitment. The clinical distinctions between SVP's and MDO's "make SVP's more difficult to treat and more likely to commit additional sexual offenses than [] MDO's." (McKee II, supra, 207 Cal.App.4th at p. 1347.) Critically, an SVP poses a higher risk of sexual reoffending than does an MDO. (Id. at p. 1342.) Although an SVP committee who is unconditionally discharged from custody is deemed not "likely" to reoffend (§ 6600, subd. (a)(1)), this does not mean that the individual poses no risk of reoffending. The risk of reoffense, " 'to a particularly vulnerable class of victims, such as children' " (McKee II, at p. 1347), justifies the requirement that a discharged SVP committee receive parole supervision. (Ibid.) Accordingly, we conclude that the tolling provision of the Act does not violate Bocklett's constitutional equal protection rights. B. Alleged Equal Protection Violation Regarding Conditional Release 1. Additional background a. The MDO Act Under the MDO Act, a state prisoner may be civilly committed for involuntary treatment as a condition of parole if statutorily enumerated criteria are met. (Pen. Code, §§ 2962, 2966.) When MDO treatment is ordered as a condition of parole, the treatment must be inpatient "unless the [DSH] certifies to the Board of Parole Hearings that there is 18 reasonable cause to believe the parolee can be safely and effectively treated on an outpatient basis, in which case the Board of Parole Hearings shall permit the [DSH] to place the parolee in an outpatient treatment program specified by the [DSH]." (Pen. Code, § 2964, subd. (a).) If the state wishes to continue the involuntary treatment of an MDO past the expiration of parole, the state must file a petition in the superior court and prove at a hearing that the person continues to qualify for involuntary treatment, in which case treatment will be continued for one year, unless extended again under the same process. (Pen. Code, §§ 2970, 2972.) Where treatment has been continued, the court "has authority to release the MDO for outpatient treatment so long as it finds 'there is reasonable cause to believe that the committed person can be safely and effectively treated on an outpatient basis.' " (People v. May (2007) 155 Cal.App.4th 350, 359, citing Pen. Code, § 2972, subd. (d).) The statutory language of "reasonable cause to believe" requires the patient to "raise a strong suspicion in a person of ordinary prudence that outpatient treatment would be safe and effective." (People v. Gregerson (2011) 202 Cal.App.4th 306, 319.) This is similar to the "probable cause" standard imposed on the prosecution at a preliminary hearing. (Id. at pp. 318-319.) b. The Act Three routes exist for an SVP to qualify for placement in an outpatient treatment program. First, the director of DSH (the Director) "shall authorize the person to petition the court for conditional release to a less restrictive alternative" (§ 6604.9, subd. (d)) if the DSH determines in its annual report that "conditional release to a less restrictive 19 alternative is in the best interest of the person and conditions can be imposed that adequately protect the community." (Id. at subds. (d), (a).) Second, after a year of commitment in a facility designated by the Director, an SVP is permitted to petition the court for conditional release without the permission of the DSH. (§ 6608, subd. (a), (f).) If a patient files a petition for conditional release, the patient is required to prove, by a preponderance of the evidence, his or her suitability for conditional release. (§ 6608, subd. (k).) Finally, the Director may forward a report and recommendation for conditional release under section 6608 when the Director "determines that the person's diagnosed mental disorder has so changed that the person is not likely to commit acts of predatory sexual violence while under supervision and treatment in the community." (§ 6607, subd. (a).) If the Director makes this determination, the Director forwards "a report and recommendation for conditional release in accordance with Section 6608 to the county attorney designated in subdivision (i) of Section 6601, the attorney of record for the person, and the committing court." (§ 6607, subd. (a).) When such a report and recommendation is filed, the court must "set a hearing in accordance with the procedures set forth in Section 6608." (§ 6607, subd. (b).) 2. Analysis Bocklett asserts that the Director is ignoring the duty under section 6607 to recommend conditional release and that this portion of the Act violates equal protection. As support for this contention, Bocklett notes that a California Public Records Act request revealed that from 2006 to the present only 17 people have been recommended 20 for release by the treatment staff to the Director and in each of those cases the Director failed to recommend release. Bocklett claims that disparate treatment exists because MDO's are routinely released from custody into conditional release under favorable terms, but SVP's almost never are released. 2 The People respond that this claim is not ripe for review. We agree. "It is well-settled law that the courts will not give their consideration to questions as to the constitutionality of a statute unless such consideration is necessary to the determination of a real and vital controversy between the litigants in the particular case before it. It is incumbent upon a party to an action or proceeding who assails a law invoked in the course thereof to show that the provisions of the statute thus assailed are applicable to him and that he is injuriously affected thereby." (People v. Perry (1931) 212 Cal. 186, 193; People v. Williams (1966) 247 Cal.App.2d 169, 170; see People v. Carroll (2007) 158 Cal.App.4th 503, 508, fn. 2 [declining to issue advisory opinion as to constitutionality of Act provision that did not apply to decision under review].) We decline to issue an advisory opinion on the issue whether the Director should have forwarded a report and recommendation for Bocklett's conditional release in accordance with section 6608 because Bocklett failed to make a threshold factual showing that his "diagnosed mental disorder has so changed that [he] is not likely to 2 Bocklett requests that we take judicial notice of the relatively low rate at which the DSH approves persons committed as SVP's for release as support for his argument that there are constitutional flaws in the current version of section 6608. The People oppose the request on the ground that the documents were never presented to the trial court. The request for judicial notice is denied because Bocklett has failed to explain why this new evidence was never offered to the trial court in a motion for new trial. (Estate of Schluttig (1950) 36 Cal.2d 416, 423.) 21 commit acts of predatory sexual violence while under supervision and treatment in the community" as required by subdivision (a) of section 6607. Because Bocklett is appealing from his initial SVP commitment order and he has not challenged the sufficiency of the evidence supporting this commitment, Bocklett cannot make this showing as a matter of law. Moreover, Bocklett may not raise equal protection claims of other hypothetically disadvantaged SVP committees as a basis to invalidate the statute's application to the circumstances of his case. (People v. Garcia (1999) 21 Cal.4th 1, 11- 12 [whether statute had hypothetical potential for equal protection violation "must await a case in which it is actually presented"].) Bocklett also asserts that the Act violates equal protection because MDO's are immediately eligible for conditional release following their commitment, whereas SVP's must wait a year after commitment to file a petition (§ 6608, subd. (f)), and a new petition cannot be filed until a year after the prior petition has been denied. (Id. at subd. (j).) We shall assume, without deciding, that this argument is ripe for review because it is easily disposed of under McKee I and McKee II. Both decisions considered in their equal protection analyses the disparate treatment of SVP's resulting from the requirement that under the Act the SVP be committed for an indeterminate commitment period. (McKee I, supra, 47 Cal.4th at p. 1203; McKee II, supra, 207 Cal.App.4th at p. 1347.) Again, the McKee II court found that the People had presented evidence showing that (1) the inherent nature of the mental disorder of SVP's makes recidivism significantly more likely as a class than for MDO's (McKee II, supra, 207 Cal.App.4th at p. 1340); (2) victims of sex offenses suffer unique and generally greater trauma than victims of nonsex 22 offenses (id. at p. 1342); and (3) SVP's are significantly different from MDO's in terms of diagnosis and treatment (id. at p. 1344). The McKee II court also rejected the defendant's argument that the Act was unconstitutional unless it adopted the least restrictive means available to further the state's compelling interests. (McKee II, at pp. 1348-1349.) The court stated: "We are unpersuaded the electorate that passed Proposition 83 in 2006 was required to adopt the least restrictive means available (e.g., a two-year or other determinate term of civil commitment) in disparately treating SVP's and furthering the compelling state interests of public safety and humane treatment of the mentally disordered." (Id. at p. 1349.) Bocklett's argument that immediately upon his initial commitment he should be allowed to petition for release, rather than wait a year, is simply a repackaging of the argument rejected in McKee II that a less restrictive means existed (e.g., a shorter commitment term, such as immediate release) to further "the compelling state interests of public safety and humane treatment of the mentally disordered." (McKee II, supra, 207 Cal.App.4th at p. 1349.) Applying the reasoning in McKee II, we conclude that the one- year waiting period is necessary to further the compelling state interest in providing treatment to SVP's and protecting the public, and that there is no less burdensome alternative to effectuate those interests. Accordingly, we conclude that the one-year waiting periods in the Act do not violate Bocklett's constitutional equal protection rights. 3 3 Although not entirely clear, Bocklett appears to also claim that SVP's and MDO's are subject to disparate treatment regarding either the burden of proof to obtain 23 D. Alleged Ex Post Facto Violation Regarding Tolling 1. Additional background As originally enacted effective September 13, 1996, Penal Code section 3000(a)(4) provided: "Any finding made pursuant to [the Act], that a person is a [SVP] shall not toll, discharge, or otherwise affect that person's period of parole." (Pen. Code, § 3000(a)(4), as enacted by Stats. 1996, ch. 462, § 3, eff. Sept. 13, 1996.) Effective September 20, 2006, the Legislature amended Penal Code section 3000(a)(4) to provide: "For any person being evaluated as [an SVP] pursuant to [the Act], parole shall toll from evaluation through the period of commitment, including conditional release under court monitoring, if any. The period during which parole is tolled shall include the filing of a petition for commitment, hearing on probable cause, trial proceedings, actual commitment, and any time spent on conditional release under court monitoring. . . . Time spent on conditional release under the supervision of the court shall be subtracted from the person's period of parole." (Pen. Code, § 3000(a)(4), as amended by Stats. 2006, ch. 337, § 45, eff. Sept. 20, 2006.) Effective November 8, 2006, the statute was amended by the voters to provide: "The parole period of any person found to be [an SVP] shall be tolled until that person is found to no longer be [an SVP], at which time the period of parole, or any remaining conditional release, or what must be proven to obtain conditional release. We conclude either argument is not ripe for review because Bocklett has not filed a petition for conditional release under section 6608. Thus, the question whether he is disadvantaged as compared to an MDO, by what he is required to show or how he must make the showing, seeks an advisory opinion based on hypothetical facts, which we are not permitted to render. 24 portion thereof, shall begin to run." (Pen. Code, § 3000(a)(4), as amended by Prop. 83, § 17, eff. Nov. 8, 2006.) Penal Code section 3000(a)(4), was amended in 2011, effective January 1, 2012. (Cal. Const., art. IV, § 8, subd. (c)(1) [statutes enacted at a regular session go into effect on Jan. 1 of the following year].) As amended, the statute tolls the period of parole for a person subject to SVP proceedings upon a finding of probable cause rather than upon a finding that the person is actually an SVP. (Pen. Code, § 3000(a)(4), as amended by Stats. 2011, ch. 359, § 1.5.) At the same time, Penal Code section 3000, subdivision (a)(5), was added to provide as follows: "Paragraph (4) applies to persons released by the Department of Corrections and Rehabilitation on or after January 1, 2012. Persons released by the Department of Corrections and Rehabilitation prior to January 1, 2012, shall continue to be subject to the law governing the tolling of parole in effect on December 31, 2011." (Pen. Code, § 3000, subd. (a)(5), as added by Stats. 2011, ch. 359, § 1.5, eff. Jan. 1, 2012.) 2. Analysis Bocklett argues that the current version of Penal Code section 3000(a)(4), rather than the initial version enacted alongside the Act in 1996, violates his right to be free from ex post facto laws under the California and United States Constitutions. The People argue this claim is not ripe because Bocklett will not be aggrieved by the operation of this statute unless he is found to no longer meet the criteria for commitment as an SVP, granted his unconditional discharge from DSH, and released on parole. Assuming the claim is ripe, the People contend Bocklett forfeited the claim by not raising it below. For 25 purposes of analysis, we assume, without deciding, that Bocklett's claim is ripe for review and we exercise our discretion to address the issue on its merits. The federal and state ex post facto clauses (U.S. Const., art. I, § 10, cl. 1; Cal. Const., art. I, § 9) prohibit legislation " 'which makes more burdensome the punishment for a crime, after its commission . . . .' " (Collins v. Youngblood (1990) 497 U.S. 37, 42 (Collins); People v. McVickers (1992) 4 Cal.4th 81, 84.) The ex post facto prohibition is intended to ensure that individuals have " 'fair warning' about the effect of criminal statutes [and] 'restricts governmental power by restraining arbitrary and potentially vindictive legislation.' " (Landgraf v. USI Film Products (1994) 511 U.S. 244, 267.) "The ex post facto clause prohibits only those laws that 'retroactively alter the definition of crimes or increase the punishment for criminal acts.' " (McKee I, supra, 47 Cal.4th at p. 1193.) In Hubbart v. Superior Court (1999) 19 Cal.4th 1138 (Hubbart) our high court addressed whether commitment of a prisoner under the Act violated the ex post facto prohibition if it was based on sexually violent offenses committed before the effective date of the Act. (Hubbart, at p. 1171 ["The basic issue raised by [the prisoner was] whether the [Act] inflicts 'punishment' within the meaning of Collins, supra, 497 U.S. 37, 43."].) The Hubbart court held that "the [Act] does not 'affix culpability' or seek 'retribution' for criminal conduct" (Hubbart, at p. 1175), and rejected a prisoner's ex post facto argument. (Ibid.; see also McKee I, supra, 47 Cal.4th at pp. 1193-1195 [rejecting an ex post facto challenge to Act amendments modifying rules for release from commitment].) A judicial determination that a law is not punitive "removes an essential 26 prerequisite for. . . .ex post facto claims." (Kansas v. Hendricks (1997) 521 U.S. 346, 369.) Since the Act is not punitive in nature, the constitutional provisions prohibiting ex post facto laws are inapplicable. Moreover, Bocklett committed his latest offense in 1994, but the Act and Penal Code section 3000(a)(4) were not enacted until 1996. (Hubbart, supra, 19 Cal.4th at p. 1143; Pen. Code, § 3000(a)(4), as enacted by Stats. 1996, ch. 462, § 3, eff. Sept. 13, 1996.) Accordingly, because the Act did not exist at the time of Bocklett's offenses he was not subject to any increase in punishment based upon the tolling provision in the most recent version of the law as this provision is "clearly intended to operate and protect the public in the present, not to serve as additional punishment for past crimes." (In re E.J. (2010) 47 Cal.4th 1258, 1278, 1279-1280 [application of residency restrictions under Penal Code section 3003.5 to individuals released on parole after effective date of law does not violate ex post facto laws].) For this reason, we hold that application of the law here did not impose any unconstitutional, increased punishment on Bocklett. 27 DISPOSITION The judgment is affirmed. NARES, J. WE CONCUR: HUFFMAN, Acting P. J. GUERRERO, J. 28	{ "pile_set_name": "FreeLaw" }
662 S.W.2d 116 (1983) The ESTATE OF Edith W. BRIDGES, Deceased, and Agri-Place, Inc., Appellants, v. Betty Jean MOSEBROOK, Individually and as Custodian for her children, Mark Mosebrook and Michael Mosebrook; Nancy Ann Bridges and Barbara Lynn Bridges, Appellees. No. 2-83-065-CV. Court of Appeals of Texas, Fort Worth. November 17, 1983. Rehearing Denied December 28, 1983. 118 John A. Pace, Dallas, for Estate of Edith W. Bridges. Jonathan A. Pace, Dallas, for Agri-Place, Inc. Albon O. Head, Jr., and Robert J. Keffler, McLean, Sanders, Price, Head & Ellis, Fort Worth, for appellees. Before HUGHES, BURDOCK and JOE SPURLOCK, II, JJ. OPINION BURDOCK, Justice. This is an appeal from a declaratory judgment wherein the trial court held appellees to be owners of approximately 59 percent of the stock of a closely-held corporation. In addition, the trial court ordered appellants to account for all income and revenue of the corporation from July 13, 1977 to the date of judgment. Finally, the trial court ordered that a writ of mandamus be issued ordering appellants to properly execute the stock certificates in appellees' possession. We affirm. Appellants claim ownership of the corporation through a testamentary bequest from Edith Weaver Bridges, and they predicate their appeal on four points of error. Appellants argue: (1) the trial court erred in holding that the shares of stock of the corporation had been issued because none of the shares were signed by the president or vice president; (2) the trial court erred in finding that the shares of stock had been delivered to appellees and in holding that the issuance of stock constituted a valid inter vivos gift to the appellees; (3) the trial court erred in holding that W.L. Bridges, Sr. had the power and authorization to deliver the stock to appellees because the real estate in the corporation was the separate property of Edith W. Bridges; and (4) the trial court erred in failing to find that the fee title to the land in the corporation was vested in Edith W. Bridges as her separate property. Because of the complex fact situation of the present case, we find it necessary to set forth the facts in detail. W.L. Bridges, Sr. had a son, W.L. Bridges, Jr., by a prior marriage. The appellees, plaintiffs below, are the children of Bridges, Jr. and grandchildren of Bridges, Sr., namely Nancy Ann Bridges, Barbara Lynn Bridges, and Betty Jean Mosebrook, individually and as custodian for her children, Mark Mosebrook and Michael Mosebrook. In 1944, Bridges, Sr. married Edith Weaver Bridges, also referred to as Edith. The appellants are Paulette Jackson, a niece 119 of Edith W. Bridges, and her husband, Tracy Jackson, co-executors of the estate of Edith W. Bridges. The corporation in question, Agri-Place, Inc., is a closely-held Texas corporation incorporated on October 27, 1969. The initial and principal asset of the corporation was a twenty-acre tract of land, purchased in 1949 by Bridges, Sr. and his son Bridges, Jr., located in Arlington, Texas. Although there was testimony to the contrary, the trial court found that the down payment on the twenty-acre tract, known as Red Wright Farm, was paid with funds from a joint bank account maintained by Bridges, Sr. and his son. On April 2, 1956, Bridges, Sr. conveyed the farm to his brother-in-law, Paul Weaver, in an effort to avoid seizure of the property by the Internal Revenue Service. No consideration was exchanged for the property. Thereafter, Weaver executed two deeds purporting to convey Red Wright Farm. The first deed, dated April 4, 1956 named Edith W. Bridges as grantee and was not recorded until November 24, 1982. No consideration was given by Edith to Weaver for this transfer. The second deed, dated October 28, 1969, named Agri-Place, Inc. as grantee and was recorded on March 15, 1971. Bridges, Jr. testified that the purpose for organizing Agri-Place, Inc. was to transfer ownership of Red Wright Farm to a corporate entity and, thereafter, to distribute the stock in that corporation to members of his father's and step-mother's respective families. Bridges, Sr. and his wife, Edith, intended to make a gift of shares of the common stock of Agri-Place, Inc., and in 1971, Bridges, Sr. engaged an attorney to assist him in issuing 20,000 shares. The stock was first issued to Weaver, and Weaver then deeded Red Wright Farm into Agri-Place, Inc. After this transaction, Weaver's shares were cancelled, and the attorney issued stock, in specified amounts, to the following persons: Betty Jean Mosebrook (3,500 shares), Mark Mosebrook (625 shares), Michael Mosebrook (625 shares), Nancy Ann Bridges (3,500 shares), Barbara Lynn Bridges (3,500 shares), Bobby Weaver Rapp (1,250 shares), Paulette Jackson (3,500 shares), and Shane Jackson (3,500 shares). These stock certificates were delivered to the above named individuals but retained by Bridges, Sr. It was further established that the stock certificates were signed by Betty Jean Mosebrook, secretary of the corporation, but not by Bridges, Sr., the president of the corporation. The stock registry of Agri-Place, Inc. and the minutes of the stockholder meetings showed the appellees to be owners of the respective shares of stock, as previously set forth. During these shareholder meetings and in preparation of the corporation minutes, both W.L. and Edith Bridges recognized and acknowledged that appellees were stockholders in Agri-Place, Inc. Testimony at trial also showed that Bridges, Sr. stated to the corporation's accountant that neither he nor Edith owned any shares in the corporation. Furthermore, Edith stated to the accountant that the appellees owned their respective number of shares in the corporation. Income tax returns were filed for the corporation, signed by Bridges, Sr. and/or Edith, acknowledging that the appellees were owners of a certain percentage of the outstanding stock of Agri-Place, Inc. The Red Wright Farm was sold in 1973, and the corporation received in exchange a house located in Arlington, Texas, 112 acres of oil producing property in Erath County, Texas and a promissory note in the amount of $160,000.00. In 1977, Bridges, Sr. wanted to make a gift of 2,000 shares of capital stock, out of the previously issued 20,000, to the Lions and Shriners organizations. The corporation's attorney informed Bridges, Sr. and Edith that stock transfer powers would be required from the appellees before stock could be given to these organizations. Bridges, Sr. died in 1977 and the stock transfer powers had not been obtained. Furthermore, none of the appellees were informed of Bridges, Sr. intent toward these organizations prior to his death. In 1977, subsequent to the death of Bridges, Sr., appellee Betty Jean Mosebrook, on behalf of all appellees herein, 120 requested an accounting of Agri-Place, Inc., but such request was refused by Edith. Appellees also requested Edith to execute, i.e., sign, as president of Agri-Place, Inc., the stock certificates issued to them, but again she refused. Thereafter, Edith unilaterally cancelled the previously issued shares, and issued stock certificate number 23 to herself in the amount of 20,000 shares of Agri-Place, Inc. This suit resulted. In their first point of error, appellants contend that the trial court erred in holding that the shares of stock of Agri-Place, Inc. had been issued because none of the shares were signed by the president or vice president of the corporation. They further assert that the farm in question was purchased from Edith's separate funds and thus the appellants, as devisees under her will, own the corporation and are entitled to the stock certificates. It must first be pointed out that the certificate of stock is not the stock in a corporation itself, but rather, a muniment of title which is evidence of the ownership of the stock. Yeaman v. Galveston City Co., 106 Tex. 389, 167 S.W. 710, 720 (Tex. 1914); State Board of Insurance v. Southwest Gen. Ins. Co., 401 S.W.2d 369, 371 (Tex.Civ.App.Austin 1966, writ ref'd n.r. e.). It is not necessary for complete ownership of stock that a certificate even be issued. Yeaman, supra. The rule in this area has been clearly set forth in Greenspun v. Greenspun, 194 S.W.2d 134 (Tex.Civ.App. Fort Worth), affirmed, 145 Tex. 374, 198 S.W.2d 82 (1946). The appellate court held: As between transferor and transferee, it seems to be the rule that transfer of title may take place though there is no delivery of the certificates themselves, nor endorsement of them, nor transfer of them on the books of the corporation, and even though the sale be by parol. In each case the inquiry is whether the minds of transferor and transferee met, whether there was an intention that the stock should then and there be vested in the transferee, and whether there were acts in the nature of a symbolical delivery of the property. In this latter connection it is to be remembered that the certificates of stock are not in themselves property, but are only evidence of the interest of the stockholder in the corporation. It is possible under some circumstances for one to own stock in a corporation though no certificate has been issued to him or endorsed or delivered to him, and likewise it is possible under some circumstances for title to the stock to pass without delivery of the certificate of stock or without written assignment of it. Greenspun, 194 S.W.2d at 137. We agree with the trial court's finding that the stock of Agri-Place, Inc. was actually issued in the present case. The intent on the part of Bridges, Sr. to cause the issuance of the stock is apparent from a review of the record. The attorney who prepared the stock certificates testified that Bridges, Sr. instructed him to issue shares of stock in Agri-Place, Inc. to the previously named individuals. The appellees testified that Bridges handed each of them their respective stock certificates informing them of their ownership in the corporation. Each shareholder, however, left their stock certificates with Bridges, Sr. because he wanted to retain possession for them. Bridges, Sr. and Edith both acknowledged and recognized the appellees as stockholders. The appellees were referred to as stockholders in the corporate minutes and also listed as such in the 1977 tax return. The appellants urge that because the shares of stock had not been signed by the president or vice president, there could be no issuance. TEX.BUS.CORP.ACT ANN. art. 2.19 (Vernon 1980) provides: A. A corporation shall deliver certificates representing all shares to which shareholders are entitled; and such certificates shall be signed by the president or a vice president and either the secretary or assistant secretary or such officer or officers as the bylaws of the corporation shall prescribe, and may be sealed with the seal of the corporation or a facsimile thereof.... Appellants' analogy to the signatures required on other documents (deeds, 121 promissory notes, financing statements, etc.) is unpersuasive. Those documents, unlike certificates of stock, create property rights in and of themselves, by virtue of the contractual obligations contained therein. The execution of such documents is tantamount to the preservation and enforcement of the rights and obligations created by those instruments. As previously mentioned, a stock certificate is not the actual ownership of a corporation, but merely evidence that the corporation recognizes the holder as owning an interest in that corporation. We hold that art. 2.19 does not require a signature as a condition precedent to issuance; rather, it provides the owner of such stock a right to demand that the corporation provide the signatures omitted from the certificates. Appellants also contend in their first point of error that the person or persons who furnished the consideration for the corporation stock are the persons who own the corporation. Although there was testimony that the down payment of the principal asset, Red Wright Farm, was made from Edith's separate funds, the trial court found that it was purchased with funds from a joint bank account of Bridges, Sr. and Bridges, Jr. Appellants' first point of error is overruled. In their second point of error, appellants argue that the trial court erred in holding that the shares of stock had been delivered as required to constitute a completed inter vivos gift. Appellees assert that the overwhelming evidence shows that both Bridges, Sr. and Edith intended to make gifts of stock in the corporation to each of the appellees, and thereafter delivered the shares of stock to the appellees. We agree. In order to consummate a gift of corporation stock, there must be donative intent on the part of the donor, delivery to the donee, and relinquishment of dominion and control by the donor. Carrington v. C.I.R., 476 F.2d 704, 708-09 (5th Cir.1973); Ellsworth v. Ellsworth, 151 S.W.2d 628, 632 (Tex.Civ.App.El Paso 1941, writ ref'd). As previously noted, we find that the record more than sufficiently shows the requisite donative intent on the part of Bridges, Sr. and Edith. Appellants argue, however, that no delivery was made because the certificates remained in the possession of Bridges, Sr., and that he never relinquished his right to exercise dominion and control over the certificates. Appellants' argument fails for several reasons. As discussed in appellants' first point of error, ownership of stock may exist independently of possession of the stock certificate. Greenspun, 194 S.W.2d at 137. Furthermore, physical delivery of the stock certificates and possession thereof is not the only method by which a donor may make a gift of corporate stock to a donee. What will constitute delivery depends upon the nature of the corpus and the circumstances of the case. Webb v. Webb, 184 S.W.2d 153, 156-57 (Tex.Civ.App.Eastland 1944, writ ref'd). Actual delivery is not always necessary; rather, where the circumstances make actual delivery impractical, delivery may be symbolical or constructive. Webb, supra, at 156. The controlling issue is not who had possession of the certificates, but who had actual ownership of the stock, as evidenced by all the circumstances. See Greenspun, 194 S.W.2d at 138. The evidence reveals that Bridges, Sr. handed each appellee their respective stock certificates, stating that the stock belonged to them but that he would retain possession of the certificates. As previously mentioned, Bridges, Sr. and Edith treated the appellees as stockholders in Agri-Place, Inc., and acknowledged as much to several other persons. We find the evidence sufficient to prove the required delivery and overrule appellants' second point of error. Appellants' third point of error asserts that the trial court erred in holding Bridges, Sr. had the power and authority to deliver the shares of stock to appellees because title to the farm was the separate property of Edith, and any gift thereof would constitute a fraud on her property rights. 122 It is well settled law in Texas that property acquired during marriage is presumed to be the community property of the spouses. TEX.FAM.CODE ANN. § 5.02 (Vernon 1975). The burden is on the party asserting otherwise to overcome the presumption by clear and satisfactory evidence. Gaston v. Gaston, 608 S.W.2d 332, 334 (Tex.Civ.App.Tyler 1980, no writ). It is disputed as to who contributed the funds for the purchase of the Red Wright Farm. Bridges, Jr. testified that the down payment for the farm came from proceeds of a joint bank account maintained by him and his father, Bridges, Sr. To sustain their burden of tracing the character of the farm, appellants rely on the statements of Edith Bridges contained in her oral deposition. Appellants argue that Edith was given a tract of land in Colorado by her father as her separate property, and that the proceeds from the sale of this property were used as the down payment on the Red Wright Farm; thus, the Red Wright Farm would also be her separate property. During her deposition, however, Edith stated that she did not remember if the money was deposited in a checking account or a savings account, nor could she remember in what bank the money was deposited. Furthermore, when the Red Wright Farm was purchased in 1949, title to the property was listed in the names of William Levi Bridges and Edith Weaver Bridges. We hold that the appellants have failed in their burden of overcoming the community property presumption. The factors used in determining whether a gift of community property by one spouse constitutes a constructive fraud on the property rights of the other spouse include the relationship between the donor and donee, whether special circumstances tend to justify the gift, and whether community funds used for such gift are reasonably proportionate to the community assets remaining. Redfearn v. Ford, 579 S.W.2d 295, 297 (Tex.Civ.App.Dallas 1979, writ ref'd n.r.e.). In Horlock v. Horlock, 533 S.W.2d 52 (Tex.Civ.App.Houston [14th Dist.] 1975, writ dism'd), the donor made gifts of community property to his daughters from a prior marriage. The appellate court, in upholding the validity of the gifts, reasoned that the daughters were the natural objects of his bounty, the tax advantages to both spouses were substantial, and the remaining assets were sufficient to provide for the needs of the wife. Horlock, supra, at 55-56. We find nearly the identical fact situation in the present case. The gifts of stock were not only made to the grandchildren of Bridges, Sr., but stock was also given to relatives of Edith. It is undisputed that the primary and motivating factor behind the incorporation of Agri-Place, Inc. and the subsequent gifts of the stock therein was Bridges' desire to avoid the possible loss of the property to the Internal Revenue Service. Although the corporation was valued at approximately $240,000.00 and undisputably comprised a substantial part of the estate of Bridges, Sr. and Edith, the total value of the estate is not apparent from the record. Furthermore, only 59 percent of the stock was given to Bridges, Sr.'s issue; the remainder went to the relatives of Edith. Appellants rely heavily on Land v. Marshall, 426 S.W.2d 841 (Tex.1968) in support of their constructive fraud argument. In Land, the husband established an inter vivos trust and through this trust granted all of his and his wife's community property to their daughter as trustee without his wife's knowledge or consent. After the trustor's death, the widow sought to cancel the trust. The Texas Supreme Court held that the trust was wholly invalid, and that the grantor's widow was entitled to recover her undivided one-half interest in the trust property. We do not find the Land decision binding in the present case. That decision focused on the validity of an inter vivos trust and distinguished that situation from an inter vivos gift. Furthermore, and more importantly, the defrauded spouse in Land was unaware of her husband's disposition of their community property until three weeks before his death. In the present case, Edith not only knew of the gift of stock of Agri-Place, 123 Inc., she consented to and participated in the disposition of their community property and never once objected thereto. We hold that there was no fraud, either actual or constructive, perpetrated on Edith's property rights and uphold the inter vivos gift of their community property. Appellants' third point of error is overruled. Appellants assert in their fourth point of error that the warranty deed from Paul J. Weaver, dated April 4, 1956, naming Edith Weaver Bridges as grantee, vested title to the farm in Edith's name as her separate property, and that the deed from Paul J. Weaver to Agri-Place, Inc., dated October 29, 1969, did not vest title to the farm in the corporation. We have previously held that upon acquiring the farm in 1949, title was held in the names of William Levi Bridges and Edith Weaver Bridges as their community property. The question to be decided now is whether the transactions subsequent to 1949 changed the character of ownership in the farm to the separate property of Edith Bridges. As previously noted, on April 2, 1956, Bridges, Sr. conveyed the Red Wright Farm to Edith's brother, Paul Weaver, in an effort to avoid seizure of the farm by the Internal Revenue Service. No consideration was exchanged for the property. Weaver then executed a deed to Edith W. Bridges, dated April 4, 1956, purporting to convey the farm to her as her separate property. No consideration was given by Edith to Weaver for this transfer, and the deed was not recorded until November 24, 1982. On October 28, 1969, Weaver executed a second deed naming Agri-Place, Inc. as grantee, and this deed was recorded on March 15, 1971. Weaver was issued 20,000 shares of stock in the corporation in exchange for the farm. It has been held that mere recitals in a deed as to the separate character of property are not conclusive as to the true character of the property and may be rebutted by evidence to the contrary. Alexander v. Alexander, 373 S.W.2d 800, 804 (Tex.Civ.App. Corpus Christi 1963, no writ). Although there was no specific finding of fact as to the nature of this property, we hold that the findings of fact and conclusions of law, viewed together with the evidence presented, overwhelmingly support an implied finding that the property in question was the community property of Bridges, Sr. and Edith. Edith made no objection at the time the farm was deeded into the corporation, nor did she object in 1973 when the farm was sold in exchange for the house in Arlington, the oil producing property in Erath County and the promissory note in the amount of $160,000.00. Title to these properties has always been held in the name of the corporation. Edith was also an officer in the corporation and, therefore, obviously aware of these transactions, but she never claimed any of the property as her separate property. Furthermore, Edith has never paid taxes on these properties in an individual capacity or filed any tax returns alleging such ownership; rather, the corporation has reported the ownership of these assets on its corporate tax returns. We hold that the community property status was not altered by the transactions discussed above. Appellants' fourth and final point of error is overruled. The judgment is affirmed.	{ "pile_set_name": "FreeLaw" }
158 F.3d 1294 332 U.S.App.D.C. 388 McCARTY FARMS, INC., et al., Petitioners,v.SURFACE TRANSPORTATION BOARD and United States of America,Respondents.Burlington Northern and Santa Fe Railway Company, Intervenor. Nos. 97-1632, 98-1304. United States Court of Appeals,District of Columbia Circuit. Argued Sept. 3, 1998.Decided Oct. 20, 1998. [332 U.S.App.D.C. 389] On Petitions for Review of an Order of the Surface Transportation Board. Tim L. O'Neill argued the cause for petitioners, with whom Timothy R. Engler was on the briefs. Thomas J. Stilling, Attorney, Surface Transportation Board, argued the cause for respondents, with whom Joel I. Klein, Assistant Attorney General, United States Department of Justice, Robert B. Nicholson, and John P. Fonte, Attorneys, Henri F. Rush, General Counsel, Surface Transportation Board, and Ellen D. Hanson, Deputy General Counsel, were on the brief. Samuel M. Sipe, Jr. argued the cause for intervenor Burlington Northern and Santa Fe Railway Company, with whom Carolyn Doozan Clayton, Richard E. Weicher and Michael E. Roper were on the brief. Before: SENTELLE, HENDERSON, and GARLAND, Circuit Judges. SENTELLE, Circuit Judge: 1 Petitioners McCarty Farms, Inc., et al. (collectively "McCarty Farms") and the State of Montana Department of Commerce, et al. (collectively "State of Montana") challenge a decision of the Surface Transportation Board ("STB" or "Board") in which the STB ruled that petitioners had failed to demonstrate that the rates charged by Burlington Northern Railroad ("BN") to transport wheat and barley from Montana to the Pacific Northwest [332 U.S.App.D.C. 390] were unreasonable. The STB's decision covered three sets of claims: (1) single-car wheat shipments moving before September 12, 1980 (Docket No. 37809), (2) multiple-car and trainload shipments of wheat and barley (Docket No. 37815S), and (3) single-car shipments of barley and single-car wheat shipments moving after September 12, 1980 (Docket No. 37809 (Sub-No. 1)). We conclude that we have jurisdiction over the second and third categories of claims, but not the first. We further conclude that, in rendering its decision, the Board did nothing that was arbitrary, capricious, or contrary to law. As a result, we affirm the Board's ruling with respect to those claims over which we have jurisdiction. I. BACKGROUND 2 This case has a long and complex history. Indeed, these proceedings have been winding their way through the courts in one form or another for approximately 18 years. As Judge Williams noted five years ago when this case was last before this court: "McCarty Farms started this dispute's crawl through the legal system in 1980 by filing a class action on behalf of Montana farmers under 49 U.S.C. § 11705(c)(1) and 28 U.S.C. § 1337 in the U.S. district court for the District of Montana." Burlington Northern R.R. v. ICC, 985 F.2d 589, 592 (D.C.Cir.1993). In their Montana suit, McCarty Farms and the other class representatives alleged that BN was charging unreasonable rates for transporting single cars of wheat for the two-year period ending September 12, 1980, in violation of 49 U.S.C. § 10701(a) of the Interstate Commerce Act. See McCarty Farms, Inc. v. Burlington Northern, Inc., 787 F.Supp. 937 (D.Mont.1992). 3 Under the doctrine of primary jurisdiction, the district court referred the action to the Interstate Commerce Commission ("ICC" or "Commission") to determine the rate reasonableness issues. On March 27, 1981, McCarty Farms filed the referred complaint with the ICC (Docket No. 37809), in which it challenged not only BN's single-car wheat rates, but also its single-car rates for barley. McCarty Farms sought a prescription on future rates and did not limit its request for reparations to the two-year period specified in its complaint filed with the district court. McCarty Farms' Petition for Declaratory Order and Complaint at 6 (March 27, 1981). In an unpublished decision served on December 14, 1981, an Administrative Law Judge found that (1) BN had market dominance over wheat and barley traffic, (2) BN's present and past rates were unreasonable insofar as they exceeded 200% of the variable cost of service, and (3) a revenue-to-variable cost ratio of 200% was to be the maximum reasonable rate for the transportation of wheat and barley. 4 McCarty Farms was not alone, however, in challenging the reasonableness of BN's rates. In a separate proceeding filed with the ICC (Docket No. 37815S), the State of Montana challenged BN's rates for multiple-car and trainload shipments of wheat and barley and sought prescription for reasonable rates for the future. In an unpublished decision served on July 30, 1982, the ICC reopened the case filed by McCarty Farms (Docket No. 37809). The ICC instituted a separate proceeding regarding the reasonableness of barley rates (Docket No. 37809 (Sub-No. 1)) because it did not believe they were part of the district court's referral. The ICC consolidated the proceedings filed by McCarty Farms and those filed by the State of Montana. 5 The three consolidated cases before the ICC were held in abeyance indefinitely. In May 1984, McCarty Farms and the other class representatives filed a complaint in the district court, seeking a writ of mandamus. In response, the ICC reopened the proceedings on September 11, 1984. In a decision served on December 28, 1984, the ICC ruled that, to the extent market dominance issues had not been developed, additional evidence concerning market dominance would be accepted. After extensive discovery, on May 22, 1987, the ICC ruled that BN was market dominant over the subject wheat and barley shipments moving from Montana to the Pacific Northwest. McCarty Farms v. Burlington Northern, Inc., 3 I.C.C.2d 822 (1987). 6 Having determined that BN was market dominant for the movements at issue, the ICC turned to the rate reasonableness analysis. [332 U.S.App.D.C. 391] On February 5, 1988, the ICC decided that the Revenue-to-Variable Cost ("R/VC") standard was an appropriate means for testing the challenged rates and found that the rates charged by BN were unreasonable. The ICC directed BN to (1) compute the reparations due, (2) modify its existing rate structure, and (3) present a proposal of compliance to the ICC. On February 21, 1989, the ICC issued an unpublished decision that corrected several costing problems in the R/VC test and recomputed the ratios by which reparations were to be calculated. The ICC directed BN to submit a quantification of reparations due the class based on the corrected procedure and a proposal for modifying its existing rate structure so that BN would comply with the maximum reasonableness standard in the future. 7 On March 20, 1991, the ICC affirmed its earlier decisions in which it concluded that BN was market dominant over the movement of wheat and barley and that BN's rates for this traffic were unreasonable. The ICC calculated the amount of reparations owed by BN through 1986 to be $9,685,918 plus interest, and imposed on BN a future rate prescription procedure. McCarty Farms v. Burlington Northern, Inc., 7 I.C.C.2d 1026 (1991). On July 5, 1991, BN filed a petition for clarification of the March 20, 1991 decision, asking the ICC to modify the calculations. In an unpublished decision served on November 26, 1991, the ICC entered an order which affirmed the amount of reparations and interest due through July 1, 1991. However, the ICC sua sponte vacated the rate prescription order contained in its March 20, 1991 decision. 8 McCarty Farms, the State of Montana, and BN then sought review of the ICC decisions by this court. In an opinion issued in 1993, we questioned the theoretical basis of the R/VC test and remanded the proceedings to the ICC for the purpose of reconsidering whether it was appropriate to use the R/VC test instead of the Constrained Market Pricing ("CMP") test to evaluate the reasonableness of the challenged rates. Burlington Northern R.R. v. ICC, 985 F.2d 589 (D.C.Cir.1993). 9 In an unpublished opinion served on March 26, 1993, the ICC directed the class representatives and the State of Montana to advise the Commission whether (1) they wanted to proceed using the CMP test, (2) the proceedings should be held in abeyance pending the development of a suitable reasonableness methodology, or (3) there was some other course of action that was appropriate. On April 23, 1993, McCarty Farms notified the ICC of its election to proceed using the CMP test. On May 10, 1993, BN notified the ICC of its agreement to use the CMP test in the proceedings. Effective January 1, 1996, the ICC Termination Act of 1995, Pub.L. No. 104-88, 109 Stat. 803, abolished the ICC and transferred certain functions, including the disposition of these proceedings, to the STB. After the transfer, the STB ruled that McCarty Farms had failed to show (under the CMP test) that the challenged rates were unreasonably high, and discontinued the proceedings. McCarty Farms, Inc. v. Burlington Northern, Inc., Nos. 37815S, 37809 & 37809 (Sub-No. 1) (Aug. 20, 1997) (the "1997 Decision"). 10 Instead of petitioning the STB to correct alleged computational errors and to reconsider issues they contended were incorrectly decided, McCarty Farms and the State of Montana filed their petition for review with this court on October 14, 1997. McCarty Farms also filed an appeal with the U.S. District Court for the District of Montana, which was stayed pending the outcome of this appeal. After examining McCarty Farms' brief to this court, the STB agreed that there were certain errors in its 1997 Decision and issued a supplemental decision to correct those determinations it agreed were erroneous. McCarty Farms, Inc. v. Burlington Northern, Inc., Nos. 37815S, 37809 & 37809 (Sub-No. 1) (May 11, 1998) (the "1998 Decision"). However, even after it made these corrections, the STB still concluded that BN's rates were reasonable. II. DISCUSSION A. Jurisdiction 11 McCarty Farms challenges this court's jurisdiction to review several claims raised in this suit. The claims at issue relate to the [332 U.S.App.D.C. 392] following three categories of rates covered by the STB's decision: (1) single-car wheat shipments moving before September 12, 1980 (Docket No. 37809), (2) multiple-car and trainload shipments of wheat and barley (Docket No. 37815S), and (3) single-car shipments of barley and single-car shipments of wheat moving after September 12, 1980 (Docket No. 37809 (Sub-No. 1)). We conclude that we have jurisdiction over the second and third categories of claims, but not the first. 12 1. Single-car shipments of wheat for the two-year period ending September 12, 1980 13 Normally, this court has jurisdiction to review decisions of the STB under the Hobbs Act, 28 U.S.C. §§ 2321(a) and 2342(5). However, Congress has provided an exception to our Hobbs Act jurisdiction. Under 28 U.S.C. § 1336(b), review of orders of the STB that "arise" out of a referral from a district court are within that court's exclusive jurisdiction. Specifically, Section 1336(b) provides as follows: 14 When a district court ... refers a question or issue to the Surface Transportation Board for determination, the court which referred the question or issue shall have exclusive jurisdiction of a civil action to enforce, enjoin, set aside, annul, or suspend, in whole or in part, any order of the Surface Transportation Board arising out of such referral. 15 28 U.S.C. § 1336(b). 16 McCarty Farms asserts that claims relating to single-car shipments of wheat moving before September 12, 1980 (Docket No. 37809) fall within the exception to this court's jurisdiction found in Section 1336(b). These claims initially were raised in McCarty Farms' complaint filed with the U.S. District Court for the District of Montana and were referred by that court to the ICC. We agree that we do not have jurisdiction over this first category of claims. Indeed, we addressed this question the last time this case was before us. In Burlington Northern, we concluded that "any appeal as to the single-car wheat shipments moving before September 12, 1980 lies in the district court for the District of Montana." 985 F.2d at 592. Therefore, it is clear that we have no jurisdiction over the first set of claims. 17 2. Multiple-car and trainload shipments of wheat and barley 18 We have previously ruled, and the parties agree, that we have jurisdiction over claims relating to rates charged for multiple-car shipments of wheat and barley (Docket No. 37815S) pursuant to the Hobbs Act, 28 U.S.C. §§ 2321(a) and 2342(5). In Burlington Northern, we concluded that Section 1336(b) "has no application" to this second category of claims because they "arise out of the Montana Department of Agriculture complaint, not the district court referral." 985 F.2d at 592. 19 3. Single-car shipments of barley and single-car shipments of wheat moving after September 12, 1980 20 The determination of our jurisdiction over the third set of claims is more difficult. Characterizing this jurisdictional question as "exceptionally difficult," we declined to decide this issue in Burlington Northern on the grounds that it was not necessary to resolve all jurisdictional questions where "the merits of a case are clearly against a party seeking to invoke the court's jurisdiction." Id. at 593. However, in light of the Supreme Court's intervening decision in Steel Co. v. Citizens for a Better Environment, 523 U.S. 83, 118 S.Ct. 1003, 140 L.Ed.2d 210 (1998), this position is no longer tenable. As Justice Scalia noted in that case, proceeding to the merits despite jurisdictional objections "carries the courts beyond the bounds of authorized judicial action and thus offends fundamental principles of separation of powers." Id. at ----, 118 S.Ct. at 1012. Therefore, we must resolve all jurisdictional questions before proceeding to the merits. 21 McCarty Farms challenges this court's jurisdiction over the third category of claims on the ground that these claims fall within the statutory exception to our jurisdiction found in 28 U.S.C. § 1336(b). McCarty Farms argues that these claims "arose" out of the referral from the Montana district court and that the district court therefore has exclusive [332 U.S.App.D.C. 393] jurisdiction to review the STB's decision regarding these claims on appeal. In order to determine whether we have jurisdiction over the third category of claims, we must start with the text of Section 1336(b). The question of which court has jurisdiction turns on the construction of the term "arising" in Section 1336(b). In general usage, the meaning of the term "arise" is "to originate." Black's Law Dictionary 99 (5th ed.1979). Consistent with this usage, the third category of claims cannot be said to have "arisen" out of the district court's referral. 22 In no sense did the third category of claims originate in the district court's referral. The referral did not mention rates for shipments of barley or rates for shipments of wheat moving after September 12, 1980. The complaint filed with the district court did not even reference these rates. See McCarty Farms, 787 F.Supp. at 942 & n. 10 (reproducing relevant sections of the amended complaint). Indeed, McCarty Farms has petitioned the district court to "clarify" its referral order so that it specifically references these claims, but the district court has refused to do so. Id. at 947. We find McCarty Farms' argument that the claims may "arise" out of a referral that makes no mention of them unpersuasive. McCarty Farms has supplied no workable definition of the term "arise" supporting its contentions. 23 We acknowledge that other courts have noted that the legislative history of Section 1336(b) evidences an intent on the part of Congress to avoid "piecemeal appeals" by directing the district court to review all claims "arising" from its referral. See Railway Labor Executives' Ass'n v. ICC, 894 F.2d 915, 917 (7th Cir.1990) ("The insight behind section 1336(b) is that if a question within the purview of the ICC arises in the course of a district court proceeding, submission of the ICC's answer in the first instance to the district court rather than to the court of appeals will avoid a cumbersome and potentially protracted bifurcation of judicial review." (citing S.Rep. No. 1394, 88th Cong., 2d Sess. (1964))). Some courts have pointed to this legislative history in justifying a broad construction of the term "arising" in order to further this congressional goal. See, e.g., Union Pacific R.R. v. Ametek, Inc., 104 F.3d 558, 561 (3rd Cir.1997) (noting that a narrow construction of the term "arising" would lead to "problems arising out of parallel proceedings in different courts arising out of a single controversy"). 24 Nevertheless, we hold that we have jurisdiction over the third category of claims on the present facts. McCarty Farms could not have filed the third category of claims in the district court, even if it had wanted to do so. In the complaint it filed with the ICC, McCarty Farms sought a prescription on future rates, a remedy not available in the district court. See 49 U.S.C. § 11705(b)(1) (1988). The fact that these claims as outlined in the administrative complaint could not have been brought in the district court demonstrates that they could not have "arisen" from the district court's referral. Congress did not intend to authorize litigants to expand the district court's jurisdiction beyond its legitimate scope by filing complaints with the ICC and then seeking review of those complaints by the district court pursuant to Section 1336(b). 25 Moreover, the third category of claims could not have been brought in the district court because, by the time McCarty Farms filed its complaint with the ICC, the district court had been divested of jurisdiction to hear those claims. On October 1, 1980, approximately six months before McCarty Farms filed its complaint with the ICC on March 27, 1981, Congress enacted the Staggers Rail Act. The Staggers Act provides in relevant part that "[t]he jurisdiction of the Board over ... transportation by rail carriers ... is exclusive." 49 U.S.C. § 10501(b). After the parties petitioned the district court to "clarify" its referral order, that court rightly held that the Staggers Act had divested it of jurisdiction over the third category of claims. As a result, the court concluded that it could not allow McCarty Farms to amend its complaint to include the third category of claims, and it could not itself alter its referral order to specifically reference those claims. The court reasoned as follows: 26 [The Staggers Act] did, contrary to the assertion of the plaintiffs, divest this court of jurisdiction over challenges to the reasonableness [332 U.S.App.D.C. 394] of rail rates in effect on or after the effective date of the Staggers Rail Act, i.e., October 1, 1980. Because the court would not have had jurisdiction to entertain the challenges advanced by the plaintiffs to rail rates in effect as of October 1, 1980, the court cannot acquire jurisdiction by retroactive amendment of the order of referral. 27 McCarty Farms, 787 F.Supp. at 947. These claims, not being within the jurisdiction of the district court, could not have "arisen" out of any referral from that court. 28 Despite any lack of clarity in either the text of Section 1336(b) or its legislative history, we are satisfied that our construction is consistent with congressional intent. Although members of Congress may have expressed an intent to further judicial economy, that laudable goal will not compel a construction whereby claims that are only tangentially related to those referred by the district court arise out of that referral along with those specifically referenced by the district court. Further, there is little danger of "piecemeal appeals" where the disputed claims are not raised with the district court, but rather are brought before the STB in the first instance. Moreover, given the specific facts in this case, there necessarily will be some duplication of judicial effort since it is undisputed that we have jurisdiction over the second category of claims, and it is clear that the district court has jurisdiction over the first category. 29 We have stated before that the exception to our jurisdiction under the Hobbs Act found in Section 1336(b) is a "narrow" one. Overland Express, Inc. v. ICC, 996 F.2d 356, 358 n. 1 (D.C.Cir.1993), judgment vacated, 511 U.S. 1103, 114 S.Ct. 2095, 128 L.Ed.2d 658 (1994) (noting that " § 1336(b) is a narrow exception to our jurisdiction over challenges to Commission proceedings under the Hobbs Act"). Construing the statute narrowly gives the parties a bright line rule they may follow in seeking review of an STB decision. See Ametek, 104 F.3d at 566 (Roth, J., dissenting) ("The application of such a strict interpretation of § 1336(b) would reduce the chance that appeals are made to the wrong court. Counsel need only look to the language of the district court's referral to determine whether the issue was properly reviewable by a district court...."). Under a strict construction of Section 1336(b), issues expressly set out in the district court's referral order are reviewed by the district court. The court of appeals reviews all other issues. 30 We note that the district court has come to the same conclusion, ruling that "the scope of the court's jurisdiction to review the Interstate Commerce Commission's decisions is determined by the scope of the referral order itself." McCarty Farms, 787 F.Supp. at 942. After reviewing its own referral to the ICC, that court concluded that the third category of claims at issue here did not "arise" from its referral. Id. at 943 ("Contrary to the assertion of the plaintiffs, the express language of the court's order of referral cannot be read to have encompassed single-car, multiple-car, and trainload rates assessed by the Burlington Northern on shipments of wheat which occurred from September 12, 1980, forward and for the future, nor on single-car, multiple-car, and trainload rates on barley from March 26, 1981, the date plaintiffs filed their administrative complaint, forward, and for the future."). 31 In sum, we are convinced that the disputed claims, not having been within the jurisdiction of the district court, cannot have arisen out of a referral from that court. We further hold that this conclusion is consistent with the intent of Congress as expressed in Section 1336(b). B. The STB's Decision 32 Having established that we have jurisdiction over the second and third categories of claims, we now turn to the merits. We review final decisions of the STB under the deferential arbitrary and capricious standard of the Administrative Procedure Act, 5 U.S.C. § 706(2)(A). Under that standard, we must uphold a decision of the STB unless it is "arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law." Id. In reviewing the STB's determination of rate reasonableness issues, we must also decide whether the STB's decision is supported by "substantial evidence." 5 U.S.C. § 706(2)(E). We must "leave the [332 U.S.App.D.C. 395] Board's judgment undisturbed" if its findings rest on "such relevant evidence as a reasonable mind might accept as adequate to support a conclusion" and it has articulated a "rational connection between the facts found and the [decision] made." Burlington Northern R. Co. v. STB, 114 F.3d 206, 210 (D.C.Cir.1997) (internal citations omitted). 33 In its petition for review, McCarty Farms contends that the STB made a number of technical errors in implementing the CMP test's stand-alone cost constraint. Under the stand-alone cost constraint, the reasonableness of a railroad's rates are judged against simulated competitive prices so that the efficiencies of a contestable market serve as the guide for establishing maximum rates. The stand-alone cost is the hypothetical cost of an efficient producer to independently provide service to a shipper or group of shippers. Thus, in implementing the CMP test's stand-alone cost constraint, the STB considers a hypothetical railroad in order to determine the maximum rates that may be charged in providing service to a shipper or group of shippers. McCarty Farms asserts that the STB erred in determining several cost components of the investment necessary to construct the hypothetical stand-alone railroad. Specifically, McCarty Farms alleges that the STB erred in (1) calculating a variety of investment costs, (2) calculating revenues, (3) rejecting McCarty Farms' proposed operating plan, (4) calculating the lease rates for locomotive and rail cars, and (5) calculating depreciation expense. 34 Upon review of the STB's decision, we cannot conclude that any of these alleged errors constitute the sort of "arbitrary" and "capricious" decisionmaking that would warrant reversal. See Ethyl Corp. v. EPA, 541 F.2d 1, 34 (D.C.Cir.1976). Rather, we conclude that the STB has rationally set forth the grounds on which it acted, and its findings are based on substantial evidence. See Burlington Northern, 114 F.3d at 210-11. Moreover, the STB has taken steps to correct those technical errors in its 1997 Decision which it acknowledged by issuing its supplemental 1998 Decision.1 Where an agency has rationally set forth the grounds on which it acted, as the STB has in this case, this court may not substitute its own judgment for that of the agency. Bowman Transp., Inc. v. Arkansas-Best Freight System, Inc., 419 U.S. 281, 285, 95 S.Ct. 438, 42 L.Ed.2d 447 (1974) (citing Citizens to Preserve Overton Park, Inc. v. Volpe, 401 U.S. 402, 416, 91 S.Ct. 814, 28 L.Ed.2d 136 (1971)). III. CONCLUSION 35 For the foregoing reasons, we conclude that we have jurisdiction over claims relating to (1) multiple-car and trainload shipments of wheat and barley (Docket No. 37815S) and (2) single-car shipments of barley and single-car wheat shipments moving after September 12, 1980 (Docket No. 37809 (Sub-No. 1)). With respect to those claims over which we have jurisdiction, we conclude that the STB's decision was based on substantial evidence and was not arbitrary, capricious, or contrary to law. We therefore affirm the decision of the Board. 1 McCarty Farms has moved to strike any reference in these proceedings to the STB's 1998 Decision on the grounds that it was issued after McCarty Farms had filed its appeal with this court. Because we find the decision helpful to the court and not prejudicial to the parties, we deny the motion	{ "pile_set_name": "FreeLaw" }
114 Cal.App.3d 588 (1981) 170 Cal. Rptr. 755 In re JEROME S. STANLEY on Habeas Corpus. Docket No. 10977. Court of Appeals of California, Third District. January 13, 1981. 589 COUNSEL Stanley & Wing and Christopher H. Wing for Petitioner. George Deukmejian, Attorney General, Robert H. Philibosian, Chief Assistant Attorney General, Arnold O. Overoye, Assistant Attorney General, Edmund D. McMurray and Willard F. Jones, Deputy Attorneys General, for Respondent. 590 OPINION PARAS, J. In this original proceeding petitioner asks us to invalidate a judgment of contempt issued by the municipal court in Sacramento. The facts are not in dispute. Petitioner is attorney of record for a defendant in a criminal case. Trial was originally scheduled for June 4, 1980. On May 28 petitioner prepared a motion to continue which was filed on May 29, to be heard on June 2. Because he was scheduled to appear in federal court that day, an associate appeared to argue the motion; it was granted. The trial was rescheduled for June 23. Petitioner's associate noted the new trial date on the file he carried to court but did not record it elsewhere for office calendaring and did not inform petitioner of it. Petitioner never asked his associate or anyone else about the new trial date. When the case was called for trial on June 23, the People were ready to proceed and the defendant was present. Neither petitioner nor his associate (whom he had asked to handle his court appearances that day while he was out of town) appeared for the trial. The court issued an order to show cause for contempt and scheduled a hearing thereon for June 25. Petitioner appeared at the hearing with counsel. He and his associate both testified the failure to appear was caused by a breakdown in their office procedures regarding the scheduling of court appearances. Petitioner testified he assumed he was told the outcome of the motion hearing, but never inquired of anyone as to the date to which the trial was continued and was never aware of the new date. The court found petitioner's failure to appear on the new trial date a willful violation of Code of Civil Procedure section 1209, subdivisions 3 and 5[1] in that petitioner had a duty to make a followup inquiry on a case in which he had a continuance motion pending. Petitioner was adjudged in contempt of court and ordered to pay a fine of $500 and spend three days in county jail.[2] 591 Petitioner's several contentions are premised on the theory that he cannot be held accountable for failure to appear because he did not actually know that trial date. We reject the proposition. Elusive attorneys have long been a recurring problem in trial courts. (Arthur v. Superior Court (1965) 62 Cal.2d 404, 409 [42 Cal. Rptr. 441, 398 P.2d 777].) "When an attorney fails to appear in court with his client, particularly in a criminal matter, the wheels of justice must temporarily grind to a halt. The client cannot be penalized, nor can the court proceed in the absence of counsel. Having allocated time for this case, the court is seldom able to substitute other matters. Thus, the entire administration of justice falters." (Id., at p. 411.) (1) An attorney's failure to appear at the scheduled time without valid excuse is a species of direct contempt and may be punished summarily. (Chula v. Superior Court (1962) 57 Cal.2d 199, 203 [18 Cal. Rptr. 507, 368 P.2d 107, 97 A.L.R.2d 421].) Due process does, however, require the court to afford an opportunity for the attorney to present a valid excuse (Inniss v. Municipal Court (1965) 62 Cal.2d 487 [42 Cal. Rptr. 594, 399 P.2d 50]), as was done in this case. (2) Whether certain acts constitute contempt is a jurisdictional question to be determined by the trial court. (In re Ciraolo (1969) 70 Cal.2d 389, 394 [74 Cal. Rptr. 865, 450 P.2d 241].) As a reviewing court, our role is merely to ascertain whether there was sufficient evidence before the trial court to sustain the judgment and order. The power to weigh the evidence rests with the trial court. (Id., at p. 394.) (3) In this case the trial court rejected petitioner's proferred excuse based on a breakdown of office calendaring procedures, and determined that his failure to inquire about the new trial date was a breach of duty which led to his failure to appear. It is clear that petitioner had a duty to present himself in court and diligently continue with a trial he had undertaken and not to delay it unduly for any personal matter reasonably within his control.[3] (Lyons v. Superior Court (1955) 43 Cal.2d 592 755, 758 [278 P.2d 681].) Implicit in this duty is the obligation to be informed of required dates and times for court appearance. (See ABA, Model Code of Prof. Responsibility (1980) DR 6-101 (3) at p. 31.) Petitioner failed in these duties. His omissions were willful in that his failure to inquire and consequent scheduling of an out-of-town appointment evidenced "a ... willingness to commit the ... omission" (Lyons, supra, 43 Cal.2d at p. 759), and an indifferent disregard of the duty to obey court orders promptly (In re Karpf (1970) 10 Cal. App.3d 355, 372 [88 Cal. Rptr. 895]). There was sufficient evidence to support the trial court's findings. (4) Petitioner's additional argument that the sentence imposed was an abuse of discretion is without merit; the penalty is well within statutory limits. (Code Civ. Proc., § 1218.) The order to show cause is discharged and the petition for writ of habeas corpus is denied. The stay heretofore issued by this court will be dissolved on finality of this opinion. Puglia, P.J., and Wolters, J.,[] concurred. Petitioner's application for a hearing by the Supreme Court was denied March 20, 1981. Bird, C.J., and Tobriner, J., were of the opinion that the application should be granted. NOTES [1] Code of Civil Procedure section 1209: "The following acts or omissions ... are contempts ... "3. Misbehavior in office, or other wilful neglect or violation of duty by an attorney ... "5. Disobedience of any lawful judgment, order, or process of the court...." [2] The judgment recites the court considered "numerous occasions in the past" when it had given petitioner verbal warnings "when he has failed to show for trial, when he has had multiple cases set for trial on the same day and other numerous occasions wherein he was late for court or had conflicts with his calendar." After the judgment issued, petitioner applied to the superior court which ordered the municipal court to reconsider the sentence without reference to past conduct. The municipal court did so and imposed the same sentence. [3] Since there was no appearance by anyone on behalf of petitioner's client on June 23, we need not consider the effect of his arrangement with his associate to cover for him that day. [] Assigned by the Chairperson of the Judicial Council.	{ "pile_set_name": "FreeLaw" }
FILED United States Court of Appeals Tenth Circuit UNITED STATES COURT OF APPEALS March 31, 2011 TENTH CIRCUIT Elisabeth A. Shumaker Clerk of Court STANIMIR GEORGIEV PAVLOV, a/k/a Atanas Velichkov Yordanvo, Petitioner - Appellant, v. No. 11-1040 (D. Colo.) WARDEN SMELZER, [sic]; JOHN W. (D.C. No. 10-CV-01282-ZLW) SUTHERS, Attorney General of the State of Colorado, Respondents - Appellees. ORDER DENYING MOTION FOR LEAVE TO PROCEED ON APPEAL IN FORMA PAUPERIS, DENYING REQUEST FOR CERTIFICATE OF APPEALABILITY, AND DISMISSING APPEAL Before O'BRIEN, McKAY, and TYMKOVICH, Circuit Judges. Stanimer Pavlov filed a pro se1 28 U.S.C. §2254 habeas petition. The District Court dismissed it as “barred by the one year limitation period in 28 U.S.C. §2244(d),” explaining why. It also prospectively decided that no Certificate of Appealability (COA) would issue because Pavlov “has not made a substantial showing of the denial of a constitutional right.” (R. Doc. 23 at 8.); See 28 U.S.C. § 2253(c)(2). Pavlov then filed a 1 We liberally construe his pro se filings. See Ledbetter v. City of Topeka, Kan., 318 F.3d 1183, 1187 (10th Cir. 2003). Notice of Appeal with the district court. Later, in this Court, he filed several documents: a “Statement” on February 28, 2011, which we construed as a motion for issuance a COA; on March 9, 2011, a two- page “Combined Opening Brief and Application for Certificate of Appealability,” which we construed as a supplement to his “Statement,” and on March 10, 2011, a Brief and Application for COA. The parties are familiar with the facts so they will not be repeated here. We have reviewed Pavlov’s proposed opening brief and application for a COA in light of the district court’s decision. A COA may be issued only upon “a substantial showing of the denial of a constitutional right.” 28 U.S.C. § 2253(c)(2). We are confident jurists of reason would not find the district court’s analysis debatable or wrong. Slack v. McDaniel, 529 U.S. 473, 484, (2000). The district court also denied Pavlov’s request to appeal in forma pauperis (ifp), concluding it was “not taken in good faith.” (R. Doc. 30.); see 28 U.S.C. § 1915(a). He renews his ifp request here. To proceed ifp on appeal, he “must show a financial inability to pay the required filing fees and the existence of a reasoned, nonfrivolous argument on the law and facts in support of the issues raised on appeal.” DeBardeleben v. Quinlan, 937 F.2d 502, 505 (10th Cir. 1991) (emphasis added). We have solicitously reviewed his filings. He has utterly failed to pass the threshold. An appeal on a matter of law is frivolous where “[none] of the legal points [are] arguable on their merits.” Anders v. California, 386 U.S. 738, 744 (1967). Pavlov’s arguments are either irrelevant or contrary to settled law; and he makes no reasoned argument for modification of that law. -2- Pavlov’s application for a COA and his motion to proceed ifp on appeal are DENIED. He must pay the filing and docket fees in full to the clerk of the district court. See Kinnell v. Graves, 265 F.3d 1125, 1129 (10th Cir. 2001). Entered by the Court: Terrence L. O’Brien United States Circuit Judge -3-	{ "pile_set_name": "FreeLaw" }
478 F.2d 1405 Littwinv.Gottschalk 72-1603 UNITED STATES COURT OF APPEALS Seventh Circuit 5/25/73 1 N.D.Ill. AFFIRMED	{ "pile_set_name": "FreeLaw" }
122 S.E.2d 186 (1961) Ara Virginia HENTHORN, Admrx., Etc., v. Carl LONG. No. 12103. Supreme Court of Appeals of West Virginia. Submitted September 19, 1961. Decided October 24, 1961. Rehearing Denied December 4, 1961. 188 James W. Pyles, Jack Hawkins, Pros. Atty., New Martinsville, for plaintiff in error. Snyder & Hassig, New Martinsville, for defendant in error. CALHOUN, Judge. This case involves a wrongful death action growing out of a motor vehicle collision resulting in a verdict for the defendant, which the trial court declined to set aside. The basic defense was predicated on the sudden emergency doctrine. On the morning of August 11, 1958, Arthur William Henthorn and Howard Eugene Miller were proceeding in a northwesterly direction on State Route No. 20 and 7 toward New Martinsville in Wetzel County in a 1951 model Chevrolet automobile, owned and then being operated by Henthorn. At a point referred to in the testimony as the "twin bridges", Henthorn stopped his automobile near the eastern end of a narrow concrete bridge and on his right side of the highway, in order to permit an oncoming pickup truck, and perhaps one or more other vehicles following the pickup truck, to cross the narrow bridge from the opposite direction. While the automobile was stationary at that place, it was struck from the rear by a 1956 model 2-ton Ford truck then owned and being operated by Carl Long. As a consequence of that collision, the automobile was rammed into the right side of the concrete bridge on the eastern end thereof with such force and violence that the automobile was demolished, Henthorn, the driver, was killed, and Miller, the passenger in the automobile suffered a broken back and other injuries. In this wrongful death action consequently instituted in the Circuit Court of Wetzel County by Ara Virginia Henthorn, as administratrix of the estate of her deceased husband, Arthur William Henthorn, against Carl Long, a jury returned a verdict in favor of the defendant. From a judgment entered on such verdict by the trial court on May 27, 1960, the administratix prosecutes this writ of error. The plaintiff has filed a motion to reverse, pursuant to leave granted by this Court on May 8, 1961. A consideration of the several assignments of error urged in behalf of the plaintiff necessitates a rather extended summary of the pertinent facts and circumstances disclosed by the testimony. The collision occurred about 7:45 a. m., while Henthorn and Miller were proceeding from their respective homes in Wetzel County with an intention to go to Weirton, West Virginia. The impact caused Henthorn to be thrown forward against the steering wheel of his automobile, causing its horn "to stick and blow". His resultant death apparently was instantaneous. From photographs exhibited and from the testimony of witnesses it appears that eastward from the point of impact, the direction from which both vehicles had proceeded, there is a slight and gradual ascent extending for perhaps as much as 1,000 feet. The weather was clear and dry. At a point 475 feet eastward from the bridge, there was a highway marker bearing the words "Narrow Bridge". The paved portion of the highway at the eastern edge of the bridge was 17 feet, 6 inches in width. The defendant was familiar with the highway 189 in the area in question, having traveled over it frequently prior to the date of the accident. Arthur William Henthorn owned and operated a small farm near Piney in Wetzel County, and Howard Eugene Miller lived with his grandmother on an adjoining farm. Miller testified that during the trip from Piney to the scene of the accident, Henthorn operated the automobile at a speed of about 40 to 45 miles an hour; that at Porters Falls, a distance of ten or eleven miles eastward from the twin bridges, he first noticed the Long truck following at a distance of about 500 feet in the rear of the automobile; that he observed the truck three or four times thereafter; that he last observed the truck at almost the instant it struck the automobile and prior to that time he last observed the truck about one mile eastward from the scene of the accident at a place of business known as the "Cabbage Patch"; that Henthorn's automobile was then traveling approximately 45 miles an hour; that the truck was "keeping about the same distance" or "holding about the same distance" from the automobile each time he observed it prior to the moment of collision; that Henthorn gave an appropriate arm signal and stopped his automobile on the right side of the highway at a point near the third guard rail post eastward from the eastern end of the bridge; that the Henthorn automobile was in its stationary position about twelve seconds prior to the time it was struck from the rear by the truck; and that he had "no idea" of the speed of the truck when he last saw it immediately preceding the impact. Riley Beegle, a constable of Magnolia District of Wetzel County, a witness for the plaintiff, testified that he went to the scene of the accident at the suggestion or request of the chief of police of the City of New Martinsville; that he arrived at the scene about the time the ambulance was leaving with the two injured persons; and that one of such persons "looked like he was dead." Beegle testified further that at that time and place Carl Long, the defendant, told him "it was his fault, that he was on his way to New Martinsville to get his brakes fixed"; and that he said "he was sorry because these boys were both friends of his, and he was sorry that happened, and he said they came down the hill there, that he pumped his brakes on the truck, and he didn't have any brakes"; that he was about three hundred feet, apparently from the Henthorn automobile, when he first undertook to apply his brakes; and that he stated further that he "found out he didn't have any brake, and he reached across to an emergency brake, and he hit a button there which throwed it into neutral". Constable Beegle testified that there was on the floor of the cab of the truck a can lying on its side, from which was flowing or spilling a liquid which "looked like, smelled like brake fluid". The witness denied that Long stated that he was going to New Martinsville to have his brakes merely "tightened" or "adjusted" or to have his battery checked, but rather that Long stated he was going to New Martinsville to have his brakes "fixed". At the request of Sheriff S. W. Westerman, Beegle took the defendant to New Martinsville for questioning. S. W. Westerman, Sheriff of Wetzel County, arrived at the scene of the accident after Long's truck had been moved westward across the bridge and parked in front of a nearby store. As a witness for the plaintiff, he testified that the "Chevrolet was completely smashed in. It was shoved clear to the front. The Ford truck was damaged on the right side. The better part of the damage was on the right side of the front." This testimony relative to the nature of damage to the two vehicles is confirmed by photographs which are made exhibits. Sheriff Westerman did not talk with the defendant at the scene of the accident, but he did question him later in New Martinsville. In relation thereto the sheriff testified: "Well, he told me that he washe left Reader, and he had about a half a brake * * . He told that to me, that he had about a half a brake, and he 190 was starting to New Martinsville to have his brakes repaired. He came to within three hundred feet of the bridge where the accident occurred, and he pumped on his brake, and his brake wouldn't work. He pumped several times and it wouldn't work. He grabbed for his emergency, and by grabbing for his emergency, he hit some kind of a buttonI don't know what it is and threw it into neutral, thereby the emergency brake wouldn't work at all." The sheriff testified further that he caused the truck to be examined later that day on the premises of Bridgeman Motors in New Martinsville by Carl Reed, an automotive mechanic, and that such examination "revealed very little brake fluid in the cylinders." Carl Reed, an automotive mechanic since 1946, testifying for the plaintiff, stated that he examined the defendant's truck on Bridgeman Motors' used car lot on the day on which the accident occurred. He testified that on a truck of this type there is a "master cylinder" under the floor boards on the driver's side, sufficient in size to contain one-half pint of brake fluid, and that each wheel is equipped with a cylinder for the purpose of containing brake fluid as a part of the braking system. The brake fluid is forced from the master cylinder to the several wheel cylinders by a "vacuum booster." He testified further that the master cylinder "governs" all the wheel brakes, and that when he examined the truck, he discovered that the master cylinder was empty. From his testimony it appears that "pumping" the foot brake causes the brake fluid to be supplied to the several wheel cylinders, and that if one of such wheel cylinders develops a leak, the brake fluid in the master cylinder eventually may become emptied therefrom. Apparently "pumping" the foot brake will hasten this process of forcing the brake fluid from the braking system. From the examination of the truck made by the witness, he was unable to state when or how the brake fluid left the braking system. It appears rather clearly from the testimony of the witness that when a leak develops in one of the wheel cylinders, the loss of braking capacity is not sudden, but rather the loss of effectiveness of the wheel brakes takes place gradually with the increased loss of the brake fluid. He was asked the following questions, and he gave the following answers: "Q. Mr. Reed, if the wheel cylinder goes out, does that make the entire braking system go out? Does that affect the other wheels? A. In due time when it leaks enough fluid out your master cylinder is dry. It will affect all brakes. "Q. But if it just commences to leak, what effect does that have before it has leaked all the fluid out? A. My experience I found it will give you a sponge pedalsoft pedal. Instead of the pedal going so far and stopping, it will be kind of spongy like. "Q. But it can stop the vehicle? Is that correct? A. Yes." John Bridgeman of Bridgeman Brothers or Bridgeman Motors, Ford Dealer at New Martinsville, a witness for the plaintiff, examined the defendant's truck on the used car lot on the day of the accident. He testified: "I tried the brake pedal, and it went clear to the floor. It didn't have any reserve pedal." He testified further that the "right rear wheel cylinders were replaced." Later he spoke of "cylinder" in the singular rather than "cylinders". He was asked the following questions and gave the following answers: "Q. Was there brake fluid on the wheel? A. Yes, sir. "Q. Can you tell what was wrong with the cylinder? A. The rubber caps were leaking. "Q. Do you know what made the leak, if you know? A. Wear and tear, I imagine. "Q. Did you in addition to replacing the cylinder, tighten the brake? A. 191 I couldn't tell you. I don't recall. It is possible we did. "Q. After you replaced the cylinder, I assume you also put brake fluid in it? A. Yes." John E. Titus, a witness for the defendant, testified that he, as an employee of the defendant, had operated the truck in question almost exclusively; that Carl Long may have "been in it two or three times * * but he had never delivered a load that I know of, but he had driven the truck empty a time or two, but outside of that I was the only man that operated it." Titus further testified that on the preceding Friday he delivered a load of lumber with the truck from the defendant's sawmill, situated one mile below Reader on Route 20, to a mine near Moundsville; and that he did not operate the truck thereafter prior to the day of the accident. Titus testified further that on Monday morning, the day on which the accident occurred, it was necessary to push the truck in order to start the operation of its motor, because "the starter wouldn't work." Apparently Carl Long was in the driver's position when his employees pushed the truck in order to get its motor operating. In relation to the situation then existing, Titus testified as follows: "Well, Mr. Long pulled back in, * * * and got out of the truck, and he said, `Well, I will have to get that starter fixed', and I said to him, I said, `If you are going to get the starter fixed,' and I said to him, I said, `If you are going to get that starter fixed, you better have the brakes adjusted, they are beginning to get loose,' and he said, `Well, you go ahead and operate the mill. I will take the truck to the garage.'" Titus was asked the following questions, and gave the following answers: "Q. You said something about the brakes being loose? A. The brakes was loose. They needed adjusted up. The pedal didn't have sufficient to pedal it. "Q. How much pedal did it have? A. It had plenty of pedal to stop the truck without pumping. Of course, I didn't try to work it that morning at all, but you could have pumped the brake and got more pedal, but I didn't. I drove it in there and stopped on the emergency brake." (Italics supplied.) In another portion of his testimony, in relation to the brakes, Titus testified: "They were down some, but they had plenty of pedal capable of stopping an empty truck or unloaded truck if it was stopped in a reasonable distance." (Italics supplied.) Titus denied that there was any brake fluid in the cab of the truck on the day in question, but he says that on Sunday, the day before the accident, he took a can of brake fluid from the truck and used it to restore the brakes in his own automobile, and did not replace it in the truck. Nevertheless, he testified: "At the time I drove it to the Ford garage there was a mashed up can of brake fluid in the glove compartment of the truck, and it leaked over the maps and everything, put in there by somebody else. I don't know how it got there." (Italics supplied.) Immediately thereafter he testified as follows: "Q. Do you recall how many days it was after that accident you found it in the glove compartment? A. It was so we got the truck back. They worked on the truck on Tuesday, and we got the truck back on Wednesday. Wednesday, the same day, I could smell the brake fluid, and it was in the glove compartment of the truck leaking out." (Italics supplied.) It is clear from the testimony of the defendant and of Carl Reed, the mechanic, that the emergency brake operated independently of the brakes on the truck wheels, which were operated by the foot pedal. The defendant testified that, on the gear shift lever located to the right of the driver, there was a "switch button" which controlled the two-speed axle. Long testified further that Titus had told him over the week-end that he was going to have his brakes "adjusted", and that at the sawmill on the morning in 192 question it was his intention to have the starter fixed and the brakes "adjusted". In connection with the situation at that time and place he testified: "I tried my brakes, and they was low. That is, low on the pedal, and I pumped them, the brake come up, see. I would say it wasn't quite half a pedal as we say was the pedal range * ." Consequently, he left the sawmill "between seven-fifteen and seven-thirty" intending to go to Bridgeman Brothers' garage. He admitted on cross-examination that instead of traveling fourteen miles to New Martinsville, he could have traveled four or five miles of "level driving" to Pine Grove, and that he could have had his starter and brakes repaired at one of the garages located at that place. He testified that he had no difficulty with the brakes until he neared the scene of the accident as hereinafter stated. Meantime, he recalled having observed the Henthorn automobile ahead and following it "through several miles". In descending two hills known as Long Point and Slim Chance, he noted that the foot brake "I would say, would be about one-third of the pedal. Just a little better than around two inches." He recalled having seen the Henthorn automobile ahead about four to five hundred feet, as he "passed the location known as the Cabbage Patch". He testified that he observed the Henthorn automobile in a stationary position near the bridge, and that when he came over the hill about one thousand feet eastward, he could see it. The defendant testified further that when perhaps three hundred feet or more eastward, he observed the Henthorn automobile "stopped", and at a point about two hundred and seventy feet eastward, he undertook to apply his foot brake "and it went to the floor. I didn't have no brake." In relation to the situation at that juncture, he stated: "At that time I reached for my emergency brake. I don't remember hitting this button, but that is the only thing that I can realize that caused it to jump into neutral, and I heard this whining in the drive shaft, and I know she jumped out of gear." He testified that he continued without success to pump his foot brake and that he tried unsuccessfully to get the truck back in gear. Consequently, the severe and violent impact resulted as stated earlier herein. In brief, the defendant asserts in substance that without previous fault on his part, a sudden emergency was created by the failure of his foot brakes to operate when he undertook to apply them at a point about two hundred and seventy feet from the Henthorn automobile; that thereafter he acted as a reasonably prudent man in such emergency; and that, therefore, he is not subject to liability to the plaintiff for damages in this action. Over objection of the plaintiff the trial court gave the defendant's instructions numbered three and four, respectively, dealing with the sudden emergency doctrine, as follows: "Instruction No. 3: The Court instructs the jury that where a person is confronted with a sudden emergency, the failure on his part to exercise the best judgment the situation renders possible does not establish such lack of care on his part as will render him liable for any resulting injury. Stated another way, the law does not require of a person who is acting in the face of sudden danger that his act be infallible or even that he act wisely. Therefore, in this case, if you believe from the evidence that as the defendant, Carl Long, approached the place where the Henthorn automobile was located, the defendant, while theretofore operating his truck with reasonable care and caution under the circumstances, was suddenly confronted with an emergency in the effectiveness of his brakes, which condition he had not observed and by the exercise of reasonable care could not have observed before that time, and if you further find that the said Carl Long upon the discovery of such condition did what an ordinary, reasonable and prudent person would have done under similar circumstances, then the defendant Carl Long was not guilty of negligence. 193 "Instruction No. 4. The Court instructs the jury that even though they may believe from a preponderance of the evidence in this case that at the instance of the collision in this case between the motor vehicle of the plaintiff's decedent Arthur William Henthorn and the defendant Carl Long, the foot brake on the motor vehicle of the defendant Carl Long was inoperative because of a defect, and was not in good working order or adequate to control the movement of and to stop and hold such motor vehicle as required by the statutes of the State of West Virginia, yet if the jury further believe from a preponderance of the evidence that, under the facts and circumstances in this case, such brake failure occurred wholly without the fault of the defendant Carl Long, under circumstances which made it impossible for such defendant to comply with such statutory requirements at the moment complained of, and under circumstances which due care and prudence on his part could not have guarded against prior to such collision, then any such violation of such particular statute by the defendant Carl Long under such circumstances is excusable." The court reporter's transcript of the testimony and of the other trial proceedings does not disclose, in the usual way, any objections to any of the instructions offered. However, in a separate bill of exceptions, the plaintiff sets forth the instructions copied above, and the bill of exceptions states that objections to such instructions were as follows: "The Plaintiff offered objections to Instruction No. 3 and 4 saying that Instruction No. 3 used the phrase `Which condition he had not observed and by exercise of reasonable care could not have observed before that time.' This instruction is unclear as to the meaning of the word observe. The Plaintiff objected to the giving of Instruction No. 4 saying it limits the brake failure to the words `moment complained of.' Plaintiff felt that there was sufficient evidence in this case to show that the brakes needed some work on them when the Defendant left Reader, and that he had an opportunity to drive four miles to Pine Grove to a garage, but he chose to come to New Martinsville, a distance of fourteen miles and over hilly, twisting roads, and we feel that there was sufficient evidence that Carl Long should have examined the brakes before leaving from the saw mill at or near Reader." While such objections are somewhat general, we deem them adequate to question the sufficiency of the evidence to support them and to challenge the propriety of the court's action in instructing the jury in relation to the sudden emergency doctrine in the light of the testimony, facts and circumstances properly exhibited by the record. The sudden emergency doctrine was summarized in the second point of the syllabus of the case of Reilley v. Byard, W. Va., 119 S.E.2d 650, 651, as follows: "A person in a sudden emergency, not created in whole or in part by his own negligence, who acts according to his best judgment or who, because of insufficient time to form a judgment, fails to act in the most judicious manner, is not guilty of actionable negligence if he exercises the care which would be exercised by a reasonably prudent person in like circumstances." (Italics supplied.) See also Reece v. Hall, 142 W.Va. 365, 372, 95 S.E.2d 648, 653. An important aspect or qualification of the doctrine is succinctly stated in the tenth point of the syllabus in the recent case of Crum v. Ward et al., W.Va. 122 S.E.2d 18, as follows: "In an action for damages for personal injuries, a defendant can not rely on the sudden emergency doctrine where his own action has created, in whole or in part, the sudden emergency." (Italics supplied.) The second point of the syllabus of Cline v. Christie, 117 W.Va. 192, 184 S. E. 854, is as follows: "The driver of a 194 motor vehicle who has violated rules of the road may not invoke the doctrine of sudden emergency to relieve himself from liability to one injured as a result of such violation." The same proposition is stated in similar language in the tenth point of the syllabus of Elswick v. Charleston Transit Co., 128 W.Va. 241, 36 S.E.2d 419, 422 as follows: "The driver of a motor vehicle cannot invoke the doctrine of sudden emergency to relieve himself from liability to another whom he has injured as the result of his violation of a regulatory traffic statute." See also Somerville v. Dellosa, 133 W.Va. 435, 443, 56 S.E.2d 756, 762; Isabella v. West Virginia Transportation Co., 132 W. Va. 85, 93, 51 S.E.2d 318, 323; Chaney v. Moore, 101 W.Va. 621, pt. 5 syl., 134 S.E. 204, 47 A.L.R. 800. There is in this case no testimony from which the jury could have determined reasonably and properly either that an emergency arose suddenly or that, if there was an emergency within legal contemplation, it arose without negligence or fault on the part of the defendant. The defendant knew, before he embarked upon the 14-mile journey over a hilly highway, that the brakes on the truck were defective. He knew this because Titus so advised him, and also because, while still at his place of business, he tested the brakes and found that they were "low", had "less than a half a pedal." Obviously, he knew it as he proceeded on his journey, because he does not contend that the impaired condition of the brakes later became corrected or lessened. On the other hand, he admits that while descending the two hills described in his testimony, he had a one-third pedal, apparently less than the approximately one-half pedal which he discovered before he left the sawmill. We are not impressed by the tenacious adherence of Long and Titus to the contention that the foot brakes merely needed to be "adjusted" or "tightened", rather than "fixed", as Constable Beegle quoted Long as having stated; or "repaired", as Sheriff Westerman quotes Long as having described the purpose of his journey to New Martinsville. Indeed the testimony clearly refutes the accuracy of the terminology employed by Long and Titus in saying or implying that the brakes merely needed to be adjusted or tightened. The defense, on the contrary, is predicated on the proposition that an emergency was caused because of a loss of brake fluid; and while John Bridgeman and Carl Reed testified fully concerning the subsequent correction of the defective condition of the brakes, there was no effort to develop by either of such witnesses that the brakes were "tightened" or "adjusted", or that they were in need of anything of that nature. On the contrary, the entire testimony discloses unmistakably that the wheel brakes were defective because of loss of brake fluid. The defendant testified that he had operated motor vehicles for forty-one years. His testimony gives evidence of a rather unusual knowledge of automotive mechanics and of experience in that field. He testified at length, and apparently with peculiar knowledge, concerning the operation of both the foot brakes and of the emergency brake on a truck such as that herein involved. The defense evidence discloses that extra brake fluid was regularly carried in the truck. It is reasonable to assume that the defendant knew the characteristics or symptoms of lack of adequate brake fluid in the braking system, and that he knew the significance thereof. The evidence fails to disclose that the "leak" in the cylinder on the right rear wheel of the truck was of such a nature as to cause the brakes to become completely inoperative suddenly or without reasonable basis for prior adequate warning. Since the defective nature of the brakes is not accounted for on any other basis, and since the evidence utterly fails to disclose that the brakes needed to be "adjusted" or "tightened" on any other basis or in any other manner than by correcting the situation pertaining to brake fluid in the braking system, we must assume that the leak commenced prior to the time when Titus drove the truck with defective brakes to the sawmill on the preceding Friday and stopped it there by means of the emergency brake. 195 The case is somewhat unique in that apparently there is no contention that Arthur William Henthorn, the deceased, was guilty of the slightest negligence in the premises, and apparently there is no basis for such an implication or contention. Rather his death resulted from the act of the defendant in deliberately taking a truck with defective brakes upon the highway and the act of the defendant, according to his testimony, in throwing his truck into neutral in undertaking to apply its emergency brake. For reasons stated we feel that neither of such instructions was warranted by the evidence, and that the trial court erred, under the state of the testimony before us, in submitting the question of the defendant's negligence to the jury on the basis of the sudden emergency doctrine. "An instruction which is not sustained by evidence should not be given." State v. Cirullo, 142 W.Va. 56, pt. 4 syl., 93 S.E.2d 526, 528, 535, in which numerous prior decisions of this Court to the same effect are listed. The plaintiff complains of the refusal of the trial court to grant her instruction Number 6, as follows: "The court further instructs the jury that it was the duty of the defendant Carl Long to have the brakes on his truck in such condition so that they would be capable, at all times and under all conditions of loading, of being stopped on a dry, smooth, level road free from loose material upon application of the service (foot) brake, within the distances specified below, or should have been capable of being decelerated at a sustained rate corresponding to these distances. "Feet to stop Deceleration 20 miles per in feet per hour second "Vehicles having brakes on all wheels 30 14 Vehicles not having brakes on all wheels 40 10.7 "And further it was the duty of the defendant Carl Long to maintain his brakes in good working order and to be so adjusted as to operate as equally as practicable with respect to the wheels on opposite sides of the vehicle." The instruction is substantially in the language of that portion of Chapter 129, Acts of the Legislature, Regular Session, 1951, appearing in Code, 1931, as amended, as Chapter 17C, Article 15, Section 31(b) and (c). Counsel for the defendant contend that the instruction was not applicable to the instant situation because the statute refers to a "smooth, level road", and there is no proof that the road at the area in question was a "smooth, level road." We are unable to perceive the force of such reasoning. The statutory provisions deal with the required performance ability of brakes, and the maintenance thereof. Obviously, the time required for stopping a vehicle is greater and the possible deceleration rate is not as rapid on a steep descent as on a smooth, level road. But a motorist is required to have brakes which measure up to the test prescribed by the statute, no matter what is the nature of the public highway upon which the vehicle is being operated. We do not mean to be merely facetious or flippant when we observe that, if the defense contention in this respect were sanctioned and observed, there would be a singular dearth of "smooth, level road" situations in our great state to which such an instruction could be applied properly. The trial judge, over his signature on the instruction, made the following notation: "Instruction does not conform with the statute." On the contrary, the instruction appears to be substantially in the statutory language. We therefore feel that the plaintiff was entitled to an instruction dealing in proper form and language with the statutory provision in question, and that the trial court was not warranted in refusing the instruction on the basis of the reasons assigned for such refusal. At the conclusion of the voir dire examination by the court of the panel of *196 twenty jurors, counsel for the plaintiff requested the court in writing to inquire further of such jurors as follows: "If the plaintiff proves by a preponderance of the evidence that the defendant's fault caused the death of Arthur Henthorn and that the distributees of his estate, namely, Ara Henthorn, his wife, and Bonnie Henthorn, his daughter, suffered pecuniary damages or financial loss in the amount of $20,000, would you be willing to return a verdict for said amount?" The court refused to do so, and also refused to permit counsel to propound a similar inquiry, stating: "The Court sees no useful purpose of this inquiry, in view of the complete, thorough examination heretofore made of the jury, and the Court still feels that such inquiry at this time would only emphasize a possible total verdict and would serve no useful purpose in the trial of this case and might be to the prejudice of the defendant." We feel that the trial court acted with complete propriety in this respect. This proposed inquiry seems to be a technique sometimes advocated as a means of inducing juries to return big verdicts. Courts are not interested in any device or technique designed to induce either large verdicts or small verdicts; but courts are under a solemn obligation at all times to keep the symbolic scales of justice delicately balanced so that every inducement will be held out to the jury, so far as mortal capacity permits, to render a fair verdict. If such an inquiry were propounded and answered in the affirmative by the twelve jurors ultimately selected for trial of the case, there might result a dangerous field for adroit and resourceful counsel in final argument to portray such affirmative answer as something in the nature of a tacit promise to return a verdict for the amount specified in the inquiry. We feel that the trial court, in refusing to propound such inquiry, exercised its discretion wisely in the interest of justice. The trial court, in the exercise of a sound discretion, may properly limit the extent of interrogation even in relation to any of the qualifications of jurors prescribed in Code, 56-6-12. Carpenter v. Hyman, 67 W.Va. 4, pt. 2 syl., 66 S.E. 1078. While jurors may be interrogated on their voir dire within reasonable limits, to elicit facts to enable the litigants to exercise intelligently their right of peremptory challenge, the nature and extent thereof "should be left largely to the discretion of the trial court." State v. Stonestreet, 112 W.Va. 668, pt. 1 syl., 166 S.E. 378, 379. The plaintiff complains of the refusal of the court to require the defendant on the plaintiff's motion to file a specification of defense in accordance with the provisions of Code, 56-4-20. While this case was tried prior to the effective date of the Rules of Civil Procedure for Trial Courts, we observe in passing that Rule 12(e) provides for a motion for a more definite statement of defense. The granting of such request, in accordance with the statutory provision, is within the sound discretion of the trial court, and this Court will not reverse for that cause unless it is clear that the party making such request has been prejudiced by the refusal of the trial court to grant it. State v. Counts, 90 W.Va. 338, pt. 3 syl., 110 S.E. 812; State v. Greater Huntington Theatre Corporation, 133 W.Va. 252, pt. 1 syl., 55 S.E.2d 681. We perceive no error in the action of the trial court in this respect. For the reasons stated herein, the plaintiff's motion to reverse is granted and sustained, the judgment of the Circuit Court of Wetzel County is reversed, the verdict of the jury is set aside, and the plaintiff is awarded a new trial. Judgment reversed; verdict set aside; new trial awarded.	{ "pile_set_name": "FreeLaw" }
COURT OF APPEALS SECOND DISTRICT OF TEXAS FORT WORTH NOS. 2-04-275-CR 2-04-276-CR GREGORY THOMAS GEORGE APPELLANT V. THE STATE OF TEXAS STATE ------------ FROM CRIMINAL DISTRICT COURT NO. 4 OF TARRANT COUNTY ------------ MEMORANDUM OPINION[1] ------------ Appellant Gregory Thomas George appeals the trial court=s denial of his motion to suppress. Appellant was charged in two separate indictments with possession of the controlled substance hydrocodone and methamphetamine, respectively. After the trial court denied Appellant=s motion to suppress, Appellant entered an open plea of guilty to both charges. The trial court found Appellant guilty in both instances and sentenced him to eight years= confinement for the possession of hydrocodone and eleven years= confinement for the possession of methamphetamine, with the sentences to run concurrently. In two points, Appellant complains that the trial court erred in denying his motion to suppress evidence because the contraband was discovered incident to an unlawful arrest and because the evidence was the fruit of an unreasonable seizure and search conducted without probable cause. We affirm. BACKGROUND On April 20, 2001, officers of the Hurst Police Department arrested Appellant. The officers acted at the direction of Hurst Corporal Clint Younger, who was then assigned to the Tarrant County Narcotics Task Force. An informant had advised Corporal Younger that Appellant, a man who drove a white van, was involved in narcotics activities and carried around a briefcase with methamphetamine and other drugs. Based on this information, Corporal Younger set up surveillance on Appellant. Corporal Younger observed Appellant exit a residence and get into a white van as described by the informant. Corporal Younger followed Appellant for approximately five blocks until he observed Appellant failing to come to a complete stop before turning right at a red light in the City of Hurst. At that point, Corporal Younger radioed marked patrol units of the Hurst Police Department and asked them to conduct a traffic stop based on the traffic violation he had observed. Corporal Younger followed Appellant as he continuously updated the marked patrol units regarding Appellant=s location. Sergeant Schwobel of the Hurst Police Department confirmed with Corporal Younger that he was following the correct vehicle and then Sergeant Schwobel stopped Appellant. Sergeant Schwobel did not personally observe Appellant=s failure to come to a complete stop at the red light. Appellant was in Hurst when he committed the traffic violation, but he traveled approximately two and a half miles before Sergeant Schwobel had the opportunity to stop Appellant=s vehicle. At the time of the traffic stop, Appellant was in Fort Worth, Tarrant County, Texas, and Fort Worth officers did not participate in the traffic stop. A total of three officers arrived at the scene, placed Appellant under arrest for the red light violation, and recovered contraband following a search of the vehicle incident to the arrest. Corporal Younger testified that he was approximately one hundred yards from Appellant=s vehicle during the traffic stop and that at no time did he actually participate in the traffic stop. After officers arrested Appellant and transported him from the scene, Corporal Younger assisted the officers in organizing the contraband that the officers recovered from Appellant=s van. STANDARD OF REVIEW We review a trial court's ruling on a motion to suppress evidence under a bifurcated standard of review. Carmouche v. State, 10 S.W.3d 323, 327 (Tex. Crim. App. 2000); Guzman v. State, 955 S.W.2d 85, 89 (Tex. Crim. App. 1997). In reviewing the trial court's decision, we do not engage in our own factual review. Romero v. State, 800 S.W.2d 539, 543 (Tex. Crim. App. 1990); Best v. State, 118 S.W.3d 857, 861 (Tex. App.CFort Worth 2003, no pet.). The trial judge is the sole trier of fact and judge of the credibility of the witnesses and the weight to be given their testimony. State v. Ross, 32 S.W.3d 853, 855 (Tex. Crim. App. 2000); State v. Ballard, 987 S.W.2d 889, 891 (Tex. Crim. App. 1999). Therefore, we give almost total deference to the trial court's rulings on (1) questions of historical fact and (2) application-of-law-to-fact questions that turn on an evaluation of credibility and demeanor. Johnson v. State, 68 S.W.3d 644, 652-53 (Tex. Crim. App. 2002); State v. Ballman, 157 S.W.3d 65, 68 (Tex. App.CFort Worth 2005, pet. ref=d); Harrison v. State, 144 S.W.3d 82, 85 (Tex. App.CFort Worth 2004, pet. granted); Best, 118 S.W.3d at 861-62. However, when the trial court=s rulings do not turn on the credibility and demeanor of the witnesses, we review de novo a trial court's rulings on mixed questions of law and fact. Johnson, 68 S.W.3d at 652-53. HOT PURSUIT In his first point, Appellant complains that the trial court erred in denying his motion to suppress because the contraband was discovered incident to an unlawful arrest. Appellant does not challenge the fact that the search was conducted incident to an arrest, but he does challenge the lawfulness of the arrest. Appellant maintains that the arrest was unlawfully made because it was outside the arresting police officers= jurisdiction and was not made in a hot pursuit situation. Appellant contends that the stop was not made in hot pursuit because he did not attempt to flee and he stopped his vehicle soon after officers turned on their lights and sirens to stop him. The State contends that the arrest was lawful because Corporal Younger was in pursuit of Appellant while within Hurst city limits, and the uninterrupted attempt by Corporal Younger and other officers to stop Appellant=s vehicle constituted a pursuit within the meaning of Ahot pursuit.@ A police officer may arrest a person outside the officer=s jurisdiction when the pursuit began within the officer=s geographical boundary and the pursuit was Alawfully initiated on the grounds of suspicion.@ Yeager v. State, 104 S.W.3d 103, 106-107 (Tex. Crim. App. 2003). Additionally, the hot pursuit doctrine does not necessarily require some element of a chase, although often it will. Id. at 106. Therefore, the relevant consideration is whether the initial pursuit was lawfully initiated. Id. at 107. An officer may arrest a person without a warrant for any offense committed in his presence or within his view. Tex. Code Crim. Proc. Ann. art. 14.01(b) (Vernon 2005). In the present case, Corporal Younger witnessed Appellant=s failure to come to a complete stop before turning right at a red light. Corporal Younger followed Appellant from the location where he observed the traffic violation, and throughout his pursuit of Appellant, Corporal Younger updated uniformed officers of Appellant=s location. We hold that the continued pursuit of Appellant constituted hot pursuit within the meaning of Yeager, even absent evidence that Appellant was attempting to flee because the hot pursuit doctrine does not necessarily require an element of chase. See Yeager, 104 S.W.3d at 106-07. Therefore, we hold that the trial court did not err in denying Appellant=s motion to suppress. We overrule Appellant=s first point. PARTICIPATION IN ARREST In his second point, Appellant contends that the trial court erred in denying his motion to suppress because the evidence was the fruit of an unreasonable search and seizure conducted without probable cause. Appellant contends that because Corporal Younger, who witnessed the traffic offense, did not participate in the arresting of Appellant, the arrest was invalid. The State maintains that the actions of Corporal Younger constitute sufficient participation in the arrest of Appellant, and therefore, the search incident to Appellant=s arrest was lawfully conducted. In Texas, a peace officer's authority to make a warrantless arrest is controlled exclusively by statute. Fry v. State, 639 S.W.2d 463, 465 (Tex. Crim. App. [Panel Op.] 1982), cert. denied, 460 U.S. 1039 (1983). Statutory warrantless arrests stand as exceptions to the general rule that an officer must obtain a warrant prior to an arrest. Id. Texas Code of Criminal Procedure article 14.01 provides an exception to the rule, but its conditions must be complied with to result in a lawful arrest. See Tex. Code Crim. Proc. Ann. art. 14.01 (Vernon 2005). Article 14.01(b) states that A[a] peace officer may arrest an offender without a warrant for any offense committed in his presence or within his view.@ Id. 14.01(b). A peace officer who does not himself possess probable cause to make a warrantless arrest may act on information relayed to him by other officers to effect a lawful arrest. Pyles v. State, 755 S.W.2d 98, 109 (Tex. Crim. App.), cert. denied, 488 U.S. 986 (1988). Therefore, an officer may rely on others in determining that probable cause exists, and may in some instances rely on other officers in making the actual arrest. Astran v. State, 799 S.W.2d 761, 764 (Tex. Crim. App. 1990). As long as the facts show that the viewing officer effectively participated in the arrest and was fully aware of the circumstances of the arrest, article 14.01 is satisfied. Id. In Astran, the court of criminal appeals determined that an undercover officer sufficiently participated in the arrest where the officer did not personally see the arrest, but parked two blocks away from the scene of the arrest and maintained radio contact with the arresting officers during the arrest. The court of criminal appeals determined in Armendariz v. State that an undercover officer sufficiently participated in the arrest when the officer observed a traffic violation and radioed other officers to effect the stop, remained in continuous radio contact with the arresting officers, and arrived at the scene a few minutes after the stop. 123 S.W.3d 401, 405 (Tex. Crim. App. 2003), cert. denied, 541 U.S. 974 (2004). Appellant contends that Armendariz is distinguishable from the case at bar because the record contains no evidence that the officers remained in continuous radio contact and because Corporal Younger testified that he did not attend the scene of the arrest and did not approach or personally deal with Appellant. The record does reflect that Corporal Younger maintained a safe distance from the scene to ensure that he did not compromise his undercover status, but he observed the officers making the stop through his binoculars. Though the facts of the present case differ from those facts in Armendariz, they do not establish that Corporal Younger failed to sufficiently participate in Appellant=s arrest simply because there is no evidence that Corporal Younger maintained radio contact with the arresting officers throughout the traffic stop. The record reflects that Corporal Younger personally witnessed Appellant commit the traffic offense. Corporal Younger followed Appellant and radioed for marked patrol units to assist in Appellant=s arrest in order to avoid compromising his undercover status. Though the marked units were not staged to assist Corporal Younger, the marked units were in the area. Corporal Younger continued to follow Appellant and continuously updated the marked patrol units of Appellant=s location. Corporal Younger confirmed with Sergeant Schwobel that Sergeant Schwobel was behind the vehicle in question, and he requested that Sergeant Schwobel stop the vehicle based on probable cause for his failure to come to a complete stop before turning right at the red light. Corporal Younger testified that at the location of the traffic stop, he remained a distance of approximately one hundred yards away, but he personally observed the officers confronting Appellant through the use of binoculars. Although Corporal Younger testified that he did not ever approach and deal with Appellant himself, his testimony reflects that he was fully aware of the circumstances of the arrest. Corporal Younger remained in his observation position until Appellant was transported away from the scene. Based on these facts, we hold that the trial court could have reasonably concluded that Corporal Younger=s participation in and awareness of the circumstances of Appellant=s arrest made him just as much a participant in the arrest as if he had stopped and seized Appellant himself. Therefore, we hold that the trial court did not err in denying Appellant=s motion to suppress. We overrule Appellant=s second point. CONCLUSION Having overruled Appellant=s two points, we affirm the trial court=s judgment. PER CURIAM PANEL A: HOLMAN, LIVINGSTON, and GARDNER, JJ. DO NOT PUBLISH Tex. R. App. P. 47.2(b) DELIVERED: November 10, 2005 [1]See Tex. R. App. P. 47.4.	{ "pile_set_name": "FreeLaw" }
57 Cal.2d 479 (1962) ALEX G. VARGAS et al., Plaintiffs and Appellants, v. C. F. HAMPSON, Defendant and Respondent. L. A. No. 26594. Supreme Court of California. In Bank. Mar. 26, 1962. A. L. Wirin and Richard J. Kamins for Plaintiffs and Appellants. Stanley Mosk, Attorney General, Howard H. Jewel, Assistant Attorney General, Dent N. Hand, Jr., Deputy Attorney General, David B. Finkel, Richard H. Floum, Rudolph Pacht, Ephraim Margolin, Richard J. Archer, Spurgeon Avakian, Robert Baca, Lester Bise, Frank F. Chuman, Marvin J. Colangelo, G. Blandin Colburn, Jr., William C. Dixon, Basil Feinberg, Dan Hammack, Bruce Hochman, Jack Levine, Abe F. Levy, Lloyd E. McMurray, Loren Miller, Anthony V. Randles, Gerald L. Rosen, Irving S. Rosenblatt, Jr., Marshall Ross, John E. Thorne and David Ziskind as Amici Curiae on behalf of Plaintiffs and Appellants. Dennin & Poitevin and William W. Dennin for Defendant and Respondent. GIBSON, C. J. Plaintiffs, relying on the Unruh Civil Rights Act (Civ. Code, 51 and 52), brought an action for injunctive relief. General and special demurrers to the complaint were sustained with leave to amend. Plaintiffs failed to amend and are appealing from the judgment of dismissal. The allegations of the complaint may be summarized as follows: Plaintiffs, husband and wife, are of Mexican ancestry and are citizens of the United States. The action is brought in their behalf and as a class action in behalf of all persons discriminated against because of such ancestry. Defendant, a real estate broker, was engaged in that capacity in connection with the sale of real property in a tract development. 481 Plaintiffs desired to purchase a home in the tract, made a cash deposit with defendant, and at his request signed a purchase and sale agreement. Later defendant returned the deposit to plaintiffs and told them that the house and lot would not be sold to them. Defendant "refused to sell" the property to plaintiffs for the sole reason they are of Mexican ancestry, and his refusal was "pursuant to, and in accordance with," his policy as a real estate broker not "to sell" real property to persons of Mexican ancestry. Defendant in the course of his business threatened to, and unless enjoined will, refuse to sell real property to plaintiffs and others solely because of their Mexican ancestry.plaintiffs pray that defendant be enjoined from refusing to sell real property to them and others similarly situated solely because of their race or ancestry. [1, 2] We held in Burks v. Poppy Construction Co., ante, p. 463 [20 Cal.Rptr. 609, 370 P.2d 313], that the Unruh Act is valid, that it applies to real estate transactions, that a person aggrieved by a violation of the act is entitled to injunctive relief, and that he may bring an action for such relief on behalf of all persons similarly situated. In Lee v. O'Hara, ante, p. 476 [20 Cal.Rptr. 617, 370 P.2d 321], we held that the act applies to real estate brokers. [3] The complaint states a cause of action against defendant for violation of the act, and it would have been error to sustain a demurrer without leave to amend. [4a] The special demurrer was based in part upon the ground that the complaint was uncertain, ambiguous, and unintelligible in that it could not be ascertained whether plaintiffs are "complaining of defendant's actions solely as they relate to the conducting of his own business or whether they are complaining of defendant's actions as the agent of third parties." In response to questions by the trial court with respect to an interpretation of the pleading, the attorney for plaintiffs took the position that if defendant acted upon instructions from his principal in telling plaintiffs that the property would not be sold to them, defendant was nevertheless guilty of a violation of the statute. [5] In some circumstances, of course, both a broker and an owner may be guilty of discrimination, but a broker who in good faith does all within his power to serve a member of a racial minority is not liable if the broker's failure to complete the transaction is due solely to the owner's refusal to sell because of the buyer's race or color. 482 [4b] Defendant accepted a cash deposit from plaintiffs and had them sign a purchase and sale agreement. Later he returned the deposit and told plaintiffs the house and lot would not be sold to them. It thus appears that defendant rendered some services to plaintiffs. The allegation that defendant "refused to sell" to plaintiffs can be interpreted as charging him only with a failure to complete the transaction by entering into a contract of sale, and there is no averment that he had the authority to do so. Although the words "refused to sell" can also be interpreted as meaning "refused to render services," the complaint does not specify a failure by defendant to render any service within his power as a broker, such as transmitting the offer of plaintiffs to the owner, and it may have been the owner who refused to consummate the sale. The allegation that the refusal was "pursuant to, and in accordance with," defendant's policy of refusing "to sell" to persons because of their Mexican ancestry does not necessarily show that the refusal involved here was caused by that policy, and in any event clarification was appropriate since this allegation was in conflict with the facts, as alleged, that defendant did render services to plaintiffs notwithstanding their Mexican ancestry. The judgment is affirmed. Traynor, J., Schauer, J., McComb, J., Peters, J., White, J., and Dooling, J., concurred.	{ "pile_set_name": "FreeLaw" }
99 F.Supp.2d 1048 (2000) Gerald Keene MOSLEY, Plaintiff, v. Shirley Maxine REEVES, et al., Defendants. No. 1:98CV137 FRB. United States District Court, E.D. Missouri, Southeastern Division. January 21, 2000. 1049 Gerald Keene Mosley, Poplar Bluff, MO, plaintiff pro se. Daniel T. Moore, Moore and Walsh, L.L.P., Poplar Bluff, MO, for Shirley Maxine Reeves, defendant. D. Keith Henson, Paule and Camazine, Clayton, MO, for Kenny Carpenter, defendant. MEMORANDUM AND ORDER BUCKLES, United States Magistrate Judge. Presently pending before the Court is defendants Kenny Carpenter and Poplar Bluff Police Department's Motion for Summary Judgment on Counts II and III (filed April 21, 1999/Docket No. 22). All matters are pending before the undersigned United States Magistrate Judge, with consent of the parties, pursuant to 28 U.S.C. § 636(c). Plaintiff Gerald Keene Mosley brings this cause of action, pro se, alleging that the conduct of defendants Shirley Maxine Reeves, Kenny Carpenter and the Poplar Bluff Police Department resulted in his unlawful arrest which in turn caused his "unlawful incarceration, defamation of character, and extensive damage to his business and social standing." (Compl. at p. 3.) In his original complaint, captioned "Complaint Under the Civil Rights Act 42 USC Section 1983," plaintiff specifically claims that defendant Kenny Carpenter, a police officer for the Poplar Bluff Police Department, violated his constitutional rights by effecting his unlawful arrest; that defendant Poplar Bluff Police Department 1050 violated his constitutional rights in that it "failed in its duty to protect and serve" and engaged in a "pattern of negligence" which culminated in plaintiff's unlawful arrest; and that plaintiff's former wife, defendant Shirley Maxine Reeves, out of retaliation stemming from their divorce, filed a false police report which provided the basis for the unlawful arrest. In an amended complaint filed January 13, 1999, plaintiff raised an additional claim that defendant Reeves obstructed the sale of real property, in violation of the Judgment of Dissolution of Marriage entered November 30, 1998, in the Circuit Court of Butler County, Missouri. Defendants Carpenter and Poplar Bluff Police Department now move for summary judgment on plaintiff's claims against them arguing that there are no genuine issues of material fact and that they are entitled to judgment as a matter of law. Specifically, defendant Carpenter contends that he is entitled to qualified immunity in effecting the arrest of plaintiff. The Poplar Bluff Police Department claims it is not a legal entity and/or government agency capable of being sued, and further contends that nevertheless, plaintiff's allegations fail to raise a claim upon which relief can be granted. Although plaintiff has not responded to defendants' motion,[1] the Court deems plaintiff's original complaint to be verified[2] and thus will consider the complaint in determining the instant motion. See Burgess v. Moore, 39 F.3d 216, 217-18 (8th Cir.1994); Williams v. Adams, 935 F.2d 960, 961-62 (8th Cir.1991). Pursuant to Rule 56(c), Federal Rules of Civil Procedure, a court may grant summary judgment if the information before the court shows that there are no material issues of fact in dispute and that the moving party is entitled to judgment as a matter of law. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). The burden of proof is on the moving party to set forth the basis of its motion, Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986), and the court must view all facts and inferences in the light most favorable to the non-moving party, Matsushita Elec. Indus. Co. v. Zenith Radio, 475 U.S. 574, 587, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986). Once the moving party shows there are no material issues of fact in dispute, the burden shifts to the adverse party to set forth facts showing there is a genuine issue for trial. Id. The non-moving party may not rest upon its pleadings, but must come forward with affidavits or other admissible evidence to rebut the motion. Celotex, 477 U.S. at 324, 106 S.Ct. 2548. Summary judgment is a harsh remedy and should not be granted unless the movant "has established his right to judgment with such clarity as to leave no room for controversy." New England Mutual Life Ins. Co. v. Null, 554 F.2d 896, 901 (8th Cir.1977). The Eighth Circuit has noted, however, that "summary judgment can be a tool of great utility in removing factually insubstantial cases from crowded dockets, freeing courts' trial time for those that really do raise genuine issues of material fact." City of Mt. Pleasant, Iowa v. Associated Elec. Coop., Inc., 838 F.2d 268, 273 (8th Cir.1988). I. Evidence Before the Court on the Motion On November 7, 1998, plaintiff intended to travel to the residence of his former wife, Shirley Maxine Reeves, to retrieve personal property awarded him in relation 1051 to dissolution proceedings between he and Ms. Reeves. (Compl. at p. 3.) A Full Order of Protection was in effect at that time which prohibited plaintiff from entering or staying upon the premises of the dwelling of Ms. Reeves. (Defts.' Mot. Summ.Judg., Exh. C.) In addition, the Full Order of Protection provided that plaintiff: shall not use, attempt to use, or threaten to use physical force against [Ms. Reeves] that would reasonably be expected to cause bodily injury and shall not stalk, abuse, threaten to abuse, molest or disturb the peace of [Ms. Reeves] wherever [Ms. Reeves] may be. (Defts.' Mot.Summ.Judg., Exh. C.) Any violation of the Full Order of Protection was punishable by confinement in jail for a maximum period of five years and a maximum fine of $5,000.00. (Id.) On account of the Full Order of Protection, plaintiff contacted the Poplar Bluff Police Department to seek permission to travel to Ms. Reeves' dwelling to retrieve his property. (Compl. at p. 3.) Officer Hefner verbally advised plaintiff that he would be permitted to do so. No police officer accompanied plaintiff to Ms. Reeves' residence. (Compl. at p. 3.) At approximately 3:00 p.m. on November 7, 1998, plaintiff traveled to Ms. Reeves' residence, retrieved his personal property without incident, and left the premises. (Compl. at pp. 3-4; Defts.' Mot.Summ.Judg., Exh. B.) At approximately 3:50 p.m., the Poplar Bluff Police Department received a report that plaintiff had violated the protective order entered in the divorce proceedings between plaintiff and Ms. Reeves. (Defts.' Mot.Summ.Judg., Exh. A.) In response to this report, Officer Kenny Carpenter of the Poplar Bluff Police Department was dispatched to Ms. Reeves' home. (Id.) Upon Officer Carpenter's arrival, Ms. Reeves reported to Officer Carpenter that approximately thirty minutes after ending a mutually agreed meeting for the transfer of property, plaintiff returned to Ms. Reeves' house, began driving his car back and forth in front of the house, took photographs of the house, and took photographs of Ms. Reeves' son-in-law's truck. (Defts.' Mot.Sum.Judg., Exhs. A, B.) Ms. Reeves reported to Officer Carpenter that she considered plaintiff's conduct to be stalking and harassment. (Id.) In addition, Lee Ray Pickerell reported to Officer Carpenter that he witnessed plaintiff to return to Ms. Reeves' house after retrieving his property, to drive in front of the house, and to take photographs of the house. (Defts.' Mot.Summ.Judg., Exhs. A, D.) After receiving these statements, Officer Carpenter returned to the police station. (Defts.' Mot.Summ.Judg., Exh. A.) Later that same date, plaintiff contacted the Poplar Bluff Police Department to report that he had not retrieved all of his personal property and that some items were missing. (Compl. at p. 4.) Officer Carpenter advised plaintiff to come to the police station. (Id.) Upon plaintiff's arrival at the police station, Officer Carpenter placed plaintiff under arrest for violating the Full Order of Protection. (Id.; Defts.' Mot.Summ.Judg., Exh. A.) Officer Carpenter's arrest of plaintiff was based on the statements and eyewitness accounts of Ms. Reeves and Mr. Pickerell. (Defts.' Mot. Summ.Judg., Exh. A.) II. Discussion A. Officer Carpenter Defendant Carpenter claims that he is entitled to qualified immunity on plaintiff's claim that his arrest of plaintiff was unlawful and thus in violation of plaintiff's constitutional rights. To withstand a motion for summary judgment on the grounds of qualified immunity, a civil rights plaintiff must: (1) assert a violation of a constitutional right; (2) demonstrate that the alleged right is clearly established; and (3) raise a genuine issue of fact as to whether the official would have known that his alleged conduct would have violated plaintiff's clearly established right. 1052 Habiger v. City of Fargo, 80 F.3d 289, 295 (8th Cir.1996). Once it has been established that the relevant predicate facts are not in dispute, the determination as to whether an officer's conduct violated a clearly established right becomes a question of law. See Pace v. City of Des Moines, Iowa, 201 F.3d 1050, 1056 (8th Cir.2000). A person has "a clearly established right under the Fourth Amendment not to be arrested unless there [is] probable cause for [the] arrest." Habiger, 80 F.3d at 295. In the context of a warrantless arrest, probable cause exists when facts known to the arresting officer are sufficient to make a reasonably prudent officer believe that the suspect is committing or has committed an offense. Olinger v. Larson, 134 F.3d 1362, 1366 (8th Cir. 1998). When determining whether a law enforcement officer is entitled to qualified immunity, the issue "is not probable cause in fact but arguable probable cause." Myers v. Morris, 810 F.2d 1437, 1455 (8th Cir.1987). If officers act "with the objectively reasonable belief that they [have] probable cause" to arrest, they are entitled to qualified immunity, even if they were mistaken in their belief. Womack v. City of Bellefontaine Neighbors, 193 F.3d 1028, 1031 (8th Cir.1999). The qualified immunity defense protects "all but the plainly incompetent or those who knowingly violate the law." Malley v. Briggs, 475 U.S. 335, 341, 106 S.Ct. 1092, 89 L.Ed.2d 271 (1986). The undisputed facts before the Court show that Officer Carpenter had arguable probable cause, if not probable cause in fact, to arrest plaintiff for violation of the Full Order of Protection. At the time of the incident, a Full Order of Protection was in place which made it a felony offense for plaintiff to, inter alia, stalk or disturb the peace of Ms. Reeves wherever Ms. Reeves may be. At the time of plaintiff's arrest, Officer Carpenter had information in the form of statements from Ms. Reeves and corroborating statements from an independent eyewitness that plaintiff was driving back and forth in front of Ms. Reeves' home, was taking photographs of Ms. Reeves' home, and was taking photographs of a vehicle parked at the home. See Pace, at 1057 (corroborating statements from witnesses provided support for police officer's finding of probable cause); Clay v. Conlee, 815 F.2d 1164, 1168 (8th Cir.1987) (law enforcement officers entitled to rely on information supplied by crime victim, absent some indication that the information is not reasonably trustworthy or reliable). The undisputed facts before the Court show that this incident occurred separately from and was wholly independent of the consensual encounter between the plaintiff and Ms. Reeves wherein plaintiff was given his personal property without incident. It is not necessary for the Court to decide whether these facts known to Officer Carpenter provided him actual probable cause to arrest plaintiff. Instead, the undisputed facts need only show, and indeed do show, that the facts and information available to Officer Carpenter would support a reasonable law enforcement officer's belief that probable cause existed to arrest plaintiff for violation of the Full Order of Protection, which prohibited plaintiff's stalking and/or disturbing the peace of Ms. Reeves. See Johnson v. Schneiderheinz, 102 F.3d 340, 342 (8th Cir.1996). Plaintiff argues, however, that Officer Carpenter "refused to listen to plaintiff's side of the story and farther [sic] refused to acknowledge that there was a domestic dispute already in existence between the two parties." (Compl. at p. 4.) Plaintiff further claims that Officer Carpenter should have, but failed to, conduct a preliminary investigation of the facts before arresting plaintiff. (Id. at p. 5.) Plaintiff does not state what information he would have provided to Officer Carpenter as to his "side of the story" or that such information would have provided exculpatory evidence sufficient to negate the probable cause necessary for arrest. See Kuehl v. 1053 Burtis, 173 F.3d 646, 650-51 (8th Cir. 1999). In addition, contrary to plaintiff's assertion that Officer Carpenter refused to acknowledge the domestic dispute between plaintiff and Ms. Reeves, Officer Carpenter arrested plaintiff for violating an existing Order of Protection which arose out of such dispute. Finally, plaintiff has presented nothing to the Court to demonstrate that any further investigation would have exonerated plaintiff and thus negated probable cause for arrest. See id.; see also Olinger, 134 F.3d at 1366. Indeed, plaintiff has failed to present any evidence to rebut defendants' showing that plaintiff returned to Ms. Reeves' home after the consensual encounter ended and proceeded to drive back and forth in front of the home while taking photographs of the home and a vehicle parked at the home. As discussed above, a reasonable officer could have believed that such facts constituted probable cause to arrest plaintiff for violating the Full Order of Protection. "That the [officer] may have been mistaken is not enough to find a violation of [plaintiff's] constitutional rights." Johnson v. Schneiderheinz, 102 F.3d at 342. Therefore, in light of the foregoing, defendant Carpenter is entitled to qualified immunity on plaintiff's claim that his arrest of plaintiff was unlawful and in violation of plaintiff's constitutional rights.[3] B. Poplar Bluff Police Department In his complaint, plaintiff claims that the Poplar Bluff Police Department violated his constitutional rights in that it "failed in its duty to protect and serve" and engaged in a "pattern of negligence" which culminated in plaintiff's unlawful arrest. In the instant motion for summary judgment, the Poplar Bluff Police Department argues it is entitled to summary judgment on plaintiff's claims against it inasmuch as it is not a legal entity and/or government agency capable of being sued. The Eighth Circuit Court of Appeals has previously determined that police departments are not suable entities, but instead are merely divisions of city government. See Ketchum v. City of West Memphis, Ark., 974 F.2d 81, 82 (8th Cir.1992); see also Russell v. City of Overland Police Dep't, 838 F.Supp. 1350, 1352 (E.D.Mo. 1993). But see Tilson v. Forrest City Police Dep't, 28 F.3d 802, 807 (8th Cir.1994) (setting out what civil rights plaintiff must show for police department to be liable for constitutional violations).[4] As such, the City of Poplar Bluff is the appropriate suable entity in this cause. See Russell, 838 F.Supp. at 1352. Given the liberal 1054 construction accorded pro se complaints, the Court will construe plaintiff's claims to be against the City of Poplar Bluff, which is the proper suable entity here. Russell, 838 F.Supp. at 1352.[5] To impose liability upon a municipality under 42 U.S.C. § 1983, a civil rights plaintiff must demonstrate that the conduct complained of is attributable to an unconstitutional official policy or custom. Polk County v. Dodson, 454 U.S. 312, 326, 102 S.Ct. 445, 70 L.Ed.2d 509 (1981); Monell v. Department of Social Servs. of the City of New York, 436 U.S. 658, 694, 98 S.Ct. 2018, 56 L.Ed.2d 611 (1978); Johnson v. Outboard Marine Corp., 172 F.3d 531, 535 (8th Cir.1999). For municipal liability to attach, it is not enough for a § 1983 plaintiff to show that the municipality's agents or employees have violated or will violate the Constitution, for a municipality will not be held liable solely on a theory of respondeat superior. Monell, 436 U.S. at 694, 98 S.Ct. 2018. In addition, an allegation of mere negligence is insufficient to demonstrate an unconstitutional policy or custom. See Board of County Commissioners of Bryan County, Okla. v. Brown, 520 U.S. 397, 407, 117 S.Ct. 1382, 137 L.Ed.2d 626 (1997). Instead, the plaintiff must demonstrate that, through its deliberate conduct, the municipality was the "moving force" behind the injury alleged. That is, a plaintiff must show that the municipal action was taken with the requisite degree of culpability and must demonstrate a direct causal link between the municipal action and the deprivation of federal rights. Id. at 404, 117 S.Ct. 1382 (emphasis in original). Further, the existence of a municipal policy, custom or practice cannot be inferred solely from the proof of a single unconstitutional incident. Wedemeier v. City of Ballwin, 931 F.2d 24, 26 (8th Cir. 1991) (generally, an isolated incident of police misconduct by subordinate officers is insufficient to establish municipal policy or custom); Williams v. Mensey, 785 F.2d 631, 635 (8th Cir.1986) (improper to permit jury to infer the existence of a municipal policy or custom solely from proof of one officer's conduct, no matter how egregious the conduct may have been). Here, plaintiff asserts a deprivation of his constitutional rights but appears to claim only respondeat superior liability against the Department/City regarding Officer Carpenter's alleged unlawful arrest. Such respondeat superior claims are not cognizable under § 1983. To the extent plaintiff's complaint can be construed to assert municipal liability under § 1983, plaintiff has failed to identify the official municipal policy or widespread custom or practice that caused his injury. Monell, 436 U.S. at 691, 98 S.Ct. 2018. Although plaintiff claims that the Department's/City's "pattern of negligence" caused his alleged injury, negligence alone is insufficient to state a claim of municipal liability under § 1983. Brown, 520 U.S. at 407, 117 S.Ct. 1382. Nothing before the Court demonstrates that the City of Poplar Bluff, through deliberate conduct or an established policy, custom or practice, caused plaintiff's constitutional rights to be violated. Because plaintiff has failed to identify a custom, policy or practice which resulted in a deprivation of his constitutional rights, defendant Poplar Bluff Police Department/City of Poplar Bluff should be granted judgment as a matter of law as to plaintiff's claims against it. Johnson v. Outboard Marine Corp., 172 F.3d at 536. C. Shirley Maxine Reeves In his original complaint, plaintiff claims that his former wife, defendant Shirley Maxine Reeves, filed a false police report *1055 which provided the basis for his alleged unlawful arrest. In his amended complaint, plaintiff claims that defendant Reeves obstructed the sale of real property, in violation of the Judgment of Dissolution of Marriage entered November 30, 1998, in the Circuit Court of Butler County, Missouri. Because such claims are insufficient to impose liability upon defendant Reeves under 42 U.S.C. § 1983, the undersigned liberally construes plaintiff's complaints to allege pendent state law claims against Reeves. For liability to attach under 42 U.S.C. § 1983, a plaintiff must allege the violation of a right secured by the Constitution and laws of the United States, and must show that the alleged deprivation was committed by a person acting under color of state law. Roe v. Humke, 128 F.3d 1213, 1215 (8th Cir.1997). To hold a private party liable under § 1983, plaintiff "`must allege, at the very least, that there was a mutual understanding, or a meeting of the minds, between the private party and the state actor.'" Miller v. Compton, 122 F.3d 1094, 1098 (8th Cir.1997) (quoting Mershon v. Beasley, 994 F.2d 449, 451 (8th Cir.1993)). Plaintiff makes no allegation in either his original complaint or amended complaint that Reeves acted in concert with any state actor in allegedly filing a false police report or in allegedly obstructing the sale of real property, nor can the complaints be reasonably construed to make such an allegation. A private party's mere invocation of state legal procedures does not constitute joint participation or conspiracy with state officials to satisfy the § 1983 requirement of action under state law. Lugar v. Edmondson Oil Co., 457 U.S. 922, 939 n. 21, 102 S.Ct. 2744, 73 L.Ed.2d 482 (1982). Inasmuch as plaintiff does not allege that defendant Reeves was a state actor or acted in concert with any state actor, plaintiff's allegations, even liberally construed, do not give rise to claims actionable against Reeves under 42 U.S.C. § 1983. See Barnes v. Dorsey, 480 F.2d 1057, 1061 (8th Cir.1973). The Court thus construes plaintiff's complaints to raise only state law claims against defendant Reeves. Cf. Roe, 128 F.3d at 1218 ("The [injury] to plaintiff, while reprehensible and to be condemned in the strongest possible terms, was a private tort committed by a person acting in a purely private capacity."). Inasmuch as the Court will dismiss all claims over which this Court has original jurisdiction, see discussion supra at Sections II.A and B, the undersigned declines to exercise supplemental jurisdiction over these state law claims. 28 U.S.C. § 1367(c)(3). Therefore, for all of the foregoing reasons, IT IS HEREBY ORDERED that plaintiff's "Motion for Leave of Court to File Untimely Amended Pleadings to Statement of Claim" (Docket No. 24) is denied. IT IS FURTHER ORDERED that defendants Kenny Carpenter and Poplar Bluff Police Department's Motion for Summary Judgment on Counts II and III (Docket No. 22) is granted in its entirety. IT IS FURTHER ORDERED that plaintiffs claims against defendant Shirley Maxine Reeves are dismissed without prejudice pursuant to 28 U.S.C. § 1367(c)(3). IT IS FURTHER ORDERED that all motions which remain pending in this cause are denied as moot and without prejudice. Judgment shall be entered accordingly. NOTES [1] On July 26, 1999, plaintiff filed a Motion for Summary Judgment in which plaintiff appears to respond to some of the claims raised in the instant motion. In a Memorandum filed with the Court September 3, 1999, however, plaintiff contends that his Motion for Summary Judgment should "in no way [be] construed" as an opposition to defendants' motion (Pltf.'s Resp. to Defts.' Oppos., filed Sept. 3, 1999, at p. 4), and that, in fact, defendants' motion "was judicially ignored by the Plaintiff[.]" (Id. at p. 1.) [2] Plaintiff's original complaint was sworn and subscribed by plaintiff before a notary public. [3] The undersigned notes that plaintiff currently has pending before the Court a "Motion for Leave of Court to File Untimely Amended Pleadings to Statement of Claim" (filed July 26, 1999/Docket No. 24) in which plaintiff seeks to file an "Amended Statement of Claim Against Defendant Kenny Carpenter." In the proposed amended statement, plaintiff asserts that defendant Carpenter "is unable to produce legal justification for his specific acts and omissions of acts that were instrumental in his probable cause arrest of the plaintiff on November 7, 1998." In light of the foregoing discussion, the amended statement is insufficient to provide a basis upon which to deny defendant Carpenter's motion for summary judgment based on qualified immunity. Inasmuch as the amended statement would be futile to plaintiff's cause, the Court will deny plaintiff's motion for leave to file the amended statement. Williams v. Little Rock Mun. Water Works, 21 F.3d 218, 225 (8th Cir.1994). [4] Under Tilson, a police department may be liable under § 1983 if a civil rights plaintiff shows that the action that is alleged to be unconstitutional implements or executes a policy statement, ordinance, regulation, or decision officially adopted and promulgated by [the Department] or that a constitutional deprivation [was] visited pursuant to governmental "custom" even though such a custom has not received formal approval through the body's official decisionmaking channels. Tilson, 28 F.3d at 807 (citations omitted). Assuming arguendo that a city's police department may be liable under § 1983, the plaintiff here has nevertheless failed to present any evidence to this Court to demonstrate that a policy statement, ordinance, regulation, decision, or custom adopted and promulgated by the Poplar Bluff Police Department resulted in a constitutional deprivation to plaintiff. [5] Indeed, in the instant motion for summary judgment, the Poplar Bluff Police Department appears to argue that plaintiff's claims fail to state a claim even to the extent they attempt to impose liability upon the City of Poplar Bluff.	{ "pile_set_name": "FreeLaw" }
United States Court of Appeals Fifth Circuit F I L E D UNITED STATES COURT OF APPEALS FIFTH CIRCUIT June 21, 2005 Charles R. Fulbruge III Clerk 03-50602 Summary Calendar UNITED STATES OF AMERICA, Plaintiff-Appellee, versus MARIO RODRIGUEZ, also known as Joseph Armando Ramirez, Defendant-Appellant. Appeal from the United States District Court for the Western District of Texas (MO-02-CR-105-ALL) Before JONES, BARKSDALE, and PRADO, Circuit Judges. PER CURIAM:* Mario Rodriguez appeals his guilty-plea conviction and sentence (including an upward departure) for possession of a firearm during and in relation to a drug trafficking offense, in violation of 18 U.S.C. § 924(c)(1). Court-appointed counsel filed a motion to withdraw, pursuant to Anders v. California, 386 U.S. 738 (1967); but a member of this court found a potentially nonfrivolous appellate issue: whether Rodriguez’s plea was rendered involuntary by the magistrate judge’s failure to advise * 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. him during rearraignment, pursuant to FED. R. CRIM. P. 11(b)(1)(M), that the court could depart upward from the applicable Sentencing Guidelines range. The order denying leave to withdraw also stated that counsel “should ... include an explanation of the effects of the waiver-of-appeal provision”. In response, however, counsel filed a merits brief that neither addresses the voluntariness of Rodriguez’s plea in the light of Rule 11(b)(1)(M) nor mentions the waiver provision. (The order pre-dated United States v. Booker, 125 S. Ct. 738, (2005) (holding Sentencing Guidelines only advisory).) As to the merits, Rodriguez has not established that his guilty plea was rendered involuntary. Because he did not object in district court during rearraignment, Rodriguez’s claims are reviewed only for plain error. See United States v. Vonn, 535 U.S. 55, 59 (2002). He has not shown that his substantial rights were affected by any error in the magistrate judge’s explanation of the availability of appointed counsel at trial. See United States v. Olano, 507 U.S. 725, 731-37 (1993). In addition, the magistrate judge appropriately advised Rodriguez: about the elements of the offense to which he pleaded guilty, see United States v. Ceballos- Torres, 218 F.3d 409, 413 (5th Cir.), amended on rehearing in part by, 226 F.3d 651 (5th Cir. 2000), and cert. denied, 531 U.S. 1102 (2001); and that the statutory maximum sentence was life imprisonment, see United States v. Sias, 227 F.3d 244, 246-47 (5th 2 Cir. 2000). Rodriguez has not established a violation of the Court Interpreters Act, 28 U.S.C. § 1327(d)(1); the record reflects that he had access to an interpreter at every stage of the proceeding. Although the parties did not address it, this court may sua sponte consider the waiver-of-appeal provision. See United States v. Martinez, 263 F.3d 436, 438 (5th Cir. 2001); cf. United States v. Rhodes, 253 F.3d 800, 804 (5th Cir. 2001)(disregarding a waiver provision if the Government expressly chooses not to rely upon it). Rodriguez voluntarily waived his right to appeal his conviction and sentence, other than claims of ineffective assistance of counsel or prosecutorial misconduct of constitutional dimension not known to him at the time of his sentencing. See United States v. Melancon, 972 F.2d 566, 567-68 (5th Cir. 1992). Consequently, review of certain of Rodriguez’s claims is barred: that the district court erred in adopting the presentence report, despite misstatements contained therein; that the district court wrongly departed upward, despite the Government’s failure to give notice of its intent to seek an upward departure under 21 U.S.C. § 851; and that the upward departure violates the Sixth Amendment. See United States v. McKinney, __ F.3d __, 2005 WL 887153, at *2-3 (5th Cir. 15 Apr. 2005) (holding that, absent a specific provision to the contrary, a valid appeal-waiver provision in a plea agreement precludes a claim of Sixth Amendment error under Booker). 3 Rodriguez also contends: the Government improperly filed a superseding indictment to establish greater bargaining power and breached the plea agreement by requesting an upward departure. Even if these claims allege prosecutorial misconduct of constitutional dimension, Rodriguez was aware of them by the time of sentencing. Therefore, they are barred by the waiver provision. As discussed, counsel failed to address the issues specifically noted by this court in its order denying him leave to withdraw. Accordingly, counsel (David K. Sergi) is ORDERED to show cause within 30 days why he should not be sanctioned for such failure to comply with a court order. AFFIRMED; COUNSEL ORDERED TO SHOW CAUSE WHY SANCTIONS SHOULD NOT BE IMPOSED 4	{ "pile_set_name": "FreeLaw" }
537 U.S. 986 GASTELUM-ALMEIDAv.UNITED STATES. No. 02-6443. Supreme Court of United States. October 21, 2002. 1 CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT. 2 C. A. 9th Cir. Certiorari denied. Reported below: 298 F.3d 1167.	{ "pile_set_name": "FreeLaw" }
34 Ill. App.3d 448 (1975) 340 N.E.2d 98 SOL I. DVORKIN et al., Plaintiffs-Appellants, v. ILLINOIS BELL TELEPHONE COMPANY et al., Defendants-Appellees. No. 59063. Illinois Appellate Court First District (3rd Division). November 20, 1975. 449 Donald H. Sharp, L. Bow Pritchett, and Edward Butts, all of Chicago, for appellants. Max Earl Sherman, of Chicago, for appellees. Order affirmed. Mr. JUSTICE MEJDA delivered the opinion of the court: Plaintiff, Sol I. Dvorkin, individually and on behalf of a class, commenced an original action in the circuit court of Cook County for damages against defendants Illinois Bell Telephone Company and American Telephone and Telegraph Company. The trial court granted the motion of Illinois Bell to strike the complaint and dismiss the suit for want of jurisdiction. Plaintiff appeals. The sole issue for review is whether the instant complaint states a cause of action which may be commenced originally in the circuit court. We affirm. The complaint filed on April 28, 1972, by plaintiff on his own behalf and on behalf of a class consisting of persons and corporations who have been subscribers, lessees, patrons and customers of Illinois Bell from the date the company first began the practice complained of was in two counts. Count I alleged that Illinois Bell had a policy and practice of providing services for the personal use of certain current, former and retired officers, directors, and employees of Illinois Bell either without charge or at less than the rate established and in force as shown by the schedule filed with the Illinois Commerce Commission, all in contravention 450 and violation of sections 37, 38 and 39 of the Illinois Public Utilities Act (Ill. Rev. Stat. 1971, ch. 111 2/3, pars. 37, 38 and 39); that as a direct result of the loss of revenue, plaintiff and the class are required to pay greater rates for services from Illinois Bell; and prayed that the practice be declared unlawful and enjoined; and that judgment be entered against Illinois Bell for the lost revenue and punitive damages for the use and benefit of the class, and other relief. Count II alleged that the illegal actions were with the knowledge, control, management, connivance and complicity of American Telephone by reason of its ownership of 99 percent of the stock of Illinois Bell, and prayed judgment against American Telephone for the losses and punitive damages to be paid to Illinois Bell for the use and benefit of plaintiff and the class, together with other relief. Section 37 of the Utilities Act prohibited a public utility from charging greater or less or different compensation than the rates specified in its schedules on file and in effect at the time "except such as are regularly and uniformly extended to all corporations and persons." An amendment effective October 1, 1972 (P.A. 77-2759), added a sentence: "No law of the State shall be construed to prohibit a public utility from furnishing its service, product or commodity to its employees, officers, directors or pensioners, or its employees, officers, directors or pensioners from receiving such service, product or commodity, free or at rates or charges less than those specified in its filed schedules." Ill. Rev. Stat. 1973, ch. 111 2/3, par. 37. Section 38 of the Act prohibits the granting of any preference or advantage and the establishment or maintenance of "any unreasonable difference as to rates or other charges, services, facilities, or in any other respect, either as between localities or as between classes of service." Section 39 further prohibits any utility, its officer, agents and employees, from directly or indirectly permitting any corporation or person "to obtain any service, commodity, or product at less than the rate or other charge then established and in force as shown by the schedules filed and in effect at the time." Ill. Rev. Stat. 1971, ch. 111 2/3, pars. 38 and 39. The trial court, in the order granting Illinois Bell's motion to strike, found that the alleged discrimination is "necessarily so intertwined with establishment of rates or tariffs as to constitute rates or tariffs issue, rather than a question of discrimination per se," and that the exclusive jurisdiction for establishing rates and tariffs and for the recovery of refunds or reparation for allegedly excessive charges is in the Illinois Commerce Commission. Since no ruling was made as to American Telephone, nor was the amendment to section 37 challenged in the trial court, neither will be considered. 451 Plaintiff contends that in accordance with section 73 of the Illinois Public Utilities Act (Ill. Rev. Stat. 1971, ch. 111 2/3, par. 77), a civil action may be commenced in any court of competent jurisdiction for the violation by a public utility of sections 37, 38 and 39 of the Act. Further, that the remedy is cumulative under the provisions of section 72 and 74 (pars. 76 and 78). Defendant Illinois Bell, on the other hand, contends that the complaint states a claim for the recovery of refunds as reparation and is governed by section 72 (par. 76) of the Act, and that the exclusive jurisdiction for such recovery is vested in the Illinois Commerce Commission. The pertinent provisions of sections 72, 73 and 74 follow: "§ 72. When complaint has been made to the Commission concerning any rate or other charge of any public utility and the Commission has found, after a hearing, that the public utility has charged an excessive or unjustly discriminatory amount for its product, commodity or service, the Commission may order that the public utility make due reparation to the complainant therefor, with interest at the legal rate from the date of payment of such excessive or unjustly discriminatory amount. * * The remedy provided in this section shall be cumulative, and in addition to any other remedy or remedies in this Act provided in case of failure of a public utility to obey a rule, regulation, order or decision of the Commission. [Par. 76.] * * * § 73. In case any public utility shall do, cause to be done or permit to be done any act, matter or thing prohibited, forbidden or declared to be unlawful, or shall omit to do any act, matter or thing required to be done either by any provisions of this Act or any rule, regulation, order or decision of the Commission, issued under authority of this Act, such public utility shall be liable to the persons or corporations affected thereby for all loss, damages or injury caused thereby or resulting therefrom, and if the court shall find that the act or omission was wilful, the court may in addition to the actual damages, award damages for the sake of example and by the way of punishment. An action to recover for such loss, damage or injury may be brought in any court of competent jurisdiction by any person or corporation. * * * No recovery as in this section provided shall in any manner affect a recovery by the State of the penalties in this Act provided. [Par. 77.] 452 § 74. This Act shall not have the effect to release or waive any right of action by the State, the Commission, or by any body politic, municipal corporation, person or corporation for any right or penalty which may have arisen or accrued or may hereafter arise or accrue under any law of this State. All penalties accruing under this Act shall be cumulative of each other, and suit for the recovery of one penalty shall not be a bar to or affect the recovery of any other penalty or be a bar to any criminal prosecution against any public utility, or any officer, director, agent or employee thereof, or any other corporation or person. [Par. 78.]" In his brief to this court, plaintiff states that the cause was filed to enforce the anti-discrimination provisions of the Illinois Public Utilities Act and to end the granting of free and reduced rate services to employees, management personnel, and retired employees, and for the return of excess charges levied against the public as a result of the failure of Illinois Bell and its parent company to comply with the Act. 1 Section 72 of the Act provides for the recovery of reparations for excessive or unjustly discriminatory amounts charged by a utility when complaint has been made to the Illinois Commerce Commission. By its terms the remedy provided is cumulative and in addition to any other remedy or remedies in the Act in case of failure of a public utility to obey a rule, regulation, order or decision of the Commission. Section 73 of the Act provides for the recovery of civil damages for loss, damages or injury caused by or resulting from any act or omission contrary to any provision of the Act or of the Commission. Such action may be brought in any court of competent jurisdiction for consequential damages as distinguished from a claim for reparation. (See Malloy v. Illinois Bell Telephone Co. (1973), 12 Ill. App.3d 483, 299 N.E.2d 517.) Section 74 of the Act, consistently with the provisions of sections 72 and 73, provides that the Act shall not release or waive any right of action for any right or penalty. The provision as to cumulative rights is confined to penalties and suits for recovery of penalty. This latter provision is inapplicable to actions for the recovery of damages or reparations. The action herein is not for penalties, but rather, for a refund as damages or reparations for the allegedly illegal practice. The Illinois courts have uniformly held that the jurisdiction of the Illinois Commerce Commission as to proceedings against a public utility to recover reparations for excessive charges is primary and exclusive. See Terminal Railroad Association v. Public Utilities Com. (1922), 304 Ill. 312, 317, 136 N.E. 797; Chicago North Shore & Milwaukee R.R. Co. v. City of Chicago (1928), 331 Ill. 360, 163 N.E. 141; Medusa Portland 453 Cement Co. v. Illinois Central R.R. Co. (1936), 287 Ill. App. 549, 5 N.E. 2d 782; Adler v. Northern Illinois Gas Co. (1965), 57 Ill. App.2d 210, 206 N.E.2d 816; Cummings v. Commonwealth Edison Co. (1965), 64 Ill. App.2d 320, 213 N.E.2d 18; and Malloy v. Illinois Bell Telephone Co. (1973), 12 Ill. App.3d 483, 299 N.E.2d 517. A common-law action will not originally lie "at any time or under any circumstances" for damages on account of excessive rates. (Medusa Portland Cement Co. v. Illinois Central R.R. Co., 287 Ill. App. 549, 565.) Equity will not take jurisdiction of an action in which collateral attack is made on the order of the Commission. Chicago, North Shore & Milwaukee R.R. Co. v. City of Chicago, 331 Ill. 360, 375. In Colton v. Commonwealth Edison Co. (1953), 349 Ill. App. 490, 111 N.E.2d 363, in affirming the dismissal of a class action for injunctive relief which alleged that a revision of rates deprived the class of constitutional rights, the court held that if the legal remedy consists in part of proceedings before an administrative agency, equity should decline jurisdiction; that the Public Utilities Act has superseded all common-law remedies so far as rates are concerned; that the statutory remedies afforded consumers under the Act are exclusive; that the rate filed with the Commission by a utility is presumed to be lawful; that the complaint must be made in the first instance before the Commission; and that the courts do not have jurisdiction to fix rates. In Burke v. Illinois Bell Telephone Co. (1952), 348 Ill. App. 529, 109 N.E.2d 358, the court affirmed the dismissal of a class action which sought a refund for defendant's failure to publish telephone directories semiannually. In holding that the trial court did not have jurisdiction of the subject matter, the court found that the gist of plaintiff's claim was for reparations within the meaning of section 72 and not for consequential or actual damages under section 73 as contended by the plaintiff. In the recent case of Malloy v. Illinois Bell Telephone Co., a class action complaint was filed against Illinois Bell in the circuit court which sought a refund for a six-day period during which electric service had been disrupted by vandalism. There, as in the instant case, plaintiff relied on section 74 in maintaining that the claim was within section 73 and not section 72. The court rejected the argument and affirmed the dismissal of the complaint, concluding that the claim was for reparations under section 72 and not for consequential damages, and that the Illinois Commerce Commission therefore had exclusive jurisdiction. Plaintiff here, as did the plaintiff in Malloy, cites Barry v. Commonwealth Edison Co. (1940), 374 Ill. 473, 29 N.E.2d 1014. In Barry, plaintiff initially filed a petition before the Illinois Commerce Commission 454 for reparations which alleged that the utility wrongfully accused him of unlawfully bypassing the meter and taking electricity, and wrongfully disconnected service and refused restoration until he paid $800, the estimated amount of current alleged to have been taken by fraud. Plaintiff prayed to be exonerated of the unjust charges of fraud and the return of the excess payment, which demand was reduced to $697 on hearing. The Commission refused to determine whether the current was obtained by fraud, and ordered that the petition be dismissed and the parties left to their respective remedies at law. Plaintiff Barry then filed a complaint in court, not as a review of the Commission's order but as a new action. The first two counts alleged the foregoing charges, and additionally, that plaintiff was willing to pay any amount due, and sought damages for a wrongful disconnection of service and for the loss of business thereby sustained. The third count alleged that agents of the utility charged plaintiff with being a thief by stealing current, and therein sought damages for slander. The only issue presented was whether the prior determination by the Commission was a bar to the action at law. The Supreme Court reversed the trial court's dismissal and held that the action was not barred. The Court stated that the finding by the Commission as to reparations involved a claim for the repayment of specific money collected in excess of the legal rate, whereas the action at law involved a claim for unliquidated damages to plaintiff, his business, and for slander resulting from the utility's abuse of power. Barry supports the dismissal in the instant case. 2 Plaintiff argues that the instant action is brought to enforce the antidiscrimination provisions of the Illinois Public Utilities Act and that plaintiff and the class have been and are required to pay greater rates and charges than they would if the practice of granting services without charge or at reduced rates by Illinois Bell had not been permitted. Plaintiff seeks "the return of excess charges." Under somewhat similar facts, in Cummings v. Commonwealth Edison Co. (1965), 64 Ill. App.2d 320, 324, 213 N.E.2d 18, the court stated: "It is apparent that the sole basis for plaintiff's claim, irrespective of the label she chooses to employ, is that she and other customers were charged excessive rates for which she wants reparations. The fact that plaintiff does not seek to upset a rate schedule or fix utility rates for the future does not bring this matter within the powers of a court of equity and outside the exclusive jurisdiction of the Illinois Commerce Commission." Although the complaint in the instant case prays for such exemplary and punitive damages as may be found proper, it addresses itself to the proposition that if Illinois Bell had not given discounted 455 services to some of its employees, plaintiff's rates would have been lower, and that Illinois Bell should be required to repay, account for, refund or credit plaintiff and the class the appropriate loss suffered as a result of the allegedly unlawful practice. This is necessarily predicated upon the allegedly "excess charges" and therefore, upon the excessive rates to plaintiff and the class, and simultaneously, upon the inadequate charges or rates to the employees and officers. Plaintiff, in order to obtain a return of the portion of the charges paid by the class as excess clearly reparations as provided in section 72 seeks to reduce the rates paid by him and the class by eliminating the practice of discounted services to provide the additional revenues necessary to effect such reduction. If the practice is so eliminated and the present rate is held excessive as alleged, a new rate must then be established, based on the new revenues, and applicable to the class as well as the employees and officers. This would require the court to undertake the function of the Commission by fixing what would be considered a reasonable charge if the concession services had not been granted. This would further involve rate-making by the court. The statutory remedies and procedures prescribed by the Illinois Public Utilities Act are primary and exclusive; the court does not have jurisdiction to fix the rates. See Colton v. Commonwealth Edison Co. 3 Plaintiff further contends that without court action the plaintiff class has no adequate remedy at law. He argues that the practice of giving reduced rates and free services dates back to General Order 18 issued by the Commission in 1914; that the Commission, during a certain rate case, rejected the contention that Illinois Bell was acting improperly in providing such free and reduced rate service to employees; and that in view of the Commission's willingness for more than 58 years to permit such practice, contrary to the Act, further resort to the Commission for relief is patently useless. The rate case to which plaintiff refers ultimately reached the Illinois Supreme Court in Illinois Bell Telephone Co. v. Illinois Commerce Com. (1973), 55 Ill.2d 461, 303 N.E.2d 364. On September 23, 1971, Illinois Bell filed with the Illinois Commerce Commission new tariff schedules that provided for a general increase in telephone rates applicable to all exchanges. The matter was there pending when the instant suit was filed on April 28, 1972. Numerous municipalities, persons, organizations and groups filed appearances. On August 11, 1972, the Commission entered an order granting the rate increases. The order contained findings which specifically included a recital that the Independent Voters of Illinois (IVI) proposed several adjustments to both Revenue and Expenses. The order recited: "They advocate the elimination of free service 456 and reduced rates for Company employees and pensioners; the elimination of virtually all advertising, public relations, and charitable contribution expenses of all types and descriptions"; and that "An examination of the Record does not substantiate the sums for which the IVI contended adjustments should be made." The order specifically considered the items of advertising, public relations, and charitable contributions, but did not further mention the elimination of free service and reduced rates. The order did, however, provide that any objections and motions made in the proceedings that remained were disposed of in a manner consistent with the ultimate conclusions contained therein. Following a petition for rehearing, an appeal was taken to the circuit court and later to the Supreme Court as provided by section 68 (Ill. Rev. Stat. 1971, ch. 111 2/3, par. 72). The Commission order was affirmed by the circuit court. On the appeal to the Illinois Supreme Court, the contention that it was error to refuse to disallow the concession service rates as an operating expense was abandoned and not considered. Plaintiff Dvorkin did not seek to intervene or participate in such proceeding at any time, as authorized by statute (Ill. Rev. Stat. 1971, ch. 111 2/3, par. 69), but has instead brought the instant action in equity. Plaintiff maintains that the Commission's willingness, for more than 58 years, to permit the practice makes further resort to the Commission for relief patently useless. In Adler v. Northern Illinois Gas Co., a class action was brought on behalf of all customers of the utility for a declaratory judgment and accounting, alleging that the utility had fraudulently enriched itself through the sale of natural gas to its customers. The complaint, similar to the contention herein, alleged that plaintiff had properly filed no complaint with the Illinois Commerce Commission because "`50 years of history of Illinois utility regulation apparently discloses no precedent for lower rates obtained by individual consumers against large utilities. Such remedy has become largely a fiction or illusion.'" (57 Ill. App.2d 210, 214.) The allegations there were insufficient to avoid the primary jurisdiction of the Commission. The court held that the complaint, although alleging fraud, did not present a cause of action for court proceedings until the prescribed statutory procedures were exhausted. Plaintiff argues that he should not be required to engage in administrative proceedings where the dispute is limited to a purely legal issue and where the outcome is predictable and the result foredoomed. This argument was approved in People ex rel. Naughton v. Department of Public Aid (1973), 12 Ill. App.3d 43, 297 N.E.2d 784; however, the decision was reversed in People ex rel. Naughton v. Swank (1974), 58 Ill.2d 95, 317 N.E.2d 499. The Supreme Court held that an applicant for relief 457 who is dissatisfied with the results of his internal administrative appeal may not ignore the administrative review provided by statute to pursue a review of the determination by any form of action he chooses. The court stated at page 102 that the legislative purpose "was designed to channel into a single procedure the judicial review of the decisions made by administrative agencies in particular cases." In the instant case, plaintiff seeks relief by original proceedings in equity without first taking any action before the Commission for the requested remedy. 4 The doctrine of exhaustion has long been a basic principle of administrative law, and a party aggrieved by administrative action ordinarily cannot seek review in the courts without first pursuing all administrative remedies available to him; however, exceptions recognize the rule that equitable relief will be available if the remedy at law is inadequate. (See Illinois Bell Telephone Co. v. Allphin (1975), 60 Ill.2d 350, 326 N.E.2d 737.) Here, plaintiff would presume not only that the Commission will decide against him, but also that any appeal by administrative review to the trial and appellate courts will not provide appropriate relief. The avoidance of a prior administrative decision would severely undermine the legislative purpose manifest in providing a statutory review. We cannot assume that the Commission's decision will be against plaintiff or that if unsuccessful, appeal will not eventually result in a different decision, or that in any event, the public interest will suffer through loss or probable loss of service. City of Wheaton v. Chicago, Aurora & Elgin Ry. Co. (1954), 3 Ill. App.2d 29, 37, 120 N.E. 2d 370. 5, 6 Plaintiff also argues that the Commission has no jurisdiction to entertain class actions and that the inherent powers of a court of equity are needed to provide redress. The commencement of a class action does not automatically invoke the jurisdiction of equity. The instant proceeding was brought on "behalf of all other persons * * * who have been subscribers * * * from the date upon which said company first began its unlawful practice." Damages are claimed and sought for those who were and are now subscribers. This, plaintiff clearly cannot do. As noted in Burke v. Illinois Bell Telephone Co., 348 Ill. App. 536, "* * * subscribers are served by different exchanges with different classes of service and rates and for varying periods of service"; the claim of each subscriber is legally separate and distinct. Each claim presents a different question with respect to the right of recovery and the amount of alleged damages. The class action herein does not have the requisite common interest in the questions involved. (See Hagerty v. General Motors Corp. (1974), 59 Ill.2d 52, 57-59, 319 N.E.2d 5.) Furthermore, since we have held that plaintiff has no individual cause *458 of action, it necessarily follows that any attempted class action must also fail. Zelickman v. Bell Federal Savings & Loan Association (1973), 13 Ill. App.3d 578, 587, 301 N.E.2d 47; De Phillips v. Mortgage Associates, Inc. (1972), 8 Ill. App.3d 759, 764, 291 N.E.2d 329. 7 Plaintiff finally contends, without citation of any authority, that if the Commission were to take action, the recovery would be limited to a period of one year under section 72 (Ill. Rev. Stat. 1971, ch. 111 2/3, par. 76), and that it makes no sense to restrict the plaintiff class to such limitation where the alleged violations have persisted over 50 years without intervention by the Commission. The contention is without merit. For the foregoing reasons the order of the circuit court of Cook County dismissing plaintiff's complaint is affirmed. Affirmed. DEMPSEY and McNAMARA, JJ., concur.	{ "pile_set_name": "FreeLaw" }
527 So.2d 125 (1987) BLUE CROSS AND BLUE SHIELD OF ALABAMA v. PROTECTIVE LIFE INSURANCE COMPANY, Alabama Association of Life Insurance Companies, and Health Insurance Association of America. Civ. 5873. Court of Civil Appeals of Alabama. September 23, 1987. Rehearing Denied October 28, 1987. Certiorari Denied June 24, 1988. 126 William I. Hill II of Hill, Hill, Carter, Franco, Cole & Black, Montgomery, William G. Sommerville, Jr., and Lawrence B. Clark, of Lange, Simpson, Robinson & Somerville, Birmingham, and James W. Rankin, G. Christian Kronberg, and Thomas D. Graber, of Kirkland & Ellis, Chicago, Ill., for appellant. Charles M. Crook and W. Joseph McCorkle, Jr., of Balch & Bingham, Montgomery, and Ryburn H. Bailey, Assoc. Gen. Counsel and John K. Wright, counsel for Protective Life Ins. Co., Birmingham, for appellees. Alabama Supreme Court 87-152. HOLMES, Judge. This is an insurance case requiring statutory interpretation of certain laws pertaining to Blue Cross and Blue Shield of Alabama (Blue Cross). This case originated when Blue Cross filed a "Form A" with the commissioner of the Alabama Department of Insurance (commissioner), by which it sought his approval of its proposed acquisition of United Trust Life Insurance Company (United Trust), an Alabama life insurance company. Protective Life Insurance Company, the Alabama Association of Life Insurance Companies, and the Health Insurance Association of America (intervenors) intervened in the proceedings held before the commissioner, opposing the proposed acquisition. The commissioner issued an order approving the acquisition. The intervenors appealed the commissioner's order to the Montgomery County Circuit Court. Following ore tenus proceedings, the circuit court overruled and vacated the commissioner's order and entered a judgment in favor of the intervenors. The circuit court concluded that it was not permissible under the statutes governing Blue Cross for it to acquire ownership and control of United Trust and to use that subsidiary to market life insurance. Blue Cross, through able counsel, appeals. We affirm. I Blue Cross is purely a statutory creature. Its purpose and all of its powers are derived from Ala.Code (1975), §§ 10-4-100 through -115 (1980 Repl. Vol.). The question now before this court is thus one of statutory interpretationwhether §§ 10-4-100 through -115 permit Blue Cross to acquire a subsidiary and use it to market life insurance.[1] Accordingly, we find the ore tenus rule, which is advanced by the intervenors, to be inapplicable. The cardinal rule in interpreting legislation is to determine the intent of the legislature, which is determined by examining the statute as a whole, in light of its general purpose. Gulf Coast Media, Inc. v. Mobile Press Register, Inc., 470 So.2d 1211 (Ala.1985); Mitchell v. State Child Abuse & Neglect Prevention Board, 512 So.2d 778 (Ala.Civ.App.1987). 127 Words in the statute should be given their natural, plain, ordinary, and commonly understood meaning. See Alabama Farm Bureau Mutual Casualty Insurance Co. v. City of Hartselle, 460 So.2d 1219 (Ala.1984); Mitchell, 512 So.2d 778. In interpreting the statutes governing Blue Cross, we can only conclude that it was not the intent of the legislature that Blue Cross enter the field of life insurance. Ala.Code (1975), § 10-4-100 sets forth the single purpose for which Blue Cross was organized: that of "establishing, maintaining and operating a health care service plan under which health services are furnished to such of the public who become subscribers to such plan." Thus, the one purpose set forth by the legislature for the organization of Blue Cross is the maintenance of a health care service plan for subscribers. Though it is not pertinent to the question before us, it is interesting to note that the evidence shows that, in carrying out its legislative purpose, Blue Cross has apparently become the largest hospital and medical insurer in the state. Blue Cross contends that the trial court erred in focusing its attention on § 10-4-100 and that it has the legal authority to acquire United Trust under what it characterizes as broad grants of power given by §§ 10-4-101 and -103. Section 10-4-101 specifies those items which Blue Cross's certificate of incorporation must contain. It also provides, however, that the certificate "may also contain any other provisions, not inconsistent with the provisions of this article, which the incorporators may desire to insert for the regulation of the business or affairs of the corporation or which would be permitted nonprofit corporations by chapter 3 of this title." Ala.Code (1975), § 10-3A-20(7) (1986 Cum.Supp.), which is part of the aforementioned "chapter 3," grants to nonprofit corporations the power to purchase or otherwise acquire the shares of other corporations, whether they be for profit or nonprofit corporations. Blue Cross contends that § 10-4-101 provides it with the authority of a nonprofit corporation to acquire the shares of United Trust. We disagree. Section 10-4-101 provides that Blue Cross's certificate of incorporation may contain additional provisions, including those permissible for nonprofit corporations under Alabama law, but such provisions must be "not inconsistent with the provisions of this article." In other words, Blue Cross may not acquire the shares of another corporation if it would be inconsistent with any of the provisions of §§ 10-4-100 through -115. Blue Cross contends that the term "inconsistent" as used in § 10-4-101 must be given its plain, ordinary meaning and that "inconsistent" must thus be construed to mean "contradictory" or "mutually repugnant." See City of Mobile v. Collins, 24 Ala.App. 41, 130 So. 369 (1930); Black's Law Dictionary 689 (5th ed. 1979). Blue Cross argues that its acquisition of United Trust is permissible because the evidence shows that marketing life insurance is not inconsistent with, or mutually repugnant to, marketing health insurance. We will assume for purposes of argument that the marketing of both health insurance and life insurance by the same company is not contradictory and may, in fact, be profitable. Such, however, is not the issue before this court. Rather, the issue is whether the marketing of life insurance by Blue Cross, even through the use of a subsidiary, is inconsistent with the statutory provisions governing Blue Cross. Put another way, the issue is whether Blue Cross's interpretation of § 10-4-101 as empowering it to acquire a subsidiary through which to market life insurance can have "concurrent operative effect," Belknap v. Shock, 125 W.Va. 385, 391, 24 S.E.2d 457, 460 (1943), with § 10-4-100 and the other statutes governing Blue Cross. We conclude that it cannot. The powers possessed by a corporation can be no broader than the purposes for which it is organized. See Blue Cross & Blue Shield of Connecticut v. Mike, 184 Conn. 352, 439 A.2d 1026 (1981). This is particularly the case where the corporation is organized for special, as opposed to, general 128 purposes. "Corporations organized for special purposes are limited in their powers to the purposes for which they are organized." Mike, 184 Conn. at 355, 439 A.2d at 1029. See also Woodyard v. Arkansas Diversified Insurance Co., 268 Ark. 94, 594 S.W.2d 13 (1980); Blue Cross of Southwestern Virginia v. Commonwealth, 230 Va. 521, 338 S.E.2d 849 (1986). The Alabama Supreme Court has recognized the distinction of limited purpose corporations and the effect such a limitation has on corporate powers. See Bauman v. Hayes, 379 So.2d 1251 (Ala. 1980); Security Trust & Savings Bank v. Marion County Banking Co., 287 Ala. 507, 253 So.2d 17 (1971). There can be no doubt that Blue Cross is a special purpose corporation, organized under § 10-4-100 for the specific and limited purpose of maintaining a health care service plan for subscribers. Cf. Mike, 184 Conn. 352, 439 A.2d 1026. Marketing life insurance is not included in this limited statutory purpose and is thus impermissible.[2]Cf. Woodyard, 268 Ark. 94, 594 S.W. 2d 13; Mike, 184 Conn. 352, 439 A.2d 1026; Blue Cross of Virginia, 230 Va. 521, 338 S.E.2d 849.[3] Although the language of § 10-4-101 may appear to be a broad grant of power to Blue Cross, such grant can be no greater than, i.e., must not be "inconsistent with," the limited statutory purpose of Blue Cross set forth in § 10-4-100. Clearly, the power to acquire a subsidiary through which to market life insurance would exceed, and thus contradict, Blue Cross's limited statutory purpose. Blue Cross's interpretation of § 10-4-101 as giving it this power is incorrect. Blue Cross makes a similar argument with regard to Ala.Code (1975), § 10-4-103, as that it asserts for § 10-4-101. Section 10-4-103 provides that Blue Cross is to be managed by a board of directors "with the powers and authority necessary or incidental to the purposes of the corporation." Blue Cross contends in brief that the necessary and incidental powers referred to in § 10-4-103 include "anything `appropriate and suitable for the purposes for which the corporation was organized.' Cadden v. Ladd, 358 So.2d 437, 439 (Ala.1978), quoting Paterson [ & ] Edey Lumber Co. v. Bank of Mobile, 203 Ala. 536, 538, 84 So. 721, 722 (1919)." In response, we would simply note again that the powers granted to Blue Cross by § 10-4-103 can be no greater than its limited statutory purpose of maintaining a health care service plan for subscribers. We do not think that the sale of life insurance through a subsidiary can be characterized as incidental to, or even appropriate for, this limited purpose. The fact that marketing both types of insurance may be desirable or profitable to Blue Cross does not mean that such marketing is necessary and incidental to Blue Cross's limited raison d'etre. Cf. Security Trust & Savings Bank, 287 Ala. 507, 253 So.2d 17. We find that the learned and distinguished trial judge correctly interpreted the statutes governing Blue Cross as making it impermissible for Blue Cross to acquire United Trust and to market life insurance through that corporation. II Blue Cross also contends on appeal that the intervenors do not have standing to challenge the commissioner's order which approved the proposed acquisition of United Trust. It claims that the intervenors 129 are merely competitors and that fear of increased competition by Blue Cross is not a valid grievance to confer standing. See Alabama State Florists Association v. Lee County Hospital Board, 479 So.2d 720 (Ala.1985). We would tend to agree with this contention were it not for the fact that standing is conferred on the intervenors by statutes governing the administrative proceedings before the commissioner and appeal therefrom. The intervenors are not simply challenging the acts of Blue Cross as being ultra vires, but are appealing the order of the commissioner, and this case is thus distinguished from Alabama State Florists Association. The administrative proceedings were conducted pursuant to Ala.Code (1975), § 27-29-3(d) (1986 Repl. Vol.), which requires the commissioner to conduct a public hearing before approving any merger or acquisition of control of one insurance company over another. Section 27-29-3(d)(2) provides that at the hearing "any ... person whose interest may be affected thereby shall have the right to [participate]." Ala.Code (1975), § 27-2-30(d), which also governs hearings before the commissioner, provides that the commissioner shall allow persons "whose pecuniary interests are to be directly and immediately affected by the commissioner's order made upon the hearing" to become parties to the hearing by intervention. There is no doubt that the intervenors were properly permitted to become parties to the hearing before the commissioner on Blue Cross's application for approval for the acquisition of United Trust. In fact, as competitors of Blue Cross, the intervenors had a direct financial interest that would be affected by the commissioner's order. Cf. Alabama Power Co. v. Alabama Public Service Commission, 278 Ala. 597, 179 So. 2d 725 (1965). Blue Cross does not seriously challenge on appeal the right of the intervenors to have participated in the proceedings before the commissioner, but focuses upon their appeal from such proceedings. The latter is specifically addressed by Ala.Code (1975), § 27-29-13. Section 27-29-13(a) provides that "[a]ny person aggrieved by any act, determination, rule, regulation or order or any other action of the commissioner pursuant to this chapter may appeal therefrom...." Blue Cross contends that the intervenors lack standing under § 27-29-13(a) because their only grievance is fear of competition from Blue Cross. We disagree. Blue Cross is attempting to place restrictions on standing to appeal under § 27-29-13(a), which we do not think was the intent of the legislature. In determining such legislative intent, we must give to the phrase "person aggrieved by [the] order or any other action of the commissioner" its natural, plain, ordinary, and commonly understood meaning. See Alabama Farm Bureau Mutual Casualty Insurance Co., 460 So.2d 1219; Mitchell, 512 So.2d 778. Black's Law Dictionary 60 (5th ed. 1979) defines an aggrieved party as "[o]ne whose legal right is invaded by an act complained of, or whose pecuniary interest is directly affected by a decree or judgment." (Emphasis supplied.) This definition is quite similar to the language contained in § 27-29-13(a) itself. As competitors of Blue Cross, the intervenors clearly had a pecuniary interest that was directly affected by the commissioner's order. Cf. Alabama Power Co., 278 Ala. 597, 179 So.2d 725. Our interpretation of § 27-29-13(a) is reinforced by Ala.Code (1975), § 27-2-32(a), which governs appeals from hearings before the commissioner. Section 27-2-32(a) broadly grants the right to appeal from such hearings to "[a]ny person who was a party to [the] hearing." The intervenors were not simply competitors of Blue Cross, but were parties to the proceedings before the commissioner on Blue Cross's application to acquire United Trust. As such, they have the right to appeal from those proceedings under § 27-2-32(a). Blue Cross also contends that the intervening associations lack standing because *130 they have no grievance apart from that of their members and that they must be able to show injury in their capacity as associations to have standing. In support of this contention, Blue Cross cites a 1953 Alabama case, City of Birmingham v. Fairview Home Owners Association, 259 Ala. 500, 66 So.2d 775 (1953). Although City of Birmingham may have once governed the standing rights of associations in this state, it does not today. Under the standing rules set forth by the United States Supreme Court in Warth v. Seldin, 422 U.S. 490, 511, 95 S.Ct. 2197, 2211, 45 L.Ed.2d 343 (1975), an association may have standing solely as the representative of its members. See Alabama State Florists Association, 479 So.2d 720. We agree with the circuit court that the intervenors had standing to appeal the commissioner's order. The judgment of the circuit court is due to be affirmed. AFFIRMED. BRADLEY, P.J., and INGRAM, J., concur. NOTES [1] Blue Cross has attempted to characterize the issue as only whether it may acquire the stock of United Trust, not whether it may market life insurance through that subsidiary. It is clear, however, from the Form A Blue Cross filed with the commissioner that such is its intention, and we, therefore, find the legality of such intention to be the key issue before this court. [2] While we do not find it necessary to resort to the legislative history of § 10-4-100 and the other statutes governing Blue Cross to resolve the question of statutory interpretation now before us, we find it highly interesting that the legislature has rejected on at least two occasions Blue Cross's attempts to broaden its limited statutory purpose. [3] We agree with Blue Cross that the cases of other jurisdictions are not direct precedent for our decision in this case since we are faced with a question of interpreting Alabama law. Because the question is one of first impression, however, we find the cases of other jurisdictions which have faced similar issues particularly helpful. We note that the appellate courts of Connecticut, Virginia, and Arkansas in the cases cited in the text have rejected the efforts by the Blue Cross corporations in those states to enter the field of life insurance.	{ "pile_set_name": "FreeLaw" }
NUMBER 13-11-00620-CR COURT OF APPEALS THIRTEENTH DISTRICT OF TEXAS CORPUS CHRISTI - EDINBURG LADISLADO MUNOZ GOMEZ, Appellant, v. THE STATE OF TEXAS, Appellee. On appeal from the 404th District Court of Cameron County, Texas. MEMORANDUM OPINION Before Chief Justice Valdez and Justices Garza and Vela Memorandum Opinion Per Curiam Appellant, Ladislado Munoz Gomez, attempts to appeal his conviction for aggravated robbery. The trial court has certified that this Ais a plea-bargain case, and the defendant has NO right of appeal.@ See TEX. R. APP. P. 25.2(a)(2). On December 15, 2011, this Court notified appellant=s counsel of the trial court=s certification and ordered counsel to: (1) review the record; (2) determine whether appellant has a right to appeal; and (3) forward to this Court, by letter, counsel=s findings as to whether appellant has a right to appeal, or, alternatively, advise this Court as to the existence of any amended certification. Following trial court hearings, the trial court found that appellant does not have the right to appeal and that the trial court will not change, modify, undo, rescind, or set aside the trial court’s certification that the appellant does not have the right to appeal. On August 22, 2012, counsel filed a letter brief with this Court. Counsel=s response does not establish that the certification currently on file with this Court is incorrect or that appellant otherwise has a right to appeal. The Texas Rules of Appellate Procedure provide that an appeal must be dismissed if the trial court=s certification does not show that the defendant has the right of appeal. TEX. R. APP. P. 25.2(d); see TEX. R. APP. P. 37.1, 44.3, 44.4. Accordingly, this appeal is DISMISSED. PER CURIAM Do not publish. See TEX. R. APP. P. 47.2(b). Delivered and filed the 27th day of August, 2012. 2	{ "pile_set_name": "FreeLaw" }
FILED NOT FOR PUBLICATION OCT 04 2017 UNITED STATES COURT OF APPEALS MOLLY C. DWYER, CLERK U.S. COURT OF APPEALS FOR THE NINTH CIRCUIT CATHY ALATORRE, an individual, No. 15-55882 Plaintiff-Appellant, D.C. No. 3:13-cv-01702-BAS-DHB v. SEAN J. STACKLEY, Secretary, MEMORANDUM* Department of the Navy, Defendant-Appellee. Appeal from the United States District Court for the Southern District of California Cynthia A. Bashant, District Judge, Presiding Argued and Submitted August 8, 2017 Pasadena, California Before: REINHARDT, KOZINSKI, and CHRISTEN, Circuit Judges. 1. The Navy argues that Alatorre’s bankruptcy discharge of the district court’s cost award against her moots this appeal.1 “Article III’s ‘case-or- controversy limitation’ on federal court jurisdiction requires a live controversy * This disposition is not appropriate for publication and is not precedent except as provided by Ninth Circuit Rule 36-3. 1 Because the parties are familiar with the facts and the procedural history, we do not recount them here. between two adversaries.” United States v. Sanchez-Gomez, 859 F.3d 649, 657 (9th Cir. 2017) (en banc). If the district court’s order granting summary judgment were to be reversed on appeal, Alatorre’s claims would proceed to trial and she might ultimately obtain a damages award. Thus, there is a live controversy and her appeal is not moot. Nor does equity counsel us against entertaining this appeal. That Alatorre listed her cause of action against the Navy as an exempt asset in her bankruptcy petition is consistent with the “fresh start” policy animating the Bankruptcy Code. See Rousey v. Jacoway, 544 U.S. 320, 325 (2005). Alatorre did not gain an unfair advantage by filing for bankruptcy; the Navy would be in the same position whether she filed her bankruptcy petition before or after her appeal from the district court’s judgment. 2. “An employer is vicariously liable for an actionable hostile environment created by a supervisor with immediate (or successively higher) authority over the employee.” Hardage v. CBS Broad., Inc., 427 F.3d 1177, 1183 (9th Cir. 2005) (internal quotation marks omitted). Where harassment does not culminate in “a significant change in employment status, such as discharge or undesirable reassignment,” an employer may assert an affirmative defense to vicarious liability. Davis v. Team Elec. Co., 520 F.3d 1080, 1097 (9th Cir. 2008). 2 Alatorre’s transfer to the Public Works Office (PWO) in February 2012 does not qualify as a tangible employment action because she did not show that Bergamini was involved in the decision to transfer her, and Alatorre’s affidavit portrays a positive experience at the PWO. Her transfer back to the Facilities and Maintenance Division (FMD) in May 2012 does not qualify because her stint at the PWO was always intended to be temporary. Moreover, Bergamini and Grant were placed on administrative leave for three weeks immediately after Alatorre filed her informal EEO complaint. Thus, her return to the FMD lasted, at most, slightly more than a fortnight. As for her assignment to online training courses, Alatorre did not meet her burden to show a causal nexus between this assignment and Bergamini’s alleged sexual harassment. Since no tangible employment action occurred, the Navy was entitled to raise its affirmative defense, and it did so successfully. In response to Alatorre’s first complaint about Bergamini, the Navy temporarily transferred her to the PWO. The FMD held a meeting emphasizing the Navy’s zero-tolerance policy after Alatorre returned. When Alatorre filed an informal EEO complaint, the Navy placed Bergamini (and Grant) on administrative leave, transferred Alatorre to the PWO for the second time, and later hired a former EEOC Administrative Law Judge to conduct an investigation of her complaints. The Navy “exercised 3 reasonable care to prevent and correct promptly any sexually harassing behavior,” and by delaying, Alatorre “unreasonably failed” to avail herself of the available corrective mechanisms. See Hardage, 427 F.3d at 1183–84. 3. Alatorre did not establish a prima facie case of co-worker harassment. To make out such a claim, she was required to show that she “was subjected to verbal or physical conduct of a sexual nature, . . . that was unwelcome; and . . . that was sufficiently severe or pervasive to alter the conditions of [her] employment and create an abusive working environment.” E.E.O.C. v. Prospect Airport Servs., Inc., 621 F.3d 991, 997 (9th Cir. 2010). The alleged behavior of Alatorre’s colleagues, while distasteful and offensive, was almost entirely non-sexual in nature. The only incident that bore sexual overtones was Grant’s comment about her legs. But Alatorre did not show that this was more than an isolated incident or so grievous as to “amount to a [discriminatory] change in the terms and conditions of employment.” See Faragher v. City of Boca Raton, 524 U.S. 775, 788 (1998). 4. Alatorre did not exhaust the claim that she was “relegated to taking online courses” in retaliation for engaging in protected activity. “Exhaustion depends upon the ‘fit’ between the administrative claim, the investigation and any subsequent allegations.” Greenlaw v. Garett, 59 F.3d 994, 1000 (9th Cir. 1995). Because this form of harassment was not like or reasonably related to the 4 harassment of which Alatorre complained, she was required to present it to the EEOC. AFFIRMED. 5	{ "pile_set_name": "FreeLaw" }
[Cite as State v. Scott, 2017-Ohio-2642.] STATE OF OHIO ) IN THE COURT OF APPEALS )ss: NINTH JUDICIAL DISTRICT COUNTY OF SUMMIT ) STATE OF OHIO C.A. No. 28013 Appellee v. APPEAL FROM JUDGMENT ENTERED IN THE JEREMY SCOTT COURT OF COMMON PLEAS COUNTY OF SUMMIT, OHIO Appellant CASE No. CR 2015 01 0039 DECISION AND JOURNAL ENTRY Dated: May 3, 2017 CALLAHAN, Judge. {¶1} Jeremy Scott appeals from his convictions in the Summit County Court of Common Pleas. This Court affirms. I. {¶2} Mr. Scott sexually abused J.D. from the time she was seven until the time she was twelve. Mr. Scott lived with J.D. the majority of this time, first as her mother’s boyfriend and later as her stepfather. {¶3} A grand jury indicted Mr. Scott for ten counts of rape in violation of R.C. 2907.02(A)(1)(b), ten counts of sexual battery in violation of R.C. 2907.03(A)(5), and four counts of gross sexual imposition in violation of R.C. 2907.05(A)(4). Each count stated that the victim was under the age of thirteen. Counts 1, 2, 3, and 4 further specified that the victim was under the age of ten at the time of those offenses. 2 {¶4} Following a four-day jury trial, Mr. Scott was found guilty on all counts in the indictment. At sentencing, the trial court merged the sexual battery and gross sexual imposition counts into the rape counts. The court sentenced Mr. Scott to a life sentence on each of the counts, with parole eligibility after 15 years on counts 1, 2, 3, and 4, and parole eligibility after 10 years on counts 5, 6, 7, 8, 9, and 10. The court further ordered the sentences to run consecutively. {¶5} Mr. Scott appeals raising one assignment of error. II. ASSIGNMENT OF ERROR IT WAS PLAIN ERROR AND A DENIAL OF FUNDAMENTAL DUE PROCESS FOR THE TRIAL COURT TO ALLOW MULTIPLE CONVICTIONS BASED UPON A DUPLICATIVE INDICTMENT. {¶6} In his sole assignment of error, Mr. Scott argues that he was denied due process because the indictment contained counts that were “duplicative in pairs.” This Court disagrees. {¶7} There was no objection to the indictment in the trial court. The failure to object to an indictment waives all but plain-error review on appeal. State v. Horner, 126 Ohio St.3d 466, 2010-Ohio-3830, ¶ 46. Plain error exists only where there is a deviation from a legal rule, that is obvious, and that affected the appellant’s substantial rights to the extent that it affected the outcome of the trial. State v. Barnes, 94 Ohio St.3d 21, 27 (2002). Plain error is noticed “with utmost caution, under exceptional circumstances and only to prevent a manifest miscarriage of justice.” State v. Long, 53 Ohio St.2d 91 (1978), paragraph three of the syllabus. {¶8} The various counts in Mr. Scott’s indictment covered one-year time periods corresponding to J.D.’s age at the time of each offense. The first ten counts in the indictment alleged Mr. Scott raped J.D. in violation of R.C. 2907.02(A)(1)(b), which prohibits engaging in 3 sexual conduct with a person under the age of thirteen. Counts 1 and 2 covered the time period when J.D. was eight. Counts 3 and 4 covered the time period when J.D. was nine. Counts 5 and 6 covered the time period when J.D. was ten. Counts 7 and 8 covered the time period when J.D. was eleven. Counts 9 and 10 covered the time period when J.D. was twelve. Each pair of counts was identically worded.1 {¶9} Mr. Scott argues that this use of identically-worded counts violated his due process rights. In support, Mr. Scott relies on Valentine v. Konteh, 395 F.3d 626 (6th Cir.2005). Valentine involved a 40-count indictment alleging offenses over a ten-month time period. Id. at 629. The indictment contained 20 identically-worded counts for rape and 20 identically-worded counts for felonious sexual penetration. Id. The prosecution did not delineate the factual bases for the charges in a bill of particulars or at trial. Id. at 628. The court found a due process violation, but noted it was “traceable not to the generic language of the individual counts of the indictment but to the fact that there was no differentiation among the counts.” Id. at 636. Consequently, the court found all but one conviction for rape and one conviction for felonious sexual penetration invalid. Id. at 637. {¶10} Mr. Scott recognizes that this Court distinguished Valentine in State v. Just, 9th Dist. Wayne No. 12CA0002, 2012-Ohio-4094. Mr. Scott contends the distinction was “based on the fact that the [S]tate provided more specific details to the defense through a bill of particulars.” Mr. Scott continues that he filed a motion for a bill of particulars, but there is nothing in the record to show that the State responded or that the court ruled on that motion. Mr. 1 Mr. Scott notes that he was indicted on two identically-worded counts for each one-year time period in counts 11 through 20 (sexual battery) and 21 through 24 (gross sexual imposition) as well, but he does not challenge those counts because they were merged into counts 1 through 10 (rape) for sentencing. 4 Scott notes the general rule that appellate courts will presume that a motion was denied when a trial court fails to explicitly rule on that motion. {¶11} While “[t]his [C]ourt ordinarily holds that a motion that is still pending at the time of the final disposition of a case is presumed to have been denied,” there are exceptions to this general rule. State v. Romandetti, 9th Dist. Summit No. 23388, 2007-Ohio-363, ¶ 7; see also State v. DePaulo, 25 Ohio App.2d 39 (9th Dist.1971), syllabus (holding counsel’s statement that he was present for a hearing on the merits of the case waived the right to hearings on pending motions including a motion for a bill of particulars). “Because a request for a bill of particulars, like a demand for discovery, is filed with the court but made directly to the prosecutor, the defendant is required to bring the [S]tate’s failure to respond to the trial court’s attention at a time when the error can be remedied.” State v. Sims, 9th Dist. Lorain No. 94CA005797, 1994 WL 581408, *3 (Oct. 19, 1994). Based on the record, this Court is unable to discern whether the State did or did not provide Mr. Scott a bill of particulars. If Mr. Scott did not receive a bill of particulars, it was his obligation to bring that to the attention of the trial court. Mr. Scott did not file a motion to compel the State to provide him a bill of particulars or otherwise bring to the trial court’s attention any alleged failure by the State to do so. Consequently, he cannot complain of such on appeal. See State v. Hickle, 6th Dist. Ottawa No. OT-03-034, 2004-Ohio-5250, ¶ 15, (“A defendant who has requested a bill of particulars waives error by proceeding to trial without receiving the bill or requesting a continuance.”). {¶12} In addition, this Court did not hold in Just that a bill of particulars was the only manner to differentiate among counts in an indictment. Rather, this Court noted that Valentine “specified that ‘[t]he due process problems in the indictment might have been cured had the trial court insisted that the prosecution delineate the factual bases for the forty separate incidents 5 either before or during trial.’” (Emphasis added.) Just at ¶ 8, quoting Valentine at 634. This Court found that the State adequately delineated among the counts through the different types of sexual contact and the different locations where the offenses occurred. Just at ¶ 9. The bill of particulars differentiated the types of sexual contact alleged, which was different for all but two of the counts. Id. at ¶ 7. In addition to the bill of particulars, which delineated all but two of the counts, there was a recorded interview between the victim and Children Services and the victim’s testimony, which further differentiated the counts based on the location where the abuse occurred. Id. at ¶ 7, 9. {¶13} In the present matter, multiple lay and professional witnesses testified at trial. Exhibits including J.D.’s medical records and various recordings were also admitted into evidence. Mr. Scott’s argument fails to discuss any of this testimony or evidence, or how the State failed to establish the factual bases for each count during trial. An analysis of that testimony and evidence is necessary in order to determine whether any error occurred. “An appellant has the burden of demonstrating error on appeal.” State v. Mastice, 9th Dist. Wayne No. 06CA0050, 2007-Ohio-4107, ¶ 7; see also App.R. 16(A)(7). Having failed to address the testimony and evidence at trial, Mr. Scott has not demonstrated that an error occurred, much less a plain error. {¶14} Mr. Scott’s assignment of error is overruled. III. {¶15} Mr. Scott’s assignment of error is overruled. The judgment of the Summit County Court of Common Pleas is affirmed. Judgment affirmed. 6 There were reasonable grounds for this appeal. We order that a special mandate issue out of this Court, directing the Court of Common Pleas, County of Summit, State of Ohio, to carry this judgment into execution. A certified copy of this journal entry shall constitute the mandate, pursuant to App.R. 27. Immediately upon the filing hereof, this document shall constitute the journal entry of judgment, and it shall be file stamped by the Clerk of the Court of Appeals at which time the period for review shall begin to run. App.R. 22(C). The Clerk of the Court of Appeals is instructed to mail a notice of entry of this judgment to the parties and to make a notation of the mailing in the docket, pursuant to App.R. 30. Costs taxed to Appellant. LYNNE S. CALLAHAN FOR THE COURT HENSAL, P. J. SCHAFER, J. CONCUR. APPEARANCES: NICHOLAS SWYRYDENKO, Attorney at Law, for Appellant. SHERRI BEVAN WALSH, Prosecuting Attorney, and HEAVEN DIMARTINO, Assistant Prosecuting Attorney, for Appellee.	{ "pile_set_name": "FreeLaw" }
UNPUBLISHED UNITED STATES COURT OF APPEALS FOR THE FOURTH CIRCUIT No. 12-7434 UNITED STATES OF AMERICA, Plaintiff - Appellee, v. BERNARD BOSTIC, Defendant - Appellant. Appeal from the United States District Court for the District of South Carolina, at Florence. Terry L. Wooten, District Judge. (4:08-cr-00060-TLW-1) Submitted: November 2, 2012 Decided: November 6, 2012 Before WILKINSON, KEENAN, and THACKER, Circuit Judges. Dismissed by unpublished per curiam opinion. Bernard Bostic, Appellant Pro Se. Unpublished opinions are not binding precedent in this circuit. PER CURIAM: Bernard Bostic seeks to appeal the district court’s order denying his “Motion to Rectify the Record.” We dismiss the appeal for lack of jurisdiction because the notice of appeal was not timely filed. When the United States or its officer or agency is a party, the notice of appeal must be filed no more than sixty days after the entry of the district court’s final judgment or order, Fed. R. App. P. 4(a)(1)(B), unless the district court extends the appeal period under Fed. R. App. P. 4(a)(5), or reopens the appeal period under Fed. R. App. P. 4(a)(6). “[T]he timely filing of a notice of appeal in a civil case is a jurisdictional requirement.” Bowles v. Russell, 551 U.S. 205, 214 (2007). The district court’s order was entered on the docket on April 3, 2012. The notice of appeal was filed on August 19, 2012. * Because Bostic failed to file a timely notice of appeal or to obtain an extension or reopening of the appeal period, we dismiss the appeal. We dispense with oral argument because the facts and legal contentions are adequately presented in the * For the purpose of this appeal, we assume that the date appearing on the notice of appeal is the earliest date it could have been properly delivered to prison officials for mailing to the court. Fed. R. App. P. 4(c); Houston v. Lack, 487 U.S. 266 (1988). 2 materials before the court and argument would not aid the decisional process. DISMISSED 3	{ "pile_set_name": "FreeLaw" }
579 So.2d 145 (1991) Pedro GONZALEZ, Appellant, v. The STATE of Florida, Appellee. No. 90-2329. District Court of Appeal of Florida, Third District. March 26, 1991. Rehearing Denied June 7, 1991. Roy L. Taylor and Margaret S. Brodsky, Miami, for appellant. Robert A. Butterworth, Atty. Gen., and Angelica D. Zayas, Asst. Atty. Gen., for appellee. Before NESBITT, COPE and GERSTEN, JJ. PER CURIAM. Appellant, Pedro Gonzalez, appeals the denial of his motion for post conviction relief. We affirm. On plenary appeal, this court affirmed appellant's conviction for first degree murder. *146 Gonzalez v. State, 543 So.2d 386 (Fla. 3d DCA 1989). Appellant then sought post conviction relief based on a claim of ineffective assistance of counsel. Appellant claimed that his attorney improperly admitted collateral evidence which prejudiced him. At the hearing on the motion, appellant's trial attorney testified that the decision to admit the evidence of which appellant now complains, was a joint one. Appellant's trial attorney testified that he and appellant discussed the risks and advantages of entering the complained of testimony into evidence. The attorney characterized these evidentiary decisions as "tactical." Tactical or strategic decisions of counsel do not justify post conviction relief. Buford v. State, 492 So.2d 355 (Fla. 1986); Straight v. Wainwright, 422 So.2d 827 (Fla. 1982). Even where the tactical decision evinces bad judgment, relief is not justified. Fisher v. State, 239 So.2d 863 (Fla. 3d DCA 1970). Finally, in order to obtain relief, appellant must not only show that the errors committed by counsel fell outside the range of professionally acceptable performance, but also that there is a reasonable probability that, but for counsel's errors, the result of the proceeding would have been different. Strickland v. Washington, 466 U.S. 668, 104 S.Ct. 2052, 80 L.Ed.2d 674 (1984). The evidence against appellant was overwhelming and included the testimony of two eye witnesses. Accordingly, we affirm, finding that appellant has failed to show any basis for relief.	{ "pile_set_name": "FreeLaw" }
124 F.Supp.2d 1203 (2000) Sam BUSH and Jennifer Bush, Plaintiffs, v. STATE FARM FIRE AND CASUALTY COMPANY, an Illinois corporation, Defendant. No. CIV. 00-605-JO. United States District Court, D. Oregon. November 8, 2000. 1204 Jeffrey W. Hansen, Paul Eberhardt, Smith Freed Heald & Chock, Portland, OR, for plaintiffs. Dianne K. Dailey, Bullivant Houser Bailey, Portland, OR, for defendant. OPINION AND ORDER ROBERT E. JONES, District Judge. Plaintiffs Jennifer and Sam Bush ("the Bushes") bring this action against defendant State Farm Fire and Casualty Company ("State Farm") alleging claims resulting from State Farm's refusal to defend and indemnify the Bushes in a lawsuit arising out of the Bushes' previously-owned residence.[1] This case is now before the court on the parties' cross-motions for summary judgment ( 5,8). For the reasons explained below, defendant's motion is GRANTED and plaintiffs' motions are DENIED. FACTUAL BACKGROUND Before October 16, 1996, the Bushes owned a single-family residence located in Portland, Oregon ("the Lambert Street home"). On October 15, 1996, the Bushes sold the Lambert Street home to a trust for the benefit of Julie Upsher, who continued to live in the house with a second woman, Kristin Dilworth. The Bushes have had a homeowners' insurance policy with State Farm since February 16, 1996, or approximately eight months before they sold the Lambert Street home. The "Declarations Page" of the State Farm policy lists the "residence premises" as 12000 NW Big Fir Circle, Portland, OR ("the Big Fir Circle home"), and does not mention the Lambert Street home. It appears that the Bushes insured the Lambert Street home with Ohio Casualty Insurance Company ("Ohio Casualty"), but that policy is not part of the record before the court.[2] In October 1998, Dilworth sued the Bushes in Multnomah County Circuit Court alleging that she was injured as a result of the Bushes' negligence in repairing and remodeling certain electrical equipment in the Lambert Street home. Specifically, Dilworth alleged that she had suffered electrical shock when she came into contact with an electrical sub-panel inside the house. The Bushes tendered their defense to both State Farm and Ohio Casualty. State Farm rejected the tender of defense on the ground that the Lambert Street home was not covered by its policy. Ohio Casualty, however, did defend and indemnify the Bushes in the lawsuit. Eventually, the case settled for $47,500. The Bushes also incurred approximately $32,000 in attorney fees and costs in defending the lawsuit. It appears that Ohio Casualty paid both the settlement and attorney fees on behalf of the Bushes.[3] 1205 THE PRESENT MOTIONS The Bushes now seek summary judgment in their favor as to Claim 1 (breach of contract), or, in the alternative, partial summary judgment as to State Farm's duty to defend. The Bushes also seek dismissal of State Farm's first affirmative defense, that recovery is barred by Exclusion (II)(1)(d) of the policy. State Farm, in turn, seeks summary judgment in its favor as to Claim 1. In support of their respective motions, the parties proffer substantially different interpretations of the same policy language. STANDARD OF REVIEW Summary judgment should be granted if there are no genuine issues of material fact and the moving party is entitled to judgment as a matter of law. Fed. R.Civ.P. 56(c). If the moving party shows that there are no genuine issues of material fact, the non-moving party must go beyond the pleadings and designate facts showing an issue for trial. Celotex Corp. v. Catrett, 477 U.S. 317, 322-23, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). A scintilla of evidence, or evidence that is merely colorable or not significantly probative, does not present a genuine issue of material fact. United Steelworkers of America v. Phelps Dodge, 865 F.2d 1539, 1542 (9th Cir.1989). The substantive law governing a claim determines whether a fact is material. Anderson v. Liberty Lobby, Inc. 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986); see also T.W. Elec. Service v. Pacific Elec. Contractors, 809 F.2d 626, 630 (9th Cir.1987). Reasonable doubts as to the existence of a material factual issue are resolved against the moving party. T.W. Elec. Service, 809 F.2d at 631. Inferences drawn from the facts are viewed in the light most favorable to the non-moving party. Id. at 630-31. DISCUSSION This case involves a homeowners' insurance policy coverage dispute. Specifically, the case concerns whether the Bushes' general liability coverage under their policy with State Farm covers liability arising from Dilworth's injuries at the Lambert Street home even though only the Big Fir Circle home is identified in the policy Declarations. Because the issue is one of contract interpretation, a question of law, it is well-suited for summary judgment. L.K. Comstock & Co. v. United Engineers and Constructors, Inc., 880 F.2d 219, 221 (9th Cir.1989). 1. Insurance Policy Interpretation in Oregon Under Oregon law, analysis of insurance coverage issues is based on the specific terms of the policy, not on the court's general concepts of what coverage various kinds of insurance should provide. Martin v. State Farm Fire and Cas. Co., 146 Or.App. 270, 279, 932 P.2d 1207 (1997). In Hoffman Construction Co. v. Fred S. James Co. of Oregon, 313 Or. 464, 836 P.2d 703 (1992), the Oregon Supreme Court discussed the proper method for interpretation of an insurance policy. According to the court, "the primary and governing rule of the construction of insurance contracts is to ascertain the intent of the parties ... based on the terms and conditions of the insurance policy." Hoffman, 313 Or. at 469, 836 P.2d 703. In that case, as here, the parties offered competing interpretations of the same policy language. Although the Hoffman court acknowledged the general rule that ambiguous terms contained in insurance policies are to be construed against the insurer, the court elaborated that a term is ambiguous in a sense that justifies application of the rule of construction against the insurer only if two or more plausible interpretations of that term withstand scrutiny, i.e. continues to be reasonable, after the interpretations are examined in the light of, among other things, the particular context in which that term is used in the policy and 1206 the broader context of the policy as a whole. Hoffman, 313 Or. at 470, 836 P.2d 703. Therefore, the interpretations of the specific policy provisions put forth by both the Bushes and by State Farm must be examined in the context of the policy as a whole to assess their reasonableness. 2. Applicability of Exclusion (II)(1)(d) The main focus of the parties' disagreement is on whether Exclusion (II)(1)(d) of the policy applies, thereby excluding from coverage Dilworth's claims arising from the Lambert Street home. Under "Coverage L" of the policy, which provides coverage for general liability, If a claim is made or a suit is brought against an insured for damages because of bodily injury or property damage to which this coverage applies, caused by an occurrence, [State Farm] will ... pay up to [its] limit of liability for the damages for which the insured is legally liable; and ... provide a defense at [its] expense.... Plaintiffs' Memorandum in Support of Motion for Summary Judgment, Exhibit B, p. 17. Excluded from that broad liability coverage is bodily injury or property damage arising out of any premises owned or rented to any insured which is not an insured location. Id. at p. 19 (emphasis added). Resolution of this case requires interpretation of the above policy language. Although not stated in their summary judgment materials, the Bushes conceded at the summary judgment hearing that the Lambert Street home was never an "insured location," as that term is defined in the policy. They theorize, nonetheless, that the above exclusion does not apply to Dilworth's claim because, by its terms, the exclusion applies only to property owned at the time of the "occurrence"[4] that is not an insured location. According to the Bushes, because they did not own the Lambert Street home at the time of Dilworth's injury and it was not an insured location, the exclusion does not apply. Although the Bushes' argument is creative, I decline to accept it. The only reasonable interpretation of the policy language compels the conclusion that there is no coverage for injuries on property not owned by the insured, not covered in any manner as an insured location, not related somehow to any insured location, and not in any way arising out of activities contemplated by the express terms of the policy. Considering the language of Exclusion (II)(1)(d) within the context of the policy as a whole, as required under Oregon law, I find that to the extent that the State Farm policy provided any coverage related to the Lambert Street home, which is doubtful, the exclusion is properly interpreted as excluding coverage of liability arising from activities on locations owned or formerly-owned by an insured but never covered under the policy as an insured location, except as specifically contemplated by other express coverage in the policy. I do not find the temporal connection between the "occurrence" and the insured's ownership to be relevant or controlling for purposes of the Exclusion analysis, as urged by the Bushes. Exclusion (II)(1)(d) does not mention the word "occurrence." It merely excludes coverage for liability arising from ownership, past or present, of property that is "not an insured location." The Bushes cite Martin v. State Farm, supra, 146 Or.App. 270, 932 P.2d 1207, in support of their interpretation. Martin, however, does not support their position. 1207 In Martin, an insured, who was the former owner of contaminated property and was sued by the present owners of the property to recover the costs of remediation, brought suit against the insurer who issued two separate liability policies to him. The first policy covered claims made or actions brought "against an insured for damages because of bodily injury or property damage to which this coverage applies, caused by an occurrence," but excluded from coverage such damage "arising out of the ... discharge ... of pollutants ... at or from premises owned, rented, or occupied by the ... insured." Id. at 273, 932 P.2d 1207. The second policy covered any loss for which the insured was legally obligated to pay damages, excluding from coverage property damage "to your own property." That policy defined "loss" as "an accident that results in personal injury or property damage during the policy period." Martin, 146 Or.App. at 273, 932 P.2d 1207. Concluding that the insurance company did not have a duty to defend the insured under either policy due to the two policy exclusions, the court cited the fact that "[the insured's] liability to the underlying plaintiffs was dependent on his having been an owner." Id. at 275, 932 P.2d 1207. The circumstances of this case are analogous to Martin. But for their ownership of the Lambert Street property, the Bushes would have never been sued by Dilworth. All of the allegations in the Dilworth complaint are premised on the fact that the Bushes owned the Lambert Street home at one time. Thus, under Martin, because the Bushes had "owned" the Lambert Street home, even though it was never an "insured location" covered by the State Farm policy, Exclusion (II)(1)(d) of the policy applies, barring coverage. CONCLUSION Plaintiffs' motion for summary judgment and related motions (# 8) are DENIED. Defendant's motion for summary judgment (# 5) is GRANTED. Any other pending motions are denied as moot, and this action is dismissed. NOTES [1] The Bushes originally alleged two claims against State Farm: breach of contract and negligence. The Bushes withdrew the negligence claim (Claim 2), recognizing that it failed to state a claim under Oregon law. [2] At the summary judgment hearing, the Bushes' counsel explained that the Bushes had not notified Ohio Casualty when they sold the Lambert Street home and, consequently, the Ohio Casualty policy remained in effect through the time of Dilworth's accident. [3] The Bushes' counsel admitted in pleadings and at the hearing that Ohio Casualty retained him to pursue this action. [4] The policy defines "occurrence" as follows: "Occurrence," when used in Section II of this policy, means an accident, including exposure to conditions, which results in: a. bodily injury b. property damage during the policy period. Repeated or continuous exposure to the same general conditions is considered to be one occurrence. Plaintiffs' Memorandum in Support of Motion for Summary Judgment, Exhibit B, p. 17.	{ "pile_set_name": "FreeLaw" }
985 F.2d 565 Koettel (Glenn)v.Central Prod. Credit NO. 91-1358 United States Court of Appeals,Eighth Circuit. Oct 25, 1991 1 Appeal From: E.D.Ark. 2 AFFIRMED.	{ "pile_set_name": "FreeLaw" }
T.C. Memo. 1996-259 UNITED STATES TAX COURT RICHARD H. DALEY AND ESTATE OF ANNE H. DALEY, DECEASED, RICHARD H. DALEY, EXECUTOR, Petitioners v. COMMISSIONER OF INTERNAL REVENUE, Respondent Docket No. 9816-93. Filed June 5, 1996. Gregory A. Robinson, for petitioners. Thomas S. Dileonardo, for respondent. MEMORANDUM FINDINGS OF FACT AND OPINION WRIGHT, Judge: Respondent determined deficiencies in, an addition to, and penalties on petitioners’ Federal income taxes as follows:1 1 Unless otherwise indicated, all section references are to the Internal Revenue Code in effect for the years at issue, and all Rule references are to the Tax Court Rules of Practice and (continued...) - 2 - Addition to Tax and Penalties Year Deficiency Sec. 6661 Sec. 6662(a) 1988 $11,351 $2,838 --- 1989 11,536 --- $2,307 1990 10,058 --- 2,012 After concessions, the issues for decision are: (1) Whether petitioners' horse activity during the taxable years at issue was engaged in for profit. We hold that it was not. (2) Whether petitioners are liable for the addition to tax under section 6661 for a substantial understatement for taxable year 1988. We hold that they are. (3) Whether petitioners are liable for the accuracy-related penalty under section 6662(a) for a substantial understatement for taxable years 1989 and 1990. We hold that they are. FINDINGS OF FACT Some of the facts have been stipulated and are so found. The stipulation of facts and attached exhibits are incorporated herein. At the time the petition was filed, petitioner2 resided in Phoenix, Arizona. All references to petitioner in the singular are to Richard H. Daley. 1 (...continued) Procedure. 2 Anne H. Daley died during taxable year 1989, and petitioner Richard H. Daley is the executor of Anne H. Daley's estate. - 3 - Petitioner has practiced medicine as a surgeon in Arizona since 1967. His medical practice requires between 50 and 60 hours of his time each week. During the 12-year period ending with 1992, petitioner's average wage income from his medical practice was $266,507. Similarly, during the taxable years at issue, petitioner's average wage income from his medical practice was $299,687. Petitioner has always relied on a professional accountant to manage the books and records of his medical practice. During the years 1972 through 1986, petitioner was a partner in M.L. Leasing, a partnership engaged in the leasing of various types of goods. In 1987, this partnership was dissolved and petitioner began operating M.L. Leasing as a sole proprietorship. Petitioner continued to operate M.L. Leasing as such through at least March 1994. M.L. Leasing's books and records were managed by a professional bookkeeping service. During taxable years 1983 through 1992, petitioner reported the following profits and losses from his interest in M.L. Leasing:3 Year Profit (Loss) 1983 $7,270 1984 1,280 1985 7,565 1986 (2,000) 1987 9,283 1988 4,429 3 Until 1987, M.L. Leasing was a partnership. Accordingly, the amounts reflected for years prior to 1987 indicate petitioner's share of partnership profit and losses. - 4 - 1989 (2,313) 1990 (4,535) 1991 4,665 1992 5,458 Petitioner grew up in rural Nebraska and spent much of his time "on the farm". He developed an interest in horses at a young age and retained that interest into adulthood. Sometime during the 1970's, petitioner developed an interest in "cutting horses". Historically, a cutting horse was a horse bred and trained to serve as a tool for separating (cutting) cattle from a herd. Generally speaking, cutting horses are now assets that are used by their owners to compete against other cutting horse owners in organized "cutting" competitions for prize money. Competitions featuring cutting horses are held at both national and local levels, and entrants are judged on their ability to "cut" a single steer from a herd of steers. Petitioner began engaging in cutting horse activities in 1979. This activity has continued uninterrupted since its commencement and has involved breeding and training horses to compete in organized events. Petitioner entered his horse activity without the aid of a written market study, and he has not relied on a formal profit or business plan at any time. In managing the affairs of his activity, petitioner used a ledger to record various transactions and events. He also maintained a separate "drop" file for most of his horses. The ledger and drop - 5 - files, however, are not completely accurate, and some significant discrepancies and omissions exist in each. During the course of the 14-year period ending with 1992, petitioner owned in excess of 30 horses.4 These horses were either purchased by petitioner or born to horses that he already owned. In either event, most were eventually sold during this 14-year period, although some died and others were donated to various people or organizations. Throughout the entire course of his horse activity, petitioner never experienced a net profit, although he did generate some income. Income was generated from several sources, including prize winnings, foal sales, and stud fees. Expenses from petitioner's horse activity, however, always exceeded such income. Boarding and training costs have constituted the majority of such expenses. Petitioner rode his horses in the evenings and on weekends. He also rode his horses at numerous organized cutting horse events. Although petitioner's spouse had little interest in horses, petitioner's two children occasionally rode certain horses for various reasons. On the average, petitioner devoted 10 to 12 hours each week to his horse activity. 4 In any one year petitioner owned as few as 2 and as many as 11 horses. Petitioner owned an average of approximately eight horses per year. - 6 - Petitioner boarded his horses at a local stable and relied extensively on the services of a David Costello (Costello) to maintain and train his horses. The maintenance performed by Costello consisted of typical physical labors associated with horse ownership. Costello is a professional horse trainer and has a national reputation in the cutting horse industry. He owned and operated the stables and training facility used by petitioner during the taxable years at issue. Petitioner began deducting expenses associated with his horse activity in 1979, its year of inception. The following table lists the income, expenses, and losses reported by petitioner during the 12-year period ending with 1992: Year Gross Receipts Expenses Loss 1981 $0 $27,598 $27,598 1982 8,770 41,149 32,379 1983 15,050 49,715 34,665 1984 4,746 33,498 28,752 1985 1,949 33,397 31,448 1986 2,531 36,888 34,357 1987 12,580 72,858 60,278 1988 7,588 46,295 38,707 1989 3,927 37,414 33,487 1990 1,273 33,448 32,175 1991 167 33,438 33,271 1992 3,271 46,460 43,189 ______ _______ _______ Total 61,852 492,158 430,306 Respondent determined that petitioner did not operate his horse activity with the intent of earning a profit and disallowed - 7 - the claimed expenses to the extent such expenses exceed the income generated by the activity for each taxable year at issue. OPINION We must decide whether section 183 applies to petitioner's horse activity. Respondent maintains that section 183 limits the amount of expenses petitioner is entitled to deduct to an amount equal to the amount of gross income earned from his horse activity. In contrast, petitioner contends that section 183 is inapplicable because he conducted his horse activity with the requisite profit motive. We agree with respondent. Section 183 allows only specified deductions unless an activity is engaged in for profit. Section 183(c) defines an activity not engaged in for profit as any activity other than one with respect to which deductions are allowable under section 162 or under paragraphs (1) or (2) of section 212. An activity engaged in for profit is one in which the taxpayer has an actual and honest objective of making a profit. Dreicer v. Commissioner, 78 T.C. 642, 645 (1982), affd. without opinion 702 F.2d 1205 (D.C. Cir. 1983). This profit expectation need not have been reasonable, but the activity must have been either entered into or continued with a bona fide objective of making a profit. Taube v. Commissioner, 88 T.C. 464, 478-479 (1987); Dreicer v. Commissioner, supra at 644-645; sec. 1.183-2(a), Income Tax Regs. Profit in this context means economic profit, - 8 - independent of tax consequences. Antonides v. Commissioner, 91 T.C. 686, 694 (1988), affd. 893 F.2d 656 (4th Cir. 1990). The determination of profit objective is factually based and requires a consideration of all the surrounding facts and circumstances. Finoli v. Commissioner, 86 T.C. 697, 722 (1986); sec. 1.183-2(b), Income Tax Regs. Although the purpose of the inquiry is to ascertain the taxpayer's subjective intent, greater weight is given to objective facts than to self-serving statements of intent. Beck v. Commissioner, 85 T.C. 557, 570 (1985); sec. 1.183-2, Income Tax Regs. In conducting the profit objective analysis, courts have relied on a nonexclusive list of nine factors enumerated in the regulations under section 183. See Hendricks v. Commissioner, 32 F.3d 94 (4th Cir. 1994), affg. T.C. Memo. 1993-396; Independent Elec. Supply, Inc. v. Commissioner, 781 F.2d 724 (9th Cir. 1986), affg. Lahr v. Commissioner, T.C. Memo. 1984-472; Elliott v. Commissioner, 90 T.C. 960 (1988), affd. without published opinion 899 F.2d 18 (9th Cir. 1990). No single factor is determinative of the issue, however. Golanty v. Commissioner, 72 T.C. 411 (1979), affd. without published opinion 647 F.2d 170 (9th Cir. 1981). The nine factors set forth under section 1.183-2(b), Income Tax Regs., are: (1) The manner in which the taxpayer carries on the activity; (2) the expertise of the taxpayer or his advisers; (3) the time and effort expended by the taxpayer in carrying on other similar or dissimilar activities; (4) the - 9 - expectation that the assets used in the activity may appreciate in value; (5) the success of the taxpayer in carrying on other similar or dissimilar activities; (6) the taxpayer's history of income or losses with respect to the activity; (7) the amount of occasional profits, if any, that are earned; (8) the financial status of the taxpayer; and (9) the elements of personal pleasure or recreation involved in the activity. A careful review of the entire record in this case convinces us that petitioner has failed to carry his burden in proving that his horse activity was motivated by an actual and honest objective of making a profit. The objective facts indicate that most of the above-enumerated factors weigh in favor of respondent. Issue 1. Profit Motive Businesslike Manner & Adequate Records The fact that an activity is carried on in a businesslike manner and complete and accurate books and records are maintained is a factor indicating the existence of a profit objective with respect to such activity. Sec. 1.183-2(b)(1), Income Tax Regs. Respondent argues that petitioner failed to operate his horse activity in a businesslike manner. In support of this argument, respondent advances several contentions.5 First, respondent argues that petitioner failed to conduct a formal market study 5 To the extent that such arguments are not addressed herein, we have found them to be without merit. - 10 - prior to undertaking his horse activity. Respondent also contends that petitioner's failure to formulate a credible business or profit plan indicates that his actions were not businesslike and that he lacked a profit motive. We agree with both of these contentions. While the law does not require a taxpayer to engage in extensive formalities prior to undertaking a venture, it does require that the taxpayer conduct a basic investigation of the factors that would affect profit. Golanty v. Commissioner, supra at 432. Although petitioner testified that he started his horse activity after consultation with various professionals within the industry, such testimony was not credible, and it appears that petitioner did little else in terms of an investigation. Petitioner undertook his horse activity with no concept of what his ultimate costs might be or how he might achieve any degree of cost efficiency. Similarly, petitioner entered and conducted his activity not knowing the amount of revenues he could expect or what risks might impair the generation of such revenues. It is quite likely that this stems from his failure to consider any type of financial planning instrument during the course of his activity. Moreover, at trial petitioner was asked whether he was aware of the amount of losses incurred since the inception of his horse activity. Not only was petitioner unaware of the amount of total losses incurred, but he was also unaware of the amount of losses incurred during 1993, the year immediately prior to trial. It seems to us peculiar - 11 - that someone claiming a particular activity is motivated by profit would not know simple but significant information such as this with respect to that activity. Respondent also points to numerous omissions in petitioner's records as further support for her contention that petitioner lacked the requisite profit motive with respect to his horse activity. We agree. While maintaining less than precise records does not conclusively establish the lack of a profit objective, see Engdahl v. Commissioner, 72 T.C. 659, 666-667 (1979), petitioner's records are so fraught with omissions and inconsistencies that it is difficult to imagine how they served any beneficial purpose. Petitioner's records do not reflect the income and expenses associated with each individual horse, and petitioner testified that he could not otherwise tell from his records whether any one horse was profitable in any particular year. Similarly, as noted earlier, petitioner's records do not reflect the activity's past losses. Furthermore, petitioner testified that the ledger contained various data pertaining to each horse; however, respondent has shown that much of such data is lacking from the ledger. Petitioner's drop files are equally incomplete. In fact, petitioner failed to maintain a drop file on several of his horses. The drop files are supposed to contain information pertaining to registration and breeding, among other things, but such information is lacking from several of the files that do exist. Not only are petitioner's records incomplete, - 12 - some contain inconsistencies of a significant nature. Inconsistencies also exist between petitioner's records and the information contained on some of his tax returns. In light of the facts before us, we find that petitioner did not operate his horse activity in a businesslike manner. We also find that he maintained inadequate and insufficient records with respect to such activity. Accordingly, we find that this factor weighs in favor of respondent. Taxpayer Expertise The expertise of the taxpayer or his or her advisers is another factor relevant to the determination of whether such taxpayer possessed the requisite profit motive with respect to the activity in question. Sec. 1.183-2(b)(2), Income Tax Regs. Petitioner lacked any meaningful degree of expertise with regard to his horse activity, and we are not convinced that he was developing an expertise merely as a result of his associations with professionals within the cutting horse industry. However, petitioner relied extensively on Costello, an individual possessing much expertise involving horses. Because of the extent Costello was involved in petitioner's horse activity, we conclude that this factor favors petitioner. Time and Effort Expended The time and effort expended by the taxpayer in carrying on the activity at issue is an indication of whether a profit motive existed with respect to such activity, particularly if there are - 13 - no substantial personal or recreational elements associated with such activity. Sec. 1.183-2(b)(3), Income Tax Regs. Petitioner maintains that he spent 10 to 12 hours each week engaged in his horse activity. Yet he failed to produce credible evidence explaining the type of work he performed. The available evidence indicates that petitioner spent much of his time riding his horses. Petitioner contends, however, that such riding was not recreational. Instead, petitioner maintains that his riding served several business purposes, including exercising and training. Petitioner also maintains that the reason he rode his horses during competitive events was to develop a better appreciation for his business and illustrate to perspective purchasers that his horses were suitable for novice riders. The record does not support petitioner's arguments. Essentially, by relying on Costello to maintain and train his horses, petitioner avoided the rigors of his horse activity and indulged himself with its pleasantries. Petitioner's testimony otherwise is simply not credible, and we are reluctant to accept Costello's testimony as corroboration in light of his business relationship with petitioner. We conclude that petitioner's horse activity contained substantial elements of a recreational and personal nature. Accordingly, we find that this factor favors respondent. - 14 - Expectation that Assets will Appreciate An expectation that assets used in the activity in question may appreciate in value may also be an indication of the taxpayer's motive with respect to such activity. Sec. 1.183- 2(b)(4), Income Tax Regs. Petitioner contends that a principal factor underlying his motivation for engaging in his horse activity was the expectation that he would experience appreciation in the value of his horses. We recognize that appreciation in the horse industry often requires the passage of many years and is frequently dependent upon on a successful breeding and training program. It is not enough, however, that petitioner maintained the objective that his horse activity would eventually become profitable as a result of appreciation in the value of his horses. It is necessary that the objective be to realize a profit on the entire operation. Bessenyey v. Commissioner, 45 T.C. 261, 274 (1965), affd. 379 F.2d 252 (2d Cir. 1967). This presupposes not only future net earnings but also future net earnings sufficient to recoup the losses which have been sustained in prior years. Id. Petitioner failed to produce credible evidence that would suggest that his activity had any realistic chance of recovering the enormous losses previously incurred. In light of this record, we are not convinced that petitioner maintained a good faith belief that his horses would appreciate over time and that such appreciation would eventually - 15 - be sufficient to account for the losses experienced prior to such appreciation. Accordingly, we find that this factor favors respondent. Other Activities The success of the taxpayer in carrying on other activities can also be some indication of whether the taxpayer had a profit motive for the activity in question. Sec. 1.183-2(b)(5), Income Tax Regs. Petitioner has no experience in similar activities; however, both his medical practice and his leasing business are successful profit-oriented activities. In any event, we find that this factor neither supports nor weakens either party's position. Income, Losses, and Occasional Profits A history of income, losses, and occasional profits with respect to an activity can be indicative of whether a profit objective exists with respect to such activity. Sec. 1.183- 2(b)(6), Income Tax Regs. Respondent contends that the history of losses relating to petitioner's horse activity suggests that he lacked the requisite profit motive necessary to render section 183 inapplicable. We agree. Petitioner's contention that he expected to eventually experience a profit is self-serving, unsupported by the record, and otherwise unrealistic. The uninterrupted series of losses has been sustained beyond the period which is customarily necessary to bring a similar operation to profitable status. See Engdahl v. Commissioner, 72 - 16 - T.C. 659 (1979). In light of the instant facts, we find that petitioner's history of losses suggests that he lacked a profit motive in carrying on his horse activity. Accordingly, we find that this factor favors respondent. Amount and Frequency of Occasional Profits The amount and frequency of occasional profits earned from the activity at issue may also be indicative of a profit objective. Sec. 1.183-2(b)(7), Income Tax Regs. Petitioner's horse activity had several sources of income, yet none proved fruitful. While an opportunity to earn a substantial ultimate profit in a highly speculative venture may be sufficient to indicate that the activity is engaged in for profit even though only losses are generated, sec. 1.183-2(b)(7), Income Tax Regs, we are convinced that such a likelihood was too remote in the instant case. Accordingly, we find that this factor favors respondent. Petitioner's Financial Status The lack of substantial income from sources other than the activity in question may indicate the existence of a profit motive with respect to such activity. Sec. 1.183-2(b)(8), Income Tax Regs. As petitioner is a successful orthopedic surgeon earning in excess of $250,000 per year, there is little doubt that this factor favors respondent. - 17 - Personal Pleasure or Recreation The absence of personal pleasure or recreation relating to the activity in question may indicate the presence of a profit motive. Sec. 1.183-2(b)(9), Income Tax Regs. As noted earlier in this opinion, we are convinced that petitioner's horse activity contained significant recreational aspects that gave rise to many personal pleasures. We find that the personal pleasure derived from petitioner's horse activity was the principal factor motivating his decision to enter into and carry on such activity. Accordingly, we find that this factor favors respondent. Having considered the facts and circumstances of this case in light of the factors set forth in section 1.183-2(b), Income Tax Regs., we conclude that petitioner did not engage in his horse activity with an actual and honest objective of making a profit within the meaning of section 183. Issue 2. Addition to Tax, Sec. 6661 Respondent determined that petitioners are liable for the addition to tax pursuant to section 6661 for taxable year 1988 due to a substantial understatement of income tax. This determination is benefited by a presumption of correctness. Rule 142(a). The addition to tax is 25 percent of any underpayment attributable to a substantial understatement. Sec. 6661(a). A - 18 - substantial understatement is one that exceeds the greater of 10 percent of the tax required to be shown on the return, or $5,000. Sec. 6661(b)(1). If a taxpayer has substantial authority for the tax treatment of any item on the return, the understatement is reduced by the amount attributable to such authority. Sec. 6661(b)(2)(B)(i). Similarly, the amount of the understatement is reduced for any item adequately disclosed either on the taxpayer's return or in a statement attached to the return. Sec. 6661(b)(2)(B)(ii). Because petitioner has presented no argument on this issue other than to deny the underlying deficiencies, respondent's determination is sustained. Issue 3. Accuracy-Related Penalty, Sec. 6662 Respondent determined that petitioners are liable for the accuracy-related penalty pursuant to section 6662 for taxable years 1989 and 1990 because the underpayment of income tax for such years was attributable to a substantial understatement. Again, respondent's determination is benefited by a presumption of correctness. Rule 142(a). The accuracy-related penalty is equal to 20 percent of the portion of an underpayment to which section 6662 applies. Sec. 6662(a). Section 6662(b)(2) provides that section 6662 applies to an underpayment attributable to any substantial understatement of income tax. A substantial understatement is one that exceeds the greater of 10 percent of the tax required to be shown on the - 19 - return, or $5,000. Sec. 6662(d)(1)(A). Petitioner has presented no argument on this issue other than to deny the underlying deficiencies. Because the understatements at issue are substantial and neither is subject to reduction pursuant to section 6662(d)(2)(B)(i), section 6662(d)(2)(B)(ii), or section 6664(c)(1), respondent's determination is sustained. To reflect the foregoing, Decision will be entered under Rule 155.	{ "pile_set_name": "FreeLaw" }

99 P.3d 1239 (2004) 195 Or. App. 546 STATE v. GUISTI. Court of Appeals of Oregon. October 6, 2004. Affirmed without opinion.

{ "pile_set_name": "FreeLaw" }

UNPUBLISHED UNITED STATES COURT OF APPEALS FOR THE FOURTH CIRCUIT JEFFREY STEVENS, Petitioner, v. BATH IRON WORKS CORPORATION; No. 96-2599 DIRECTOR, OFFICE OF WORKERS' COMPENSATION PROGRAMS, UNITED STATES DEPARTMENT OF LABOR, Respondents. On Petition for Review of an Order of the Benefits Review Board. (BRB-95-1950) Argued: March 6, 1998 Decided: July 27, 1998 Before NIEMEYER, HAMILTON, and LUTTIG, Circuit Judges. _________________________________________________________________ Affirmed by unpublished per curiam opinion. _________________________________________________________________ COUNSEL ARGUED: Edward Paul Gibson, RIESEN LAW FIRM, L.L.P., North Charleston, South Carolina, for Petitioner. Richard Fenn van Antwerp, ROBINSON, KRIGER & MCCALLUM, Portland, Maine, for Respondents. ON BRIEF: Allison A. Stover, RIESEN LAW FIRM, L.L.P., North Charleston, South Carolina, for Petitioner. Thomas R. Kelly, Daniel Nuzzi, ROBINSON, KRIGER & MCCAL- LUM, Portland, Maine, for Respondent Bath Iron Works. Unpublished opinions are not binding precedent in this circuit. See Local Rule 36(c). _________________________________________________________________ OPINION PER CURIAM: Jeffrey Stevens, proceeding under the Longshore and Harbor Workers' Compensation Act, seeks to compel Bath Iron Works to bear the cost of back surgery and temporary total disability benefits relating to the surgery. Although Stevens had a prior history of back problems, he aggravated his condition in 1989 while working for Bath Iron Works. The ALJ denied benefits, finding that Stevens' need for back surgery is not related to his 1989 work-related injury, and the Benefits Review Board affirmed by operation of Public Law 104-134. On appeal, Stevens contends (1) that the ALJ's determination that his need for surgery is unrelated to his prior workplace injury is not supported by substantial evidence, and (2) that the ALJ erred in not holding that a 1992 compensation order voluntarily entered into by Bath Iron Works to obtain Special Fund relief precludes Bath Iron Works from now arguing that it is not liable for the requested bene- fits. For the reasons given below, we affirm. I Stevens was first employed at Bath Iron Works located in Bath, Maine, in 1978, working as a tinsmith. In March 1989, he sustained a lower back injury at work when he attempted to pick up a box of bolts weighing between 100 and 175 pounds. As a result of this injury, Stevens missed more than four months of work and returned to work on limited duty. Shortly thereafter, in January 1991, he moved to South Carolina where he found work in a grocery store. Even before his work-related injury, Stevens had had a lengthy his- tory of lower back problems. In addition to a congenital abnormality in his spine, Stevens was involved in an automobile accident in December 1973, for which he received treatment to his back for three 2 months. In 1979, his back condition flared up again, requiring contin- uing treatment until 1981. In January 1988, he sustained another back injury in an automobile accident that caused him to remain out of work for eight months. He settled a lawsuit based on that accident for $82,500. Stevens currently suffers from a symptomatic pseudarthrosis of the lower lumbar vertebrae in the sacrum and degenerative lumbar disc disease. Essentially, Stevens has an extra spinal segment in his lower back and a degenerative condition in the tissues between his lower lumbar vertebrae. His treating physician, Dr. Donald Johnson, a board-certified orthopedic surgeon, has recommended that Stevens undergo surgery to remove the discs at the lowest two lumbar levels with a fusion done across the vertebrae above and below those discs. It is for this operation that Stevens seeks compensation from Bath Iron Works on the grounds that his current condition is related to his 1989 work-related injury. Relying on the opinions of Dr. Johnson and Dr. John W. Wicken- den, the only doctor who had seen Stevens both before and after his work-related injury, the ALJ concluded that Stevens' degenerative lumbar disc disease and the symptomatic congenital pseudarthrosis of the lowest lumbar vertebrae in the sacrum were present in 1988 and were not affected by the lifting incident at Bath Iron Works in 1989. The ALJ quoted approvingly from Dr. Wickenden's opinion as fol- lows: The lifting incident which occurred at Bath Iron Works on March 2, 1989 is of no orthopedic/medical consequence to the history of this man's spinal pathology. That injury caused a transient exacerbation of symptoms which had been consistently present for at least fourteen months prior to that time, and symptoms which had occurred intermit- tently since 1973. Images taken prior to March, 1989 are essentially the same as images which have been taken in the interval since that time. . . . The basis for his surgery is con- genital and degenerative disease which first showed itself in 1973 and became more chronically persistent after January 1988. I see no meaningful way in which any current, or 3 hypothetical future, physical restrictions can be attributed to a lifting incident at Bath Iron Works during March, 1989. Accordingly, the ALJ denied any further benefits. From the affir- mance of the Benefits Review Board by operation of law, this appeal followed. II Under the Longshore Act, an employer is liable to his employees for "such medical, surgical, and other attendance or treatment . . . for such period as the nature of the injury or the process of recovery may require." 33 U.S.C. §§ 904, 907. Furthermore, it is presumed that a claim for compensation under the Longshore Act comes within the scope of the Act's coverage "in the absence of substantial evidence to the contrary." Id. at 920(a). An employer, however, must provide benefits for only those injuries that "aris[e] out of and in the course of employment." Id. at § 902(2). In this case, the ALJ found that the need for the proposed surgery on Stevens' back was unrelated to Stevens' 1989 work injury and that therefore Bath Iron Works was not required by the Longshore Act to pay the costs of surgery. We must uphold this decision if it is "sup- ported by substantial evidence in the record considered as a whole." 33 U.S.C. § 921(b)(3); see also Newport News Shipbuilding and Dry Dock Co. v. Tann, 841 F.2d 540, 543 (4th Cir. 1988). Substantial evi- dence is "such relevant evidence as a reasonable mind might accept as adequate to support a conclusion." Richardson v. Perales, 402 U.S. 389, 401 (1971) (quoting Consolidated Edison Co. v. NLRB, 305 U.S. 197, 229 (1938)). Moreover, "the ALJ's findings may not be disre- garded on the basis that other inferences might have been more rea- sonable. Deference must be given the fact-finder's inferences and credibility assessments, and we have emphasized[that] the scope of review of ALJ findings is limited." Newport News Shipbuilding, 841 F.2d at 543 (citation omitted). The ALJ's finding that Stevens' lower back problems were "not related in any way to the trivial lifting incident at Bath Iron Works on March 2, 1989," is supported by the medical evidence provided by both Dr. John Wickenden, a board-certified orthopedic surgeon who 4 treated Stevens from November 1988 until April 1990 and who reviewed Stevens' medical records from 1979 to 1994, and by Dr. Johnson, Stevens' current treating doctor. According to Dr. Wicken- den, Stevens' lower back problems started in 1973, following his involvement in the first of two automobile accidents, and continued intermittently over the next two decades. In Dr. Wickenden's opinion, the "real cause" of Stevens' back problems"was some combination of congenital anomalies and degenerative changes in his low back." Dr. Wickenden stated that x-rays taken of Stevens' lower back as early as 1979 revealed "essentially the same pathology" as imaging studies done as recently as 1993. Based on these findings, Dr. Wick- enden concluded, The basis for [Stevens'] surgery is congenital and degenera- tive disease which first showed itself in 1973 and became more chronically persistent after January 1988. I see no meaningful way in which any current, or hypothetical future, physical restrictions can be attributed to a lifting inci- dent at Bath Iron Works during March 1989. Dr. Johnson seconded Dr. Wickenden's finding that Stevens' lower back problems predated Stevens' March 1989 injury by well over a year and were of "longstanding" and "permanent" duration. Stevens presented no medical evidence at the hearing before the ALJ that contradicted the opinions offered by Dr. Wickenden and Dr. Johnson. The only evidence that Stevens presented that even remotely supported his claim that his current back condition is related to his March 1989 injury was his own testimony which the ALJ discredited in light of Stevens' admitted failure to disclose his complete medical history to three of his treating physicians. We cannot say that this credibility determination was in error. See Newport News Shipbuilding, 841 F.2d at 543. Accordingly, we find that the ALJ's decision to deny the requested benefits is supported by substantial evidence in the record considered as a whole. III Stevens objects to the ALJ's having decided the causation issue in this proceeding because the issue was not properly before the ALJ, 5 having been decided when Stevens was first provided benefits for his 1989 injury. He argues that because 33 U.S.C. § 907(a) requires the employer to pay medical benefits indefinitely, the only issue was whether Bath Iron Works "is responsible for payment for the surgery prescribed by Dr. Johnson" and for related disability and medical expenses. Stevens, however, misunderstands the statutory scheme because Bath Iron Works' continuing liability under the Longshore Act for the costs of the proposed surgery is predicated on a finding that the sur- gery is intended to treat an injury that arose out of and in the course of Stevens' employment at Bath Iron Works. See 33 U.S.C. § 902(2); see also Colburn v. General Dynamics Corp., 21 B.R.B.S. 219 (1988) (where employee's condition is not natural or unavoidable result of workplace injury, but is result of intervening cause, employer is relieved of liability for disability and medical expenses). Thus, dem- onstrating a causal connection between Stevens' current need for sur- gery and his March 1989 workplace injury is a necessary precondition to Bath Iron Works' liability for the surgery under the Longshore Act. Stevens also contends that the issue of causation had already been decided by a 1992 compensation order voluntarily entered into by Bath Iron Works and that that order constitutes res judicata in this case. The 1992 order provided that starting in April 1992 the Long- shore Act's § 8(f) Special Fund would pay Stevens permanent partial disability benefits based on the "combined result of the injury sus- tained on March 2, 1989, superimposed on the pre-existing permanent partial disability to the back." See 33 U.S.C. § 908(f). In addition, the order stated that Bath Iron Works "remains liable for medical care related to the employment injury." (Emphasis added). This provision clearly leaves open the question of whether Stevens' current need for surgery was caused, even in part, by the March 1989 lifting incident. Because the order did not decide the causation issue before us, res judicata does not apply. For the foregoing reasons, the decision of the Benefits Review Board is AFFIRMED. 6

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763 F.Supp. 1282 (1991) MOUNTAIN RIDGE STATE BANK, Plaintiff, v. INVESTOR FUNDING CORPORATION, et al., Defendants. Civ. A. No. 91-80. United States District Court, D. New Jersey. March 21, 1991. *1283 John G. Geppert, Jr., Wiley, Malehorn & Sirota, Morristown, N.J., for plaintiff F.D. I.C. Gary Trachten, Kudman & Trachten, New York City, for defendants Daniel H. Cohen, Louis L. Cregler, Paul Glaser, Carolyn Glaser, John J. Keelin, Betty A. Keelin, Howard Kitain, Sandra Kitain, Ursala Meyer, Jose Saavedra and Angela Saavedra. David R. Rudd, Rudd and Poss, South Orange, N.J., for defendants Mahesh Agashiwala, Loma Agashiwala, Mukesh Ajmera, Dina Ajmera, Avinash Bapat, Shahsultan Bapat, Custodians of Anil Bapat, Robert Beckerle, Elgene Beckerle, Samuel J. Berman, Anand M. Dhanda, Russel J. Dunlop, Linda Dunlop, Robert A. Emmett, John R. Everitt, Peter J. Ferrara, Consuelo C. Ferrara, Manhar Ghandi, Daksha Ghandi, Jean Goddard, William Goddard, Mandukant Gosalia, Eugene McCloskey, Jayaprakash Modi, Subramanian Natarajan, James L. Nolan, Mary E. Nolan, William Nurse, Phyllis Nurse, Elliot Palmer, Shirish C. Parikh, Chhaya Parikh, David Rand, Rhonda Rand, Samuel Klein and Co., Paul Taenzler, Warren Lieberman, Marvin Gottlieb, Joseph Faccone, Jerome Fien, John Dashuta, Howard Ehrlich, James Tennant, George Huss, Nathan Honig, Estate of Frederick M. Stern, Subramanian Sundaraman, Trygve S. Vik, Sharadkuman Saraiya, Raksha Saraiya, Subodhchandra Trivedi, Sudha Trivedi, James R. Baehler and Jeffrey Singer. OPINION LECHNER, District Judge. This matter is before the court on the motion of certain defendants (the "Moving Defendants") to remand this case to the *1284 Superior Court of New Jersey, Law Division, Essex County (the "Superior Court").[1] For the reasons set forth below, the motion is granted. Facts and Procedural History The plaintiff, Mountain Ridge State Bank ("Mountain Ridge"), is a New Jersey banking corporation. FDIC Brief at 1. Mountain Ridge had entered into a two participation agreements with defendant Investor Funding Corporation ("IFC") whereby IFC transferred all of its rights and obligations with respect to numerous promissory notes (the "Notes") to Mountain Ridge. Id. The Notes were executed by, among others, the Moving Defendants. Id.; Defendants' Brief at 1. The Moving Defendants claim the proceeds of the Notes were paid not to them directly, but to partnerships in which they had invested. Defendants' Brief at 1. The Moving Defendants claim they ceased to make payments due and owing under the Notes when they discovered that the partnerships were in fact part of "ponzi scheme" involving IFC and defendant John Kimble. Id. Subsequently, Mountain Ridge commenced an action on 22 August 1989 in the Superior Court to recover for the Moving Defendants' default under the Notes. Id. at 2; FDIC Brief at 1. The Moving Defendants answered Mountain Ridge's complaint and asserted, among other things, the affirmative defenses of fraud and failure of consideration. Defendants' Brief at 2. On 4 October 1990, after a series of motions in the Superior Court, the defendants, represented by the law firm of Kudman & Trachten ("Kudman"), were granted leave to amend their answer to assert counterclaims against Mountain Ridge for rescission and restitution. Id. at 2-3. On 5 October 1990, the Commissioner of Banking of the State of New Jersey declared Mountain Ridge insolvent and appointed and confirmed the FDIC as receiver pursuant to N.J.S.A. 17:9A-272(D).[2] Defendants' Brief at 3; FDIC Brief at 3-4. On the same day, the FDIC filed an ex parte application in the Superior Court pursuant to 12 U.S.C. § 1821(d)(12)[3] for a ninety-day stay of all proceedings in the Superior Court to which Mountain Ridge was a party. FDIC Brief at 4; Defendants' Brief at 3. The FDIC's ex parte application was apparently made in a proceeding separate from the action to enforce the Notes. Defendants' Brief at 3; FDIC Brief at 3. The application for the stay, however, was heard by Hon. Paul B. Thompson, who was the Judge in the Superior Court before whom the action to enforce the Notes was pending. FDIC Brief at 3. Judge Thompson, by an Order, dated 9 October 1990, stayed until 3 January 1991 all cases or matters in the Superior Court in which Mountain Ridge was a party. FDIC Brief at 3; Defendants' Brief at 3. The Moving Defendants did not learn of the stay until 20 November 1990, when they received from the law firm of Wiley, Malehorn & Sirota ("Wiley") a copy of the Order granting a stay. FDIC Brief at Exhibit L. *1285 It is apparent from various orders of the Superior Court that Wiley represented Mountain Ridge in this case in state court prior to the appointment of the FDIC. See FDIC Brief at Exhibits C, D, E & F. For example, in a letter-opinion, dated 4 October 1990, Judge Thompson declined to grant Mountain Ridge's motion for summary judgment. FDIC Brief at Exhibit G. The letter-opinion was addressed to Wiley. Id. It does not appear Wiley had been formally retained by the FDIC to handle any Mountain Ridge litigation at the time Wiley sent a copy of the Order granting the stay to the Moving Defendants. By a letter sent to Wiley, dated 13 November 1990, the FDIC stated it was attempting to ascertain whether Wiley was qualified to represent the FDIC in the Mountain Ridge cases pending in the Superior Court. FDIC Brief at Exhibit K. Although that letter did not specifically refer to this case, the letter did state that Wiley should "continue to handle" the unspecified Mountain Ridge cases discussed in a meeting between Wiley and the FDIC on 7 November. Id. On 24 December 1990, the FDIC directed Wiley to commence proceedings to remove this case from state to federal court. FDIC Brief at Exhibit M. The FDIC desired removal because it anticipated the defendants represented by Kudman would assert a counterclaim. Id. It is assumed that sometime in December 1990, Wiley was formally retained to continue as counsel for the FDIC on this matter. See Geppert Affidavit at ¶ 10. On 3 January 1991, the FDIC filed its Notice of Removal with this court. On 15 January 1991, the parties appeared for a status conference at which time the parties discussed whether the removal from state to federal court was appropriate.[4] Discussion The Moving Defendants oppose removal of this case to federal court and seek remand to the Superior Court. The Moving Defendants contend removal is improper for several reasons. First, the Moving Defendants contend removal is precluded because this is a "state action" involving purely state law. Defendants' Brief at 6. Second, the Moving Defendants contend the notice of removal was untimely. Id. at 7. Third, they contend the stay was improperly obtained. Id. at 13. Last, the Moving Defendants contend this court should decline or defer exercise of jurisdiction because the Superior Court has retained jurisdiction to determine whether appointment of the FDIC as receiver was appropriate. Id. at 15. The FDIC disputes all of these contentions. A. Removal Under 12 U.S.C. § 1819 1. Standard of Review The FDIC may seek the removal from state to federal court of a case in which the FDIC is a party.[5] 12 U.S.C. § 1819(b)(2)(B) (as amended by the Financial Institutions Reform, Recovery and Enforcement Act of 1989, Pub.L. No. 101-73, § 209, 103 Stat. 183 (1989) ("FIRREA"), codified, as amended, at 12 U.S.C. § 1819(b)(2)(B)). Any case in which the FDIC is a party has been deemed by Congress to arise, except in certain circumstances, under the laws of the United States.[6]Id. at § 1819(b)(2)(A). An action does not arise under the laws of the United States when it is an action: *1286 (i) to which the [FDIC], in the [FDIC]'s capacity as receiver of a State insured depository institution by the exclusive appointment by State authorities, is a party other than as a plaintiff; (ii) which involves only the preclosing rights against the State insured depository institution, or obligations owing to, depositors, creditors, or stockholders by the State insured depository institution; and (iii) in which only the interpretation of the law of such State is necessary. Id. at § 1819(b)(2)(D). Section 1819(b)(2)(D) is not to be construed, however, to limit a federal court's jurisdiction when the State insured depository institution could have invoked the jurisdiction of federal courts in the action. 12 U.S.C. § 1819(b)(2)(E). 2. State Action Under 12 U.S.C. § 1819 The Moving Defendants contend that this action is excluded from removal because the counterclaims they have asserted turn this action into an action arising under state, not federal, law. Defendants' Brief at 7. This contention, however, has no merit. There are few cases interpreting Section 1819(b)(2)(D). None of the cases directly address the relevant issue here or even the issue of whether each of the subsections must be met for removal to be barred. From the plain language of Section 1819(b)(2)(D), however, it appears each subsection must be met because subsection (ii) ends with an "and." See Bruce v. First Fed. Sav. & Loan Ass'n, 837 F.2d 712, 715 (5th Cir.1988) ("The word `and' is therefore to be accepted for its conjunctive connotation rather than as a word interchangeable with `or' except where strict grammatical construction will frustrate clear legislative intent."). Consequently, the Moving Defendants' assertion that this action is not removable on the basis of Section 1819(b)(2)(D) will fail if they cannot show any of the three subsections are met. The Moving Defendants argue this action involves only state law and the preclosing rights of the Moving Defendants against Mountain Ridge on the Notes. Defendants' Brief at 6. Assuming that this action is indeed one involving only state law, the relevant issue then is whether the FDIC is a party other than plaintiff. 12 U.S.C. § 1819(b)(2)(D)(i). The FDIC, as receiver, has succeeded to all the rights and obligations of Mountain Ridge. Bacsik Certification at ¶ 9. Thus, the FDIC will litigate this action on behalf of Mountain Ridge, the plaintiff. Consequently, the FDIC is a party in this action in its capacity as the plaintiff. In addition, the mere assertion of counterclaims by the Moving Defendants does not vitiate the FDIC's status as plaintiff and turn this action into a state action. In FDIC v. Kasal, 913 F.2d 487 (8th Cir.1990), cert. denied, ___ U.S. ___, 111 S.Ct. 1072, 112 L.Ed.2d 1178 (1991), it was held that federal courts have jurisdiction to hear counterclaims asserted against the FDIC based on state law. Kasal, 913 F.2d at 493. Although Kasal addressed the issue of when state law governs a case, it suggests counterclaims do not hinder the FDIC's access to federal courts. Consequently, the Moving Defendants' contention that this is a nonremovable state action is without merit. 3. Timeliness of Removal Under 12 U.S.C. § 1819 Section 1819 does not, on its face, limit the time in which the FDIC may remove an action. The FDIC contends a reasonable period should be read into Section 1819, rather than the thirty day period set forth in the general federal removal statute, 28 U.S.C. § 1446(b).[7] FDIC Brief at 4. The FDIC suggests that ninety days is a reasonable time because Congress has allowed the Resolution Trust Corporation ("RTC") ninety days in which to seek removal in *1287 similar actions.[8]Id. (citing 12 U.S.C. § 1441a(l)(3)). In the alternative, the FDIC suggests that a reasonable period would be no less than the thirty days allowed under the general federal removal statute. Id. (citing 28 U.S.C. § 1446(b)). Under either suggestion, the FDIC contends the removal period should begin running only upon the expiration of the ninety day stay of proceedings to which the FDIC is entitled under 12 U.S.C. § 1821(d)(12)(B). FDIC Brief at 8-9. The Moving Defendants argue the proper time period for removal is the thirty day limit under 28 U.S.C. § 1446(b) and the period commences running either when the FDIC is appointed receiver or when the FDIC acquires knowledge of the existence of a removable action. Defendants' Brief at 9-13. The Moving Defendants also contend that a stay of proceedings does not toll the running of the limitations period. Id. at 10-13. a. Removal Under 28 U.S.C. § 1446 Under the general federal removal statutes, an action brought in state court can be removed by defendants to the federal district court encompassing the state court if that federal district court would have had original jurisdiction. 28 U.S.C. § 1441(a).[9] A defendant seeking to remove a case must file "a notice of removal ... containing a short and plain statement of the grounds for removal, together with a copy of all process, pleadings, and orders served...." 28 U.S.C. § 1446(a).[10] Section 1446 provides a thirty day limitations period for removal. 28 U.S.C. § 1446(b). The notice of removal must be filed within thirty days after receipt by service of process or otherwise of the initial pleading setting forth the basis for removal.[11]Id. If the initial pleading does not reveal a basis for removal, then the notice of removal may be filed within thirty days of receipt by any means of an amended pleading, motion, order or other paper which indicates the case is removable. Id. The thirty day limitation is mandatory and cannot be extended by the court. Balestrieri v. Bell Asbestos Mines, Ltd., 544 F.Supp. 528, 529 (E.D.Pa.1982); Typh, Inc. v. Typhoon Fence of Penn., Inc., 461 F.Supp. 994, 996 (E.D.Pa.1978); see also Northern Ill. Gas Co. v. Airco *1288 Indus. Gases Div. of Airco Inc., 676 F.2d 270, 273 (7th Cir.1982); Courtney v. Benedetto, 627 F.Supp. 523 (M.D.La.1986). Moreover, the thirty day period does not commence running from when the party seeking removal has actual knowledge of the propriety of removal; all that is required is the receipt of a paper indicating removal is proper. Rowe v. Marder, 750 F.Supp. 718, 721 (W.D.Pa.1990). Consequently, the party seeking removal cannot attempt to excuse an untimely filing of the notice of removal by claiming that he did not read the paper or that the paper was somehow incomplete. Id. A case may be remanded to state court on the ground of a defect in the removal procedure. 28 U.S.C. § 1447(c).[12] Failure to file a notice of removal within the thirty day limitations period is cause for remand. Capone v. Harris Corp., 694 F.Supp. 111, 112 (E.D.Pa.1988); Blow v. Liberty Travel, Inc., 550 F.Supp. 375, 375-76 (E.D.Pa.1982). The party seeking removal has the burden of showing that federal subject-matter jurisdiction exists, filing of the notice of removal was timely and that removal is proper. Boyer v. Snap-On Tools Corp., 913 F.2d 108, 111 (3d Cir.1990), cert. denied, ___ U.S. ___, 111 S.Ct. 959, 112 L.Ed.2d 1046 (1991); Steel Valley Authority v. Union Switch and Signal Division, Amer. Standard, Inc., 809 F.2d 1006, 1011 (3d Cir.1987), cert. dism'd, 484 U.S. 1021, 108 S.Ct. 739, 98 L.Ed.2d 756 (1988); Capone, 694 F.Supp. at 112. "The removal statutes `are to be strictly construed against removal and all doubts are to be resolved in favor of remand.'" Boyer, 913 F.2d at 111 (quoting Steel Valley, 809 F.2d at 1010). b. The Removal Limitations Period Under 12 U.S.C. § 1819 Courts which have considered the issue of whether Section 1446 governs the time for removal pursuant to Section 1819(b)(2)(B) agree that the section does in fact apply. See, e.g., In re Meyerland Co., 910 F.2d 1257, 1264 (5th Cir.1990) (Higginbotham, J., concurring); FDIC v. Loyd, 744 F.Supp. 126, 128 (N.D.Tex.1990); Hunter's Run, I, Ltd. v. Arapahoe County Public Trustee, 741 F.Supp. 207, 207 (D.Colo.1990); MTech Corp. v. FDIC, 729 F.Supp. 1134, 1136 (N.D.Tex.1990); FDIC v. Taylor, 727 F.Supp. 326, 328 (S.D.Tex. 1989); FDIC v. Norwood, 726 F.Supp. 1073, 1075 (S.D.Tex.1989). Section 1819(Fourth) of Title 12 of the United States Code was the predecessor to Section 1819(b)(2)(B). See 12 U.S.C. § 1819(Fourth), amended by FIRREA, Pub.L. No. 101-73, § 209, 103 Stat. 183, 216-17 (codified, as amended, at 12 U.S.C. § 1819(b)(2)(B)). In decisions involving Section 1819(Fourth), courts uniformly held that Section 1446 governed removal. See, e.g., Bowen v. FDIC, 915 F.2d 1013, 1014-15 (5th Cir.1990); Kasal, 913 F.2d at 489; In re Franklin Nat'l Bank Sec. Litig., 532 F.2d 842, 843 (2d Cir.1976); T & M Dental Lab, Inc. v. First Indus. Bank, 714 F.Supp. 798, 799 (E.D.La.1989); Heafitz v. Interfirst Bank, 711 F.Supp. 92, 94-95 (S.D.N.Y.1989); Yankee Bank for Finance & Savings, FSB v. Hanover Square Associates-One L.P., 693 F.Supp. 1400, 1410 (N.D.N.Y.1988); FDIC v. The Atlantic Org., Inc., 682 F.Supp. 5, 7 (D.P.R.1988). Section 1819(Fourth) contained the language that the FDIC may remove "by following any procedure for removal now or hereafter in effect." 12 U.S.C. § 1819(Fourth). Consequently, courts looked to the general federal removal statutes because they were the removal procedures then in effect. See In re Franklin, 532 F.2d at 846. With FIRREA, Congress eliminated the language referring to removal procedures *1289 in effect. See FIRREA, Pub.L. No. 101-73 at § 209, 103 Stat. at 216-17. Significantly, Congress did not replace that language with any other language indicating the proper procedures for removal. In this regard, "Congress is presumed to be aware of an administrative or judicial interpretation of a statute and to adopt that interpretation when it re-enacts a statue without change." Lorillard v. Pons, 434 U.S. 575, 580, 98 S.Ct. 866, 870, 55 L.Ed.2d 40 (1978) (citations omitted). As well, "if Congress intends for legislation to change the judicial interpretation of a judicially created concept, it makes that intent specific." Midlantic Nat'l Bank v. New Jersey Dep't of Environmental Protection, 474 U.S. 494, 501, 106 S.Ct. 755, 759, 88 L.Ed.2d 859 (1986). In this situation, Congress left a lacuna in the FIRREA as to the procedure for removal. Even though Section 1819 was not re-enacted verbatim, it is presumed Congress was aware of the way courts had applied Section 1446 to Section 1819(Fourth). Absent any indication otherwise, it is also presumed Congress intended that a Section 1819(b)(2)(B) removal should be governed by 28 U.S.C. § 1446. The FDIC has failed to demonstrate Congress intended to eliminate the thirty day limitation. Plainly, had Congress wanted to, it could have done so. For example, Section 1819 diverges from the general federal removal statutes in that Section 1819 allows removal by the FDIC when it is a plaintiff, whereas the general federal removal statutes allow for removal only by defendants. Compare 12 U.S.C. § 1819(b)(2)(B) with 28 U.S.C. 1441. Clearly Congress, when it wanted to expand the FDIC's removal power, explicitly provided as much. In re Meyerland Co., 910 F.2d 1257, 1264 (5th Cir.1990). Nothing in the legislative history of FIRREA, however, indicates Congress intended to uncouple the FDIC's removal powers from the general federal removal statutes. See FIRREA, Pub.L. No. 101-73, 103 Stat. 183, passim. The FDIC's reliance on the RTC removal limitations period is inapposite. Congress created distinctly different procedures for removal for the FDIC and the RTC. Matrix Ski Corp. v. FDIC, 734 F.Supp. 763, 765 (N.D.Tex.1990). For example, Section 1819 allows removal to any federal court, while suits involving the RTC can be removed only to the District of Columbia under 12 U.S.C. § 21A(l)(3). Matrix, 734 F.Supp. at 765. Moreover, Congress explicitly provided for a removal limitations period for the RTC, 12 U.S.C. 1441a(l)(3), whereas Congress declined to do so for the FDIC. RTC v. Key, 733 F.Supp. 1086, 1089-90 (N.D.Tex.1990). The removal provisions for the RTC and the removal provisions for the FDIC are not interchangeable. Key, 733 F.Supp. at 1090 n. 7. In MTech, the FDIC attempted to advance the same arguments it makes here. There the FDIC argued the elimination of the language referring to removal procedures in effect indicated Congress intended to broaden the FDIC's removal powers and that a reasonable limitations period such as the ninety day RTC period should be applied. 729 F.Supp. at 1136 & 1136 n. 4. The court rejected those arguments, stating: This Court cannot countenance such a reading of FIRREA. If Congress had sought to insulate the FDIC from § 1446(b)'s time restrictions, it could have explicitly said so. Nowhere is there a "reasonableness" standard set out in the amended statute. Nor can one find a word mentioned in the voluminous legislative history that accompanied the act as to the applicability or inapplicability of § 1446(b); these materials make but a scant general reference which affirms the FDIC's authority to remove certain state court proceedings. This general affirmance seems the better interpretation of FIRREA's slightly modified language. Moreover, taken to its logical extreme, the FDIC's argument would mean that it need not comply with any provisions of the general removal statute, including the requirement that a removing party file a notice of removal. Id. at 1136 (citations omitted). Accord Norwood, 726 F.Supp. at 1075. *1290 Because Congress failed to otherwise provide, removal under Section 1819(b)(2)(B) is governed by the general federal removal statute 28 U.S.C. § 1446. Accord In re Meyerland, 910 F.2d at 1264; Loyd, 744 F.Supp. at 128; Hunter's Run, 741 F.Supp. at 207; Norwood, 726 F.Supp. at 1075; MTech, 729 F.Supp. at 1136; Taylor, 727 F.Supp. at 328. "A party contending that legislative action changed settled law has the burden of showing that the legislature intended such a change." Green v. Bock Laundry Mach. Co., 490 U.S. 504, 521, 109 S.Ct. 1981, 1991, 104 L.Ed.2d 557 (1989). The FDIC has failed to meet this burden of showing that Congress intended to uncouple Section 1819 from Section 1446. c. Commencement of the Removal Limitations Period Because the thirty day limitations period derives from Section 1446, it must be applied in a manner consistent with Section 1446. Consequently, the limitations period commences upon receipt by the FDIC of "an amended pleading, motion, order or other paper from which it may first be ascertained that the case is one which is or has become removable." 28 U.S.C. § 1446(b); see, e.g., MTech, 729 F.Supp. at 1135. Other courts have ruled differently. Some have held the limitation period commences as soon as the FDIC is appointed receiver. See, e.g., Loyd, 744 F.Supp. at 128-29; Norwood, 726 F.Supp. at 1076; see Structural Sys., Inc. v. Sulfaro, 687 F.Supp. 22, 23 (D.Mass.1988) (decided under 12 U.S.C. § 1819(Fourth)). This approach, however, may not comport with Section 1446. Section 1819(b)(2)(B) gives the FDIC the power to remove a case. 12 U.S.C. § 1819(b)(2)(B). Importantly, an order appointing the FDIC as receiver for a bank may not outline the specific actions in which that bank was a party. Here, for example, the order of the New Jersey Commisioner of Banking appointing the FDIC as receiver does not set forth any details about the Mountain Ridge action to enforce the Notes. See FDIC Brief at Exhibit H. Therefore, an order appointing the FDIC as receiver, when it does not mention any specific litigation, would not place the FDIC on notice that a particular case is removable; it only places the FDIC on notice that it has the power to remove.[13] Others courts have held the limitations period begins when the FDIC is formally substituted as a party. See, e.g., T & M Dental Lab, 714 F.Supp. at 799-800 (decided under 12 U.S.C. § 1819(Fourth)); Heafitz, 711 F.Supp. at 95 (decided under 12 U.S.C. § 1819(Fourth)). The court in T & M Dental Lab based its holding on the language in Section 1819(b)(2)(A) that any action in which the FDIC is a "party" arises under the laws of the United States. 714 F.Supp. at 799. Such a constricted reading of Section 1819, however, does not comport with Section 1446. Neither Section 1819 nor Section 1446 explicitly require the FDIC be formally substituted as a party before removal is proper. Moreover, the FDIC's interest in an action comes into being at the moment it is appointed as receiver, not at the moment it is formally substituted. To hold that the thirty day limitations period commences running only when the FDIC is formally substituted allows the FDIC to ignore an initial pleading or other paper which indicates removal is proper. MTech, 729 F.Supp. at 1135 (citing FDIC v. Brooks, 652 F.Supp. 745, 746 (N.D.Tex.1988)). There is no policy, however, that justifies allowing the FDIC to delay removal of a case it knows can be properly removed until the moment the FDIC is formally substituted. Brooks, 652 F.Supp. at 746. Section 1446 should govern when the limitations period commences because Section 1446 governs the limitations period for removal. MTech, 729 F.Supp. at 1135. As stated above, Section 1446 provides that the limitations period commences by receipt *1291 through service or otherwise of either an initial pleading or "an amended pleading, motion, order or other paper from which it may first be ascertained that the case is one which is or has become removable." 28 U.S.C. § 1446(b). Consequently, after appointment as a receiver which grants removal power, the FDIC must remove a case within thirty days of when it receives through service of process or otherwise a pleading or other paper which reveals that removal is appropriate. It therefore must be determined whether a stay under Section 1821 tolls the running of the removal period and when the FDIC received a paper revealing removal is proper in this case. d. Tolling the Removal Limitations Period with a Stay Under 12 U.S.C. § 1821 The tolling issue appears to be one of first impression.[14] A stay is granted in order to give the FDIC "breathing room" to familiarize itself with the case. Taylor, 727 F.Supp. at 328. "The appointment of a conservator or receiver can often change the character of litigation; the stay gives the FDIC a chance to analyze the pending matters and decide how best to proceed." H.R.Rep. No. 54(I), 101st Cong., 1st Sess. 331 (1989), reprinted in 1989 U.S.Code Cong. & Admin.News 86, 127. This goal, however, is not necessarily impeded if a stay is deemed not to toll the removal limitations period. If a stay does not toll the removal limitations period, then the FDIC would be forced to remove the case prior to or contemporaneously with seeking a stay. Norwood, 726 F.Supp. at 1076-77. Forcing the FDIC to remove prior to seeking a stay would not cause the FDIC to be prejudiced because a stay obtained after removal would still permit the FDIC to familiarize itself with the case. See id. at 1076. Removal does not require an intimate knowledge of a case; all that it requires is some sort of awareness that the case is removable. See 28 U.S.C. 1446(b). This can be determined upon receipt by any means of a paper relating to the case. Id. Moreover, prior removal should not hinder the granting of a stay if the FDIC moves for a stay immediately after removal. Only if the FDIC unnecessarily delays in seeking a stay or if the FDIC has already substantially participated in the case will a stay be denied. See, e.g., Hunter's Run, 741 F.Supp. at 208; Tuxedo Beach Club Corp. v. City Federal Sav. Bank, 729 F.Supp. 1508, 1510 (D.N.J.1990); Taylor, 727 F.Supp. at 327. Given that the thirty day period in Section 1446 is mandatory, this construction is consistent with both the stay and removal statutes. Consequently, a stay of proceedings under Section 1821 should not toll the limitations period of Section 1446(b) as applied to Section 1819(b)(2)(B). e. The FDIC's Notice of Removal Here, the FDIC filed its notice of removal on 3 January 1991. Because the stay of proceedings ordered by the Superior Court does not toll the running of the thirty day limitations period, the next relevant issue is when did the FDIC first receive by service of process or otherwise an initial pleading or other paper which indicated removal was possible. On 5 October 1990, the FDIC was appointed receiver. FDIC Brief at 3. As discussed above, the order of the New Jersey Commissioner of Banking appointing the FDIC as receiver did not state that Mountain Ridge was involved in any particular litigation. See FDIC Brief at Exhibit H. It is therefore assumed at that point in time the FDIC did not know specifically what actions were pending in the state courts with respect to Mountain Ridge. See Bacsik Certification at ¶ 6 ("Immediately after the Commissioner closed the Bank, the [FDIC] sought 90-day stays of action in various courts where it had reason to believe the Bank was engaged in litigation"). In other words, while the FDIC had the power to remove this action on 5 October, *1292 it could not exercise that power because the order appointing it as receiver did not refer to this action. Accordingly, the thirty day limitations period did not commence running in this case on the date the FDIC was appointed receiver. At that point in time, however, when the FDIC knew of its removal power with respect to Mountain Ridge litigation, it should have examined Mountain Ridge files with a view towards removal. An argument can be made that the removal period commenced running when the FDIC was appointed receiver because Wiley, the firm which represented Mountain Ridge, was in possession of papers indicating this case was removable. See Rowe, 750 F.Supp. at 721 (mere possession, not actual knowledge, commences running of the removal period). Thus, even though the FDIC might not have reviewed those papers on the date of appointment, Wiley, as Mountain Ridge's and the FDIC's agent, could have exercised the FDIC's removal power. It is unclear, however, that Wiley was in fact the FDIC's agent at the time the FDIC was appointed receiver. Consequently, it is assumed Wiley could not exercise the FDIC's removal power on 5 October. On 13 November 1990, the FDIC informally requested Wiley to "handle" certain cases involving Mountain Ridge. FDIC Brief at Exhibit K. Although the letter which makes this requests does not so specify, the FDIC has conceded that Wiley was to handle this case. FDIC Brief at 4. The FDIC also requested copies of the files relating to Mountain Ridge litigation in Wiley's possession. FDIC Brief at Exhibit K. It therefore appears that this is the first point in time that the FDIC knew of this litigation. This conclusion is further buttressed by the fact that Wiley represented Mountain Ridge in this case prior to the appointment of the FDIC as receiver. See FDIC Brief at Exhibits C, D, E & F (orders of Superior Court predating FDIC's appointment indicating Wiley represented Mountain Ridge). Wiley therefore had an intimate knowledge of this case and certainly was in a position to discuss with the FDIC the propriety of removal. Consequently, the removal of this case was untimely because it was not removed until fifty-one days after 13 November. Even if the FDIC did not know of this case on 13 November, it certainly had a sufficient opportunity to make that determination by the time it mailed a copy of the stay to the Moving Defendants one week later on 20 November. See FDIC Brief at 4. Because Wiley had represented Mountain Ridge prior to the FDIC's appointment, Wiley would have been in a position to discuss the details of this case with the FDIC. On 1 November 1990, Wiley, on the FDIC's behalf, returned a copy of the order granting the stay to the Superior Court Judge before whom this action was pending. Id. at 4. It is clear, therefore, that during the almost three week period between 1 November and 20 November, the FDIC had ample opportunity to discuss this case with Wiley. Even if the FDIC had not received the Mountain Ridge files it had requested, the FDIC had sufficient information to determine who was the Superior Court Judge and who were the opposing counsel in this action. Accordingly, the FDIC had sufficient information to determine whether this action was removable. Under these circumstances, removal of this action was untimely.[15] 4. The Pending Appeal The Moving Defendants suggest this court should defer the exercise of jurisdiction until after the hearing in the Appellate Division of the Superior Court on the propriety of the appointment of the FDIC as receiver. Defendants' Brief at 15-16. There is no need, however, to consider this suggestion because the FDIC's notice of removal was untimely filed. However, it is doubtful the state court, appellate division or otherwise, had any authority after removal. In point of fact, the removal statute is clear that after removal is effected, "the State court shall proceed no further *1293 unless and until the case is remanded." 28 U.S.C. § 1446(d). Conclusion For the reasons set forth above, the FDIC's notice of removal was filed beyond the thirty day limitation under 28 U.S.C. § 1446(b). Consequently, removal is improper and this case must be remanded to the Superior Court of the State of New Jersey, Law Division, Essex County. The Moving Defendants' motion to remand is granted. NOTES [1] The Moving Defendants have submitted the following in support of the motion to remand: Brief in Support of Motion to Remand ("Defendants' Brief"); and Affidavit of Gary Trachten, Esq., sworn to on 29 January 1991. Certain other defendants have joined in the motion. See Letter from David R. Rudd, Esq., dated 31 January 1991. The Federal Deposit Insurance Corporation ("FDIC") has submitted the following in opposition: Brief in Support of Plaintiff's Notice of Removal ("FDIC Brief"); Plaintiff's Reply Brief; Certification of Dennis G. Bacsik, Esq., dated 22 January 1991 (Bacsik Certification"); and Affidavit of John G. Geppert, Jr., Esq., sworn to on 1 February 1991. [2] The Superior Court, Appellate Division, has apparently retained jurisdiction to determine whether the appointment of the FDIC as a receiver was proper. Defendants' Brief at 4. [3] Section 1821(d)(12) provides, in pertinent part: (12) Suspension of legal actions (A) In general After the appointment of a conservator or receiver for an insured depository institution, the conservator or receiver may request a stay for a period not to exceed . . . . . (ii) 90 days, in the case of any receiver, in any judicial action or proceeding to which such institution is or becomes a party. 12 U.S.C. § 1821(d)(12)(A). [4] It is also appropriate for the court to inquire, sua sponte, whether it has subject matter jurisdiction. Medlin v. Boeing Vertol Co., 620 F.2d 957, 958 & 960 (3d Cir.1980); see also Boyer v. Snap-On Tools Corp., 913 F.2d 108, 111 (3d Cir.1990), cert. denied, ___ U.S. ___, 111 S.Ct. 959, 112 L.Ed.2d 1046 (1991). [5] Section 1819(b)(2)(B) provides, in pertinent part: ... the [FDIC] may, without bond or security, remove any action, suit, or proceeding from a State court to the appropriate United States district court. 12 U.S.C. § 1819(b)(2)(B). [6] Section 1819(b)(2)(A) provides, in pertinent part: ... all suits of a civil nature at common law or in equity to which the [FDIC], in any capacity, is a party shall be deemed to arise under the laws of the United States. 12 U.S.C. § 1819(b)(2)(A). [7] It is interesting to note the incongruity of the FDIC's attempt to avoid application of Section 1446 when its own notice of removal invokes that section. See MTech Corp. v. FDIC, 729 F.Supp. 1134, 1136 (N.D.Tex.1990). [8] The Resolution Trust Corporation was created by Congress to manage federally insured depository institutions for which a receiver or conservator has been appointed. See 12 U.S.C. § 1441a. [9] Section 1441(a) provides, in pertinent part: Except as otherwise expressly provided by Congress, any civil action brought in a State court of which the district courts of the United States have original jurisdiction, may be removed by the defendant or defendants, to the district court of the United States for the district and division embracing the place where such action is pending.... 28 U.S.C. § 1441(a). [10] Section 1446(a) provides: A defendant or defendants desiring to remove any civil action or criminal prosecution from a State court shall file in the district court of the United States for the district and division within which such action is pending a notice of removal signed pursuant to Rule 11 of the Federal Rules of Civil Procedure and containing a short and plain statement of the grounds for removal, together with a copy of all process, pleadings, and orders served upon such defendant or defendants in such action. 28 U.S.C. § 1446(a). [11] Section 1446(b) provides: The notice of removal of a civil action or proceeding shall be filed within thirty days after receipt by the defendant, through service or otherwise, of a copy of the initial pleading setting forth the claim for relief upon which such action or proceeding is based, or within thirty days after the service of summons upon the defendant if such initial pleading has then been filed in court and is not required to be served on the defendant, whichever period is shorter. If the case stated by the initial pleading is not removable, a notice of removal may be filed within thirty days after receipt by the defendant, through service or otherwise, of a copy of an amended pleading, motion, order or other paper from which it may be first ascertained that the case is one which is or has become removable, except that a case may not be removed on the basis of jurisdiction conferred by section 1332 of this title more than 1 year after commencement of the action. 28 U.S.C. 1446(b). [12] Section 1447(c) provides, in pertinent part: A motion to remand the case on the basis of a defect in removal procedure must be made within thirty days after filing of the notice of removal under section 1446(a). If at any time before final judgment it appears that the district court lacks subject matter jurisdiction, the case shall be remanded. An order remanding the case may require payment of just costs and any actual expenses, including attorney fees, incurred as a result of the removal.... 28 U.S.C. § 1447(c). [13] Significantly, an order appointing the FDIC as receiver by its very nature places the FDIC on notice that it may remove an action pursuant to Section 1819. Accordingly, once on notice of its removal power, the FDIC should exercise additional care to ensure that cases are removed promptly. [14] The court in MTech pointed out that there might be merit to the FDIC's argument that a thirty day limitations period would be inconsistent with the ninety day stay provision but declined to address the issue. 729 F.Supp. at 1136 n. 5. [15] Because the FDIC's notice of removal was untimely filed, the question of whether the stay was properly obtained does not need to be considered. See Defendants' Brief at 14-15.

{ "pile_set_name": "FreeLaw" }

29 F.3d 644 NOTICE: Federal Circuit Local Rule 47.6(b) states that opinions and orders which are designated as not citable as precedent shall not be employed or cited as precedent. This does not preclude assertion of issues of claim preclusion, issue preclusion, judicial estoppel, law of the case or the like based on a decision of the Court rendered in a nonprecedential opinion or order.WEST COAST INDUSTRIES, INC., a Washington Corporation,Plaintiff-Appellee,v.FATIGUE TECHNOLOGY, INC., a Washington Corporation,Defendant-Appellant. No. 94-1058. United States Court of Appeals, Federal Circuit. May 24, 1994.Rehearing Denied Aug. 8, 1994. Before NIES, MICHEL, and SCHALL, Circuit Judges. JUDGMENT PER CURIAM. 1 AFFIRMED. See Fed.Cir.R. 36.

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752 F.Supp. 634 (1990) Herman Benjamin FERGUSON, Plaintiff, v. FEDERAL BUREAU OF INVESTIGATION, Defendant. No. 89 Civ. 5071 (RPP). United States District Court, S.D. New York. December 18, 1990. Center for Constitutional Rights, New York City by Joan P. Gibbs, for plaintiff. Otto G. Obermaier, U.S. Atty., for the Southern District of New York, New York City by Steven I. Froot, Asst. U.S. Atty., for defendant. OPINION AND ORDER ROBERT P. PATTERSON, Jr., District Judge. Plaintiff Herman Ferguson ("Ferguson") moves to compel defendant Federal Bureau of Investigation ("FBI") to reprocess his 1980 and 1989 requests for documents or, in the alternative, to prepare a second, more detailed index of material it claims is exempt from disclosure, under the Freedom of Information Act ("FOIA"). 5 *635 U.S.C. § 552 et seq. Defendant moves for partial summary judgment pursuant to Fed.R.Civ.P. 56 and plaintiff cross moves pursuant to Fed.R.Civ.P. 56(f) for an order continuing or denying defendant's motion for summary judgment and directing discovery. The Court reserves decision on defendant's motion for partial summary judgment and on plaintiff's motions for discovery and to compel reprocessing of the document requests, pending in camera review of a limited number of relevant documents. BACKGROUND Plaintiff Ferguson was closely involved in black nationalist politics in New York in the 1960's. In 1968, he was convicted in New York of conspiracy to murder two other black leaders: Whitney M. Young, Jr. of the National Urban League ("Urban League") and Roy Wilkins of National Association for the Advancement of Colored People ("NAACP"). Ferguson was freed on bond pending the outcome of appeals. After hearing that his last appeal had been denied, Ferguson fled the country and eventually settled in Guyana, where he lived for the next 18 years. While a fugitive, Ferguson made an FOIA request in August 1980 for documents located at FBI headquarters which related to him; some documents were delivered in redacted form to plaintiff's attorney in January 1984. In 1989, Ferguson returned to New York and was promptly arrested. He made another FOIA request in April 1989, seeking documents from the files at FBI headquarters and from the files of the New York and Philadelphia field offices of the FBI. This action seeking expedited review of the files in view of the criminal proceeding against Ferguson was commenced on July 26, 1989. In June, 1990, Ferguson pled guilty to jumping bail and was sentenced to one year in prison on that charge, which he is now serving concurrently with his original sentence of three-and-one-half to seven years on the conspiracy to murder charge. Ferguson claims that he was framed in the 1968 prosecution and that the FBI has in its possession either exculpatory material or material which would lead to exculpatory evidence. He alleges that during the 1968 trial and the subsequent appeals he was wrongfully deprived of the statements of witnesses against him, exculpatory evidence, and the names of informants against him. By an Opinion and Order dated October 24, 1989, this Court held that the FBI should treat plaintiff's 1989 request for documents (insofar as it requested documents for the period 1963-70) ahead of other FOIA requesters and ordered the FBI to produce the documents responsive to this request within 35 days or by January 19, 1990. Ferguson v. FBI, 722 F.Supp. 1137 (S.D.N.Y.1989). It also required the FBI to produce a Vaughn index with respect to the 1980 request within 32 days thereafter, or by February 20, 1990.[1]Ferguson v. FBI, 729 F.Supp. 1009 (S.D.N. Y.1990). By January 19, 1990, the FBI produced redacted documents responsive to the 1989 request as ordered. Plaintiff objected to the extent of the redactions and, in an Opinion and Order dated January 31, 1990, this Court ordered, inter alia, that the FBI produce a detailed Vaughn index of the 1963-1970 portion of Ferguson's FOIA request by April 27, 1990. By February 20, 1990, the FBI produced declarations as Vaughn indexes for Ferguson's 1980 and 1989 requests, except for the post-1970 documents' responsive to the 1989 request. Superneau Aff., February 16, 1990; Davis Aff., February 16, 1990. Since then, the FBI has provided additional affidavits by Regina Superneau, Katherine Stricker and Joseph Smith, in explanation of redactions or FBI search methods. Defendant then moved for partial summary judgment with respect to the 1980 FOIA request and the 1989 FOIA request *636 (through 1970) on the ground that it has properly searched for and produced all the documents to which the plaintiff is entitled under the FOIA, taking into account the statutory exemptions from disclosure, in properly redacted form. Ferguson opposes the motion, alleging bad faith and errors in the FBI's processing of his requests, and seeks reprocessing or a more detailed index indicating the nature of the information redacted and the justification for redacting it. Plaintiff also cross moves for a court order denying summary judgment and directing the FBI to submit to discovery, arguing that his ability to oppose summary judgment is hampered by his inability to get information from the FBI. Fed.R.Civ.P. 56(f). Pursuant to the oral argument on October 10, 1990, Ferguson submitted a list of documents considered most relevant to his claims, on October 16, 1990. DISCUSSION To grant a motion for summary judgment a court must find that there is no genuine issue as to any material fact, and that the moving party is entitled to judgment because, after sufficient time for discovery, the non-movant has failed to make a sufficient showing of an essential element of its case as to which it has the burden of proof. Celotex Corp. v. Catrett, 477 U.S. 317, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). See also, Anderson v. Liberty Lobby, 477 U.S. 242, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). The burden rests on the moving party to demonstrate the absence of a genuine issue of material fact, Adickes v. S.H. Kress & Co., 398 U.S. 144, 90 S.Ct. 1598, 26 L.Ed.2d 142 (1970), and the Court must view the facts in the light most favorable to the non-moving party. Meiri v. Dacon, 759 F.2d 989, 997 (2nd Cir.1985), cert. denied, 474 U.S. 829, 106 S.Ct. 91, 88 L.Ed.2d 74 (1985). Defendant asserts that its affidavits and indices sufficiently show that the FBI has fully complied with its duties under the FOIA. The FOIA embodies a strong policy in favor of disclosure to the public. John Doe Agency v. John Doe Corporation, ___ U.S. ___, 110 S.Ct. 471, 107 L.Ed.2d 462 (1989), reh'g denied, ___ U.S. ___, 110 S.Ct. 884, 107 L.Ed.2d 966 (1990); Donovan v. FBI, 806 F.2d 55, 57 (2nd Cir.1986). "[W]hen the Government declines to disclose a document the burden is upon the agency to prove de novo in trial court that the information sought fits under one of the exemptions to the FOIA." Vaughn v. Rosen, 484 F.2d 820, 823 (D.C.Cir.1973), cert. denied sub nom. Rosen v. Vaughn, 415 U.S. 977, 94 S.Ct. 1564, 39 L.Ed.2d 873 (1974). The FOIA is to be liberally construed in favor of disclosure and its exemptions are to be narrowly construed. Julian v. United States Dept. of Justice, 806 F.2d 1411 (9th Cir.1986), aff'd sub nom. United States Dept. of Justice v. Julian, 486 U.S. 1, 108 S.Ct. 1606, 100 L.Ed.2d 1 (1988). The FOIA specifically provides that "the district court ... may examine the contents of such agency records in camera to determine whether such records" are exempt from disclosure. 5 U.S.C. § 552(a)(4)(B) (1982). While it may be true that such review is exceptional, "the propriety of such review is a matter entrusted to the district court's discretion." Local 3, I.B.E.W., AFL-CIO v. N.L.R.B., 845 F.2d 1177 (2d Cir.1988). A district court may consider several factors in deciding whether in camera review is warranted, Donovan, 806 F.2d at 59, including (a) judicial economy, (b) the conclusory nature of the agency affidavits, (c) bad faith on the part of the agency, (d) disputes concerning the contents of the documents, (e) whether the agency requests an in camera inspection, and (f) the strong public interest in disclosure. Id. See also, Allen v. CIA, 636 F.2d 1287, 1298-99 (D.C.Cir.1980). Although plaintiff contests the sufficiency of the search and asks for discovery on the adequacy of the search, he offers no support for such a request. On the basis of evidence presently before the Court, the declarations of Smith, Davis, Stricker and Superneau, the Court finds that defendant has complied with its obligations under FOIA to make a search of its files. Weisberg v. United States Dep't of *637 Justice, 745 F.2d 1476 (D.C.Cir.1984), reh'g denied, 763 F.2d 1436 (D.C.Cir.1985); Meeropol v. Meese, 790 F.2d 942, 952-53, 956 (D.C.Cir.1986). Plaintiff also contests the exemptions from disclosure as provided in 5 U.S.C. § 552(b). Plaintiff has attached ten documents previously disclosed in Moore v. Levi, 75-6203 (MJL) (S.D.N.Y.) and released with redactions to Ferguson. A comparison of the two sets of released documents shows such extensive redactions in defendant's FOIA production in this case, utilizing exemptions (b)(6) and (b)(7), that some of those documents are almost completely blacked out. In contrast, with minor exceptions defendant disclosed those documents almost in their entirety, including names of FBI personnel, in Moore v. Levi. Plaintiff also claims that Section 552(b) exemptions have been used to withhold disclosable reports of public meetings and information about public figures who are now deceased. He asks for discovery with respect to defendant's reliance on exemptions (b)(1), (b)(2), (b)(3), (b)(6) and (b)(7). Defendant points to the propriety of each of the exemptions and opposes such discovery. The scope of each relevant exemption is: Exemption (b)(1): secrecy in national defense and foreign policy matters pursuant to executive order; Exemption (b)(2): relating to internal personnel rules and practices of an agency; Exemption (b)(3): statutory exemptions (e.g., information received through grand jury subpoenas); Exemption (b)(6): personnel files and medical files involving personal privacy; Exemption (b)(7): records compiled for law enforcement purposes; but only to the extent that such law enforcement records or information would result in enumerated types of harm. Under exemption (b)(7), defendant relies solely on three types of harm: 1) information which under (b)(7)(C) could reasonably be expected to constitute an unwarranted invasion of personal privacy, e.g. information about FBI personnel; 2) information which under (b)(7)(D) could reasonably be expected to disclose the identity of a confidential source and 3) information which under (b)(7)(E) would disclose an investigative technique through portions of released records. The tests relating to each of the exemptions give broad discretion to the defendant in the application of those exemptions. The Court is persuaded that discovery of defendant by plaintiff as to the adequacy of defendant's reliance on the exemptions would be an exercise in futility fraught with refusals to answer based on the breadth of the exemptions involved. It is true, however, that the affidavits submitted by defendant are conclusory in nature as to the basis for applying the exemptions, perhaps necessarily so in view of the enormous number of documents involved. The Court recognizes, in addition, that twenty-two years have elapsed since the conviction of plaintiff for the crime for which he is currently in prison; that the FBI internal document cited by the Court in its Opinion of October 24, 1989 describes non-investigative techniques involving prominent black nationalist figures in the 1960's which are contrary to our constitutional heritage; that plaintiff was a prominent black nationalist figure in those years; and that among African-American citizens in particular, as well as others, there is a strong public interest in determining whether any such non-investigative techniques were utilized in connection with the prosecution of plaintiff. Accordingly, in the interests of judicial economy and the strong public interest in disclosure, as well as the conclusory nature of the agency affidavits in applying the exemptions to thousands of documents, the Court will conduct an in camera review, not of the 3500 or more documents produced pursuant to the 1980 and 1989 FOIA requests of plaintiff, but of those documents contained in the October 16, 1990 submission of plaintiff. "[A] finding of bad faith or contrary evidence is not a prerequisite to an in camera review; a trial judge may order such an inspection *638 `on the basis of an uneasiness, a doubt he wants satisfied ...'", Meeropol, 790 F.2d at 958 (quoting Ray v. Turner, 587 F.2d 1187, 1195 (D.C.Cir.1978). Decisions on defendant's motion for partial summary judgment and plaintiff's motions for discovery and to compel reprocessing of the document request are hereby reserved pending the completion of the in camera review. Defendant will produce for the Court's review in camera the documents identified in the October 16, 1990 submission on or before December 27, 1990. IT IS SO ORDERED. NOTES [1] A Vaughn index or affidavit is a "detailed index which separates disclosable from exempt material, and which provides an explanation and cross-reference to specific exemptions." Donovan v. F.B.I., 806 F.2d 55 (2nd Cir.1986). See, Vaughn v. Rosen, 484 F.2d 820, 824, 826 (D.C.Cir.1973).

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183 F.2d 685 SCHATTE et al.v.INTERNATIOANL ALLIANCE of THEATRICAL STAGE EMPLOYEES ANDMOVING PICTURE MACHINE OPERATORS OF THE UNITEDSTATES AND CANADA et al. No. 12321. United States Court of Appeals Ninth Circuit. July 28, 1950.Writ of Certiorari Denied Oct. 9, 1950.See 71 S.Ct. 64. Clarence E. Todd, Todd & Todd, all of San Francisco, Cal., Kenny & Cohn, Los Angeles, Cal., for appellant Paul Hinst. Zach Lamar Cobb, Los Angeles, Cal., for appellants Schatte, et al., other than Paul Hinst. Bodkin, Breslin & Luddy, Michael G. Luddy, all of Los Angeles, Cal., for appellees Int. Alliance, et al. O'Melveny & Myers, Homer I. Mitchell, W. B. Carman Jr. and William Alsup, all of Los Angeles, Cal., for appellees Ass'n of Motion Picture Prod. et al. Before ORR and POPE, Circuit Judges, and WEINBERGER, District Judge. PER CURIAM. 1 Paul Hinst, one of the appellants in the above entitled action, has moved this court for an order substituting Clarence E. Todd as his counsel and for leave to file a petition for rehearing. Both motions are opposed by counsel for the remaining 25 appellants. The motions were submitted on affidavits, briefs and oral argument. 2 Ordinarily substitution of counsel is granted a litigant upon request.1 But in this case we think the circumstances are such that to permit such a substitution at this stage of the proceedings would result in confusion and perhaps injustice insofar as the remaining twenty-five appellants are concerned. 3 Appellant Hinst and twenty-five other individuals brought this action for damages arising out of the loss of their employment. The complaint purports to have been brought on behalf of 2,000 other individuals similarly situated but, since each plaintiff's claim is individual and several, and no specific property can be affected by the action, the action is a 'spurious class suit' under Rule 23(a)(3) of the Federal Rules of Civil Procedure, 28 U.S.C.A. Such a suit is merely a permissive joinder device in which the right and liability of each individual plaintiff is distinct and no member of the 'class' is bound by a judgment who does not join as plaintiff or intervenor. 3 Moore's Federal Practice, (2nd ed.) § 23.10(1). Of the twenty-six plaintiffs in the instant case, one, through his attorney, Mr. Todd, has asked for leave to file a petition for rehearing. The other twenty-five plaintiffs, represented by another attorney, consider it as not in their best interest that such a petition be filed. It is apparent that so long as this proceeding retains its character as a single action one plaintiff should not be permitted, under the circumstances here presented, to dictate a manner of conducting the litigation contrary to the judgment of counsel who is still the attorney for the other twenty-five plaintiffs. The general rule in class suits is that the member of the class who is the original plaintiff retains control over the action as opposed to other members of the class who may later seek to intervene. Annotations, 91 A.L.R. 587, 3 Moore's Federal Practice § 23.07 n. 7. This rule, while not directly applicable here, is based on an underlying principle that where several parties are joined on the same side of a single case, orderly procedure requires that decisions be made as to how that side shall conduct the case even though such decisions may not accord with the individual desires and opinions of each member of the side. Such is the situation here. There being a difference of opinion concerning the advisability of filing a petition for rehearing, the opinion of twenty-five plaintiffs, acting through their attorney, must prevail over the opinion of one other plaintiff, acting through another attorney. 4 Plaintiff Hinst will not be prejudiced. He will doubtless have the opportunity to ask for substitution of counsel in the United States Supreme Court in the event that court decides to review this case. 5 We are frankly advised by counsel for plaintiff Hinst that the motive underlying the request for substitution of counsel at this time is to permit the filing of a petition for rehearing in order to get a clarification of our decision in this case so as to benefit plaintiffs in an independent action now pending in a lower court. We are unwilling to disrupt the procedure adopted by counsel for twenty-five of the plaintiffs in this action in order to serve such purpose. 6 Motions denied. 1 In re Paschal, 1870, 10 Wall. 483, 77 U.S. 483, 19 L.Ed. 992; The Flush, 2 Cir., 1921, 277 F. 25; Doggett v. Deauville Corp., 5 Cir., 1945, 148 F.2d 881; Evans v. Ockershausen, 1938, 69 App.D.C. 285, 100 F.2d 695, 709, 128 A.L.R. 177; United States v. McMurtry, D.C.S.D.N.Y. 1927, 24 F.2d 145; Binsfield v. Johnson, D.C. Mont. 1934, 6 F.Supp. 29, 32

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6 Cal.App.2d 49 (1935) E. HOYT, Respondent, v. SOUTHERN PACIFIC COMPANY (a Corporation), Appellant. Civ. No. 9312. California Court of Appeals. Second Appellate District, Division One. April 9, 1935. Laselle Thornburgh for Appellant. Charles F. Blackstock for Respondent. Edmonds, J., pro tem. Plaintiff recovered judgment upon the verdict of a jury for damage to a trailer struck by one of the trains of the defendant railway at a crossing in the city of Oxnard. The points presented by the defendant on appeal are that the evidence shows that the driver of the truck was guilty of contributory negligence as a matter of law; that there is no evidence of negligence on the part of the defendant; and that the court erred in instructing the jury. [1] By the court's instructions the jury was given the definition and effect of a presumption and told that "it is presumed that plaintiff's servant and employee, George *51 Owen, used due care and did everything that a reasonable, prudent person would have done under the same circumstances to avoid the collision and that he was not negligent". It was also told, as requested by plaintiff, that "in weighing the evidence in this case you may consider this presumption of care on the part of said George Owen as evidence in the case and weigh it against other evidence in the case to determine whether or not said plaintiff's servant and employee, George Owen, was guilty of contributory negligence, and, if the evidence, if any, introduced here of negligence on the part of said plaintiff's servant and employee does not produce conviction in your minds, then you are not bound to decide in conformity with such evidence as against the presumption of due care, but may decide that question in conformity with the presumption that said plaintiff's servant and employee, George Owen, was not negligent". The court refused to give an instruction requested by the defendant to the effect that the law presumes that the defendant was not negligent and which, in language almost identical with that of the last-quoted instruction, directed the jury to weigh and consider this presumption in behalf of the defendant against other evidence to determine whether or not the defendant was negligent. Appellant contends that the plaintiff was thus given the benefit of the presumption in his favor while the jury could reasonably conclude that the same rule did not apply to the defendant. In the case of Olsen v. Standard Oil Co., 188 Cal. 20, 25 [204 P. 393], the court approved the following instruction: "The presumption is that every man obeys the law and the presumption in this case is that the plaintiff was traveling at a lawful rate of speed and on the proper side of the highway at all times. This presumption is in itself a species of evidence and it shall prevail and control your deliberations until and unless it is overcome by satisfactory evidence." In Tyson v. Burton, 110 Cal.App. 428, 434 [294 P. 750], the reason and authority for an instruction on this subject was considered at length, and the court said: "Just how this instruction can be considered proper, where each party to an automobile collision charges the other with the sole negligence which resulted in the collision, and the circumstances attending the collision are fully testified to by the respective parties and also by eyewitnesses, does not *52 clearly appear." The court also said in that case: "It would seem that both parties would be equally entitled to the presumption of taking ordinary care for his own welfare, and also that he was obeying the law." This appears to us to be the only logical conclusion which can be reached. [2] Where the same standard of care applies equally to each of two parties, an instruction stating the rule as applying to one without any reference to its application to the other places them in different positions before the jury. This is misleading to the jury (19 Cal.Jur. 754; Howard v. Worthington, 50 Cal.App. 556 [195 P. 709]), and the error of the trial court in refusing to give the instruction requested by the defendant is cause for reversal if, after an examination of the entire cause, including the evidence, it appears that as a result of such error there has been a miscarriage of justice. (Const., art. VI, sec. 4 1/2.) [3] At the time of the accident the railway company maintained five tracks crossing Third Street. The plaintiff's driver was operating a very large truck and trailer on this street, approaching the tracks from east to west in the middle of the afternoon of a clear day. The railroad tracks cross this street on a curve which limits the vision of one looking for trains coming from the north. The main line was the center track of the five, and as one approached them from the east the farther north one could see. It is uncontradicted that at a distance of 10 feet from the center of the main line track, one could see the track to the north for only 800 feet. The driver of the truck testified that he stopped it about 10 feet from the main line track and looked both north and south; that he saw no train approaching in either direction, and heard no bell nor whistle; that he then started his truck in low gear, and that when the front of the truck was about in the center of the track, he saw a train bearing down upon him from the north at a distance of 150 yards. He estimated the speed of the train at the time at thirty-five to forty miles per hour. The engineer of the train testified on behalf of the defendant that his position on the engine, as the train approached the crossing, was on the side opposite from that from which the truck was approaching; that because of the curve he could not see the track as he approached the crossing *53 for more than thirty or forty feet ahead; that he did not see the truck before the accident; that the train was running twenty-five or twenty-six miles per hour with the engine bell ringing continuously; that he had blown the whistle for the station and also for the crossing at the distances prescribed for each; that "the fireman hollered 'hold her'" and that he immediately set the air brakes for an emergency stop. The fireman testified that when he first saw the truck it was in motion 60 or 65 feet east of the tracks; that the engine was then 250 feet from the crossing; that he did not realize that the truck was not going to stop until it was about 8 or 10 feet from the track at which time he "hollered for the engineer to hold 'em hard". He also testified that the engineer had whistled for the station and the crossing some distance north of the place of the accident and that the engine bell was ringing continuously. Other eye-witnesses to the accident testified, and the evidence as to the precautions taken by the truck driver before driving on to the track and the care exercised by the engine crew in approaching the crossing is in direct conflict. If a verdict had been rendered by the jury in favor of the defendant it would be supported by the evidence. It is presumed that the jury followed the court's instructions and we cannot estimate to what extent the instruction concerning the presumption of due care on the part of the truck driver influenced the jury to find a verdict against the defendant. The error is, therefore, substantial and requires a reversal of the case for a new trial. (Zolkoske v. United States F. & L. Co., 72 Cal.App. 63 [236 P. 344 ].) It is, therefore, unnecessary for us to consider the other points raised. The judgment is reversed. Conrey, P. J., and Houser, J., concurred.

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398 N.E.2d 1298 (1979) Richard H. GERRISH, Plaintiff-Appellant, v. Stanley BREWER, Defendant-Appellee. No. 1-1078A271. Court of Appeals of Indiana, First District. December 26, 1979. *1299 Donald W. Ward, John F. Ittenbach, Ronald L. Jackson, Feeney & Ward, Indianapolis, John W. Donaldson, Lebanon, for plaintiff-appellant. Glenn E. Davis, Sr., Davis & Davis, Indianapolis, Charles W. Ritz, Parr, Richey, Obremsky & Morton, Lebanon, for defendant-appellee. NEAL, Judge. Plaintiff-appellant Richard Gerrish appeals from an adverse judgment in the Boone Superior Court in a suit for personal injuries arising out of a fall suffered by appellant on defendant-appellee Stanley Brewer's premises. The record discloses that appellant rented a basement apartment from appellee in Indianapolis in 1967. Appellant had requested appellee to repair a window in his apartment. The repair work involved a certain raised grating around the window well in a narrow walkway which appellant used daily. At the time of the injury, September 9, 1975, the walkway was unlighted, and appellant incurred his injuries by falling over the unguarded raised grating in the dark. The only error alleged by appellant was the court's giving Defendant's Instruction No. 8, to the jury. That instruction, which is an incurred risk instruction reads as follows: "The defendant has raised the issue that plaintiff incurred the risk of the injuries and damages he seeks in this lawsuit. The Doctrine of Incurred Risk is a separate defense from that of contributory negligence and is based upon the the proposition that one incurs all the ordinary and usual risks of an act upon which he voluntarily enters so long as those risks are known and understood by him, or could be readily discovered and understood by a reasonable and prudent person under like or similar circumstances. If you find, therefore, that the plaintiff knew, or in the exercise of reasonable and ordinary care, should have known, that the grating at the walkway he was using protruded out of the walkway, that at the time he fell the plaintiff voluntarily entered the walkway which at the time was dark and unlighted; and you further find that the plaintiff did trip over the grating, then plaintiff incurred the risk of the injuries and damages he seeks and can not recover from the defendant, even though you find the defendant may have been negligent." At trial Gerrish objected to this instruction as follows: "On behalf of the Plaintiff, Richard Gerrish, the Plaintiff would object to Defendant's tendered Instruction Number 8 for the reason that the second paragraph is an incorrect application of the facts to the law, is an incorrect statement of the law, in that it gives the impression to the jury that knowledge of the risk at any time prior to the accident would bar recovery by the Plaintiff. It is a mandatory instruction and omits the requirement that he know and appreciate the danger at the time he entered the passageway in question. Therefore, it's an incorrect statement of the law. Plaintiff would also object to Defendant's Tendered Instruction Number 8 for the reason that there was no evidence from which inferences could be drawn which would support the giving of the Instruction on incural [sic] of the risk." (Emphasis added.) The errors that appellant has preserved by his objection to Defendant's Instruction No. 8 may be stated as follows: 1. It gives the impression to the jury that knowledge of the risk at any time prior to the accident would bar recovery by the plaintiff. (Emphasis added.) 2. It is a mandatory instruction. 3. Omits the requirement that he knew and appreciated the danger at the time he entered into the passageway in question. *1300 Prior to entering into the discussion of the merits of Instruction No. 8 we wish to note the lament expressed by Justice Arterburn in Perry v. Goss, (1970) 253 Ind. 603, 608, 255 N.E.2d 923, 927. "Instructing a jury is a most difficult and complex process. It is generally conceded that there has been an overemphasis placed upon the wording and refined meaning of instructions which far exceed [sic] their actual effect upon the jury. When an instruction has to be read and reread by a legally trained mind to catch a slight variation or error in its meaning, it is difficult to believe that a jury of laymen could have been misled. Words are mere signs or symbols of meaning and thought, which are never exact. We strive with inexact tools to work out refinements and precise lines in statements of thoughts and ideas, but are never able to reach exact perfection. In the writing of instructions, we are eternally confronted with attempts and failures at exactitude, and we must keep this human frailty in mind when we examine the language of instructions. [Citations omitted.]" The appellant argues that the instruction incorrectly allows constructive knowledge to bar recovery under the incurred risk doctrine, and cites Kroger Co. v. Haun, (1978) Ind. App., 379 N.E.2d 1004, decided after this case was tried. In that case Judge Sullivan, in a lengthy review of the doctrine of incurred risk, correctly held that constructive knowledge has no place in determining incurred risk. However, appellant did not raise this argument in his objections to the instructions at trial level and has therefore waived it. Grinter v. Haag, (1976) Ind. App., 344 N.E.2d 320. We will discuss objections Nos. 1 and 3 which defendant did make at trial level to the instruction, which are set out above, together, as they import the same subject matter. Appellant argues that in this incurred risk instruction, the instruction did not specifically set forth the idea that the defendant must know and appreciate the danger at the time he encountered it. He cites cases which discuss the doctrine of "momentary forgetfulness." Town of Argos v. Harley, (1943) 114 Ind. App. 290, 49 N.E.2d 552; State v. Dwenger, (1976) Ind. App., 341 N.E.2d 776. Town of Argos v. Harley, supra, 114 Ind. App. at 305, 49 N.E.2d at 557-558, states the doctrine as follows: "Where a pedestrian is injured as a consequence of a defect of which he had previous knowledge, the mere fact of previous knowledge does not per se establish contributory negligence. And this is also the rule where previous knowledge is coupled with absence of thought concerning the defect at the time of the injury, or momentary forgetfulness of it. Previous knowledge of a defect and forgetfulness of it are important facts to be considered in connection with all other circumstances in determining whether the party injured was exercising reasonable care. But it is not negligence, as a matter of law, for a person who has knowledge of a defect not to remember it at all times and under all circumstances." (Emphasis added.) All of the cases cited by appellant relating to the doctrine of "momentary forgetfulness" are contributory negligence cases. In Kroger Co. v. Haun, supra, 379 N.E.2d at 1008, incurred risk and contributory negligence are distinguished: "(1) Incurred risk demands a subjective analysis with inquiry into the particular actor's knowledge and voluntary acceptance of the risk. Contributory negligence contemplates an objective standard for the determination whether a reasonable man would have so acted under similar circumstances. [Citations omitted.] (2) Incurred risk is concerned with the perception and voluntariness of a risk and is blind as to the reasonableness of risk acceptance. Contributory negligence is concerned with whether the acceptance of the risk was reasonable and justified in light of the possible benefit versus the degree of danger. [Citation omitted.] (3) Incurred risk involves a mental state of `venturousness' while contributory negligence, ... describes conduct *1301 which is `careless'. [Citations omitted.]" By definition, then, since the very essence of incurred risk is the conscious, deliberate and intentional embarkation upon a course of conduct with knowledge of the circumstances, the doctrine of "momentary forgetfulness" cannot become a part of the doctrine of incurred risk. It is difficult to perceive how a plaintiff could consciously, deliberately and intentionally encounter a risk that he had forgotten about. The doctrine is correctly a part of the doctrine of contributory negligence, and the cases so hold. Therefore, the court did not commit error in not incorporating the doctrine of "momentary forgetfulness" into an incurred risk instruction. It may be noted that the court did so instruct as related to contributory negligence. Plaintiff next argues that under objection No. 2 to instruction No. 8, as set out above, the instruction is erroneous because it is mandatory. A mandatory instruction is one in which there is an attempt to set out certain facts upon which the jury is directed to reach a certain result. Although mandatory instructions are not necessarily bad, the courts look with disfavor upon their use. Perry v. Goss, supra; Board of Commissioners of Delaware County v. Briggs, (1975) Ind. App., 337 N.E.2d 852. A mandatory instruction must set out all of the elements or facts essential to justify the compulsive verdict, and a failure to include all of the essential elements or facts constitutes reversible error. Stauffer, Admx. v. Ely, (1971) 149 Ind. App. 93, 270 N.E.2d 889. Plaintiff claims that instruction No. 8 is deficient in the recital of the essential elements or facts in that it failed to specify the following: "1. How far the grating protruded out of the walkway. 2. Whether the grating was directly in plaintiff's way in walking down the pathway or whether it was off to one side. 3. Whether alternate paths were available to the plaintiff. 4. Whether once he was in the walkway, he could have turned around and avoided any risk. 5. Whether plaintiff knew at the time he entered the walkway that the grating protruded out of the walkway, or whether he had momentarily forgotten about the danger. 6. Whether the injuries the plaintiff sustained were the ordinary or usual risk of using the walkway. 7. Whether plaintiff had previously used the same walkway safely." It is to be noted that in his objections to the instruction at the trial level, the appellant raised only specification No. 5. By the authority of Grinter v. Haag, supra, these objections are waived. We have discussed specification No. 5 above. Even if appellant had not waived those issues, such would not constitute error. It is our opinion that it is not necessary to incorporate every minutia of evidence, or exclude every related hypothesis, for a mandatory instruction to adequately express the facts and the law. Incurred risk is defined as follows in Indiana, etc., Oil Co. v. O'Brien, (1903) 160 Ind. 266, 272-73, 65 N.E. 918, 920: "[If] the injured person had knowledge of the danger in question, and appreciated it, and voluntarily, or of his own choice, exposed himself to or encountered such danger, thereby incurring or taking upon himself, the risk incident thereto [,]" he may not recover. The instruction in question added to that definition the principal facts that the plaintiff with knowledge of the grating which was protruding entered the walkway which was dark, and tripped over the grating. Those are ultimate facts sufficient to invoke the doctrine of incurred risk. Such an incurred risk instruction was approved in Thompson v. Pickle, (1963) 136 Ind. App. 139, 191 N.E.2d 53. There the recital of facts was as follows, at 146, 191 N.E.2d at 57: "I instruct you that if you find from the evidence in this case that the plaintiff *1302 entered the automobile of the defendant at a time when the plaintiff knew that the defendant was under the influence of intoxicating liquor and about to drive his automobile while in such condition ..." For the reasons set forth above, the decision in the court is affirmed. Affirmed. LOWDERMILK, P.J., and ROBERTSON, J., concur.

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520 F.2d 212 172 U.S.App.D.C. 31 Bestv.Mitchell 74-1890 UNITED STATES COURT OF APPEALS District of Columbia Circuit 8/5/75 1 D.C.D.C. 2 AFFIRMED* * The judgment or order is accompanied by a Memorandum explanatory of the judgment. Such memorandum is not included with the opinions of the Court that are printed, and it may not be cited in briefs or memoranda of counsel as precedents, under local rule

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215 F.Supp. 249 (1963) PAPER CONVERTING MACHINE CO., Inc., Plaintiff, v. FMC CORPORATION, Defendant. No. 59-C-152. United States District Court E. D. Wisconsin. February 5, 1963. *250 Wheeler, Wheeler & Wheeler, Milwaukee, Wis., Dawson, Tilton, Fallon & Lungmus, Chicago, Ill., for plaintiff. Andrus & Starke, Milwaukee, Wis., Lyon & Lyon, Los Angeles, Cal., for defendant. TEHAN, Chief Judge. In this suit charging infringement by the defendant FMC Corporation[1] of a patent for a web cutting apparatus, the plaintiff, Paper Converting Machine Co., Inc. has filed a motion to produce, portions of which the defendant has opposed claiming that the plaintiff seeks production of privileged communications between attorney and client. Pursuant to order of the court, the defendant has submitted to the court those allegedly privileged documents coming into existence prior to January 27, 1959, the date of issuance of the patent in suit, for ruling as to their privileged character. Most of the documents involved are letters to or from Hans C. Hoffmeister, patent counsel for the defendant, who, although a member of the Bar of the State of Ohio, was not at the times relevant *251 hereto a member of the Bar of the State of California, in which latter state he was employed. As stated by J. Wyznaski in United States v. United Shoe Machinery Corporation (D. C. Massachusetts 1950) 89 F.Supp. 357 at 358-359, with respect to the attorney-client privilege: "The privilege applies only if (1) the asserted holder of the privilege is or sought to become a client; (2) the person to whom the communication was made (a) is a member of the bar of a court, or his subordinate and (b) in connection with this communication is acting as a lawyer; (3) the communication relates to a fact of which the attorney was informed (a) by his client (b) without the presence of strangers (c) for the purpose of securing primarily either (i) an opinion on law or (ii) legal services or (iii) assistance in some legal proceeding, and not (d) for the purpose of committing a crime or tort; and (4) the privilege has been (a) claimed and (b) not waived by the client." We believe that the defendant may assert the privilege with respect to correspondence to or from its patent counsel despite the fact that that counsel was not admitted to the bar of the state in which he was located, providing the above quoted tests have been met, it being our opinion that Mr. Hoffmeister is entitled to the status of an attorney. We also believe that a corporation patent counsel is not excluded from the class concerning whose documents the privilege may be asserted solely by reason of the fact that he is employed in that capacity. (See Georgia-Pacific Plywood Company, United States Plywood Corporation (S.D.N.Y., 1956) 18 F.R.D. 463) We have therefore examined the documents submitted in the light of the tests set forth above, considering always that the purpose of the attorney-client privilege is to encourage clients to make full disclosures to their attorneys and that the privilege is to be strictly construed, and have reached the following conclusions: ITEM 1. Inter-Office Correspondence dated March 21, 1958 from an officer of the original defendant to Mr. Hoffmeister must be produced. Although the officer relayed certain factual information to Mr. Hoffmeister in this document, it does not appear that the information was given to obtain a legal opinion or advice. ITEM 2. Inter-Office Correspondence dated May 5, 1958 from an officer of the original defendant to Mr. Hoffmeister. This communication is privileged, the primary purpose thereof being to seek Mr. Hoffmeister's advice concerning the plaintiff's statements to the trade that the original defendant was copying the plaintiff's machine. ITEM 3. Inter-Office Correspondence dated September 29, 1958, from an employee of the defendant to Mr. Hoffmeister, seeking legal advice concerning the plaintiff's statements to the trade that it would sue for infringement, is privileged. ITEMS 4, 5 and 8. Inter-Office Correspondence dated September 30, 1958, December 26, 1958, and September 25, 1958, between an officer of the original defendant and an employee of the defendant, copies of which were sent to Mr. Hoffmeister. These documents cannot be considered privileged merely because copies were furnished to an attorney, and must be produced. ITEM 6. Inter-Office Correspondence dated December 29, 1958 from an employee of the defendant to Mr. Hoffmeister. Like Item 1, no confidential disclosures were made therein for the purpose of obtaining legal advice or assistance and the document must be produced. ITEM 7. Letter dated December 30, 1958 from Mr. Hoffmeister to an officer of the original defendant, concerned in part with the plaintiff's statements to the trade, is privileged. *252 ITEMS 9, 10, 11 and 12. Correspondence between Mr. Hoffmeister and the U. S. Patent Office. No privilege attaches to these documents and they must be produced under the court's order of July 13, 1960. ITEM 13. Letter dated December 2, 1957 from an employee of the original defendant to Mr. Hoffmeister furnishing information relative to knife cut perforation on toilet tissue and asking Mr. Hoffmeister to check on patentability of and possible infringement by a unit made by that defendant. Since Mr. Hoffmeister was not being asked to apply rules of law to facts known only to his client, but was asked in effect to make "initial office preparatory determinations of patentability," (Zenith Radio Corp. v. Radio Corp. of America (D.Del.1954, 121 F.Supp. 792, at page 794) this document is not privileged. ITEMS 14, 15, 16, 17, 18, 19, 20, 21 and 22 constitute correspondence between Mr. Hoffmeister and others relative to a patent search to determine patentability of, or possible infringement by, a unit made by defendant. In Item 14, dated February 3, 1958, Mr. Hoffmeister requests Washington patent counsel to conduct such a search. In Item 15, dated March 4, 1958, Mr. Hoffmeister is asked by an officer of the original defendant to report on the status of the search. In Item 16, dated March 7, 1958, Mr. Hoffmeister requests Washington counsel to expedite the search. In Item 17, dated March 10, 1958, Mr. Hoffmeister replies to Item 15. In Item 18, dated March 27, 1958, Washington counsel reports to Mr. Hoffmeister giving his opinion on patentability and infringement based on his search. In Item 19, dated April 11, 1958, Mr. Hoffmeister forwards Item 18 to an officer of the original defendant. In Item 20, dated May 12, 1958, the officer furnishes Mr. Hoffmeister with information for proceeding with a patent application. In Item 21, dated May 16, 1958, Mr. Hoffmeister is asked to give his opinion of the patentability of plaintiff's unit and its effect on the patentability of defendant's unit. In Item 22, dated May 23, 1958, Mr. Hoffmeister responds to Item 21. While the defendant contends that Mr. Hoffmeister and Washington counsel were acting in their capacities as lawyers in connection with these documents, we do not believe that they were receiving and applying rules of law to confidential information received from their client. Rather, we believe that their activities were of the nature described in the Zenith Radio Corp. case, supra, as non-legal. The documents must be produced. ITEM 23. Post Script on letter of March 31, 1959. This document need not have been submitted to the court under the order of July 13, 1960. Counsel for the plaintiff will prepare an order in accordance with this opinion and submit it to opposing counsel for approval as to form. NOTES [1] FMC Corporation, formerly Food Machinery and Chemical Corporation was the parent corporation of the original defendant herein, Hudson-Sharp Machine Co. Food Machinery and Chemical Corporation was substituted as defendant herein after a merger with the original defendant.

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411 F.2d 1208 LEVISA STONE CORPORATION and Johnson Brothers Limestone Company, Plaintiffs-Appellants,v.ELKHORN STONE COMPANY, Inc., Defendant-Appellee. No. 18931. United States Court of Appeals Sixth Circuit. June 19, 1969. James F. Fitzpatrick, Washington, D. C., Arnold & Porter, Washington, D. C., O. T. Hinton, Pikeville, Ky., on brief, for appellants. Francis D. Burke, Pikeville, Ky., Francis D. Burke, Burke & Justice, Pikeville, Ky., on brief, for appellee. Before O'SULLIVAN, PHILLIPS and CELEBREZZE, Circuit Judges. CELEBREZZE, Circuit Judge. 1 This controversy arose as a result of the Secretary of Commerce granting loans and other financial assistance to Appellee pursuant to the Public Works and Economic Development Act of 1965, 42 U.S.C. § 3121 et seq., to enable Appellee to enter the crushed limestone market in southeastern Kentucky. 2 Appellants, who are presently crushing limestone in this area, sued Appellee and the Secretary of Commerce separately in the United States District Court for the Eastern District of Kentucky contending that the Secretary's financial assistance to Appellee violated a provision of the Act that enjoins the Secretary from extending such assistance when it would lead to unfair competition. Sec. 702 Public Works and Economic Development Act of 1965, 42 U.S.C. § 3212. On September 29, 1967 Appellee and the Government, in behalf of the Secretary of Commerce, moved to dismiss the actions. On March 14, 1968 the District Court dismissed the complaint against Appellee but took under advisement the Government's motion to dismiss the complaint against the Secretary of Commerce. 3 The District Court denied the Government's motion on May 13, 1968, well over the time allowed Appellants to file notice of appeal of the judgment dismissing their action against Appellee. Rule 73(a), Federal Rules of Civil Procedure allows thirty days in which to file notice of appeal.1 On that date, however, Appellants moved for leave pursuant to Rule 73(a) (2) to extend the time for filing such notice to and including May 13, 1968. In support of their motion Appellants argued that the consequences arising from the dismissal of their action against Appellee only "became clear" on May 13, 1968, the date that the District Court rejected the Government's motion to dismiss the action against the Secretary. Appellee vigorously opposed the extension of time but the District Court, after a hearing, granted Appellants' motion and ordered that the time for filing notice of appeal be extended to and including May 13, 1968. Appellants promptly filed their notice of appeal. This was more than thirty days but less than sixty days after the judgment of the District Court dismissing Appellants' action against Appellee. The District Court, however, made no findings of fact in support of its order. 4 On September 9, 1968 Appellee filed in this Court a motion to dismiss the appeal. We took the motion under advisement and passed it to the hearing on the merits. On April 9, 1969 we heard oral argument on the motion and on the merits. We have concluded that we have no jurisdiction to hear the appeal and that it must be dismissed. We therefore express no opinion on the merits of this controversy. 5 Notice of appeal from any judgment where the United States was not a party must be filed within thirty days after the entry of such judgment. Rule 73(a) Federal Rules of Civil Procedure; 28 U.S.C. § 2107. If a party does not file within the thirty day period, we lack jurisdiction to hear his appeal. Schlink v. Chesapeake & Ohio Railroad Co., 276 F.2d 116 (6th Cir.1960.) 6 Although this Court cannot waive or extend the filing period, a District Court may extend it "not to exceed thirty days * * * `from the expiration of the original time.'" Rule 73(a) (2); Reed v. People, 398 F.2d 800 (6th Cir.1968). The District Court, however, is not untrammeled in its power to extend the filing period; the movant must allege and show "excusable neglect" for failure to timely file his appeal and the District Court must make such a finding before it may extend the filing period beyond the first thirty days. This is the sole ground upon which the District Court may extend the filing period. Richland Knox Mutual Insurance Co. v. Kallen, 376 F.2d 360 (6th Cir.1967). 7 Under an earlier version of Rule 73(a) (2), "excusable neglect" could only arise where a "party [failed] to learn of the entry of judgment * * *." Although this express limitation was deleted from the Rule in 1966, it still remains the principal ground for a showing of excusable neglect. Winchell v. Lortscher, 377 F.2d 247 (8th Cir.1967.) 8 In the case before us Appellants do not claim that they were unaware of the judgment dismissing their complaint against Appellee. That aside, Appellants did not allege or show that their neglect was excusable, nor did the District Court find that it was; the Court without explanation granted Appellants' motion and extended the time within which Appellants could docket their appeal. 9 Harris Truck Lines, Inc. v. Cherry Meat Packers, Inc., 371 U.S. 215, 83 S. Ct. 283, 9 L.Ed.2d 261 (1962) is cited by Appellants in support of their contention that a District Court's order extending the filing period should be given great deference by reviewing courts. In Harris, however, the party moved to extend the filing period prior to the expiration of the initial thirty-day period. The Court held that the "obvious great hardship" to the party relying on the Judge's finding overcame what the result "should have been on the initial facts." Harris, of course, is distinguishable from the case before us because Appellants did not move to preserve their right within the initial thirty-day period. We do not have here an extraordinary situation where dismissal of Appellants' appeal would yield a grave injustice. Appellants knew exactly when the judgment against them was entered and they could have easily perfected this appeal within the prescribed period. As Appellee correctly points out, Appellants knew nothing more after the District Court rejected the Government's motion to dismiss the action against the Secretary of Commerce than they did before. These circumstances do not suggest "excusable neglect." And since the District Court did not find that they did, its order extending the time for filing notice of appeal was of no effect and we have no jurisdiction to hear the appeal. 10 Appeal dismissed. Notes: 1 The events in this case occurred before July 1, 1968. On this date Rule 73(a) of the Federal Rules of Civil Procedure was superseded by Rule 4 of the Federal Rules of Appellate Procedure

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11 Cal.App.3d 210 (1970) 89 Cal. Rptr. 669 FRANK P. DONOVAN, Plaintiff and Respondent, v. ALVIN WECHSLER, Defendant and Appellant. Docket No. 36074. Court of Appeals of California, Second District, Division Two. September 16, 1970. *211 COUNSEL Lyn H. Marcus for Defendant and Appellant. Kenneth S. Biely for Plaintiff and Respondent. OPINION ROTH, P.J. Respondent Frank P. Donovan, on May 3, 1966, through the efforts of one Salmonson, an independent salesman, executed a written contract with Venco Construction Company, a corporation (Venco) for the conditional sale of four items of construction equipment totaling in value, including finance charges, the sum of $26,742.39 (Sale). Appellant Wechsler, *212 an attorney who defended the action in the trial court, held 47 1/2 percent of the issued capital stock of Venco. Prior to the consummation of the sale, Wechsler was told by Salmonson that Donovan intended to assign the Sale to Industrial Credit Company (Industrial) and that there could be no sale unless Wechsler executed a personal guaranty of the Sale. Since one of the basic points relied on by Wechsler (appellant herein) is bottomed on the manner in which the Sale was consummated, the testimony of Salmonson on cross-examination by Wechsler and undenied by Wechsler, is detailed in pertinent part: "... [T]he conditional sales contract was signed by Mr. Fuller[1] in my presence. At that time I advised him that Industrial ... would require a personal signature by Mr. Wechsler, and at that time, I had those forms,[2] and then I made an appointment with Mr. Wechsler to have that personal guaranty signed. ".... .... .... .... ... "... I advised him that it was necessary for Mr. Wechsler to sign a personal guaranty, and then, at that time, I made an appointment with Mr. Wechsler. THE COURT: Was this before the equipment was delivered? THE WITNESS: Yes, sir. THE COURT: Was the guaranty signed before the equipment was delivered? THE WITNESS: Yes, sir. THE COURT: And delivered to Venco? THE WITNESS: Yes, sir. THE COURT: Then, in your discussions with Mr. Fuller, was it a condition that Mr. Wechsler sign a guaranty prior to acceptance with of the sale or the contract, is that your testimony? THE WITNESS: Yes, sir." Wechsler did, on May 6, 1966, prior to the delivery of said items of equipment, execute a written guaranty to Industrial. The guaranty did specifically guaranty all the terms of the sale and in pertinent part it provided that it was to "your successor or assigns...." Donovan assigned the Sale to Industrial with recourse. It is not clear from the record whether the Wechsler guaranty was delivered at the same time to Industrial by Donovan or sent directly to Industrial by Wechsler. Since Wechsler had only a vague recollection of executing the guaranty, although he admitted his signature, it is fair to assume that it was delivered to Salmonson, as he in effect testified and that both documents were then delivered to Donovan who in turn delivered them to Industrial. Within two months Venco defaulted. Donovan continued payments due *213 from Venco under the sale for a few months and then discontinued. Venco continued in default. Industrial declared a default, repossessed the equipment and reassigned the sale to Donovan together with the equipment collateral and the Wechsler guaranty. Donovan thereafter, as required by and pursuant to the terms of the contract and section 9504 of the Commercial Code of California, sold the equipment at private sale. Donovan then brought this action against Wechsler on the guaranty for a sum equal to the difference beween the price fixed in the sale and the price obtained at the private sale, plus interest, repossession charges, commissions and attorneys' fees, all included in the guaranty by Wechsler. Donovan obtained judgment. Wechsler appeals. (1) Donovan's amended complaint did not allege an assignment from Industrial to himself, nor did he introduce evidence of the assignment or that proper notice of the private sale of the equipment had been given when he first rested his case. These omissions were called to the court's attention by Wechsler who at that stage of the litigation moved for a nonsuit or dismissal on the ground that the action had been prematurely brought and that the complaint stated no cause of action against him. Donovan promptly asked leave to reopen to supply the missing evidence to amend his complaint. The court granted the motion to reopen and amend. The case was reopened and evidence of assignment, notice of sale and proper adherence to Commercial Code section 9504 were supplied, although the record shows that the assignment from Industrial to Donovan was not completed until a month after the original complaint was filed. The record also shows that although granted leave to amend, to conform to proof, no amendment was actually filed. The case was reopened and tried on the theory that a formal amendment to conform to proof would be filed. Since the proof was made, the fact that no formal amendment was filed is immaterial. (Provost v. Worrall, 142 Cal. App.2d 367, 373 [298 P.2d 726]; 39 Cal.Jur.2d 353.) The findings made by the trial court are supported by ample evidence. In pertinent part the findings are as follows: "2. On May 6, 1966 [Wechsler] executed a guaranty to Industrial Credit Company on behalf of Venco, providing that he would guarantee to Industrial Credit Company or its assigns the performance of the said conditional sales contract. ".... .... .... .... ... "7. That the said equipment was not delivered to Venco until [Wechsler] executed his guaranty and was delivered in consequence of said guaranty. "8. That [Donovan] sold said equipment to Piper Machinery Company *214 for $10,500.00 after having advertised it for sale and attempting to sell the same on the open market. "9. That [Donovan] through his attorney and [Wechsler] on his own behalf stipulated that proper notice of the sale of the collateral was given." The court's conclusions of law in pertinent part were: "1. That there was consideration for [Wechsler's] guaranty. "2. That the sale of said equipment by [Donovan] to Piper Machinery Company was made in a commercially reasonable manner. "3. That proper notice of the sale of the collateral was given. ".... .... .... .... ..." (2) Wechsler argues that the action was prematurely filed; his guaranty was without consideration or in the alternative, that Donovan could not collect on the guaranty because (a) it ran to Industrial and (b) Industrial was not hurt because it recovered in full from Donovan the consideration it had paid Donovan for the sale; no proper notice of sale was given as required by section 9504, subdivision (5), of the Commercial Code of California; that the sale was not made in a commercially reasonable manner as required by said code section, and finally, that the assignment to Donovan by Industrial of the guaranty did not give Donovan the right to sue thereon, since he had parted with the debt which was the subject of the guaranty. The premature filing of the original complaint was cured by the assignment from Industrial to Donovan shown by the evidence and found by the court to have been made a month after the action was filed. (Loop Bldg. Co. v. DeCoo, 3 Cal. App.2d 129, 134-135 [38 P.2d 816]; Meyer Koulish Co. v. Cannon, 213 Cal. App.2d 419, 425 [28 Cal. Rptr. 757]; Baumgarten v. California Pac. Title & Trust Co., 127 Cal. App. 649 [16 P.2d 332].) Finally, the record shows that the tardy assignment of contractual rights represented by the Sale and the guaranty of that Sale were vested in Donovan at the time of trial and the court so found. (3) The trial court specifically concluded that Donovan "... has the same rights as [Industrial] under the conditional sales contract." The trial court's conclusion is further fortified by section 9504, subdivision (5), of the Commercial Code which provides: "A person who is liable to a secured party under a guaranty, indorsement, repurchase agreement or the like and who receives a transfer of collateral from the secured party or is subrogated to his rights has thereafter the rights and duties of the secured party...." (Offer v. Superior Court, 194 Cal. 114, 121 [228 P. 11].) (4) The evidence shows and the court found that no Sale would have *215 been consummated except for the Wechsler guaranty. Assuming the guaranty as Wechsler contends was executed a few days later, and not concurrently with the sale, an assumption contrary to the evidence and the findings of the trial court, there was ample consideration for the guaranty. (Cal.Jur.2d, Suretyship and Guaranty, § 22; Pauly v. Murray, 110 Cal. 13 [42 P. 313]; Stroud v. Thomas, 139 Cal. 274 [72 P. 1008].) Sherwood v. Lowell, 34 Cal. App. 365 [167 P. 554], cited by Wechsler, is not in point. The facts at bench show the guaranty was an intrinsic part of the Sale. The guaranty was made to Industrial and its assigns. Wechsler cites no case and we know of none which prevents the assignment of a guaranty. The fact that Industrial was not damaged because it recovered its purchase price from Donovan does not prevent Donovan from recovering on the Sale. The recourse arrangement between Donovan and Industrial required Donovan to take the Sale back from Industrial. Donovan was in precisely the same position as Industrial. The parties stipulated that proper notice of the private Sale was given.[3] The trial court so found and concluded also from evidence too full to detail, that the Sale was made in a commercially reasonable manner, as required by section 9504, subdivision (3), of the California Commercial Code. The judgment is affirmed. Fleming, J., and Compton, J., concurred. A petition for a rehearing was denied October 6, 1970, and appellant's petition for a hearing by the Supreme Court was denied November 10, 1970. NOTES [1] Fuller signed as President of Venco. Wechsler testified he was the General Manager. [2] The forms were contract of conditional sale with Donovan and guaranty thereof running to Industrial, both of which were introduced in evidence. [3] Speaking in respect of the notice, Mr. Wechsler stated after evidence thereof had been introduced, as follows: "I was unaware of this evidence, ... and I am willing to stipulate that it was given. THE COURT: As required by Section 9504? MR. WECHSLER: That's correct, your Honor."

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Filed 11/21/13 P. v. Aguayo CA4/2 NOT TO BE PUBLISHED IN OFFICIAL REPORTS California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115. IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA FOURTH APPELLATE DISTRICT DIVISION TWO THE PEOPLE, Plaintiff and Respondent, E058421 v. (Super.Ct.No. FSB026475) GABRIEL AGUAYO, OPINION Defendant and Appellant. APPEAL from the Superior Court of San Bernardino County. Michael A. Smith, Judge. (Retired judge of the San Bernardino Super. Ct. assigned by the Chief Justice pursuant to art. VI, § 6 of the Cal. Const.) Affirmed. Howard C. Cohen, under appointment by the Court of Appeal, for Defendant and Appellant. No appearance for Plaintiff and Respondent. 1 Defendant and appellant Gabriel Aguayo appeals from an order denying his petition for recall of his indeterminate life term under Penal Code section 1170.126, subdivision (f).1 We will affirm the order. I PROCEDURAL BACKGROUND On December 29, 2000, a jury found defendant guilty of one count of residential burglary (§ 459, count 2); two counts of assault with a firearm (§ 245, subd. (a)(2), counts 3 & 5); and one count of possession of a firearm by a felon (§ 12021, subd. (a), count 6).2 In addition, the jury found true the special allegation that defendant personally used a firearm within the meaning of section 12022.5, subdivision (a)(1), in the commission of the assaults. In a bifurcated bench trial, the trial court found true the special allegations that defendant had suffered three prior serious or violent felony convictions (§§ 667, subds. (b)-(i), 1170.12, subds. (a)-(d)), two prior serious felony convictions (§ 667, subd. (a)(1)), and three prior prison terms (§ 667.5, subd. (b)). On September 11, 2001, after granting defendant’s motion for a new trial on counts 2 and 3, and denying 1 All future statutory references are to the Penal Code unless otherwise stated. 2 The jury found defendant not guilty of two counts of robbery. (§ 211, counts 1 & 4.) The jury also found not true the special allegations that in the commission of the robbery in count 1 and the residential burglary defendant had personally used a firearm, to wit, a rifle, and that in the commission of the robbery in count 4 defendant had personally and intentionally discharged a firearm, to wit, a rifle. 2 defendant’s motion for a new trial on counts 5 and 6, the trial court sentenced defendant to a total term of 42 years to life in state prison under the three strikes law.3 Defendant subsequently appealed to this court. Defendant’s claims were rejected and the judgment was affirmed. (People v. Aguayo (Aug. 23, 2002, E030343) [nonpub. opn.].) Defendant later sought federal habeas relief. The federal district court denied defendant’s request for relief. (Aguayo v. Ollison (C.D. Cal., Mar. 20, 2008, No. ED CV 07-607 RGK (SH)) 2008 U.S. Dist. Lexis 25373.) On November 6, 2012, the electorate passed Proposition 36, also known as the Three Strikes Reform Act. Among other things, this ballot measure enacted section 1170.126, which permits persons currently serving an indeterminate life term under the three strikes law to file a petition in the sentencing court, seeking to be resentenced to a determinate term as a second striker. (§ 1170.126, subd. (f).) If the trial court determines, in its discretion, that the defendant meets the criteria of section 1170.126, subdivision (e), the court may resentence the defendant. (§ 1170.126, subds. (f), (g).) Section 1170.126, subdivision (e), provides, as pertinent here, that a defendant is eligible for resentencing if he or she is serving an indeterminate term of imprisonment imposed pursuant to paragraph (2) of subdivision (e) of Section 667 or subdivision (c) of 3 Defendant’s sentence consisted of the following: 25 years to life for the assault with a firearm conviction in count 5, plus 10 years for the personal firearm use finding attached to count 5; five years for one of the prior serious felony convictions, plus two one-year terms for two prior prison term findings; and with respect to the possession of a firearm by a felon (count 6), a stayed sentence pursuant to section 654. The trial court struck one of the prior serious felony convictions and one of the prior prison term findings. The trial court subsequently granted the prosecution’s motion to dismiss counts 2 and 3. 3 Section 1170.12 “for a conviction of a felony or felonies that are not defined as serious and/or violent felonies by subdivision (c) of Section 667.5 or subdivision (c) of Section 1192.7.” (§ 1170.126, subd. (e)(1).) On February 19, 2013, defendant filed in pro. per. a petition for resentencing under section 1170.126. The trial court denied the petition on March 21, 2013, because defendant’s current commitment offense for assault with a firearm, with a special allegation for use of a firearm, is a serious and/or violent felony under section 667, subdivision (e)(2)(C)(iii), which made defendant ineligible for resentencing under section 1170.126, subdivision (e)(2). Defendant filed a timely notice of appeal. II DISCUSSION We appointed counsel to represent defendant on appeal. After examination of the record, counsel has filed a brief under the authority of People v. Wende (1979) 25 Cal.3d 436 and Anders v. California (1967) 386 U.S. 738, setting forth a statement of the case, a summary of the facts and potential arguable issues, and requesting this court conduct an independent review of the record. We offered defendant an opportunity to file a personal supplemental brief, but he has not done so. Pursuant to the mandate of People v. Kelly (2006) 40 Cal.4th 106, we have independently reviewed the record for potential error and find no arguable issues. Defendant’s current commitment conviction for assault with a firearm with an enhancement allegation that defendant used a firearm in the commission of the assault is 4 a serious and/or violent felony within the meaning of section 667, subdivision (e)(2)(C)(iii). III DISPOSITION The order is affirmed. NOT TO BE PUBLISHED IN OFFICIAL REPORTS RAMIREZ P. J. We concur: RICHLI J. CODRINGTON J. 5

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656 F.2d 698 *U. S.v.Stellar 81-1024 UNITED STATES COURT OF APPEALS Fifth Circuit 9/9/81 1 N.D.Tex. AFFIRMED 2 --------------- * Fed.R.App. P. 34(a); 5th Cir. R. 18.

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12 Cal.App.3d 12 (1970) 90 Cal. Rptr. 414 SAFECO INSURANCE COMPANY OF AMERICA et al., Plaintiffs and Respondents, v. HARVEY L. HOUCHINS, Defendant and Appellant. Docket No. 35603. Court of Appeals of California, Second District, Division Four. October 16, 1970. *13 COUNSEL Arthur S. Black for Defendant and Appellant. Allan S. Garber and L.E. Schweiner for Plaintiffs and Respondents. *14 OPINION DUNN, J. On July 31, 1967 appellant, a postal employee, was driving a United States mail truck in the course and scope of his employment and was injured when it collided with a vehicle driven by Gary Gnade, an uninsured motorist. The United States, through its Bureau of Employees' Compensation, paid benefits to appellant pursuant to 5 United States Code Annotated sections 8101-8150, entitled "Compensation for Work Injuries."[1] Before the accident, respondents had issued a policy of automobile insurance to appellant affording uninsured motorist coverage with limits required by California statute and otherwise complying with California Insurance Code section 11580.2. Appellant instituted an arbitration proceeding, pursuant to Insurance Code section 11580.2, subdivision (f). Respondents then filed a superior court action seeking: (1) an injunction prohibiting the arbitration and (2) a declaration that any amount payable by respondents to appellant should be reduced by the amount of compensation benefits paid and payable to appellant by his employer. This action went to trial and the court found the amounts so paid and payable exceeded the limits of respondents' uninsured motorist coverage. Judgment was ordered for respondents and appellant was enjoined from further pursuing arbitration. The appeal is from that judgment. (1) Only one point is presented on this appeal, namely, the right of respondent insurers to reduce uninsured motorist benefits payable to appellant by the amount he received from his employer, the United States government, as compensation for work injuries. Insurance Code section 11580.2, subdivision (a) requires an automobile policy to provide uninsured motorist coverage, unless deleted by written agreement. The insured must be covered, with statutory limits, "... for all sums within such limits which he... shall be legally entitled to recover as damages for bodily injury or wrongful death from the owner or operator of an uninsured motor vehicle." Subdivision (h) states: "Any loss payable under the terms of the uninsured motorist ... coverage to or for any person may be reduced: (1) By the amount paid and the present value of all amounts payable to him under any workmen's compensation law...." The policy issued by respondents adopted the statutory language providing, under its clause entitled "Limits of Liability," that: "(b) Any loss payable under the terms of this coverage to or for any person shall be reduced by: (1) the amount paid and the present value of all amounts payable to him under any workmen's compensation law...." *15 The question to be determined is whether the system of compensation for work injuries provided by the United States Code is a workmen's compensation law. A review of this system discloses that it is entitled "Compensation for Work Injuries" (see fn. 1) and requires the United States to pay compensation "... for the disability or death of an employee resulting from personal injury sustained while in the performance of his duty...." The government is required to furnish such injured employee with medical care and assistance; vocational rehabilitation may be provided for one permanently disabled. An Employees' Compensation Fund is established and total and partial disabilities are compensated according to a schedule; a claim for compensation must be filed by or on behalf of the employee; there is provision for a hearing, findings and an award, the award being subject to review by an Employees' Compensation Appeals Board; in case of a fatal injury, death benefits are payable. It is obvious these provisions constitute a "workmen's compensation law" as contemplated by Insurance Code section 11580.2, subdivision (h) and by the insurance policy. Counsel have cited us to no contrary case and our own research has disclosed none. (2) Appellant contends the United States is an "insured" within the meaning of the policy and is a "person" entitled to recover, citing Government Employees Insurance Co. v. United States (4th Cir.1967) 376 F.2d 836. He contends the government, under 5 United States Code Annotated section 8131, may require him to assign his rights against respondents to the United States and that the Insurance Code conflicts with the government's rights thus to be subrogated. The cited case is not in point. It considered only the right of the United States to sue, not the extent of its recovery. Neither the United States Code, the Insurance Code nor the policy endows the government with rights greater than those of the named or any other insured under the policy. The United States may be subrogated, under 5 United States Code Annotated section 8131, to the rights of its employee where: "... an injury or death for which compensation is payable ... is caused under circumstances creating a legal liability on a person other than the United States to pay damages...." This means only that the government may step into its employee's shoes and based upon his rights, if any, seek reimbursement from a third party. (See generally: 46 Cal.Jur.2d 95, Subrogation, § 13.) The rights the government has against Gary Gnade, who caused the accident, are unaffected by the Insurance Code. Similarly unaffected are the government's rights against respondents. It has only the same rights to recover against them as does appellant, not greater. Appellant's right of recovery from respondents is based upon the terms of his contract with them. He would have no right at all except for the provisions *16 in the policy, required by the statute. Since the statute (and respondents' policy) specifically provides that any loss payable "... may be reduced.... (1) By the amount paid and the present value of all amounts payable ... under any workmen's compensation....", the government's rights against respondents are likewise limited. Accordingly, the effect of the Insurance Code is not to deprive the United States of any right of subrogation; there is no conflict with the United States Code provisions. There is little doubt that the provision for reducing liability by off-setting against the compensation benefits, is a valid provision under California law. (See generally, 24 A.L.R.3d 1369, Annotation, Uninsured Motorist Coverage: Validity and Effect of Policy Provision Purporting to Reduce Coverage by Amount Paid Under Workmen's Compensation Law; and see: Fireman's Fund etc. Co. v. Ind. Acc. Com. (1964) 226 Cal. App.2d 676 [38 Cal. Rptr. 336]; Eliopulos v. North River Ins. Co. (1963) 219 Cal. App.2d 845, 854 [33 Cal. Rptr. 449]; Jarrett v. Allstate Ins. Co. (1962) 209 Cal. App.2d 804 [26 Cal. Rptr. 231].) The language of the policy is clear and its meaning unambiguous. A statement in Darrah v. California State Automobile Assn. (1968) 259 Cal. App.2d 243, 247 [66 Cal. Rptr. 374] is in point: "Finally, Wheatley and Darrah insist that we apply the well-known rule that any ambiguity or uncertainty of an insurance policy will be construed against the insurer which caused the ambiguity to exist. Even if we were to find an ambiguity that rule would not be fairly applicable here. The policy's language under discussion is not the choice of the insurance companies. It is substantially the language of the Legislature as expressed in section 11580.2." The judgment is affirmed. Files, P.J., and Frampton, J.,[*] concurred. NOTES [1] Title 5, U.S.C.A., "Government Organization and Employees," part III, sup-part G, chapter 81, subchapter I. [*] Retired judge of the superior court sitting under assignment by the Chairman of the Judicial Council.

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98186CV.Khader-MikeS.twg.dis.wpd IN THE TENTH COURT OF APPEALS No. 10-98-186-CV MIKE S. KHADER, Appellant v. MOHAMED AZIZ MOMIN, Appellee From the 37th District Court Bexar County, Texas Trial Court # 96-CI-12429 DISSENTING OPINION This case involves the breach of a commercial property lease. It was tried before the court. At trial the only two witnesses were the lessee, Momin, and the lessor, Khader. The trial court found in favor of Momin. The only issue Khader brings on appeal is a complaint that the trial court used an improper measure of damages to award Momin damages of $27, 259.65. Neither the judgment or the findings of facts and conclusions of law state the measure of damages the trial court used. Everyone seems to agree that the proper measure is benefit of the bargain. Essentially, Khader complains that the evidence is factually insufficient to support the amount of the damages awarded under a benefit of the bargain measure of damages. It was within the province of the trial court, acting in his capacity as the finder of fact, to determine, based upon the disputed and conflicting testimony, the amount of damages the plaintiff had suffered. The trial court had before him evidence of over $80,000 in damages. He choose to award only $27,259.65. The evidence is factually sufficient to support the damages awarded measured under the benefit of the bargain theory of recovery. Thus I would affirm the judgment of the trial court, and accordingly I respectfully dissent from the majority opinion. The record of the trial in this case is sometimes difficult to follow. At times the testimony from the same witness seems to be conflicting. However what is clear and not in dispute is as follows: 1. Momin agreed to lease the property from Khader for a period of fifteen years. 2. The lease had an option for Momin to purchase the property for $174,000, with certain discounts depending upon when Momin exercised the option. During the first 10 months the discount was $1000 per month. 3. The lease agreement required Khader to pay the property taxes, insurance and repairs. 4. Momin paid the rents as they were due under the lease. 5. Khader owed property taxes and a note on the property. 6. Khader failed to pay the property taxes and note payments. The property was foreclosed upon within the first 5 months of the lease. The conflicting testimony, relates primarily to who purchased the property at foreclosure. What is clear is that Momin did not purchase it alone, if at all. The evidence at trial was that Momin’s brother is the one who purchased the property at foreclosure. However, the unchallenged findings of fact, find that they purchased it together. The legal effect of what is undisputed is that Momin has lost the benefits of his lease and option agreement with Khader. The trial court, in findings of fact and conclusions of law, determined that Momin had been injured in the amount of $27,259.65. There is no discussion about how the amount was calculated or what the amount represents. It is acknowledged that this is the amount of back taxes against the property. It is also the total of two cashiers checks made payable to “Bexar County Tax” which show the remitter as Momin’s sole proprietorship business. The testimony at trial would support damages of zero to over $80,000 depending upon the testimony that was found to be credible. Neither party did an economic analysis of the value of the property, or the value of the lease, or the cost to Momin if he had to relocate his business as a result of Khader’s breach of the lease. Momin did testify that the value of the purchase option he lost was $40,000. In response to questioning about the value of the option, Momin testified as follows: Q. How do you come up with the $40,000? Is it – – is there any mathematical formula we can – – A. It’s not mathematical formula or whatsoever. The thing is I lost the chance to have the property on my name and one day I be owning that property. And I don’t have that. He was the owner of the option. As the owner he could testify regarding its value. Redman Homes, Inc. v. Ivy, 920 S.W.2d 664 (Tex. 1996); State v. Berger, 430 S.W.2d 557 (Tex. Civ. App. – Waco 1968, writ ref’d n.r.e.). Further, there was no objection to his testimony of value. If he and his brother had not purchased the property at foreclosure, which they had no obligation to do, he also would have lost his investment in improvements made to the property. Khader wants this Court to calculate the damages based upon what he contends to be Momin’s lost benefit of the bargain. He asserts that the benefit Momin lost is the price paid at foreclosure plus the back taxes paid, less the option price of $174,000. He does not credit Momin for the option discounts that Momin contracted for and to which Momin would have been entitled if Momin had purchased the property pursuant to the option. Khader’s damage computation also does not allow for the fact that Momin would not have to pay the option price, taxes, insurance, or repairs until after he had exercised the option, which could be as many as fifteen years in the future. Khader’s measure of damages also does not consider that during the period of time prior to exercising the option, Khader had the risk of decreases in the market value of the property. The option agreement had value to Momin because it protected him from decreases in market value because he was not obligated to purchase the property, but would have allowed Momin to benefit from property value increases by exercising the option. According to Khader, Momin’s damages total $177,259.65 less $174,000, or $3,259.65. This is the amount the majority awards Momin for the undisputed breach of the lease. Like Khader, the majority has stripped Momin of the value of the lease and option and only partially compensates him for Khader’s breach of the lease agreement. Momin has not received the benefit of his bargain. It is not our task to try to determine what the trial court did or why. Our task is much more focused. We must analyze the points of error raised by the appellant, and determine, based upon the record before us, if the trial court erred. Great North American Stationers, Inc. v. Ball, 770 S.W.2d 631, 634 (Tex. App. -- Dallas 1989, no writ). Finding that the amount of damages awarded by the trial court as the finder of fact is well within the range of damages supported by the evidence of Momin’s lost benefits of his lease and option, I would affirm the judgment. TOM GRAY Justice Opinion delivered and filed June 9, 1999 Do not publish

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62 F.3d 1428 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. Frank Charles CARROLL, Petitioner-Appellant,v.D.M. O'NEAL, Respondent-Appellee. No. 94-6453. United States Court of Appeals, Tenth Circuit. Aug. 15, 1995. Before TACHA, LOGAN and KELLY, Circuit Judges. ORDER AND JUDGMENT1 LOGAN, Circuit Judge. 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 case is therefore ordered submitted without oral argument. 2 This matter is before the court on petitioner Frank C. Carroll's application for a certificate of probable cause. The right of a petitioner convicted of a state crime to appeal a federal district court's denial of habeas corpus relief is conditioned upon either the district court or this court granting a certificate of probable cause. See 28 U.S.C. 2253. 3 The Supreme Court in Barefoot v. Estelle, 463 U.S. 880, 892-93 (1983), declared that the "primary means of separating meritorious from frivolous [habeas corpus] appeals should be the decision to grant or withhold a certificate of probable cause." We will not grant such a certificate unless the petitioner makes "a substantial showing of the denial of an important federal right by demonstrating that the issues raised are debatable among jurists, that a court could resolve the issues differently, or that the questions deserve further proceedings." Gallagher v. Hannigan, 24 F.3d 68 (10th Cir.1994) (citing Barefoot, 463 U.S. at 893 & n. 4). 4 Petitioner contends that he was denied due process and equal protection during the proceedings at which he pleaded guilty to three drug-related charges in Oklahoma state court. Petitioner did not appeal those convictions. His principal objection is that he was never put under oath, though he signed a summary of the facts and statement of the rights he waived in the plea hearing. 5 The magistrate judge in the Report and Recommendation of October 31, 1994, and the district court in its Order of December 19, correctly analyzed the facts, the procedural posture of the case, and the applicable law. We conclude that petitioner has failed to make the necessary showing to warrant our issuance of a certificate of probable cause. Therefore, we deny his application and DISMISS the appeal. 6 The mandate shall issue forthwith. 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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653 A.2d 241 (1994) Craig HUGHES, Defendant Below, Appellant, v. STATE of Delaware, Petitioner Below, Appellee. No. 168, 1994. Supreme Court of Delaware. Submitted: October 19, 1994. Decided: December 22, 1994. Order Clarifying Decision on Denial of Reargument January 30, 1995. Bernard J. O'Donnell, Asst. Public Defender, Office of the Public Defender, Wilmington, for defendant. Richard E. Fairbanks, Jr., Chief of Appeals Div., Dept. of Justice, Wilmington, for petitioner. Before VEASEY, C.J., WALSH, HOLLAND, HARTNETT, and BERGER, JJ., constituting the Court En Banc. *242 WALSH, Justice: This certification proceeding comes before the Court pursuant to Article IV, Section 11(9) of the Delaware Constitution and Supreme Court Rule 41. The Family Court has certified five questions of law which this Court accepted by order dated May 19, 1994. Briefing and oral argument before the Court en Banc followed. This is the decision of the Court on the certified questions. I As required for certification proceedings, the facts underlying the certified questions are undisputed. The defendant, Craig Hughes ("Hughes"),[1] was arrested on November 6, 1993, for receiving stolen property worth over $500 (11 Del.C. § 851) and second degree conspiracy (11 Del.C. § 512). The charges against Hughes would constitute felonies if he were an adult. Because Hughes was seventeen years old at the time of his arrest, he was subject to the jurisdiction of the Family Court. State v. Connors, Del.Super., 505 A.2d 1301, 1302 (1986). Accordingly, Hughes was arraigned in February, 1994, and his case scheduled for trial in the Family Court on November 1, 1994. Under the statutory scheme in place at the time of his arrest, Hughes fell under the original jurisdiction of the Family Court with the possibility that he could be transferred to Superior Court if, following an amenability hearing, the Family Court determined that Hughes was not amenable to its processes. *243 10 Del.C. § 1010(c)[2]. This statutory scheme was altered subsequent to Hughes' arrest, however. On April 11, 1994, Senate Bill 140 was signed into law. Under the language of this amendment, "if a child reaches his eighteenth birthday prior to an adjudication on a charge of delinquency arising from acts which would constitute a felony," the Family Court must automatically transfer the matter to Superior Court. 69 Del.Laws c. 205. Hughes turned eighteen years old on September 24, 1994, and is therefore subject to the statute as amended. In addition, at least forty-five other cases pending before the Family Court involve children who either have reached the age of eighteen or may reach that age before their cases are adjudicated in the Family Court. Because of the great number of cases affected by the statutory amendment, and its attendant consequences upon the jurisdiction of the Family Court, the following questions implicating the amendment's construction, application, and constitutionality were certified and accepted by this Court: 1. Whether the amendment to 10 Del.C. § 1002, effective as of April 11, 1994, applies to all relevant cases in which the offenses are committed on or after the effective date of the amendment, or to all cases pending in the Family Court as of the effective date of the amendment in which the respondent has already turned 18 years of age or will turn 18 years of age while awaiting trial. 2. Whether extended jurisdiction of the Family Court over juveniles beyond the age of 17, pursuant to 10 Del.C. § 928, is applicable in cases where the juvenile turns 18 while awaiting trial in the Family Court or becomes moot pursuant to the recent amendment to 10 Del.C. § 1002. 3. Whether the Attorney General must obtain an indictment before proceeding to try the defendant on the charges once the case is transferred to the Superior Court pursuant to 10 Del.C. § 1002. 4. Whether the statutory amendment violates the constitutional guarantee of equal protection of the laws. 5. Whether the statutory amendment violates the constitutional guarantee of due process of law. We have concluded that the statutory amendment violates the constitutional guarantees of equal protection of the laws under the Federal Constitution and due process of law under both the Federal and Delaware Constitutions. U.S. Const. amend. 14; Del. Const. art I, § 7.[3] Because we answer question numbers four and five in the affirmative, the remaining questions are rendered moot and, accordingly, we decline to answer them. See State v. Ayers, Del.Supr., 260 A.2d 162, 170 (1969). II Before addressing the merits of Hughes' constitutional claims arising under the due process and equal protection clauses, a review of the statutory framework delineating the jurisdiction of the Family Court, and our prior case law interpreting that scheme, is necessary to appreciate the circumstances which precipitated the enactment of the statutory amendment at issue. Since its inception in 1945, the Family Court has been conferred almost exclusive jurisdiction over those under the age of eighteen charged with violations of State law. 10 Del.C. § 921; State v. J.K., Del.Supr., 383 *244 A.2d 283, 285 (1977), cert. denied, 435 U.S. 1009, 98 S.Ct. 1882, 56 L.Ed.2d 392 (1978).[4] Under section 921(2)(a), the Family Court is vested with original jurisdiction over "[a]ny child charged in this State with delinquency or by having committed any act or violation of any law of this State...." The statutory scheme evidences a legislative intent, with some exceptions, to treat child offenders differently from adult offenders. Fletcher v. State, Del.Supr., 409 A.2d 1256 (1979). In its recognition that children generally require distinctive treatment, the General Assembly has established a dual judicial system so that children and adults are segregated and adjudicated separately. To that end, the Family Court Act was enacted to provide uniform jurisdiction, policies and procedure by creating a statewide Family Court system. Wife, S. v. Husband, S., Del.Ch., 295 A.2d 768 (1972). The function of the Family Court in the Delaware dual system is expressly set forth in the Act: § 902. Purpose; construction. (a) In the firm belief that compliance with the law by the individual and preservation of the family as a unit are fundamental to the maintenance of a stable, democratic society, the General Assembly intends by enactment of this chapter that 1 court shall have original statewide civil and criminal jurisdiction over family and child matters and offenses as set forth herein. The court shall endeavor to provide for each person coming under its jurisdiction such control, care, and treatment as will best serve the interests of the public, the family, and the offender, to the end that the home will, if possible, remain unbroken and the family members will recognize and discharge their legal and moral responsibilities to the public and to one another. (b) This chapter shall be liberally construed that these purposes may be realized. 10 Del.C. § 902. Thus, in direct contrast to the criminal nature of an adult prosecution in the Superior Court, an adjudication of delinquency in the Family Court is a civil proceeding. G.D. v. State, Del.Supr., 389 A.2d 764, 765 (1978); see also State v. Wilson, Del.Supr., 545 A.2d 1178, 1181 (1988) ("By its creation of the Family Court, the General Assembly recognized the unique role that Court is called upon to play through the application of its civil processes in the resolution of offenses committed by children."). The civil nature of a proceeding in Family Court removes the stigma of criminality which is inherent in an adult prosecution in Superior Court. Accordingly, the Family Court Act provides that "no child shall be deemed a criminal by virtue of an allegation or adjudication of delinquency...." 10 Del.C. § 1002. We have previously summarized the statutory scheme as follows: The proceedings against a child are not criminal in concept or in practice. Indeed, the child is not even charged with a `crime' no matter what the conduct. See 10 Del.C. § [1002]. In the Family Court the charge is a general one of `delinquency.' § 921(1)(2)a.... State policy in a proceeding against a child in the Family Court is to make it entirely a part of the Court's `civil jurisdiction,' § 921.... State v. J.K., 383 A.2d at 286. Notwithstanding the societal policy to proceed against children in a civil setting, the General Assembly has provided two statutory exceptions under which children may be criminally prosecuted at the adult level. 10 Del.C. § 1010. First, under section 1010(a)(1), children, regardless of age, who are charged with the most serious felonies, as designated by the statute, are prosecuted as adults. Second, under section 1010(a)(2), the Family Court has the discretion to transfer the case of a child over sixteen years of age to the Superior Court for trial as an adult if the court concludes that the child is not amenable to the Family Court processes. Under the statute, the Family Court conducts a so-called amenability hearing, initiated upon motion of the Attorney General or *245 by the court sua sponte, to determine independently whether the child will benefit from the "rehabilitative processes of the Court." § 1010(c). In its inquiry, the Family Court may consider six enumerated, nonexclusive criteria. Id. If the Family Court finds that the child is amenable, the court retains jurisdiction over the child. Upon a finding of nonamenability by the court, however, the child is referred for trial as an adult in the Superior Court or any other court with jurisdiction over the offense. The statutory scheme provides an additional judicial safeguard to children alleged to have either committed a designated felony or those found by the Family Court to be nonamenable. In 1971, the State Assembly created a mechanism, now known as the "reverse amenability" process, in which those children coming within the jurisdiction of the Superior Court may be transferred to the Family Court when adjudication in that forum is proper. 58 Del.Laws c. 116, now 10 Del.C. § 1011.[5] Under section 1011(a), the Attorney General, without leave of Court, may transfer to the Family Court those cases involving either designated felony offenses or those children found nonamenable when a transfer would best serve "the interests of justice." The defendant may exercise a concomitant right under section 1011(b) and may petition the Superior Court for a hearing to determine amenability. The statute permits, but does not require, an evidentiary hearing upon application of a child to consider several enumerated factors and other relevant considerations in deciding whether the interests of justice would best be served by the transfer of the child to Family Court. The reverse amenability hearing thus ensures a judicial determination of amenability which is premised upon the nature of the offense as well as the character of the child. State v. Anderson, Del.Super., 385 A.2d 738, 741 (1978). This Court explicitly upheld the constitutionality of the reverse amenability process in Marine v. State, Del.Supr., 607 A.2d 1185 (1992), cert. dismissed, ___ U.S. ___, 113 S.Ct. 28, 120 L.Ed.2d 952 (1992) ("Marine I"). In Marine I, we held that the reverse amenability process, which was required by legislative enactment, accords the defendant a judicial counterweight to any arbitrary charging authority by granting the Superior Court the power to evaluate the basis for the charge against the child. Id. at 1209. Our decision in Marine, which was based on the statute, apparently provided the impetus for the enactment of the statutory change now under review. Because the application of the statute in that decision appears to be misunderstood, the Marine holding bears analysis. Factually, Marine involved a fourteen year old who was indicted for first degree murder. Because Marine was charged with a designated felony, he fell within the jurisdiction of the Superior Court. §§ 921(2)a, 1010(a). Marine sought transfer of his case to Family Court pursuant to the reverse amenability process under the present section 1011(b). The Superior Court conducted an evidentiary hearing on Marine's amenability after which it denied his motion for transfer. Marine *246 was eventually convicted in the Superior Court of second degree murder the charge for which he had been originally arrested. On appeal, Marine claimed, inter alia, that he was denied due process and equal protection of the law because of the unequal treatment he received when compared with other children found guilty of the same crime in the Family Court, i.e., he was charged with first degree murder as an adult but convicted of an offense (second degree murder) which was not transferrable to Superior Court under section 1010.[6] Marine also claimed that the Superior Court erred in its analysis of the section 1011 factors. After an exhaustive review of the Family Court Act, this Court held that the Delaware statutory scheme, which permitted the Superior Court to convict a child as an adult for an offense which would result in an adjudication of delinquency in the Family Court, did not violate the guarantees of due process or equal protection. Marine I, 607 A.2d at 1209. However, without reaching the correctness of its result, we found that the Superior Court erred in its application of the current section 1011 by failing to make specific factual findings into the "nature of the present offense" as expressly required by the statute. Id. at 1211. Specifically, we held that section 1011 required the Superior Court, in a proceeding similar to a "proof positive" hearing at which a defendant's right to bail is determined when charged with a capital offense, to consider whether the State can establish a prima facie case against the defendant. Marine I, 607 A.2d at 1211-12. A prima facie case is established if the evidence demonstrates that there is a fair likelihood that the defendant may be convicted on the charge. Id. at 1212 n. 17. Accordingly, we vacated the judgment of the Superior Court and remanded, with jurisdiction retained, so that Marine would receive a reverse amenability hearing in which the court properly considered section 1011(b)(1). Marine I, 607 A.2d at 1212. Essentially, our mandate required a "judicial examination of the evidentiary justification for the charging decision...." Id. Upon remand, the Superior Court concluded that the State did not have a fair likelihood of convicting Marine of first degree murder and that Marine's request to have his case transferred to Family Court should have been granted as required by the statute upon such a finding. On appeal, this Court affirmed. Marine v. State, Del.Supr., 624 A.2d 1181 (1993) ("Marine II"). Because the statute provided that the Superior Court could not hold a trial over any fourteen year old child accused of second degree murder, the Superior Court was divested of jurisdiction of a criminal prosecution against Marine by its own finding. Moreover, because Marine was over nineteen years of age at the time of the Marine II decision, under the statute, the Family Court also lacked jurisdiction over Marine because he was then an adult. Marine II, 624 A.2d at 1189. Accordingly, this Court was required to direct the Superior Court to vacate Marine's sentence and conviction and to order his release from custody. Id. The State then moved for reargument, contending that Marine could be retried for either first degree murder or second degree murder in the Superior Court. In denying reargument, we held that Marine could not be retried in the Superior Court for first degree murder because the Superior Court had determined, and this Court had affirmed, that the State did not have a fair likelihood of convicting him of that charge, thus precluding further litigation of the issue through the doctrine of collateral estoppel. 624 A.2d at 1190. Further, a second prosecution of Marine in the Superior Court for second degree murder was barred by the statute because the Family Court had exclusive jurisdiction over a fourteen year old child charged with that offense. Id. at 1190-91. On April 11, 1994, Senate Bill 140 was signed into law to amend 10 Del.C. § 1002 by *247 adding a paragraph to the existing statute. The statute, as amended, provides: § 1002. Delinquent child not criminal; prosecution limited. Except as provided by § 1010, no child shall be deemed a criminal by virtue of an allegation or adjudication of delinquency, nor shall a child be charged with or prosecuted for a crime in any other court. In this Court the nature of the hearing and all other proceedings shall be in the interest of rather than against the child. Except as otherwise provided, there shall be no proceedings other than appellate proceedings in any court other than this Court in the interest of a child alleged to be dependent, neglected, or delinquent. However, if a child reaches his eighteenth birthday prior to an adjudication on a charge of delinquency arising from acts which would constitute a felony were he charged as an adult under the laws of this State, then the Family Court shall retain jurisdiction for the sole purpose of transferring the matter to the Superior Court for prosecution as an adult. Any such transfer under this Section shall not be subject to § 1011 of this title. 69 Del.Laws c. 205 (emphasis added). The statutory amendment was drafted in direct response to our ruling which denied the State's motion for reargument of the Marine decisions. Marine II, 624 A.2d at 1190-91. See 69 Del.Laws c. 205 (Synopsis). The stated purpose for the amendment is to ensure that a Delaware court will always have jurisdiction over felony child offenders. 69 Del.Laws c. 205 (Synopsis). The General Assembly apparently perceived that the Marine decisions had created a "jurisdictional gap" which it undertook to close by requiring that all children who are charged with a felony offense be tried in the Superior Court if they reach eighteen years of age before their cases are adjudicated in the Family Court. The statute also alters the existing scheme by preventing the defendant from obtaining judicial review of an important aspect of the amenability process. First, by mandating that those offenders falling under its purview be automatically transferred to Superior Court, the statute clearly intended to dispense with the right of the accused to seek a judicial determination under section 1010. Moreover, the provision explicitly eliminates the reverse amenability process in the Superior Court under section 1011 for those children transferred to that court for trial as adults. Hughes argues that the statutory amendment violates his rights of due process and equal protection because he has been deprived of the essential protection afforded by the reverse amenability process. U.S. Const. Amend. 14; Del. Const. art. I, § 7. Hughes claims that this procedure is designed to safeguard him from the unfettered authority of the State to impose potential arbitrary or capricious charging decisions, a practice viewed as unconstitutional by this Court in Marine I. The statutory amendment, it is argued, eliminates the independent examination into the basis of a felony charge against a child and vests the prosecution with the authority to determine jurisdiction over those children who will reach age eighteen pending trial in Family Court. We agree with Hughes that the elimination of the reverse amenability process is violative of his constitutional rights. III Hughes concedes that the age-based distinction drawn by the amendment does not pertain to a fundamental right or suspect class. See Marine I, 607 A.2d at 1207. Hence, our standard of review for the statute's constitutionality is well settled. In determining whether a statutory classification, not involving a suspect class or fundamental right, violates the equal protection [or due process] clause, we presume that the distinctions so created are valid. `A statutory discrimination or classification will not be set aside if any state of facts reasonably may be conceived to justify it.' Marine I, 607 A.2d at 1207 (quoting Traylor v. State, Del.Supr., 458 A.2d 1170, 1177 (1983)). The General Assembly is endowed with broad authority as a policy-making body *248 to classify child offenders based on their age for purposes of selecting the appropriate court for adjudication. "It is no novelty in our law to require that for certain crimes juveniles shall be tried as adults in the Superior Court." Ayers, 260 A.2d at 171. This power over classification is not without constitutional limits however. The legislative scheme must bear some rational relationship to the purpose for which it was enacted. We have previously described the State's discretionary authority to treat children as adults under the Constitution as follows: The discretion of the General Assembly in setting policy under its police power is, however, not absolute. It may not be arbitrary or capricious: it must be reasonable. When the power is exercised to classify for purpose of trial for crimes, as this is, then the classification must be founded on differences reasonably related to the purposes of the statute in which the classification is made. Ayers, 260 A.2d at 171. Equal protection does not require identical treatment for all individuals within a class but, rather, when distinctive treatment for individual class members does occur, there must be a reasonable basis for the distinction. Marine I, 607 A.2d at 1207; Mills v. State, Del.Supr., 256 A.2d 752, 756 (1969). For the distinction to be so unreasonable as to be discriminatory and unconstitutional, the distinction must be "patently arbitrary and bear[ ] no rational relationship to a legitimate government interest." Gotleib v. State, Del.Supr., 406 A.2d 270, 275 (1979); Marine I, 607 A.2d at 1207. Similarly, due process also requires that a statutory provision be rationally related to its purpose. State v. Hobson, Del.Supr., 83 A.2d 846, 847 (1951). As noted earlier, the constitutionality of the Delaware statutory scheme establishing age-based distinctions among children was upheld by this Court in the Marine I decision. Marine I, 607 A.2d at 1209. The State thus contends that our holding in Marine is controlling here, as well. It is argued that the amendment merely creates another age-based distinction to ensure that a Delaware court will always have jurisdiction over a felony offender. While this Court did uphold the constitutionality of the statutory scheme in Marine I, we explicitly based our holding on the ground that the amenability process provides the requisite constitutional safeguard for those children charged with a crime before the Superior Court. We rejected Marine's claim that the Delaware legislative framework denied Marine equal protection and due process, in large part because of the Legislature's adoption in 1971 of a reverse amenability statute, the forerunner of section [1011]. See Marine I at 1209. Marine II, 624 A.2d at 1186 n. 11. Here, the amendment abrogates the constitutionally-required continuing existence of a judicial check on prosecutorial authority. Prior to the amendment, the decision whether the Family Court or the Superior Court obtained jurisdiction over a child was premised upon specific factors subject to review by an independent judicial body in an amenability hearing or reverse amenability hearing. §§ 1010, 1011. The presumptive classification of children within the jurisdiction of the Family Court under section 1010 withstands constitutional scrutiny largely because an amenability hearing ensures an impartial judicial determination, which is informed by specific criteria, of whether a child is suitable to the rehabilitative processes available in Family Court. In State v. J.K., we stated: In our judgment, a distinction drawn by the Family Court Judge in the decisional process, after having properly applied the[] extensive criteria, cannot be said to be arbitrary or irrational. Only after it clearly appears to the Court that a reasonable difference exists between two juveniles so as to classify one as amenable and one as non-amenable, may the Court bind each of them over to different treatment. 383 A.2d at 289. We thus found "the classifications drawn by the amenability process to be reasonable, and [to] rest upon a basis of difference bearing a fair and substantial relation to legitimate goals." Id. Similarly, the reverse amenability process under section 1011 protects children *249 by assuring that they are adjudicated in the correct forum. The procedure "is of constitutional dimension." Marine II, 624 A.2d at 1184. Of critical importance, a reverse amenability hearing "provide[s] a judicial counterweight to any perceived prosecutorial charging excess." Marine I, 607 A.2d at 1209. This proceeding vests with the Superior Court the power to examine independently the evidentiary basis for the crime charged by which it considers whether the State can establish a prima facie case for the charge which subjected the child to the Superior Court. Id. at 1211. Thus, the reverse amenability process provides a constitutional minimum which "eliminates the potential for arbitrary or capricious charging decisions to result in unequal treatment." Id. at 1209. Notwithstanding the pivotal constitutional safeguards inherent in the amenability and reverse amenability processes, the statutory amendment attempts to consign those children charged with felonies to the Superior Court, upon reaching age eighteen before adjudication in the Family Court, without independent judicial scrutiny into the basis of the alleged offenses. Under the new legislative scheme, neither the Family Court nor the Superior Court has the authority to review the charge against the child to weigh its evidential foundation and validity. Moreover, the courts have been divested of their discretion to transfer a case to another forum "in the interests of justice." Thus, every child charged with a felony who reaches age eighteen pending trial is subject to prosecution as an adult without regard to the factual basis which underlies the alleged offense. Under this scenario, the fate of a child is entirely entrusted without impartial judicial review to the charging authority, which unilaterally decides whether to charge a child with a felony or misdemeanor, without a mechanism to challenge its charging decision or transfer the case to the appropriate forum. In essence, the statutory amendment has stripped the judiciary of its independent jurisdictional role in the adjudication of children by granting the charging authority the unbridled discretion to unilaterally determine which forum has jurisdiction over every child who will reach eighteen years of age before being adjudicated in Family Court. In theory, under the statutory amendment, the State could attempt to try all seventeen year olds as adults by including a felony charge in every case and delaying trial until the child reaches age eighteen. By abrogating the amenability processes, the statute has deprived children, such as Hughes, the judicial counterweight which they are constitutionally entitled to receive. The State responds that it has very broad discretion in determining whether or not to prosecute and what charge(s) to file against a defendant. We recognized the broad discretion of the charging authority in Marine I: The law is well settled that a legislative scheme vesting broad authority in the state or federal government through the charging process to determine whether a child shall be prosecuted as a juvenile or as an adult is not a denial of due process in the absence of `suspect' factors [race or religion] or other arbitrary classifications. Marine I, 607 A.2d at 1208. Similarly, we noted in Albury v. State, Del.Supr., 551 A.2d 53 (1988), that: ... the State has broad discretion as to whom to prosecute. `[S]o long as the prosecutor has probable cause to believe that the accused committed an offense defined by statute, the decision of whether or not to prosecute, and what charge to file or bring before a grand jury, generally rests entirely in his discretion.' Id. at 61 (quoting Wayte v. United States, 470 U.S. 598, 607, 105 S.Ct. 1524, 1530, 84 L.Ed.2d 547 (1985)) (citations omitted). The State notes that this Court has "recognized a rebuttable presumption that criminal prosecutions are undertaken in good faith and in a nondiscriminatory manner." See id. at 62. The State insists that it acted in good faith and did not selectively charge Hughes based upon a suspect or arbitrary classification. Rather, the fortuity of Hughes' date of birth, date of arrest, and charge indiscriminately determined the appropriate forum for his trial. The State contends that Hughes should bear the risk of this fortuitous combination so long as the State acted in good faith and did not discriminate by bringing charges against him. *250 Despite the very broad discretion the State maintains in its decision to charge and prosecute child offenders, nonetheless, when children are prosecuted as adults, "a judicial examination of the evidentiary justification for the charging decision is required." Marine I, 607 A.2d at 1212. Independent judicial review to assess the basis for prosecuting a child as an adult is "a prerequisite for sustaining the constitutionality of the Delaware statutory framework." Marine II, 624 A.2d at 1186. The good faith of the charging authority in its decision to charge a child with a felony is not sufficient to protect a child's constitutional rights. See, e.g., Hammond v. State, Del.Supr., 569 A.2d 81, 87 (1989); Bailey v. State, Del.Supr., 521 A.2d 1069, 1091 (1987); Deberry v. State, Del. Supr., 457 A.2d 744, 752-53 (1983) (as matter of State Constitutional law, failure to preserve potentially exculpatory evidence requires the court to perform a tripartite analysis for due process violation in which the conduct (good faith) of the State's agents is a relevant but not determinative consideration); compare Arizona v. Youngblood, 488 U.S. 51, 57-58, 109 S.Ct. 333, 337, 102 L.Ed.2d 281 (1988) (as matter of Federal Constitutional law, failure to preserve potentially useful evidence does not constitute due process violation unless defendant can show bad faith). The State's decision to charge a child with a felony implicates constitutional rights not present in the average charging decision of an adult. The consequences of over-charging an adult are limited. While an unfounded felony charge may implicate an adult's liberty interest and provide the State greater bargaining position in any plea negotiations with the adult, a trial buffers any prejudice suffered by the adult by compelling the State to prove the elements of the alleged offense beyond a reasonable doubt. In re Winship, 397 U.S. 358, 90 S.Ct. 1068, 25 L.Ed.2d 368 (1970). An adult acquitted of an alleged felony offense but convicted of a lesser included misdemeanor offense will be subject to the same penalties as if originally charged with the lesser offense. Thus, our judicial review of the charging decision is limited because the prosecution is accorded broad discretion when charging adults already in the adult system. Albury, 551 A.2d at 61. Conversely, judicial review of the charging decision is essential for those children who are prosecuted as adults. While over-charging an adult is of little consequence, a groundless felony charge against a child who reaches age eighteen pending trial in the Family Court results in a criminal prosecution with its grave attendant consequences. The child is subjected to a public trial in the Superior Court and, if found guilty, convicted of a crime with the attendant stigma of possessing a criminal record. Therefore, an unfounded felony charge may arbitrarily deprive a child of the many advantages of adjudication in the Family Court in which, regarding a misdemeanor: the child is afforded treatment in his own interest, 10 Del.C. § 902(a); the child is assured privacy, 10 Del.C. § 1063; the child may have certain delinquency adjudications expunged and arrest records destroyed, 10 Del.C. § 1001; and, most importantly, the child is never designated a criminal. 10 Del.C. § 1010. In view of these consequences, it is unconstitutional to grant unfettered discretion to the prosecution, whose unilateral charging decision can effectively establish the jurisdiction over a child. Some meaningful judicial review into the nature of the charge is essential to the constitutionality of such a scheme. The State argues that the elimination of the reverse amenability process is not constitutionally offensive because adults have never been afforded an amenability procedure under this State's statutory scheme. Under the language of section 1011, only a child (person under the age of eighteen) can be subject to a reverse amenability hearing. Because the statutory amendment only applies to those who have reached adulthood prior to trial, the State argues that such children lost the benefit of reverse amenability upon reaching their eighteenth birthday. It is argued that these children turned adults cannot be deprived of that to which they are no longer entitled. The State claims that the amendment simply reiterates the basic principle that the Family Court loses jurisdiction over a child who reaches *251 the age of eighteen. We find this argument disingenuous. Every child who is under the age of eighteen when arrested for a crime is initially subject to the jurisdiction of the Family Court unless charged with a designated felony or found nonamenable by the Family Court. The reverse amenability process ensures that those children charged with a designated felony receive an independent evaluation into the merits of the alleged offense. In either case, the child is afforded a judicial determination of whether the Superior Court should assume jurisdiction over the child. It is of no consequence that adults are not entitled to an amenability or reverse amenability hearing. As a threshold matter, there must be some mechanism in which a child may seek a disinterested examination into the basis of the felony charge to be prosecuted as an adult. It is now well established in Delaware that the defendant's age at the time of his arrest for a given offense is determinative of whether the Family Court or the Superior Court has jurisdiction over the offense. Marine II, 624 A.2d at 1190; Connors, 505 A.2d at 1303; Howard v. State, Del.Supr., No. 385, 1991, Walsh, J., 612 A.2d 158 (1992) (Order). Thus, it is the date of arrest and the seriousness of the crime charged which determines jurisdiction. Marine II, 624 A.2d at 1191; 10 Del.C. §§ 921, 1002, 1011. The reverse amenability process guarantees that jurisdiction in Superior Court is premised upon the nature of the offense rather than the nature of the charge. The amendment alters this process by fashioning jurisdiction over certain children based upon the date of adjudication and the crime alleged. Under this scheme, a child arrested and charged with a nondesignated felony while under eighteen years of age is subject to the scheduling variables of the Family Court. As a consequence, children charged with felonies are literally at the "mercy of the call of the calendar" of the Family Court. We are informed that currently, the routine trial tract for a case within the Family Court may extend from one year from arrest date until trial date. Moreover, due to the inevitable complications inherent in an overburdened Family Court, even the most efficient caseload management is subject to prolonged adjudicative delays. Hence, jurisdiction over children becomes contingent upon the efficiency of the judicial system rather than the seriousness of the crime and the age and character of the child. Premising jurisdiction over children upon the date their cases are adjudicated imposes an arbitrary deadline on a child's constitutional rights and compounds the risk of arbitrariness in the charging process. Such risks cannot withstand equal protection scrutiny. Arbitrary treatment under the amendment is not difficult to envision. For example, two juveniles are arrested for delinquency arising from the joint theft of property. The value of the property is questionable, but the police or the prosecution decide to treat the property as subject to the felony level had the defendants been adults.[7] One juvenile is 17 years and 10 months of age while the other has just turned 17. Both are referred to Family Court for trial. Since it clearly appears that, under normal Family Court scheduling, the older juvenile will "age out" while awaiting trial, his case will be automatically transferred to the Superior Court after two months. The other offender will likely be able to remain in the Family Court for processing and not run the risk of being convicted of a crime. The older offender, even if innocent, may be tempted to seek an expedited court date in order to plead guilty to a charge of "delinquency" in the Family Court. Under this scenario, there is no rational basis for distinguishing between the defendants in terms of their conduct, and both are arrested as "children." Nonetheless, under the recent amendment differing adjudicative results will surely occur. A law which produces such results plainly violates the right of equal protection. See State v. Owens, 103 N.M. 121, 703 P.2d 898, 901 (1984) ("[S]tatutes which permit the state to subject one person to the possibility of greater punishment than another who has committed *252 an identical act violate the equal protection clauses of the state and federal constitutions."). The amendment deprives children of the constitutional safeguard of judicial review into the charging decision which was mandated by this Court in the Marine decisions. Without an independent examination into the evidentiary basis of a felony charge, the prosecution has the unfettered authority, through its charging decision, to unilaterally determine the jurisdiction over a substantial number of seventeen year old defendants in the Family Court. In effect, Hughes, and other defendants approaching their eighteenth birthday, will be penalized under the statute, via an adult prosecution in Superior Court, upon the nature of the allegation rather than the nature of the offense. Thus, the statute is facially unconstitutional as a violation of the right to due process under the United States and Delaware Constitutions. U.S. Const. amend. 14; Del. Const. art. I, § 7. See also People v. Drummond, Ct.App., 40 N.Y.2d 990, 391 N.Y.S.2d 67, 359 N.E.2d 663 (1976), cert. denied, 431 U.S. 908, 97 S.Ct. 1706, 52 L.Ed.2d 394 (1977); In the Interest of D.D., Fla.App., 564 So.2d 1224, 1225 (1990). Further, under the statute, children unfairly charged with committing a felony but convicted of a misdemeanor are accorded disparate treatment from those children charged with a misdemeanor. The former are treated as criminals on the basis of an unproven accusation while the latter are treated as delinquents and receive proceedings in their best interest. Therefore, the distinction is patently arbitrary and bears no rational relationship to a legitimate government interest. Gotleib, 406 A.2d at 275; see also State v. Johnson, La.Supr., 343 So.2d 705, 708 (1977). Accordingly, we conclude that the statutory elimination of a judicial investigation into the factual basis of a felony charge against a child violates the constitutional guarantees of due process and equal protection of the law. Marine II, 624 A.2d at 1184, 1186 n. 11.[8] We note that there never existed the perceived jurisdictional gap between the Family Court and Superior Court over those children who reach age eighteen before adjudication in the Family Court. The Marine decisions did not establish that children who reach age eighteen pending trial in Family Court become liberated from the jurisdiction of the Delaware judicial system. Rather, the result in Marine simply originated from a flawed amenability process in which Marine should have never been before the Superior Court. Marine was incarcerated throughout his trial and the appellate process and had, by then, served the maximum time period allowed under the then-existing Family Court laws so that a retrial in that court was futile. Marine was released from custody not because of a jurisdictional gap or loophole but, rather, his release was founded upon the traditional margins of jurisdiction between the Superior Court and Family Court. Under the Marine decisions, a child who reaches age eighteen pending trial can be tried in either the Family Court or Superior Court depending upon a number of factors. For most offenses, the Family Court may elect to retain jurisdiction over the child or transfer jurisdiction to the Superior Court if it concludes that the child is not amenable to its processes. Those children charged with a designated felony are tried in the Superior Court unless the alleged felony lacks a factual predicate or a transfer to Family Court is "in the interests of justice." Moreover, the General Assembly has recently granted the Family Court potential jurisdiction over children until they reach the age of twenty-one. Subsequent to the Marine decisions, the General Assembly enacted 10 Del.C. § 928, which permits the Attorney General, prior to a child's trial in Family Court, to petition the court to extend its jurisdiction over the child. 69 Del.Laws, c. 96. Consequently, if the child is adjudged delinquent by the Family Court, the court may decide, after considering the child's age and the seriousness of the offense, as well as *253 the need for rehabilitation and the public's safety, to extend jurisdiction over the child until age twenty-one or until the child is discharged from jurisdiction by the court. § 928(c). Therefore, children do not "age-out" of the Family Court upon their eighteenth birthday. Any perceived "jurisdictional gap" had been closed previously by the General Assembly. Finally, we note that the basic thrust of the statutory amendment would be constitutionally acceptable, if the reverse amenability process under 10 Del.C. § 1011(b) were retained. Since the State has argued that the provisions of the amendment are not severable, we have not attempted to preserve the constitutionality of the statutory amendment by invalidating only the last sentence of the amendment which precludes application of § 1011. IV We conclude that the statutory amendment under review violates the constitutional guarantees of due process and equal protection of the laws. The amendment divests the judiciary of its independent role in assessing the evidentiary basis of a charge against a child. Such a judicial check on the charging authority is mandatory to comply with the principles enunciated in the Marine decisions. The distinctions drawn by the amendment are patently arbitrary and bear no rational relationship to a legitimate government interest. The policy reasons which prompt the enactment of legislation are solely the concern of the General Assembly and it is not the function of the judiciary to question the wisdom underlying the passage of a statute. Ames v. Wilmington Housing Authority, Del.Supr., 233 A.2d 453, 456 (1967). Our role is limited to a review for constitutionality, i.e., does a particular statute contravene the rights or impair the guarantees which the Federal and Delaware Constitutions have established as bedrock principles limiting governmental power? Opinion of the Justices, Del.Supr., 385 A.2d 695 (1978). Where such departures are found to exist, it is the right, indeed the duty, of the judiciary to require conformity with the constitutional standards. Our action invalidating the statutory amendment is intended to ensure that the prosecution of minors is conducted in accordance with standards of equality and due process. One of the oldest and most cherished principles of constitutional due process in our nation is that when a person is arrested (charged), that person is presumed to be innocent until convicted by evidence beyond a reasonable doubt. Goddard v. State, Del. Supr., 382 A.2d 238, 240 (1977). That very same principle requires punishment to be based upon the crime for which a person is convicted and not the crime for which he or she was arrested or charged. Certified questions numbers four and five are answered in the AFFIRMATIVE. ORDER This 30th day of January, 1995 it appears that: (1) The State has moved for reargument asserting various grounds which we find to be without merit. To the extent the State's motion is intended to seek clarification for further guidance we note the following: (a) Because of its accusatory, ex parte function, a grand jury does not serve as an independent check on prosecutorial authority and is not viewed as a protector of a defendant's rights. See United States v. Williams, 504 U.S. 36, ___-___, 112 S.Ct. 1735, 1744-45, 118 L.Ed.2d 352 (1992). (b) The certified questions in the case requested this court to pass upon the constitutionality of 10 Del.C. § 1002, not 11 Del.C. § 1447. This Court will "decide only the case before us." Paramount Communications, Inc. v. QVC Network, Del.Supr., 637 A.2d 34, 51 (1991). Nor was the constitutionality of 11 Del.C. § 1447 before the Court in Cain v. State, Del. Supr., 639 A.2d 74 (1994) (ORDER), since the defendant in Cain did not seek a reverse amenability hearing under then-existing 10 Del.C. § 939 as to the section 1447 offense. *254 (c) In view of the State's explicit rejection at oral argument of a severability analysis as contrary to legislative intent, the State will not be permitted to advance a post-decision contention to the contrary. (d) As the decision of the Court makes clear, those children presently awaiting trial who are affected by 10 Del.C. § 1002 may be tried in either the Superior Court or the Family Court subject to the amenability process under 10 Del.C. § 1010(a)(2), and the Family Court may elect to retain jurisdiction over such persons under the recent amendment to 10 Del.C. § 928. NOW, THEREFORE, IT IS ORDERED that the motion for reargument be, and the same hereby is, DENIED. NOTES [1] A pseudonym adopted to preserve the privacy of the minor defendant. [2] Pursuant to 69 Del.Laws, c. 335, effective July 8, 1994, former Part A of Subchapter III of the Family Court Act, containing §§ 930 to 939, was redesignated as present §§ 1001 to 1011. Accordingly, in this opinion, we will refer to the pertinent statutory provisions as currently designated. [3] Article I, section 7, of the Delaware Constitution provides that no person shall be deprived of property except "by the law of the land." We have previously held that the phrase "due process of law" as contained in the Federal Constitution and the phrase "law of the land" as used in our State Constitution have substantially the same meaning. Goddard v. State, Del.Supr., 382 A.2d 238, 340 n. 4 (1977) (citing Opinion of the Justices, Del.Supr., 246 A.2d 90 (1968)). In comparison, the Delaware Constitution contains no equal protection clause per se. We find it unnecessary, in this case, to determine whether the equal protection concept inures as a matter of due process under the Delaware constitution. But see Attorney General of Md. v. Waldron, Md. App., 426 A.2d 929, 940-41 (1981). [4] In the past, we have used the terms "children," "minors" and "juveniles" when referring to those persons who have not yet reached their eighteenth birthday. For purposes of this opinion, we refer to such individuals as "children" because this term is defined and used throughout the Family Court Act and the amendment in question uses the term "child." See 10 Del.C. § 901(3) "`Child' means a person who has not reached his 18th birthday." [5] The reverse amenability statute provides: § 1011. Transfer of cases from Superior Court to Family Court. (a) In any case in which the Superior Court has jurisdiction over a child, the Attorney General may transfer the case to the Family Court for trial and disposition if, in his opinion, the interests of justice would be best served. (b) Upon application of the defendant in any case where the Superior Court has original jurisdiction over a child, the Court may transfer the case to the Family Court for trial and disposition if, in the opinion of the Court, the interests of justice would be best served by such transfer. Before ordering any such transfer, the Superior Court may hold a hearing at which it may consider evidence as to the following factors and such other factors which, in the judgment of the Court are deemed relevant: (1) The nature of the present offense and the extent and nature of the defendant's prior record, if any; (2) The nature of past treatment and rehabilitative efforts and the nature of the defendant's response thereto, if any; and (3) Whether the interests of society and the defendant would be best served by trial in the Family Court or in the Superior Court. (c) In the event the case is transferred by the Superior Court under this section, the case shall proceed as if it had been initially brought in the Family Court, and the Family Court shall have jurisdiction of the case, anything to the contrary in this chapter notwithstanding. [6] As noted earlier, Marine was fourteen years old at the time of his arrest. Had Marine been tried on the charges for which he was arrested, murder second degree, the Family Court would have had exclusive jurisdiction over him. On the other hand, if Marine was sixteen years of age when charged with the same crime, he would have been subject to a transfer to Superior Court upon a finding of nonamenability by the Family Court under section 1010(c). [7] Under Delaware law, theft is a misdemeanor if the value of the property in question is less than $500, otherwise the offense is deemed a felony. 11 Del.C. § 841. [8] Although we have concluded that the statutory amendment is violative of the due process and equal protection clauses of the Fourteenth Amendment of the United States Constitution, we emphasize that our holding could be sustained exclusively under the due process provision of the Delaware Constitution. Del. Const. art. I, § 7.

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901 P.2d 123 (1995) Priscilla FORD, Appellant, v. WARDEN, NEVADA WOMEN'S CORRECTIONAL CENTER, Respondent. No. 24961 Supreme Court of Nevada. July 27, 1995 As Amended August 24, 1995. Rehearing Denied October 19, 1995. *124 Michael Pescetta, Nevada Appellate and Postconviction Project, Las Vegas, for appellant. Frankie Sue Del Papa, Atty. Gen., Carson City; Richard A. Gammick, Dist. Atty., and Gregory R. Shannon, Deputy Dist. Atty., Washoe County, for Respondent. OPINION PER CURIAM. Petitioner Priscilla Ford was convicted of six counts of murder and twenty-three counts of attempted murder after driving an automobile onto a sidewalk in downtown Reno on Thanksgiving Day in 1980. See Ford v. State, 102 Nev. 126, 717 P.2d 27 (1986). She was sentenced to death. This is another in a series of appeals by Ford to this court for relief.[1] On appeal, Ford asserts the following claims: (1) that the district court erred in failing to hold a hearing or failing to issue a finding of fact as to Ford's competency prior to dismissing her petition; (2) that the district court erred in not obtaining the entire record in order to determine whether her claims had merit (the voluminous trial record is presently with the federal district court); (3) that the district court erred in refusing to appoint an attorney for Ford; (4) that the district court erred in not reaching the merits of the case, but rather dismissing the case based on procedural default rules; and (5) that the district court erred in determining that the case of Dawson v. Delaware, 503 U.S. 159 (1992), was inapplicable to the case at hand. Ford also requests this court to reduce her sentence from death to life in prison without the possibility of parole. PROCEDURAL BACKGROUND On November 12, 1991, Ford filed a petition for a writ of habeas corpus in the First Judicial District Court. Her basic grounds for relief may be summarized as follows: (1) that she was deprived of a fair trial; (2) that *125 her state and federal constitutional rights were abridged by the ineffective assistance of trial and appellate counsel; and (3) that both the state and the court system engaged in unconstitutional conduct. Ford contends that she was denied effective assistance of counsel by reason of counsel's failure to: (1) seek severance of the counts; (2) voir dire prospective jurors concerning their attitudes about the insanity defense; (3) suppress the seizure and use of Ford's personal writings and books; (4) suppress the introduction of prior bad acts; (5) seek court rulings regarding the prosecution's examination of Ford's expert witnesses; (6) challenge Ford's competence to stand trial; (7) request a jury instruction on mitigation; (8) seek a judicial determination of Ford's competence to proceed pro se and testify in her own defense; (9) effectively handle Ford's direct examination; and (10) object to a jury instruction relating to aggravating circumstances. Ford also claimed that she was denied effective assistance of counsel on direct appeal because appellate counsel failed to brief the following issues that were properly preserved for review: (1) [erroneous, rejected] jury instructions at the guilt and penalty phases; (2) the biased read-back of testimony; (3) the allegedly biased juror; (4) the administration of psychotropic drugs; (5) statements that were involuntary and coerced; (6) the denial of Ford's right of confrontation; (7) the introduction of irrelevant and prejudicial acts; (8) prosecutorial misconduct; (9) the bifurcation of sanity determination from other trial issues; (10) the injection of racial prejudice by the prosecution; and (11) prejudicial and inflammatory comments and statements of personal belief by the prosecutor. Ford maintained that she was prevented from previously presenting these claims due to the unconstitutional conduct of the State of Nevada, its judges, justices, and agencies, which, in a "rush to justice," deprived Ford of her rights to a fair trial, due process, equal protection, and freedom from cruel and unusual punishment. Ford's petition supplied two reasons why she had good cause for not having addressed the foregoing issues in her initial petition for a writ of habeas corpus. First, she claimed that the district court did not allow sufficient time for petitioner's counsel and an expert attorney to read and adequately examine the entire record. Her petition asserted that she was subjected to an unreasonable rush to justice. Ergo, several glaring errors were not recognized and raised. Second, Ford insists that she was incapable of assisting in the isolation and development of the legal issues. On December 19, 1991, the district court ordered the State to file a response to Ford's petition. In response, the State filed a motion to dismiss. The State maintained that Ford's claims of ineffective trial counsel had been litigated and rejected previously by this court in Ford, 105 Nev. 850, 784 P.2d 951 (1989). Conceding that certain claims presented by the petition were slightly distinct from previous claims, the State referred to the following comments by this court concerning the issue of ineffective counsel: (1) "[t]here is nothing in the record to show that [trial counsel] failed to give Ford reasonable assistance," Ford, 105 Nev. at 853, 784 P.2d at 953; and (2) in ruling that Ford's contention that her "appellate counsel failed to raise all meritorious issues is without merit," we noted that "Ford's counsel stated that she did not disregard any crucial issue in Ford's appeal ... [and] that appellate counsel is most effective when she does not raise every conceivable issue on appeal." Finally, we also noted that we reviewed the record and "conclude[d] that Ford's counsel adequately raised the relevant issues on appeal." Id. (Citations omitted.) In addition, the State identified issues raised by Ford which this court had already addressed, including failure to raise the issue of a biased sitting juror, extra peremptory challenges, and administration of psychotropic drugs. Ford, 102 Nev. at 131-34, 717 P.2d at 29-32. The State also insisted that Ford's claims against Nevada's judges, justices, and agencies merely repeated the claims of ineffective trial and appellate counsel. Consequently, the State concluded that the issues raised in Ford's petition were either not new or were waived, thus requiring dismissal. See NRS 34.810. *126 In Ford's response to the State's motion to dismiss, she explained the necessity for exhausting her state remedies in preparation for seeking relief in federal court. She noted that her initial petition for habeas corpus inadequately addressed issues of ineffective assistance of counsel, as the subject was only generally addressed (inexperience and time constraints of trial counsel), except for references to counsel's failure to have her car inspected and to interview State witnesses. See Ford, 105 Nev. at 852-53, 784 P.2d at 952-53. Ford argued that this court's general language, asserting that trial and appellate counsel had been effective, could not be used to bar all issues that could potentially be raised. Ford insisted that this court could not, on its own, review the entire record and ascertain whether her attorneys were effective. She also complained that we failed to discuss the issues presented in her petition, specifically, whether she was sufficiently competent to disregard her attorney's advice and testify at trial,[2] and whether she was subjected to unreasonable time restrictions. Ford rejected the State's waiver argument on grounds that because of her incompetence, she was incapable of "knowingly and understandingly" waiving her right to post-conviction relief. See Rogers v. Warden, 86 Nev. 359, 361, 469 P.2d 993, 994 (1970). As an alternative basis for relief, Ford reinvoked her arguments demonstrating good cause for not having raised the issues in her prior petition. In addition to her answer, Ford filed a motion requesting authorization, at state expense, to copy the entire record and renumber the volumes. She contended that the expense was justified because the record, as it stood, was too complex and time consuming to review. On appeal, Ford submits that her request was, in effect, an effort to provide the court with a reasonably reviewable record. In response, the State asserted that Ford's answer to its motion to dismiss merely repeated issues already raised and addressed. The State also claimed that Ford failed to demonstrate cause and prejudice. The State contended that Ford's ineffective counsel and rush to justice arguments had previously been rejected on direct appeal and in post-conviction relief proceedings. On April 20, 1992, Ford filed a statement of supplemental authority, asserting that the case of Dawson v. Delaware, 503 U.S. 159 (1992), supported her claim that her trial counsel unreasonably failed to seek pretrial suppression of Ford's writings and autobiographical material, the admission of which assertedly violated the First and Fourteenth Amendments to the U.S. Constitution and related Nevada constitutional provisions. On June 11, 1992, Ford's counsel, Annette R. Quintana, having decided to close her practice, sought judicial appointment of counsel for Ford. On September 3, 1993, the district court entered an order dismissing Ford's petition and denying Ford's motion to copy the record and to appoint new counsel. The district court reasoned that Ford's claims of ineffective assistance of trial and appellate counsel and the unconstitutional conduct of the State of Nevada had been previously raised and rejected in her direct appeal to this court. The district court also noted that the issues of competency and the administration of psychotropic medication had also been decided in Ford, 97 Nev. 578, 635 P.2d 578 (1981), and in Ford, 102 Nev. 126, 717 P.2d 27 (1986). Consequently, the district court ruled that issues not raised in the prior post-conviction petition were deemed waived, that there was no "good cause" for raising new issues, and that there was no prejudice to Ford. The district court's ruling also discussed the Dawson case, reasoning that Dawson was limited to its facts and did not apply to Ford's case. The district court distinguished *127 Dawson on the basis that Ford's abstract views were elicited from Ford herself, as opposed to an independent source, and were presented in the guilt phase, as opposed to the sentencing phase. See Dawson, 503 U.S. 159 (1992). For the aforementioned reasons, the district court dismissed Ford's petition. Ford appealed. DISCUSSION NRS 34.810 governs successive petitions for writs of habeas corpus. In part, it provides: 2. A second or successive petition must be dismissed if the judge or justice determines that it fails to allege new or different grounds for relief and that the prior determination was on the merits or, if new and different grounds are alleged, the judge or justice finds that the failure of the petitioner to assert those grounds in a prior petition constituted an abuse of the writ. 3. Pursuant to subsections 1 and 2, the petitioner has the burden of pleading and proving specific facts that demonstrate: (a) Good cause for the petitioner's failure to present the claim or for presenting the claim again; and (b) Actual prejudice to the petitioner. Commenting on this statute, this court, in Phelps v. Director, Prisons, 104 Nev. 656, 764 P.2d 1303 (1988), stated: Once [the affirmative defenses of waiver or abuse of the writ are] made by the state, the burden then falls upon the petitioner to show: (1) that good cause exists for his failure to raise any grounds in an earlier petition and that he will suffer actual prejudice if the grounds are not considered; or (2) if no new grounds for relief are asserted, that the previous petition was not decided on its merits. Should petitioner fail to meet this burden, the district court may then dismiss the petition without further proceedings. Id. at 659, 764 P.2d at 1305 (citations omitted). We have also held that "[t]o establish good cause to excuse a procedural default, a defendant must demonstrate that some impediment external to the defense prevented him from complying with the procedural rule that has been violated." Lozada v. State, 110 Nev. 349, 353, 871 P.2d 944, 946 (1994). Ford claims that the district court's interpretation of this court's broad language in Ford, barring on the merits every possible issue arising from the case, whether or not considered by this court, leaves her without any corrective options, violates her rights to due process and equal protection, and otherwise destroys her counsel's ability to secure her constitutional rights. Ford also contends that there is no evidence that she ever knowingly and understandingly waived claims for relief, and that a knowing and understanding waiver of claims is an implied requisite of good cause. Therefore, because the State failed to demonstrate such a waiver, Ford concludes that she is relieved of her burden to demonstrate good cause. Ford also argues that courts have an obligation to review habeas corpus petitions on the merits, thereby diminishing, if not eliminating, the use and effect of procedural bars such as cause and prejudice by district and appellate courts. Alternatively, Ford urges the proposition that judicial interference with her counsel's efforts to adequately prepare her initial petition for habeas corpus is sufficient cause. We conclude that the district court did not err in finding that Ford's claims were either previously adjudicated or waived. Contrary to Ford's position, the State does not have the burden to prove that a petitioner knowingly and understandingly waives grounds for relief as a prerequisite to the petitioner's burden to show good cause. Neither current legislation (NRS 34.810) nor past legislation (NRS 177.385) requires such a burden of the State. NRS 177.385, which was repealed January 1, 1993, referred to a knowing and understanding waiver of claims, but such a waiver was assumed if the petitioner did not demonstrate good cause justifying his or her failure to raise asserted grounds in a prior petition. See Rogers v. Warden, 86 Nev. 359, 363, 468 P.2d 993, 995 (quoting Commonwealth v. Black, 433 Pa. *128 150, 249 A.2d 561, 562 (1969)).[3] This reasoning is consistent with NRS 34.810, which justly places on petitioners the burden to show good cause and prejudice in order to avoid the effects of an abuse of the writ. For these reasons, we reject Ford's attempt to negate or circumvent Nevada's statutory requirements. In our review for good cause and prejudice, we discovered that none of Ford's pleadings or appellate briefs has reflected specific facts demonstrating that Ford would suffer actual prejudice. Regarding good cause, Ford argues that judicially-imposed time restrictions stymied her counsel's efforts to prepare, brief, and present her case both at trial and on appeal. As previously noted, Ford also argues as good cause that she was unable to assist in her defense because of her state of mind. We conclude that Ford's reasons do not adequately demonstrate good cause for failing to raise her present issues in a prior petition. In Ford's previous appeal from the district court's denial of her petition for post-conviction relief, Ford argued in her opening brief as follows: [p]ost-conviction counsel would only submit that the limitations imposed by the Court [instructing the expert attorney to review only pertinent parts of the record] were again born out of the unreasonable urge to rush the matter through the judicial system despite the need for extended time frames due to the length of the record and complexity of the issues. Ford contended that meaningful review of the record was precluded because of the district court's unreasonable limitations on the expert attorney. Ford urged this court to remand the matter to the district court for an unrestricted review of the record to document instances of ineffective counsel. This court, in Ford, 105 Nev. 854, 784 P.2d 951 (1989), responded as follows: Ford claims that the post-conviction court unreasonably limited the use of an attorney hired to serve as an expert witness because it did not give him all volumes of the record on appeal. This argument is without merit. A review of the record shows that the expert witness was supplied with all pertinent parts of the record. We are satisfied that the expert witness had an adequate record to work with. We conclude that Ford's remaining contentions lack merit and that the district court correctly rejected them. Id. at 854, 784 P.2d at 953. We are not persuaded that our prior ruling was in error. Ford has failed to demonstrate any valid reason why we should now more fully consider the claim of an unreasonable rush to justice by the court system. Despite her allegations, she has presented no specific evidence that the time restrictions imposed were unreasonable. Notably, Ford had access to an appointed attorney and an expert witness who was given relevant portions of the record. No showing has been made that these attorneys were ineffective or that the grounds now complained of were not ascertainable from the records they reviewed. We therefore again reject Ford's argument that the judicial system has rushed her case to justice. Ford's second justification for good cause her inability to assist in her defense was similarly lacking in specific evidence indicating Ford's inability to assist in her defense due to her mental state at the time of her petition for post-conviction relief. The burden of proving these impairments as support for good cause is on the petitioner. We conclude that Ford has failed to meet her burden. Furthermore, we note that the grounds that Ford asserts in her petition are legal in nature and were, more likely than not, gathered from reading the trial proceedings and the appellate record. They are not closely related to facts that required the assistance of Ford. Thus, Ford has failed to demonstrate how her inability to assist in her defense is related to her failure to assert the grounds raised in this successive petition. For these reasons, we conclude that Ford failed to meet her burden to show good cause and prejudice and that the district court properly dismissed Ford's petition without *129 further proceedings. See Phelps, 104 Nev. at 659, 764 P.2d at 1305. Absence of a Complete Record Ford contends that because the district court did not have access to the full record, her case must be remanded to the district court for a thorough and valid evaluation of her claims based upon the complete record. Ford notes that the United States Supreme Court has emphasized the importance of assuring that capital sentences are reviewed on a complete record. Dobbs v. Zant, ___ U.S. ___, ___, 113 S.Ct. 835, 836, 122 L.Ed.2d 103 (1993); see Richmond v. Ricketts, 774 F.2d 957, 961 (9th Cir.1985) (quoting Turner v. Chavez, 586 F.2d 111, 112 (9th Cir.1978) ("`The very nature of the habeas corpus action demands an independent review [of the record]'")). Ford insists that the district court's decision, which was based on cause and prejudice, procedural bars, and a comparison of the merits of her case with the Dawson case, required reference to the record. She asserts that the district court's actions violated the Eighth and Fourteenth Amendments to the United States Constitution and similar provisions in the Nevada Constitution. Ford claims that her motion to have the State underwrite the expense of producing renumbered volumes of the entire record constituted a reasonable attempt to present the record before the district court. We disagree. The burden of production lies with the petitioner in petitions for writ of habeas corpus. NRS 34.370(4) provides in part: "Affidavits, records or other evidence supporting the allegations in the petition must be attached unless the petition recites the cause for failure to attach these materials." Contrary to Ford's assertions, her motion to have the State cover the expense of copying the record was nothing more than a motion to copy the record; it cannot be construed as a request to retrieve and transport the existing record from Las Vegas to Carson City. In addition, we conclude, for the reasons stated above, that the petition failed on its face; therefore, it was not necessary to review the entire record prior to dismissing Ford's petition. Unlike initial petitions which certainly require a careful review of the record, successive petitions may be dismissed based solely on the face of the petition. See NRS 34.810; Phelps, 104 Nev. at 659, 764 P.2d at 1305. Competency Hearing Ford maintains that the district court, or the State, had an obligation to inquire about her competence. See Griffin v. Lockhart, 935 F.2d 926, 929 (8th Cir.1991). Ford underscores her documented vacillation between competency and incompetency throughout these proceedings,[4] arguing that this evidence was sufficient to invoke the court's obligation to establish, through a hearing or finding, her competence to proceed. We conclude that the district court did not err in not holding a hearing to determine whether Ford was competent to proceed. "Due process requires that a hearing be held whenever evidence raises a sufficient doubt about the mental competency of an accused to stand trial." Id. Ford's petition never addressed the issue of her competency except to state, as a reason for not raising the asserted post-conviction issues previously, that Ford was incapable of contributing to the isolation and development of legal issues. Likewise, no evidence was presented to the district court to raise a sufficient doubt as to Ford's competency to proceed. We therefore conclude that the district court did not err in failing to provide a competency hearing sua sponte. See id. at 930; see also Hillis v. State, 103 Nev. 531, 533, 746 P.2d 1092, 1093 (1987) (a defense not raised below *130 will be deemed waived and will not be considered on appeal). Denial of Motion to Appoint Counsel NRS 34.750(1) provides: A petition may allege that the petitioner is unable to pay the costs of the proceedings or to employ counsel. If the court is satisfied that the allegation of indigence is true and the petition is not dismissed summarily, the court may appoint counsel to represent the petitioner. In making its determination, the court may consider whether: (a) The issues presented are difficult; (b) The petitioner is unable to comprehend the proceedings; or (c) Counsel is necessary to proceed with discovery. (Emphasis added.) Although Ford's case certainly implicates elements cited in the latter half of NRS 34.750(1), we conclude, for the reasons stated above, that the district court's summary dismissal of Ford's petition was proper. Consequently, the district court did not err in dismissing Ford's petition without appointing counsel. See NRS 34.750(1). Dawson Claim Recently, in Dawson v. Delaware, 503 U.S. 159, 112 S.Ct. 1093, 117 L.Ed.2d 309 (1992), the United States Supreme Court held that evidence of a defendant's abstract beliefs, if irrelevant to the proceedings, could not be introduced at the sentencing proceeding. Id. at 165-67, 112 S.Ct. at 1097-99. In Dawson, a stipulated statement was admitted during the sentencing phase indicating that Dawson was a member of a prison gang known as the Aryan Brotherhood. Id. The short statement did not discuss why his gang membership was relevant to his crime or sentence. Id. The Supreme Court held that although relevant evidence as to a defendant's beliefs could be admitted, the statement at issue was irrelevant and was erroneously admitted by the trial court at the sentencing hearing. Id. Prefatorily, Ford contends that without an adequate record, the district court could not have properly compared Dawson's analysis to the circumstances which occurred at her trial. As to the merits of the district court's decision, Ford argues that the stage of trial at which the evidence was admitted is not an important distinction. Ford alleges that the jury was instructed during the penalty phase that it could consider all evidence presented at the guilt phase. Ford argues that her controversial opinions were irrelevant to her sentencing and that the jury, under Dawson, could not constitutionally consider such opinions in determining her sentence. In addition, Ford argues that an issue remains as to whether her trial counsel was ineffective in eliciting abstract views from her and in failing to object to their consideration in the penalty phase. Finally, Ford claims that the trial court's refusal to exclude her beliefs from the trial phase, despite her counsel's objections, was error, considering the irrelevancy of the beliefs and the highly inflammatory nature of the subjects. Initially, we note that in this petition for writ of habeas corpus, Ford never presented to the district court the issue of whether the jury improperly considered Ford's beliefs in determining her sentence. Ford mentioned Dawson in a supplemental statement to support her petition's claim that her trial counsel unreasonably failed to seek a pretrial suppression of materials and writings containing Ford's beliefs. Dawson has little relevance to this claim, and the district court did not err in determining without the record that Dawson was distinguishable from the instant case. Only on appeal to this court does Ford present the theory that the jury may have erroneously considered these materials in the penalty phase of her trial. Ford cannot change her theory underlying an assignment of error on appeal. McCall v. State, 97 Nev. 514, 516, 634 P.2d 1210, 1212 (1981). Even if we were to consider the merits of Ford's position on the unwarranted assumption that she demonstrated good cause for not raising this issue previously, we would conclude that the admitted material to which Ford objects was not totally irrelevant to the proceedings, and that consequently, Dawson *131 is distinguishable from the instant case. Ford's petition notes: A small portion of this material [Ford's books and writings] was relevant to the defense of insanity as demonstrating loose association of thought which is a symptom of schizophrenia. By far the bulk of Petitioner's writings had no relevance to the charges or the defense and were private musings, never intended for publication, expressing unpopular attitudes on highly controversial topics. It also states: Trial counsel unreasonably examined Petitioner and elicited from her a virtual autobiography of her travels and travail from the time of her first employment to the date of the Thanksgiving Day event. This prejudiced Petitioner by "opening the door" to extensive cross-examination by Prosecutor Dunlap in which he: (i) examined Petitioner on virtually all her major writings, her collection of books and her attitudes to Jews, Mormons, Hitler, American Indians, use of marijuana, sadomasochism, witchcraft and the occult, and established religion... . The foregoing material from Ford's petition indicates that Ford's beliefs and attitudes were properly admitted during the guilt phase as a result of defense counsel "opening the door." The effort by defense counsel to delve into Ford's past was an apparent tactical decision to prove Ford's only valid defense, that of insanity. See Ford, 102 Nev. at 130, 134-35, 138 n. 8, 717 P.2d at 30, 32-33, 34-35 (discussing Ford's defense, her testimony and her turbulent life). "Tactical decisions are virtually unchallengeable absent extraordinary circumstances." Ford, 105 Nev. at 853, 784 P.2d at 953 (citing Strickland v. Washington, 466 U.S. 668, 691, 104 s.Ct. 2052, 2066, 80 L.Ed.2d 674 (1984)). These extraordinary circumstances have not been shown. The excerpts above also indicate that at least certain of Ford's beliefs were relevant in providing insight as to why Ford sought to kill so many people who were unknown to her. The issue presented on appeal is whether the alleged jury instruction given during the penalty phase permitting the jury to consider evidence presented during the guilt phase so tainted the sentencing as to require reversal based on Dawson. We perceive no reasonable grounds to support such a conclusion. The Dawson Court stated: We think that it [the First Amendment] similarly prevents Delaware here from employing evidence of a defendant's abstract beliefs at a sentencing hearing when those beliefs have no bearing on the issue being tried. Dawson, 503 U.S. at 168, 112 S.Ct. at 1099 (emphasis added). The Dawson Court precluded evidence of Dawson's membership in the Aryan Brotherhood only because the evidence was "totally without relevance to Dawson's sentencing proceeding." Id. at 165, 112 S.Ct. at 1097 (emphasis added). The Dawson Court noted: We have previously upheld the consideration, in a capital sentencing proceeding, of evidence of racial intolerance and subversive advocacy where such evidence was relevant to the issues involved. In Barclay v. Florida, 463 U.S. 939, 103 S.Ct. 3418, 77 L.Ed.2d 1134 (1983), for example, we held that a sentencing judge in a capital case might properly take into consideration "the elements of racial hatred" in Barclay's crime as well as "Barclay's desire to start a race war." See id. at 949, 103 S.Ct., at 3424 (plurality opinion); id., at 970, and n. 18, 103 S.Ct. at 3435, and n. 18 (STEVENS, J., concurring in judgment). Id. at 164, 112 s.Ct. at 1097. Similarly, in the instant case, declarations and admissions by Ford at the time of the Thanksgiving Day tragedy indicate elements of racial hatred. See Ford, 102 Nev. at 130-31 n. 4, 717 P.2d at 30. Unlike the facts in Dawson, evidence of Ford's intolerances were not totally irrelevant to the sentencing proceedings. We therefore conclude that the district court did not err in distinguishing Dawson based solely on the evidence in the record before it. *132 Modifying Ford's Sentence. Finally, Ford requests this court to revisit its power to evaluate the evidence in her case and, in light of her mental fluctuations between competency and incompetency, modify Ford's sentence to one of life imprisonment without possibility of parole. Ford notes this court's remark that a "just" and "better course" would have been to secure "the defendant's permanent sequestration." Ford, 102 Nev. at 138 n. 8, 717 P.2d at 34-35. Ford refers to this court's recognition that the State will continually incur the expenses associated with finding "the point at which Mrs. Ford will be competent to receive her decreed punishment." Moreover, Ford asserts that "[t]his process will continue as long as the death sentence in this case exists." We acknowledge our recognition that this case was not "among the brightest stars in the judicial firmament." Id. We nevertheless concluded, as we do now, "that defendant's sentence of death is not excessive or disproportionate to the penalty imposed in similar cases in this State, considering both the crime and the defendant ... [and that] it is not for this Court to diminish her punishment because of a conflict in the evidence regarding defendant's mental deficiencies." Id. at 137, 717 P.2d at 34-35 (footnote omitted). We perceive no basis for reconsidering our previous holding. Therefore, we deny Ford's request for a reduction in her imposed sentence.[5] We have considered all other arguments raised in the parties' briefs and during oral argument, and conclude that they are without merit.[6] CONCLUSION For the reasons discussed above, we affirm the district court's dismissal of Ford's petition for a writ of habeas corpus.[7] NOTES [1] Ford initially sought writ relief in the form of prohibition or mandamus concerning a forced regimen of psychotropic medication. Ford v. District Court, 97 Nev. 578, 635 P.2d 578 (1981). We concluded that since Ford was determined to be competent to stand trial, she should not be forced to take psychotropic medication. Id. at 579, 635 P.2d at 579. On direct appeal from Ford's judgment of conviction and sentence of death, we affirmed. Specifically, we ruled that (1) the district court did not abuse its discretion in denying a motion for a change of venue; (2) the district court did not err in denying Ford's challenges for cause or in denying Ford's request for additional peremptory challenges; (3) the district court did not abuse its discretion in not ordering the psychiatric examination of Ford during trial; (4) the trial court did not err in submitting the issue of Ford's competency to the jury; (5) there was substantial evidence in the record to support the jury's findings, the two aggravating circumstances and the sentence of death; and (6) Ford's death sentence was not excessive or disproportionate. Ford v. State, 102 Nev. 126, 717 P.2d 27 (1986). Finally, on Ford's appeal following a denial of post-conviction relief under NRS 177, we concluded that neither trial nor appellate counsel were ineffective. Ford v. State, 105 Nev. 850, 784 P.2d 951 (1989). Ford recently sought federal post-conviction relief in the United States District Court, and that matter has been stayed pending the resolution of the issues now before this court. [2] Ford disagreed with the State's assertion that this court found Ford to be competent during trial, stressing that it was never properly decided whether Ford, resisting the advice of her attorney, was competent to represent herself. Ford notes that this court found her competent due to the psychotropic drugs, but that after she prevailed in requesting the cessation of drug therapy, her competency was never addressed. [3] Rogers relied on former NRS 177.385, which was significantly amended in 1973 and repealed January 1, 1993. See 1991 Nev. Stat., ch. 44, § 31 at 92. [4] Ford's counsel also attached to the appellate brief a personal affidavit which expressed his opinion that Ford is not capable of rationally assisting him with these proceedings. NRS 178.400(2) provides: "incompetenc[y]" means that the person is not of sufficient mentality to be able to understand the nature of the criminal charges against him, and because of that insufficiency, is not able to aid and assist his counsel in the defense interposed upon the trial or against the pronouncement of the judgment thereafter. [5] We note, parenthetically, that this case does not present, in the least degree, a factual question of guilt or innocence. The fact that Ford was the perpetrator of the crimes for which she was convicted was demonstrated beyond all doubt. It is thus seen that all of Ford's attempts to elude her decreed punishment are based on factors other than the possibility that another committed the crimes for which she was sentenced. The fact that this court may see her crimes, however heinous, in a light that does not fit traditional notions of death-worthiness affords no legitimate basis for disturbing the punishment fixed by a jury of her peers. [6] On October 3, 1994, Ford filed a motion with this court for leave to file supplemental authorities that accompanied the motion. The State has filed its opposition. We grant her motion and instruct the clerk of this court to file Ford's supplemental authorities. We have reviewed these authorities in resolving the instant appeal. [7] THE HONORABLE CHARLES E. SPRINGER, Justice, voluntarily recused himself from participation in the decision of this appeal.

{ "pile_set_name": "FreeLaw" }

410 Pa. Superior Ct. 607 (1992) 600 A.2d 619 In re ESTATE OF Lloyd F. LONG. Appeal of Elva Marie KENNEDY. Superior Court of Pennsylvania. Argued October 23, 1991. Filed January 2, 1992. *609 Christopher C. Houston, Carlisle, for appellant. Gary E. French, Harrisburg, for participating party Long. Before WIEAND, MONTEMURO and KELLY, JJ. MONTEMURO, Judge: This is an appeal from an order dismissing the objection of appellant to the First and Final Account of the Estate of Lloyd F. Long. The appellant challenges the constitutionality of 20 Pa.C.S.A. § 2507(3)[1] on the basis that the statute violates the Equal Protection and Due Process Clauses of the United States Constitution. The Court of Common Pleas of Cumberland County upheld the constitutionality of the statute, and we affirm. The relevant facts are not in dispute and are as follows: Lloyd F. Long, decedent, executed a will on January 12, 1983. The decedent provided for his entire estate to be distributed equally among three individuals; Mary Long (decedent's wife at the time the will was drafted), Paul *610 Miller (decedent's stepfather and executor of the will), and Elva Kennedy (decedent's aunt and appellant in this action). The decedent subsequently divorced Mary Long on November 29, 1983, and married Teresa Long on August 16, 1987. On November 5, 1987, the decedent died leaving neither issue nor parents. Pursuant to 20 Pa.C.S.A. § 2507(3), Teresa Long elected to receive her intestate share which equals 100% of the probate estate.[2] Appellant claims that § 2507(3) violates the Equal Protection clause of the Fourteenth Amendment because it irrationally creates two classifications of surviving spouses; one where the testator married the surviving spouse after executing a will ("after-married spouse"), and one where the testator married the surviving spouse prior to executing a will. An after-married spouse is entitled to receive an intestate share of the estate, which can operate, as in the present case, to totally invalidate the gifts to the named beneficiaries in decedent's will. Initially, we note that the Commonwealth "has the power to enact all manner of legislation with respect to wills and trusts subject, of course, to the rights and limitations ordained in the Constitution of the United States and the Constitution of Pennsylvania." In re Estate of Scott, 418 Pa. 332, 336, 211 A.2d 429, 431 (1965). Furthermore, there is a strong presumption that statutes enacted by the legislature are constitutional. Therefore, appellant "bears the burden of demonstrating that the statute `clearly, palpably and plainly' violates the Constitution. Doubts are to be resolved in favor of sustaining the legislation." Estate of Cox, 327 Pa.Super. 479, 485, 476 A.2d 367, 370-71 (1984) (quoting Hayes v. Erie Insurance Exchange, 493 Pa. 150, 154, 425 A.2d 419, 421 (1981)). The equal protection clause does not deny the legislature the power to treat different classes of persons in *611 different ways, rather it requires that the classification meet the appropriate degree of constitutional scrutiny. Cox, 327 Pa.Superior Ct. at 486, 476 A.2d at 371. Where the challenged statute impinges upon a fundamental right or liberty or concerns a `suspect class', the court is to undertake a `strict scrutiny' of the law. An intermediate standard of review ... is employed when the questioned state affects a `quasi suspect' classification. Finally, where the statutory classification concerns neither a suspect nor quasi suspect category nor fundamental rights or liberties, a minimal standard of review is to be employed. Id. Appellant concedes that the minimal standard or rational basis test is applicable. Thus, our review is limited to determining whether § 2507(3) is rationally related to a legitimate state purpose. Dandridge v. Williams, 397 U.S. 471, 90 S.Ct. 1153, 25 L.Ed.2d 491 (1970); In re Estate of Cavill, 459 Pa. 411, 329 A.2d 503 (1974) (employing the rational basis test to determine the constitutionality of Mortmain statute). "This deferential standard mandates only that the statutory classification be `reasonable' and `rest upon a difference having a fair and substantial relation to the object of the legislation.'" Estate of Cox, 327 Pa.Super. at 487, 476 A.2d at 371 (quoting Snider v. Thornburg, 496 Pa. 159, 166, 436 A.2d 593, 596 (1981); F.S. Royster Guano Company v. Virginia, 253 U.S. 412, 415, 40 S.Ct. 560, 561, 64 L.Ed. 989 (1920)). There is little doubt that the Commonwealth has a legitimate state interest in protecting an after-married spouse. As the trial court noted: The most obvious purpose behind § 2507(3) is to protect a surviving spouse from the negligence of the decedent in failing to update his will after marriage. The statute makes a presumption that had the decedent thought about it, or had a chance, he would have provided for his current spouse. It is clear that this is a legitimate purpose. *612 (T.C.O. at 10). Furthermore, this goal is well within the legislature's power to enact legislation limiting the right to inherit property. Estate of Cox, 327 Pa.Super. at 487, 476 A.2d at 371 (1984). Thus, if the means employed in § 2507(3) are rationally related to protecting the surviving spouse from an unintentional omission, then the statute withstands constitutional scrutiny. The means employed in § 2507(3) are to give the surviving spouse the share of the estate that he would have received had the testator died intestate, unless the will gives him a greater share. Id. Since this is a rational means to protect an after-married spouse, the statute does not violate the equal protection clause. Appellant argues that because the legislature has provided a spouse with an elective share, the after-married spouse is already protected from unintentional disinheritance, and therefore § 2507 serves no rational purpose. Since appellant does not challenge the legislature's ability to provide an elective share, her only objection is that § 2507 affords a surviving spouse too much protection. This argument is essentially that the means selected by the legislature for protecting an after-married spouse work too well. As the 1956 Official Comment to § 2507(3) states: The Model Probate Code makes no provision for the after-married spouse because it is considered that his right to take against the will is a full protection. Pennsylvania places the after-married in the more gracious position of receiving a full intestate share, including the spouse's allowance (Shestack's Estate, 267 Pa. 115 [110 A. 166], without requiring that there be an election to take against the will. Id. "Our scope of review is limited to questions of law. We may not sit as a super-legislature empowered to re-write legislation as we see fit nor is it within our province to judge the wisdom of the authors of challenged legislative enactments." Lehigh Foundations v. Workmans Comp. Appeal Board, 39 Pa.Commw. 416, 395 A.2d 576, 579 *613 (1978). Furthermore, "[i]t is beyond our scope of review to ascertain whether an alternative means would have more appropriately served the sovereign's purpose." Estate of Cox, 327 Pa.Super. at 489, 476 A.2d at 373. By questioning the amount of protection afforded an after-married spouse, appellant is asking this Court to pass on the wisdom of protecting the surviving spouse to the possible exclusion of the named beneficiaries. This we will not do. As such, we reject appellant's equal protection argument. Appellant's second issue is that § 2507(3) violates the Due Process clause of the United States Constitution. Specifically, appellant argues that § 2507(3) creates an irrebuttable presumption that the testator would have revised his will after marriage to include his surviving spouse to a share at least equal to her intestate share, and that this presumption denies the named beneficiaries a property right without due process of law. The flaw in appellant's argument, however, is that the named beneficiary to a will does not have a property interest protected by the fourteenth amendment. In re Estate of Cavill, 459 Pa. 411, 329 A.2d 503 (1974) (Pomeroy, J. dissenting). While it is true that the concept of property includes more than "the ownership of real estate, chattels, or money," it does not encompass a mere expectation. Board of Regents v. Roth, 408 U.S. 564, 571-72, 92 S.Ct. 2701, 2705-06, 33 L.Ed.2d 548 (1972). Rather for the due process protections to attach, appellant must have a legitimate claim of entitlement. Id. As the trial court correctly explained, appellant only had a tenuous interest in receiving any property. Aside from the application of § 2507(3), a number of unpredictable events could occur to defeat the right of appellant to receive any of the testator's estate. For example, the decedent could change his will, or the objector could have predeceased the decedent. Furthermore, there is no claim of entitlement. "There is no natural right to receive property through a will. Any *614 inheritance is accomplished through the legislature granting a person the power to will his property to another. In fact, it is even possible for the state to declare an escheat of all a decedent's property." (T.C.O. at 6) (citing Cavill, 459 Pa. 411, 329 A.2d 503 (1974) (Pomeroy, J. dissenting); Tack's Estate, 325 Pa. 545, 191 A. 155 (1937). Thus, appellant does not have a property right protected by the fourteenth amendment. Accordingly, we affirm the trial court, and hold that 20 Pa.C.S.A. § 2507(3) does not violate either the Equal Protection or Due Process Clauses of the United States Constitution. Order affirmed. NOTES [1] Section 2507(3) provides: (3) Marriage. If the testator marries after making a will, the surviving spouse shall receive the share of the estate to which he would have been entitled had the testator died intestate unless the will shall give him a greater share. Id. [2] The intestate share is calculated by applying 20 Pa.C.S.A. § 2102(1). The intestate share of a decedent's surviving spouse is: (1) If there is no surviving issue or parent of the decedent, the entire intestate estate. Id.

{ "pile_set_name": "FreeLaw" }

344 F.3d 55 UNITED STATES of America, Appellee,v.Wanjiku Thiongo, Defendant, Appellant. No. 02-2452. United States Court of Appeals, First Circuit. Heard July 30, 2003. Decided September 15, 2003. COPYRIGHT MATERIAL OMITTED Robert L. Sheketoff for appellant. Mark E. Howard, Assistant United States Attorney, with whom Thomas Colantuono, United States Attorney, was on brief for appellee. Before Selya, Circuit Judge, Stapleton,* Senior Circuit Judge, and Baldock,** Senior Circuit Judge. BALDOCK, Senior Circuit Judge. 1 A jury convicted Defendant Wanjiku Thiongo of various charges related to a two-year conspiracy to gain illegal admission into the United States for Kenyan nationals. Specifically, the jury convicted Defendant of conspiracy to commit visa fraud, in violation of 18 U.S.C. §§ 371 and 1546(a); conspiracy to encourage or induce an alien to enter, or reside, in the United States, in violation of 18 U.S.C. § 371 and 8 U.S.C. §§ 1324(a)(1)(A)(iv) and (v)(I); and eight counts of obtaining visas for entry into the United States through fraud, in violation of 18 U.S.C. § 1546(a). After adjusting the base offense level for Defendant's aggravating role in the conspiracy, the district court sentenced Defendant to 51 months' imprisonment. We have jurisdiction pursuant to 28 U.S.C. § 1291. We affirm Defendant's convictions, but remand for resentencing. I. 2 The jury found Defendant procured, or caused to be procured, B1/B2 tourist visas for seventy-seven Kenyan nationals. The Kenyans' visa applications gave as the reason for travel various cultural or agricultural programs. The Kenyan nationals did not intend to attend the programs. Instead, each Kenyan intended to enter the United States and stay. Defendant charged the Kenyans between one thousand and four thousand dollars plus airfare for her assistance in obtaining entry into the United States. 3 Aliens may enter the United States lawfully under various types of visas tailored to the type of stay. B1/B2 non-immigrant visas are designed to permit a short term stay (usually between 30 and 60 days) for business or tourist purposes. To obtain a B1/B2 visa, an applicant must establish that he or she has a legitimate reason for travel, that the stay is temporary in nature, that the applicant has sufficient means to finance the proposed trip, and that the applicant has sufficient business or family ties in the home country to assure the United States Consular Officer of his or her intent to return. 4 To demonstrate a legitimate reason for travel, an applicant must provide supporting documentation. For example, an individual seeking to travel on business must provide evidence of the planned business activities such as an agenda or the names and addresses of the people with whom the applicant will be meeting. A personal interview usually is required, but may be waived if the applicant is traveling with a group for a specific purpose. In third-world countries such as Kenya, the visa denial rate is well over fifty percent because these countries historically have had a high percentage of visa recipients fail to return from the United States following entry. 5 The evidence at trial established that Defendant fraudulently obtained letters indicating she was planning various cultural or agricultural programs. The Kenyan nationals sought B1/B2 non-immigrant visas, giving these events as the reason for travel and providing copies of the letters as documentation. 6 In September 1997, seventeen Kenyan nationals obtained B1/B2 visas from the U.S. embassy in Nairobi, Kenya to attend a twenty-one-day agricultural program at McIntosh College. Robert Decolfmaker, the President of McIntosh College, testified that he provided Defendant a letter in which he agreed to assist her in organizing an agricultural tour through the college. According to Decolfmaker, he never heard from Defendant after providing the letter, Defendant never organized an agricultural tour through the college, and no Kenyan national stayed at the college. Several of the Kenyan nationals testified that they paid several thousand dollars for a B1/B2 visa to attend the agricultural program and that they were told upon arrival that the agricultural program did not exist. 7 In October 1998, seventeen Kenyan nationals obtained B1/B2 visas from the U.S. embassy in Harare, Zimbabwe to attend the Boston International Festival, a one-week international exchange program for artists. Defendant obtained the visas during a visit to Zimbabwe. Five of the Kenyan nationals testified at trial that they had not completed a visa application, but had paid Defendant several thousand dollars to obtain a visa on his or her behalf. They also testified that they were not artists, and that none of the travelers intended to attend or attended the festival. Upon their arrival in the United States, the Kenyan nationals were transported not to Boston, but to Defendant's house in Milford, Connecticut. 8 Also in October 1998, sixteen Kenyan nationals received B1/B2 visas from the U.S. embassy in Stockholm, Sweden to participate in a student exchange program at Price Farm School in New Hampshire. Defendant obtained the visas during a visit to Sweden. Jane Miller, the owner of the Price Farm School, testified that she provided Defendant with paperwork inviting Kenyan students to travel to the United States on a three-week cultural exchange program. After providing the paperwork, Ms. Miller did not hear from Defendant again. Defendant used the paperwork to solicit a letter of support for the visa applications from New Hampshire Congressman Charles Bass. No Kenyan national attended the Price Farm School. Several of the Kenyan nationals testified that they were not aware they were to visit the Price Farm School, that they paid Defendant several thousand dollars to obtain a visa on their behalf, and that they intended to enter the United States to stay, several joining family members that had previously entered through Defendant's assistance. 9 Finally, in April 1999, twenty-seven Kenyan nationals obtained B1/B2 visas from the U.S. embassy in Lusaka, Zambia to attend a multi-week dairy tour in New Hampshire and Vermont. Defendant obtained the visas during a visit to Zambia in March. Three Kenyan nationals testified that they did not fill out visa applications, but had paid Defendant several thousand dollars to obtain visas on their behalf. They also testified that they were not dairy farmers, and that they did not visit any dairy farms in the United States. 10 Defendant testified in her own defense at trial. On appeal, she asserts the district court abused its discretion in admitting evidence of Defendant's prior bad acts under Fed.R.Evid. 608(b) and in permitting the prosecutor to repeatedly ask Defendant to comment on the accuracy of other witnesses' testimony. Defendant also asserts the court erred in adjusting her offense level based on her aggravated role in the offense. II. 11 Defendant first contends the district court abused its discretion in permitting the prosecutor to inquire about prior bad acts. The court admitted the evidence as impeachment material pursuant to Federal Rule of Evidence 608(b). Rule 608(b) permits a party to introduce on cross-examination specific instances of conduct for the purpose of attacking the witness' credibility if the evidence is "probative of truthfulness or untruthfulness." See Fed.R.Evid. 608(b). The admissibility of such evidence is determined by weighing several factors including whether the instances of prior conduct bear some similarity to the conduct at issue, whether they were recent or remote in time, and whether the evidence is cumulative of other evidence. See United States v. Simonelli, 237 F.3d 19, 23 (1st Cir.2001). Whether to admit specific instances of conduct to impeach the credibility of a witness is a decision left to the sound discretion of the district court. See United States v. Mateos-Sanchez, 864 F.2d 232, 236-37 (1st Cir.1988). We review the court's decision for an abuse of discretion. Id. 12 The prosecutor began by asking Defendant questions designed to establish that Defendant's current husband fathered her first child just a few months before she served as a legal witness in his marriage to an American citizen. The prosecutor's questions also elicited the fact that Defendant had been married to another man when she gave birth to the child. In response to defense counsel's objection, the prosecutor explained that she was attempting to establish that Defendant signed a legal document attesting to the authenticity of a marriage she knew was entered into solely for the purpose of evading immigration laws. The prosecutor asserted that Defendant had placed her credibility at issue by commenting on the testimony of other witnesses and that evidence of her willingness to assist others in evading immigration laws clearly was probative of her truthfulness. The district court agreed. 13 As 608(b) evidence, Defendant's willingness to serve as a legal witness to a sham marriage designed to avoid immigration laws is fairly probative of Defendant's truthfulness. The evidence indicated Defendant willingly participated in the marriage ceremony of her current husband and another woman, a marriage her husband entered into solely to obtain a green card and eventually his citizenship.1 The evidence further revealed Defendant obtained her own green card by later marrying the same man. Her willingness to engage in these acts shows Defendant was willing to engage in deceptive practices to avoid immigration laws. The evidence was especially relevant as it bore significant similarities to the conduct at issue in the trial.2 The district court did not abuse its discretion in admitting this evidence. 14 Evidence Defendant bore the man's child while married to another does not appear to be relevant or probative of Defendant's truthfulness or untruthfulness. The district court arguably erred in admitting this evidence.3 But we need not determine whether the district court abused its discretion because any error in admitting this evidence was harmless. The weight of the remaining evidence against Defendant was substantial and it is extremely unlikely the verdict would have been any different absent evidence of Defendant's marital infidelity. III. 15 Defendant next asserts the prosecutor improperly asked Defendant to comment on the accuracy of other witnesses' testimony. During cross-examination, the prosecutor twice asked Defendant whether two Government witnesses were lying. Defendant did not object to the first question, but did object the second time. The district court sustained the objection, instructing the prosecutor that she could ask whether Defendant disputed the testimony, but not whether a witness was lying. The prosecutor complied with this instruction, asking Defendant only whether she disputed the testimony or felt a witness was "mistaken." Defendant argues the district court erred in instructing the prosecutor she could continue asking Defendant to comment on the credibility of Government witnesses. Defendant did not object to this instruction at trial. Accordingly, the panel reviews this claim only for plain error. Gaines, 170 F.3d at 82. 16 This Court has held it is improper for an attorney to ask a witness whether another witness lied on the stand. Id. at 81-82 (citing United States v. Fernandez, 145 F.3d 59, 64 (1st Cir.1998)). Underlying this rule is the concept that credibility judgments are for the jury, not witnesses, to make. Id. Accordingly, the district court properly sustained Defendant's objection to the prosecutor's first questions. But this Court also has clarified that asking whether a witness was "wrong" or "mistaken" is proper because the witness is "not required to choose between conceding the point or branding another witness as a liar." Id. ("Asking a witness whether a previous witness who gave conflicting testimony is `mistaken' highlights the objective conflict without requiring the witness to condemn the prior witness as a purveyor of deliberate falsehood, i.e., a `liar.'"). Thus, the prosecutor's remaining questions were permissible and Defendant's claim is without merit. Defendant also makes no attempt to explain how the alleged error was prejudicial as required to establish plain error. IV. 17 Finally, Defendant asserts the district court erred in enhancing her sentence pursuant to U.S.S.G. § 3B1.1 based on her aggravated role in the criminal activity.4 U.S.S.G. § 3B1.1(a) provides for a four-point offense level enhancement if the sentencing court determines a defendant "was an organizer or leader of a criminal activity that involved five or more participants or was otherwise extensive." To properly apply § 3B1.1, "a district court must make both a status determination-a finding that the defendant acted as a leader or organizer of the criminal activity-and a scope determination-a finding that the criminal activity met either the numerosity or the extensiveness benchmarks established by the guidelines." United States v. Tejada-Beltran, 50 F.3d 105, 110 (1st Cir.1995). Assessing a defendant's role in the offense generally is a fact-specific task. Id. We review the district court's factual findings in support of the enhancement for clear error. Id. We review de novo the district court's legal interpretations of the relevant sentencing guidelines. United States v. Nedd, 262 F.3d 85, 93 (1st Cir.2001). 18 During sentencing the district court expressly adopted the factual findings and legal conclusions contained in the Presentence Investigation Report. In doing so, the district court applied the § 3B1.1 aggravating role adjustment to both the conspiracy to induce count and the conspiracy to commit visa fraud count.5 But it appears from the sentencing transcript that the district court did not intend to apply the aggravating role adjustment to the conspiracy to induce count; rather, it intended to apply the adjustment only to the conspiracy to commit visa fraud count.6 19 Application of the aggravating role adjustment to the conspiracy to commit visa fraud count was proper based on the district court's determination that Defendant organized a scheme that was otherwise extensive. The court determined that the criminal activity in which Defendant engaged was extensive in light of the "breadth of activities, when measured in terms of duration, number of clients, or geographic reach." The court also properly concluded that the aliens were criminally liable for their participation in the visa fraud and thus could be considered organized "participants" in the conspiracy. Thus, the district court properly determined that, with respect to the conspiracy to commit visa fraud count, Defendant met both the status and scope prongs necessary to apply a four-point enhancement under § 3B1.1. See Tejada-Beltran, 50 F.3d at 110-112. 20 But the court erred in adopting the sentencing report's recommendation to apply the aggravating role adjustment to the conspiracy to induce count. This count is governed by U.S.S.G. § 2L1.1. The application notes to this guideline section provide: "For the purposes of § 3B1.1 (Aggravating Role), the aliens smuggled, transported, or harbored are not considered participants unless they actively assisted in the smuggling, transporting or harboring of others."7 See U.S.S.G. § 2L1.1, comment. (n.2). Applying the guideline, this Court has ruled that "in the absence of any evidence that [a defendant] exercised control over other persons or was otherwise responsible for organizing them in the commission of an offense," the mere fact that the defendant was involved in an extensive criminal activity does not support a finding the defendant was an organizer or leader under § 3B1.1. See Tejada-Beltran, 50 F.3d at 111 (quoting United States v. Fuller, 897 F.2d 1217, 1221 (1st Cir.1990)). More succinctly, "Section 3B1.1 does not apply to a defendant who merely organizes or supervises a criminal activity that is executed without the aid of others." Id. (quoting Fuller, 897 F.2d at 1221) (emphasis in the original, internal quotations omitted). 21 At the sentencing hearing, the court found Defendant executed the criminal activities largely on her own. The court expressly declined to apply the enhancement based on the involvement of other non-aliens in the criminal conspiracy.8 Based on this factual finding, Defendant did not meet the status prong and did not qualify for an organizer or leader enhancement pursuant to § 3B1.1 on the conspiracy to induce count. See Tejada-Beltran, 50 F.3d at 110-112. The sentence report found Defendant to be an organizer based on the involvement of non-alien individuals. In adopting the sentence report, the district court adopted factual findings in direct conflict with its prior express findings. The court's express factual findings also conflict with its decision to impose the § 3B1.1 enhancement on the conspiracy to induce count. For these reasons, we remand to the district court for resentencing.9 V. 22 For the reasons stated, we AFFIRM Defendant's convictions. We REMAND for resentencing in accordance with this opinion. Notes: * Of the Third Circuit, sitting by designation ** Of the Tenth Circuit, sitting by designation 1 At oral argument, Defendant noted for the first time that the prosecutor failed to ask Defendant whether she signed the marriage license. Defendant argued that her mere participation in the marriage ceremony, absent evidence she signed the license as a legal witness, was not probative of her truthfulness. Defendant's argument challenges the prosecutor's evidence in support of her proffer rather than the district court's ruling. Defendant did not raise the matter before the district court, an act which would have permitted the Government to introduce the required evidence. Defendant also did not raise this argument in her briefs. Accordingly, we will not entertain the argument on appealSee Sandstrom v. ChemLawn Corp., 904 F.2d 83, 86 (1st Cir.1990) (arguments not made before the district court and not raised in appellant's opening brief are waived). 2 On appeal, Defendant asserts the prior conduct was too remote to be relevant. The marriage occurred in 1981 while the conduct at issue in the trial occurred in 1998-1999. Defendant did not raise this issue before the trial court. Thus the panel would review the remoteness claim only for plain errorUnited States v. Gaines, 170 F.3d 72, 82 (1st Cir.1999). As remoteness is but one factor to be considered, the district court did not plainly err in admitting the evidence despite the length of time between the prior conduct and the conduct at issue. 3 The district court also arguably sustained Defendant's objection as to this evidence. At sidebar, the prosecutor stated she had not intended to elicit information about Defendant's marriage to another man at the time she gave birth. The district court agreed that the prosecutor "probably did not realize that she would elicit a response that [Defendant] was married to someone else." After the district court made his admissibility finding, the prosecutor did not refer again to Defendant's marital infidelity. Defendant did not request a limiting instruction 4 Specifically, Defendant argues the district court erred in finding Defendant organized or lead the Kenyans for whom she arranged to procure visas. Although not well articulated, Defendant basically asserts the applicable guidelines do not permit the sentencing court to consider the aliens involved in determining whether to apply the enhancement. Defendant developed this argument more fully before the district court in her written objections to the sentencing report and during the sentencing hearing. The district court expressly addressed the issue during sentencing, and despite Defendant's failure to articulate her claim with precision, the Government's brief on appeal responds fully to her argument 5 The sentencing report calculated a total offense level of 24. In calculating Defendant's sentence, the report first grouped together the count involving conspiracy to commit visa fraud and the counts involving obtaining a non-immigrant visa by means of a false claim or statement. The report correctly used U.S.S.G. § 2L2.1 to apply a base level offense of 11. It then enhanced the sentence by 6 because the offense involved more than 25 but less than 99 documentsSee U.S.S.G. § 2L2.1(b)(2). The report then added 4 points because it found Defendant organized a criminal activity that was otherwise extensive pursuant to U.S.S.G. § 3B1.1(a). Finally, it added 2 points for obstruction of justice. This resulted in a total offense level of 23. The report then calculated the offense level for the count involving conspiracy to induce an alien to come to, enter, or reside in the United States. The report correctly used § 2L1.1 to calculate a base offense level of 12. It then added 6 points because the offense involved more than 25 but less than 99 aliens. The report added 4 points pursuant to U.S.S.G. § 3B1.1 after finding Defendant organized a criminal activity that was otherwise extensive. Finally, it added 2 points for obstruction of justice. This resulted in an offense level of 24. Pursuant to § 3D1.2(b), the sentencing report then grouped together the two calculations. Under U.S.S.G. § 3D1.3(a), the court is to calculate the total offense level as the highest offense level of grouped counts under § 3D1.2(a)-(c). Application Note 1 of that section states that "[t]he offense level for a count refers to the offense level from Chapter Two after all adjustments from Parts A, B, and C of Chapter Three." Therefore, the offense level for each offense must take into account the aggravating role adjustment under § 3B1.1, separately, before the counts are grouped. After calculating the total offense level after adjustments for each count, the sentencing court sentences the defendant based on the count that produced the highest total offense level. Pursuant to § 3D1.3(a), the report used the highest offense level to determine the sentence, in this case 24. 6 The district court discussed in detail the applicability of the enhancement as to both counts during the sentencing hearingSee Sentence Hearing Transcript at 3-24. The court repeatedly distinguished between the conspiracy to commit visa fraud count and the conspiracy to induce count. 7 This application note applies only to the sentencing guideline applicable to the conspiracy to induce count. The conspiracy to commit visa fraud count, calculated under 2L2.1, contains no such instruction 8 The Government argues that Defendant occupied a leadership role over numerous individuals including individuals named "Johanna" and "Wanderi." The district court expressly rejected this as a basis for applying the § 3B1.1 enhancement, noting that Defendant employed these individuals only to a "limited extent" and would have committed the same crimes in essentially the same way absent the assistance of these individuals. Specifically, the court stated: "I would not consider [Defendant] to be an organizer or leader of Wanderi or Johanna in the sense contemplated by this guideline.... four levels is a very significant increase in someone's criminal culpability, and her use of Wanderi and Johanna by itself doesn't warrant that big an increase in her criminal culpability." Sentence Hearing Transcript at 17-18. The district court's finding that the involvement of non-aliens in Defendant's criminal activity did not warrant a four-level enhancement pursuant to § 3B1.1 was not clearly erroneous 9 We recognize Defendant's current sentence falls within the sentence range applicable upon remand. But the district court during sentencing expressed its view that a lower sentence would be appropriate. We remand to give the court an opportunity, at its discretion, to sentence Defendant as it deems just

{ "pile_set_name": "FreeLaw" }

972 So.2d 782 (2007) Ex parte Timothy Lamar TRAWICK. (In re Timothy Lamar Trawick v. State of Alabama). 1051563. Supreme Court of Alabama. March 2, 2007. Rehearing Denied May 18, 2007. Timothy Lamar Trawick, pro se. Troy King, atty. gen., and Kevin C. Newsom, deputy atty. gen., and Stephanie N. Morman and Jean A. Therkelsen, asst. attys. gen., for respondent. LYONS, Justice. Timothy Lamar Trawick petitions for certiorari review of the affirmance by the Court of Criminal Appeals of the trial court's dismissal of his Rule 32, Ala. R.Crim. P., petition. Trawick alleged in his Rule 32 petition that his sentence had been illegally enhanced under the Habitual Felony Offender Act, § 13A-5-9, Ala.Code 1975 ("the HFOA"). We affirm. Trawick was convicted in 1986 of two counts of rape in the first degree and two counts of sodomy in the first degree. He was sentenced to life imprisonment under the HFOA based on three prior felony convictions in 1976 for the sale of controlled substances. In July 1987, the Court of Criminal Appeals affirmed Trawick's convictions and sentences, Trawick v. State, 512 So.2d 818 (Ala.Crim.App.1987), and issued a certificate of judgment. In October 1987, April 1988, and March 2001, Trawick filed petitions for postconviction relief under Rule 32, Ala. R.Crim. P. All three petitions were denied by the trial court; those denials that Trawick appealed were affirmed by the Court of Criminal Appeals. In November 2001, Trawick filed a fourth Rule 32 petition, alleging, among other things, that his enhanced sentence under the HFOA was illegal because, he argued, prior drug-related felonies could not be used to enhance the sentence for a non-drug-related offense. The trial court denied the petition, and the Court of Criminal Appeals affirmed its judgment in an unpublished memorandum on the basis that the claim was precluded under Rule 32.2(a)(4), 32.2(b), and 32.2(c), Ala. R.Crim. P. Trawick v. State (No. CR-05-1095, June 23, 2006), ___ So.2d ___ (Ala.Crim. App.2006) (table). Trawick petitions this Court for a writ of certiorari on the grounds that the denial of his fourth Rule 32 petition conflicted with prior caselaw *783 and that the Rule 32 petition presented an issue of first impression. Before we consider the merits of Trawick's position, we must first determine whether the Court of Criminals correctly held that the issue raised in the Rule 32 petition was precluded. If so, our inquiry need go no further. The State's brief in this proceeding, which Trawick has not contradicted, states that Trawick raised this same issuethat under the HFOA a felony conviction for a drug-related offense could not be used to enhance a sentence for a non-drug-related offensein his Rule 32 petition filed in March 2001 ("the third petition"). In its brief the State contends that in the third petition, "Trawick argued that his 1986 convictions of sodomy and rape were due to be set aside on grounds of a defective indictment and excessive sentence." The trial court denied Trawick's third petition, in part, on the basis that "prior felony drug offenses may be used to enhance a sentence under the [HFOA] following a conviction for a felony that was not drug related. Judo v. State, 568 So.2d 312 ([Ala.Crim.App.] 1990); Powell v. State, 624 So.2d 220 ([Ala.Crim. App.] 1993)." When the trial court dismissed the third petition, Trawick appealed, and the Court of Criminal Appeals affirmed the trial court's dismissal. Trawick did not file an application for rehearing in the Court of Criminal Appeals; thus, he did not file a petition for certiorari review with this Court in response to the decision of the Court of Criminal Appeals affirming the dismissal of his third petition. Rule 32.2(b), Ala. R.Crim. P., generally precludes a trial court from granting relief in response to a successive Rule 32 petition. Rule 32.2(b) defines a "successive petition" as follows: "If a petitioner has previously filed a petition that challenges any judgment, all subsequent petitions by that petitioner challenging any judgment arising out of the same trial or guilty-plea proceeding shall be treated as successive petitions under this rule." Rule 32.2(b) creates a two-pronged approach to addressing successive petitions. The first inquiry, under Rule 32.2(b), is whether the grounds raised in the successive petition are duplicative, that is, have the same grounds been raised in a prior petition. Under Rule 32.2(b), "[t]he Court shall not grant relief on a successive petition on the same or similar grounds on behalf of the petitioner." The second prong of Rule 32.2(b) states that "[a] successive petition on different grounds shall be denied" unless one of two exceptions apply. (Emphasis added.) The exception that Trawick attempts to invoke in this case allows the trial court to consider a successive petition when "the petitioner is entitled to relief on the ground that the court was without jurisdiction to render a judgment or to impose sentence." Rule 32.2(b), Ala. R.Crim. P. Trawick's claim that his sentence is illegal under the HFOA presents a jurisdictional claim. See, e.g., Ex parte Robey, 920 So.2d 1069, 1071-72 (Ala.2004) (holding that because multiple punishments for the same offense constitute a sentence that exceeds the maximum allowed by law and an illegal sentence affects the trial court's jurisdiction, "Robey is not barred from asserting in this successive Rule 32 petition the violation of his double jeopardy rights"); Ex parte Sanders, 792 So.2d 1087, 1091 (Ala. 2001) ("`[w]hether a sentence is excessive . . . is a jurisdictional issue' that is not precluded by the limitations period of Rule 32, by the rule against successive petitions, or by Rule 32.2(a)(3)"). However, Trawick's fourth Rule 32 petition asserts a ground Trawick has previously asserted, even if it is a jurisdictional issue. Therefore, the second prong of Rule 32.2(b), which is limited to successive petitions on different grounds, does not apply. *784 The first prong of Rule 32.2(b) precludes Trawick from reasserting a jurisdictional claim "on the same or similar grounds." Because Trawick's jurisdictional claim is duplicative, the issue having already been raised and adjudicated on its merits by the trial court in his third petition, we do not reach the second prong of Rule 32 containing the jurisdictional exception. Compare Grady v. State, 831 So.2d 646, 648-49 (Ala. Crim.App.2001) ("[A]lthough this is a successive petition . . . jurisdictional claims are not `precluded by the limitations period or by the rule against successive petitions.' . . . Moreover, from the record before us, Grady did not claim that his sentence was illegal in his first Rule 32 petition." (emphasis added)). Although our cases have previously stated that jurisdictional claims cannot be precluded as "successive," that exception to Rule 32.2(b) applies only to jurisdictional claims not previously raised and adjudicated on the merits. Because the trial court adjudicated Trawick's jurisdictional claim on the merits in a prior petition, Trawick is precluded from reasserting that jurisdictional claim in a successive petition. Accordingly, the Court of Criminal Appeals properly found that his claim that he had been illegally sentenced under the HFOA was precluded, and that judgment is due to be affirmed. AFFIRMED. SEE, WOODALL, STUART, SMITH, BOLIN, PARKER, and MURDOCK, JJ., concur. COBB, C.J., recuses herself.

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IN THE COURT OF CRIMINAL APPEALS OF TENNESSEE AT JACKSON Assigned on Briefs August 7, 2012 STATE OF TENNESSEE v. ANTONIO STARKS Direct Appeal from the Criminal Court for Shelby County No. 10-01052 John T. Fowlkes, Jr., Judge No. W2011-02038-CCA-R3-CD - Filed January 30, 2013 A Shelby County Criminal Court Jury convicted the appellant, Antonio Starks, of first degree felony murder and aggravated child abuse, and the trial court sentenced him to concurrent sentences of life and fifteen years, respectively. On appeal, the appellant contends that (1) the evidence is insufficient to support the convictions; (2) the trial court erred by allowing witnesses to testify about his previous abuse of the victim; (3) the trial court erred by refusing to allow him to question the victim’s mother about a prior conviction; (4) the trial court should have granted a mistrial when a police officer testified that the victim had been sexually abused; (5) the trial court should have given a curative instruction when the State made an improper comment during closing arguments; and (6) the trial court should have granted a new trial because the State failed to disclose that the victim’s mother received favorable treatment in return for her testimony. Based upon the record and the parties’ briefs, we affirm the judgments of the trial court. Tenn. R. App. P. 3 Appeal as of Right; Judgments of the Criminal Court are Affirmed. N ORMA M CG EE O GLE, J., delivered the opinion of the Court, in which T HOMAS T. W OODALL, and R OGER A. P AGE, JJ., joined. Edwin C. Lenow, Memphis, Tennessee, for the appellant, Antonio Starks. Robert E. Cooper, Jr., Attorney General and Reporter; J. Ross Dyer, Assistant Attorney General; Amy P. Weirich, District Attorney General; and Jennifer Nichols and Carrie Shelton, Assistant District Attorneys General, for the appellee, State of Tennessee. OPINION I. Factual Background In January 2010, the Shelby County Grand Jury indicted the appellant for first degree felony murder in the perpetration of aggravated child abuse and aggravated child abuse. The victim was his girlfriend’s three-year-old daughter, Amilyia Oliver. At trial, Linda Henry testified that she was a registered nurse at Delta Medical Center in Memphis. On May 30, 2009, a Saturday, Henry was working as a nurse house supervisor. Shortly after 12:00 p.m., Henry went to the Emergency Department in response to a “code blue,” meaning a child’s heart had stopped. Henry entered the trauma room and saw a nurse and a doctor working on the victim. She said she noticed that the victim had what looked like “a new injury off of her nose.” Henry left the room and went to the nurse’s station to find someone who could tell her the victim’s name. The appellant got a card with the victim’s name on it out of his wallet and gave it to Henry; his hand was shaking. Henry said that she returned to the trauma room, that the victim’s clothes were off, and that the victim appeared to have “some old type injuries to her body and some new type injuries to her body.” Due to the injuries, Henry telephoned the police. She said that the hospital staff used medication and a defibrillator to try to resuscitate the victim and that they worked on the victim for about fifty minutes. The victim was declared dead at 1:10 p.m. On cross- examination, Henry testified that it was not unusual for someone to be trembling after bringing an ill person to the hospital. Dr. Miguel LaBoy, an assistant medical examiner for Shelby County, testified as an expert in forensic pathology that he performed the victim’s autopsy on May 31, 2009. The victim was forty inches tall and weighed thirty-one pounds. Dr. LaBoy conducted an external examination and found seven bruises on the victim’s head. Specifically, he found bruises on the left and right side of her forehead, on her left cheek, on the left side of her chin, and inside her upper lip. He also found ten abrasions on the victim’s head. Specifically, he found abrasions on her forehead, left eyelid, left cheek, both nostrils, and inside her bottom lip. Dr. LaBoy testified that a bruise extended from the victim’s right shoulder to her right arm and covered the sides, front, and back of her arm. She also had two abrasions on the front of her right arm, an abrasion on the back of her right index finger, and an abrasion on her right middle finger. The victim had a bruise from her left shoulder onto her left arm, an abrasion on the back of her left shoulder, an abrasion on the back of her left arm, two abrasions on the inside of her left arm, a u-shaped bruise on the front of her left forearm, and a u-shaped bruise on the back of her left forearm. A bruise was near the center of the victim’s chest, and she had bruises on the left and right sides of her chest. She also had an abrasion on the right side of her chest and on the right side of her lower abdomen. Dr. LaBoy found two abrasions on the right side of the victim’s upper back, a bruise on her back, and two abrasions on the upper part of her right buttock. He found a u-shaped bruise on her right -2- thigh; a u-shaped bruise on the back of her right knee; two abrasions on her right calf; and two abrasions on her left thigh, close to her left buttock. A bruise was on the back of her left knee, and an abrasion with a scab was on the front of her left leg. The victim had multiple scars on her thighs. Dr. LaBoy x-rayed the body but saw no obvious fractures. Dr. LaBoy testified that he also conducted an internal examination of the victim. The victim had multiple contusions throughout the front of her scalp that matched the bruises on her forehead. She had a bruise in the top of her scalp and a bruise in her right temporal scalp with hemorrhaging of the right temporalis muscle, meaning the impact was more severe than merely causing bruising to the skin. The victim’s skull was not fractured. However, she had a lethal subdural hematoma on the left side of her brain and a “patchy” subarachnoid hemorrhage on her brain’s right hemisphere. An accumulation of fluid, also known as edema, was on the outer surface of her brain. He said an area on the right side of her brain had a yellow discoloration, meaning the area had hemorrhaged previously but had “resolved.” The victim also had hemorrhaging in the area around one of her optic nerves and throughout the retina of her eye. Dr. LaBoy stated that her injuries indicated blunt trauma to the head. Dr. LaBoy testified that he did not find any trauma to the victim’s neck, chest, or abdomen. He also did not find any evidence of sexual abuse. He said the victim had bruising on the “back aspect of her lungs,” which could have been caused by an impact to the area. The victim had skeletal hemorrhaging on her shoulders, upper extremities, back, and lower extremities. He stated that the victim’s cause of death was multiple blunt force injuries and that her manner of death was homicide. On cross-examination, Dr. LaBoy testified that all of the victim’s abrasions, except for the one with the scab, were recent injuries and that the bruise on the victim’s chest was not consistent with CPR having been performed on the victim. He stated that any one of the victim’s injuries could have been caused by a fall. However, all of the victim’s injuries together could not be explained by a fall. The victim’s u-shaped injuries were consistent with having been caused by a loop or the end of a loop. He stated that the yellow discoloration on the right side of her brain was a chronic or “past” injury; however, the injury on the left side of her brain was acute or recent, meaning within twelve hours of her death. He said that some of the injuries on the victim’s back were “chronic” and that some were recent. Officer Diana Dickerson of the Memphis Police Department (MPD) testified that on May 30, 2009, she responded to a call at Delta Medical Center and went into the victim’s trauma room. The hospital staff was working on the victim. After the doctor pronounced the victim dead, Officer Dickerson began trying to find the victim’s family. She met the -3- victim’s mother, put the victim’s mother into her patrol car, and began filling out paperwork. Officer Robert Halliburton of the MPD testified that he responded to a call at Delta Medical Center on May 30, 2009, and put the appellant into the back of his patrol car. He stated that the appellant was calm but that the appellant said “something about worrying about going to jail.” Officer Halliburton did not read the appellant his rights because the officer was just “watching over” the appellant and was not interrogating him. He stated that while they were sitting in the patrol car, the appellant said “something about picking up the child from the babysitter’s.” Officer Halliburton transported the appellant to the police department. Gizelle Gagne, the Assistant Manager for LEDIC Management Group, testified that her employer managed the Somerset Apartments. On May 30, 2009, MPD officers questioned Gagne about 3639 Parkwin Drive, apartment number 4. The apartment was vacant at that time and had been vacant since March 24. An individual named Erica Parker lived in 3639 Parkwin Drive, apartment number 3. Gagne did not know anyone named Alecia or Chris who lived in either apartment. On cross-examination, Gagne testified that she did not recognize the appellant’s name. She acknowledged that she did not always know who lived with renters. Officer Jeffrey Allen Garry of the MPD testified that he went to Delta Medical Center on the afternoon of May 30, 2009, photographed the victim’s body, and collected evidence. He said that the victim had “multiple bruisings about her body” and that she had bruising and scarring on her lower body. A red substance, thought to be blood, was in the crotch area and along the left hip and buttock areas of her underwear. Officer Garry collected the victim’s clothes. About 5:00 p.m., he went to a vacant apartment on Parkwin Drive and photographed the interior of the apartment. There was no evidence that anyone lived there. About 9:00 p.m., Officer Garry went to 481 Walker Street, apartment number 4; photographed the interior of the apartment; and collected evidence. The apartment had two bedrooms. One bedroom was the master bedroom, and the other was a child’s bedroom with a twin bed. Officer Garry found two belts on the floor of the master bedroom. He said that one was a green plastic belt and that the other was black “with holes stamped.” He found a black braided belt on the floor in the child’s bedroom. Officer Garry took numerous photographs at all three locations and turned in the photo card containing the photographs to the police department’s photo laboratory. On cross-examination, Officer Garry testified that he used a swab to collect evidence off a wall in the apartment on Walker Street. He acknowledged that he did not know what substance was on the victim’s panties. -4- Richard Brashier, the civilian supervisor for the MPD’s photo laboratory, testified that Officer Garry photographed three scenes in this case and that a photo lab employee logged-in the photographs. One month before trial, the laboratory was asked to retrieve the photos. However, Brashier was only able to find the photographs Officer Garry took at the hospital. William Tate testified that he and the victim’s mother, Nekela Oliver, were working at Mimio.com on May 30, 2009. Oliver’s shift ended at 12:00 p.m., and she left at that time. Later that day, police officers arrived at Mimio.com and spoke with Tate. Nekela Oliver, the victim’s mother, testified that she and the appellant met in 2008 while they were working at Mimio.com. She said that they had an intimate relationship and that their relationship was good at first. About two months after they met, they began living together in a duplex on Jasmine Cove. The victim and her brother, who was six years old, lived with them. Later, they moved into an apartment on Walker Street. Oliver continued to work at Mimio.com, but the appellant no longer worked there and looked after the children while Oliver worked. Oliver said that before she met the appellant, a babysitter named Alecia looked after the victim. Alecia had a boyfriend or a brother named Chris. Oliver testified that about two weeks before the victim’s death, she started sending the victim to daycare “because of the bruises that [she] was seeing.” Oliver saw knots on the victim’s head, carpet burns on her nose, and bruises on her arm. Oliver said that one time, the victim’s lips were “puffy.” She asked the appellant about the victim’s injuries. Oliver also asked the victim, and the victim told Oliver that the appellant had whipped her. Oliver testified that she whipped the victim’s legs with switches from trees and that the switches left welts on the victim. Oliver also whipped the victim with a belt; however, she used the belt over the victim’s clothes. At the time of the victim’s death, Oliver had not whipped the victim since she started daycare two weeks earlier. Oliver said she sometimes whipped the victim because the victim urinated on herself. Oliver never punched or kicked the victim and never made her run in the apartment. She said she saw the appellant force her son and the victim to run laps one time. She said that she asked him why and that he told her, “‘Both of them just get on my nerves.’” She said she got upset and told the appellant not to put his hands on the children anymore. Oliver testified that on the night of May 29, 2009, the victim fell asleep with her clothes on, and Oliver put her to bed. There were no marks on the victim’s head, shoulders, back, arms, or legs. The next morning, Oliver had to be at Mimio.com at 6:00 a.m. Daycare was closed, so the appellant was supposed to look after the children. The appellant drove Oliver to work in Oliver’s truck while the children remained sleeping in the apartment. About 10:00 a.m., Oliver telephoned the appellant. He told her that the victim was asleep and that -5- her son was playing a game. Oliver’s shift ended at noon, but the appellant did not pick her up on time. She said that about 12:15 p.m., the appellant “came storming down the street.” When Oliver got into the truck, she saw the victim lying across the appellant’s lap. The victim had a knot on her head, carpet burns on her face, and bruises on her arms. The side of her face also was bruised. Oliver said she picked up the victim and asked the appellant, “‘What happened?’” She said he told her that the victim had “‘peed’” on him and that “‘I didn’t mean to do it. I’m sorry.’” Oliver told the appellant to drive to the hospital. The appellant drove to Delta Medical Center, and Oliver rushed the victim inside. Oliver testified that someone cut the victim’s shirt open, that she saw bruises on the victim’s chest, and that she began “hollering.” The appellant came inside and kept telling Oliver that he was sorry, that the victim had urinated on him, and that he had whipped her. Oliver said the appellant told her that “‘I’m going to go to jail for life’” and that “‘[w]e could tell them [the children] went to Alecia’s[.]’” When the police arrived at the hospital, they separated Oliver from the appellant, and she did not see him again. Oliver testified that she told the police her children had been to Alecia’s house that day. She gave the police Alecia’s address, which was apartment number 4 in Somerset Apartments. She said she lied to the police because she was “just stupid” and “didn’t want to lose nobody at the time.” The police took Oliver to the police department and interrogated her. At some point, Oliver admitted to them that the victim had not been to Alecia’s home. She said that she was indicted for being an accessory after the fact, that the State had not offered her anything in exchange for her testimony, and that she was testifying for her “baby.” On cross-examination, Oliver testified that she did not remember telling the interrogating officer that she whipped the victim with a switch, causing the victim’s legs to bleed, one week before the victim died. She said she told the officer that she whipped the victim two weeks before the victim died. Oliver denied taking off the victim’s clothes; whipping her, causing her to bleed; and putting her in the bathtub. She also denied shutting the door to the victim’s bedroom so that her son could not see her whip the victim. She acknowledged that she used belts to whip her son and the victim. Oliver never saw the appellant whip the victim, causing the victim to bleed. She said that the tile floor in the victim’s bedroom was hard. She said she had not made a “deal” with the State. Nine-year-old Martavion Oliver, the victim’s older brother, testified that he currently lived with his father and grandmother. He said that the appellant used to be his mother’s boyfriend and that he called the appellant “Uncle.” At the time of the victim’s death, -6- Martavion1 was living with his mother, Nekela Oliver; the appellant; and the victim in an apartment on Walker Street. Martavion shared a bedroom with the victim, and the appellant shared a bedroom with Oliver. Martavion was in the second grade and attended elementary school, and the victim went to daycare. Before Oliver began dating the appellant, the victim stayed with a babysitter while Oliver worked. Martavion acknowledged that the babysitter’s name was Alecia. Martavion testified that while he lived with the appellant, he saw the appellant hurt the victim. The appellant would hit the victim on her head and arm with a wooden brush. He also hit her with an extension cord and belts. One of the belts he used was Oliver’s green plastic belt. Martavion said the appellant would punish the victim because she “used to frown up.” He made a face to the jury, demonstrating what he meant by “frown up.” He said that the victim’s making the face angered the appellant and that the appellant whipped her. The appellant also made the victim run in the apartment. He said that the victim had to run down the hallway and “make a loop in the den” and that she had to run until her mother got home. The State asked if the appellant made the victim run for a long time or a short time, and Martavion answered, “Halfway long.” Martavion also saw the appellant punch the victim’s arm and thump her in her mouth and saw Oliver whip the victim with a switch or a belt. He said he never saw anyone punch the victim in the mouth or kick her. Martavion testified that on May 30, 2009, he and the victim were with the appellant while his mother was at work. The appellant hit the victim with the brush, a belt, and the extension cord. Martavion said that the appellant punished the victim because she “[f]rowned up” and that the victim wet her pants while the appellant was holding her. The State asked if the appellant made the victim run that day, and Martavion said, “I don’t think so.” However, shortly thereafter, the State asked him, “[D]id she wet herself before or after she had to run?” He answered, “Before. No, after, when she had to run[.]” Martavion ate a hotdog in the kitchen while the victim was running. He said that he heard the victim crying and that she had to keep running or the appellant would whip her. At some point, the victim stopped running because she was tired. Martavion said he knew she was tired because he heard her breathing hard. Martavion testified that after the victim wet herself, the appellant put her on her bed and changed her clothes. He said that the appellant told the victim to “fold [the] cover” on her bed and that the victim looked at the cover but wanted to sleep. The appellant allowed the victim to go to sleep. While the victim was sleeping, two children came to the apartment, and the appellant cut their hair. Later, the appellant told Martavion to check on the victim. 1 Because the witness and his mother share a surname, we will refer to him by his first name for clarity. -7- Martavion said that he felt for her heartbeat but that her heart was not beating. The appellant tried to give her water, but she coughed it up. The appellant picked up the victim and carried her outside to Oliver’s truck. Martavion said that he got into the backseat, that the appellant put the victim into the backseat, and that the appellant drove to the “[c]orner store.” The appellant went inside and came out with a white bottle of rubbing alcohol. The appellant rubbed the alcohol around the victim’s mouth to try to wake her. The victim did not wake up, so the appellant drove to Mimio.com to pick up Oliver. When Oliver got into the truck, she started crying. The appellant drove to the hospital, and Oliver carried the victim inside. The State asked Martavion what the victim had been doing the last time he saw her awake, and he said, “She was still running.” On cross-examination, Martavion acknowledged that Oliver would take off the victim’s clothes and whip her. Sometimes, Martavion saw blood running down the victim’s legs. He acknowledged that Oliver whipped the victim, drawing blood, a few days before the victim died. Martavion also saw Oliver use her hand to hit the victim, and he acknowledged that he saw Oliver hit the victim a couple of days before her death. He acknowledged that Oliver whipped the victim regularly, that Oliver used a switch and a belt with holes in it, and that the victim cried. He acknowledged that one of the reasons the appellant made the victim run was so she would get tired and want to go to sleep. Martavion acknowledged that after the victim stopped running on May 30, the appellant put her on the bed he shared with Oliver and told her to go to sleep. Martavion said that when he checked on the victim, her heart was not beating. He acknowledged that he gave a statement to Pat Lewis on June 2, 2009, and that he told Lewis the victim’s heart was beating when he put his hands on her chest. He said he told Lewis the truth. He also acknowledged that he told Lewis the victim was acting “funny” on the morning of May 30 and that the victim fell and hit her head on the floor while she was running. The appellant picked up the victim, carried her to his bedroom, and put her on the bed. The appellant told Martavion to put some clothes on the victim, so Martavion put clothes on her. Shortly before they left to pick up Oliver, the appellant tried to give the victim water, but she coughed it up. He acknowledged that he and the State had gone over his testimony before trial. On redirect examination, Martavion testified that the victim started acting “funny” after the appellant made her run. Sergeant William Dwayne Merritt of the MPD testified that the appellant arrived at the police department about 3:00 p.m. on May 30, 2009. Sergeant Merritt advised the appellant of his Miranda rights and interviewed the appellant. The appellant told him the following: That morning, the appellant woke about 6:00 a.m., drove Nekela Oliver to work, and returned to the apartment where he had left Martavion and the victim. The appellant was a self-employed barber and was expecting people to come to the apartment for haircuts, so -8- he drove the children to an apartment complex to drop off the victim with her babysitter, Alecia. The appellant left the victim with Alecia, and he and Martavion returned home. About 11:00 a.m., the appellant received a telephone call from Alecia’s boyfriend, Chris. Chris told the appellant, “‘You need to come over here. Something’s wrong with your baby.’” The appellant and Martavion went to the apartment complex, and the appellant saw Chris carrying the victim out of apartment number 3. The appellant took the victim into his arms and carried her to Oliver’s truck. He noticed she had some foam in her mouth and wiped it away. The appellant returned to apartment number 3 and saw Alecia’s and Chris’s three-year-old daughter standing in the apartment. The appellant said that the apartment looked “lived-in” and that he returned to the truck. At some point, the appellant performed CPR on the victim. He put rubbing alcohol on her face, but she was not breathing. The appellant picked up Oliver from work, and they went to the hospital. Sergeant Merritt testified that he stopped the interview and located a driver’s license photograph of Alecia. Her address was listed as 3639 Parkwin Drive, apartment number 3. Sergeant Merritt showed the photograph to Oliver, who was in a separate interview room. He also showed the photograph to the appellant. Sergeant Merritt said the appellant “wouldn’t come out and say that was her, but he looked at it, and he -- ‘Well, that looks like her,’ was his response.” About 5:00 p.m., Sergeant Merritt, another officer, and the appellant went to 3639 Parkwin Drive. The officers went to apartment number 3 and spoke with the people who lived there, but they did not know the appellant and had never babysat the victim. The appellant told the officers that Alecia and Chris lived in apartment number 4, so the officers went to that apartment. It was vacant. Sergeant Merritt testified that he and the appellant returned to the police department and that he spoke with Oliver. Sergeant Merritt talked with the appellant again and told him that his story was inconsistent with Oliver’s story. The appellant admitted that he had lied about Alecia. He told Sergeant Merritt that he had whipped the victim with a green belt three times that day and that he had made her run around the apartment. Sergeant Merritt recalled, “I think there was some of the whipping, and then she was made to run, and then I think there was some more whipping later on in the day.” After the last whipping, the appellant put the victim to bed. He cut hair for two people, checked on the victim, and found her in distress. The appellant picked her up, put her in the truck, picked up Oliver, and drove to the hospital. The appellant told Sergeant Merritt that it was Oliver’s idea to blame Alecia and Chris for the victim’s injuries. On June 1, 2009, Sergeant Merritt searched Oliver’s truck, a Chevrolet Tahoe, pursuant to a search warrant and found a bottle of rubbing alcohol. Sergeant Merritt read the appellant’s transcribed statement into evidence. According to the statement, the appellant whipped the victim three times on May 30 because “she peed, she would not take a bath, and she would not change her clothes.” The appellant “made her -9- start running back and forth in the hallway so that [he] would not spank her [anymore].” When customers arrived for their haircuts, he told the victim to lie down on the bed. The victim kept crying, and the appellant “thought that was her normal crying because she got a whipping.” The victim went to sleep. The appellant said that he lied about Alecia because he was scared and that “I am sorry this happened. I did not mean for it to happen.” On cross-examination, Sergeant Merritt testified that the appellant arrived at the police department about 3:00 p.m. but did not give his statement until 8:00 p.m. Sergeant Merritt did not question the appellant continuously during that five-hour period. The appellant would have been offered food and drink during that time. At the conclusion of Sergeant Merritt’s testimony, the State rested its case. The jury convicted the appellant of first degree premeditated murder perpetrated during aggravated child abuse and aggravated child abuse, a Class A felony. After a sentencing hearing, the appellant received concurrent sentences of life for the murder conviction and fifteen years for the aggravated child abuse conviction. II. Analysis A. Sufficiency of the Evidence The appellant contends that the evidence is insufficient to support the convictions because although he intended to punish the victim on May 30, 2009, nothing shows that he inflicted the punishment to cause her death or that he premeditated the killing. The State argues that the evidence is sufficient. We agree with the State. When an appellant challenges the sufficiency of the convicting evidence, the standard for review by an appellate court is “whether, after viewing the evidence in the light most favorable to the prosecution, any rational trier of fact could have found the essential elements of the crime beyond a reasonable doubt.” Jackson v. Virginia, 443 U.S. 307, 319 (1979); Tenn. R. App. P. 13(e). The State is entitled to the strongest legitimate view of the evidence and all reasonable or legitimate inferences which may be drawn therefrom. State v. Cabbage, 571 S.W.2d 832, 835 (Tenn. 1978). Questions concerning the credibility of witnesses and the weight and value to be afforded the evidence, as well as all factual issues raised by the evidence, are resolved by the trier of fact. State v. Bland, 958 S.W.2d 651, 659 (Tenn. 1997). This court will not reweigh or reevaluate the evidence, nor will this court substitute its inferences drawn from the circumstantial evidence for those inferences drawn by the jury. Id. Because a jury conviction removes the presumption of innocence with which a defendant is initially cloaked at trial and replaces it on appeal with one of guilt, a convicted defendant -10- has the burden of demonstrating to this court that the evidence is insufficient. State v. Tuggle, 639 S.W.2d 913, 914 (Tenn. 1982). First degree felony murder is not a premeditated killing. Instead, it is defined as the “killing of another committed in the perpetration of or attempt to perpetrate any . . . aggravated child abuse.” Tenn. Code. Ann. § 39-13-202(a)(2). “No culpable mental state is required for conviction . . . except the intent to commit the [underlying felony].” Tenn. Code Ann. § 39-13-202(b). A defendant is guilty of aggravated child abuse when the defendant commits the offense of child abuse and the conduct results in serious bodily injury to the child. Tenn. Code Ann. § 39-15-402(a)(1). Child abuse occurs when a person “knowingly, other than by accidental means, treats a child under eighteen (18) years of age in such a manner as to inflict injury.” Tenn. Code Ann. § 39-15-401(a). “A person acts knowingly with respect to a result of the person’s conduct when the person is aware that the conduct is reasonably certain to cause the result.” Tenn. Code Ann. § 39-11-302(b). Bodily injury “includes a cut, abrasion, bruise, burn or disfigurement, and physical pain or temporary illness or impairment of the function of a bodily member, organ, or mental faculty[.]” Tenn. Code Ann. § 39-11-106(a)(2). At the time of the victim’s death, serious bodily injury was defined as bodily injury that involved (A) a substantial risk of death; (B) Protracted unconsciousness; (C) Extreme physical pain; (D) Protracted or obvious disfigurement; or (E) Protracted loss or substantial impairment of a function of a bodily member, organ or mental faculty. Tenn. Code Ann. § 39-11-106(a)(34)(A)-(E). Taken in the light most favorable to the state, the evidence is sufficient to support the convictions. Nekela Oliver testified that she left the victim in the appellant’s care while she worked on May 30, 2009. Oliver’s son, Martavion, testified that the appellant hit the victim with a brush, an extension cord, and a belt and that he made her run. When the victim was so tired that she could not run anymore, the appellant put her to bed. Later, he discovered that he could not wake her. He tried to give her some water, but she coughed it up. The appellant put the victim in the truck and picked up Oliver from work. Oliver said the victim was lying across the appellant’s lap, unresponsive. They took the victim to the hospital, but -11- she was not breathing and could not be resuscitated. Dr. LaBoy testified that he found recent injuries to the victim’s brain, including a lethal subdural hematoma, that were caused by blunt force trauma and recent bruises and abrasions all over her body. The victim’s injuries could not be explained by a fall. Although the evidence established that Oliver physically abused the victim, nothing indicates that she inflicted the type of injuries that caused the victim’s death. The appellant told Sergeant Merritt that he whipped the victim three times that day and made her run, and he does not dispute that he was the victim’s sole caregiver at the time of her death. The evidence is more than sufficient to support the appellant’s convictions. B. Appellant’s Prior Bad Acts The appellant claims that the trial court erred by allowing witnesses to testify about his physically abusing the victim before May 30, 2009, because the testimony was inadmissible propensity evidence and was highly prejudicial. The State argues that the trial court properly allowed the witnesses to testify. We agree with the State. On the morning of trial, the State filed a motion pursuant to Rule 404(b), Tennessee Rules of Evidence, notifying the appellant of its intent to introduce testimony about the appellant’s abusing the victim prior to the day of her death. Before opening statements, the trial court held a hearing on the motion. During the hearing, the State advised the court that the appellant told Sergeant Merritt he punished the victim on May 30 for urinating on herself, refusing to change her clothes, and refusing to take a bath. The State argued that Nekela Oliver and Martavion should be allowed to testify about the appellant’s prior abuse of the victim in order to show that the appellant intended to physically abuse the victim on May 30 and to provide a “contextual background” for the jury about the victim’s injuries. The State also argued that the probative value of the evidence far outweighed the danger of unfair prejudice. Martavion Oliver testified at the hearing that “the truth” means “[d]on’t lie” and that he promised to tell the truth. He said that while he lived with the appellant, the appellant hurt him by hitting him with his mother’s green belt. The appellant also hit Martavion’s lip with the appellant’s fist and made him run in the apartment until his mother got home from work. He said that when he got tired, the appellant “would just push” him, causing his head to hit the carpet. The appellant also hurt the victim, hitting her with a brush, an extension cord, and a green belt. The appellant used the “wood part” of the brush to hit the victim on her head, and he used the belt to hit the victim on her leg. Martavion said that his mother whipped him and the victim but that she never punched them or made them run. On the day of the victim’s death, the appellant hit the victim with the brush. He also made her run because she “frowned up.” Martavion said that the appellant told the victim to fold up her clothes but that -12- the victim “didn’t know how to do it.” He said the appellant “beat” the victim and told her to go to sleep. On cross-examination, Martavion testified that the appellant would hit the victim on her head and on her arm with the brush. He also would spank her leg. Martavion acknowledged that the appellant always said he did not want to hurt the victim. Martavion said that on the day of the victim’s death, the victim “was just running, and then she got real tired. She couldn’t talk, and she was constantly crying.” He said that she fell, got up, kept running, and did not fall again.” However, he later acknowledged that the victim fell “a lot of times” that day. Defense counsel asked Martavion who put “marks” on his face and arms, and he said, “My mama and Antonio.” Nekela Oliver testified that prior to May 30, 2009, she saw bruises on the victim’s arm and knots on the victim’s head. She also said that the victim’s hands were swollen and that the victim had bruises on her legs, a carpet burn on her nose, and “like a green bruise on the side of her face one time.” Oliver said that she would use her hand to hit the victim or a switch to whip the victim’s leg “every now and then” but that she did not cause the injuries she saw on the victim. One time, the victim’s lips were swollen. Oliver said she asked the appellant, “What’s wrong with her lips[?]” She said the appellant told her, “‘She’s frowning at me, and I hit her in the mouth.’” Oliver said the appellant told her three or four times that the victim was “frowning at him.” She said that she asked the victim about the injuries “a couple of times” and that the victim said the appellant hit her. About two weeks before the victim’s death, Oliver got tired of seeing bruises on her. The appellant said he could not watch the victim anymore, so Oliver put the victim in daycare. On May 30, 2009, Oliver was concerned about leaving the victim with the appellant. On cross-examination, Oliver testified that she would whip the victim with two thin switches plaited together. She also whipped the victim with a belt on top of the victim’s clothes. Oliver denied that her whipping the victim caused the victim to bleed. At the time of the victim’s death, Oliver had not whipped her for two weeks. On redirect examination, Oliver stated that after the appellant said he could not look after the victim anymore, Oliver put her in daycare the next day. The State asked her, “What made you move so quickly?” Oliver answered, “Because he was mad, very angry, and he . . . stated, ‘I saw myself hurting her[.]’” At the conclusion of the testimony, the State maintained that the evidence was admissible to show the appellant intended to physically abuse the victim on the day of her death. The defense argued that the probative value of the evidence was outweighed by its prejudicial effect. The trial court withheld ruling on the issue, stating that it would take the -13- matter under advisement. Before Nekela Oliver and Martavion testified at trial, the trial court announced its ruling. The trial court noted that the medical examiner had testified about the victim’s “old injuries” and that the defense had cross-examined him extensively about them. The trial court held that, in light of the testimony about the victim’s previous injuries, Oliver and Martavion should be allowed to testify about the appellant’s prior abuse of the victim in order to avoid creating “a chronological or conceptual void in the State’s case.” The trial court also held that not allowing them to testify would result in jury confusion. Finally, the trial court determined that the probative value of the evidence was “tremendous” and that the probative value was not outweighed by the danger of unfair prejudice. Tennessee Rule of Evidence 404 provides as follows: (b) Other Crimes, Wrongs, or Acts. - Evidence of other crimes, wrongs, or acts is not admissible to prove the character of a person in order to show action in conformity with the character trait. It may, however, be admissible for other purposes. The conditions which must be satisfied before allowing such evidence are: (1) The court upon request must hold a hearing outside the jury’s presence; (2) The court must determine that a material issue exists other than conduct conforming with a character trait and must upon request state on the record the material issue, the ruling, and the reasons for admitting the evidence; (3) The court must find proof of the other crime, wrong, or act to be clear and convincing; and (4) The court must exclude the evidence if its probative value is outweighed by the danger of unfair prejudice. See also State v. Thacker, 164 S.W.3d 208, 240 (Tenn. 2005), State v. Parton, 694 S.W.2d 299, 302 (Tenn. 1985). A trial court’s decision regarding the admission of Rule 404(b) -14- evidence will be reviewed under an abuse of discretion standard; however, “the decision of the trial court should be afforded no deference unless there has been substantial compliance with the procedural requirements of the Rule.” State v. DuBose, 953 S.W.2d 649, 652 (Tenn. 1997). In making its decision regarding the admissibility of the testimony, the trial court must first determine if the offered testimony is relevant to prove something other than the appellant’s character. If the evidence is relevant, then, upon request, the court will proceed to a Rule 404(b) hearing. Generally, “[o]nly in an exceptional case will another crime, wrong, or bad act be relevant to an issue other than the accused’s character. Such exceptional cases include identity, intent, motive, opportunity, or rebuttal of mistake or accident.” State v. Luellen, 867 S.W.2d 736, 740 (Tenn. Crim. App. 1992). In making its decision regarding the admissibility of the testimony, the trial court must first determine if the offered testimony is relevant to prove something other than the appellant’s character. In this case, the trial court found that testimony about the appellant’s prior physical abuse of the victim was relevant to provide a contextual background for the jury. In State v. Gilliland, 22 S.W.3d 266, 271-72 (Tenn. 2000), our supreme court held that “contextual background evidence, which contains proof of other crimes, wrongs, or acts, may be offered as an ‘other purpose’ under Rule 404(b) when exclusion of that evidence would create a chronological or conceptual void in the presentation of the case and that void would likely result in significant jury confusion concerning the material issues or evidence in the case.” Id. at 272. The court explained that when the state seeks to offer evidence of other crimes, wrongs, or acts that is relevant only to provide a contextual background for the case, the state must establish, and the trial court must find, that (1) the absence of the evidence would create a chronological or conceptual void in the state’s presentation of its case; (2) the void created by the absence of the evidence would likely result in significant jury confusion as to the material issues or evidence in the case; and (3) the probative value of the evidence is not outweighed by the danger of unfair prejudice. Id. Turning to the instant case, the crux of the State’s proof was that the victim died of the injuries she received on May 30, 2009, while the appellant was her sole caregiver. Ordinarily, under those circumstances, we would agree with the appellant that the absence of testimony about his previous abuse of the victim would not create a chronological or -15- conceptual void in the State’s case and that Oliver’s and Martavion’s testimony about the appellant’s previous abuse of the victim was inadmissible. However, the appellant tried to insinuate through his cross-examination of the State’s witnesses, particularly Dr. LaBoy, that the victim’s mother caused the injuries that ultimately killed the victim. Moreover, during closing arguments, defense counsel argued to the jury that the past injuries inflicted by Oliver could have resulted in the victim’s death and that the appellant did not “knowingly and intentionally [inflict] the harm on this child knowing the consequences.” This court has stated, In the event the defendant claims that the injury was accidentally inflicted, inflicted by someone else, or the defendant lacked the intent to harm the victim, proof that the defendant was responsible for prior acts of abuse may be probative of the defendant’s intent to harm the child or to show that the act of abuse was not accidental. State v. Brian Larice Cureton, No. M2002-00835-CCA-R3-CD, 2003 Tenn. Crim. App. LEXIS 848, at **46-47 (Nashville, Oct. 8, 2003) (citing State v. Dubose, 953 S.W.2d 649, 546 (Tenn. 1997)). Therefore, we conclude that the testimony was admissible to show that the appellant caused the blunt force trauma to the victim’s head, that he did so intentionally, and that the victim’s injuries were not the result of a mistake or accident. Additionally, the testimony was highly relevant, and we conclude that the probative value of the evidence was not outweighed by the danger of unfair prejudice. Therefore, the appellant is not entitled to relief. C. Prior Conviction Next, the appellant contends that the trial court erred by refusing to allow him to question Nekela Oliver about a prior misdemeanor conviction. The State argues that the trial court properly excluded the evidence. We agree with the State. The record reflects that on June 6, 2009, Oliver was arrested and charged with felony child abuse or neglect. The victim was her son, Martavion. Oliver pled guilty to misdemeanor child neglect and was granted judicial diversion. She successfully completed diversion on January 15, 2011, three months before the appellant’s trial, and the conviction was expunged. On the morning of the appellant’s trial, Oliver’s attorneys filed a motion requesting that the trial court prohibit the appellant from questioning her about the child neglect conviction because the conviction had been expunged. Counsel also argued that the appellant could not ask Oliver about the conviction because the crime was a misdemeanor and did not involve “moral turpitude.” The trial court expressed concern about counsel’s -16- standing to file the motion. Nevertheless, the court held that the appellant could not ask Oliver about the prior misdemeanor conviction. As noted by the State, Rule 609, Tennessee Rules of Evidence, provides for the use of prior convictions to impeach witnesses. However, one of the requirements of the Rule is that the “crime must be punishable by death or imprisonment in excess of one year under the law under which the witness was convicted or, if not so punishable, the crime must have involved dishonesty or false statement.” Tenn. R. Evid. 609(a)(2). Given that the crime was a misdemeanor and did not involve dishonesty or false statement, the trial court correctly held that the appellant could not cross-examine Oliver about it. We note that the appellant also contends that the trial court erred by granting the motion because “the only person objecting was [Oliver’s] attorney not the District Attorney General.” However, the appellant has failed to cite to any authority in support of his argument as required by Rule 27(a)(7), Tennessee Rules of Appellate Procedure. Therefore, the issue is waived. See Tenn. Ct. Crim. App. R. 10(b). D. Mistrial The appellant claims that the trial court erred by failing to grant his motion for a mistrial when Sergeant Merritt “testified about sexual abuse upon [the victim] after the Court granted a Motion in Limine barring such testimony.” The State argues that the trial court properly denied the motion for a mistrial. We agree with the State. The appellant filed a pretrial motion to prohibit any evidence that the victim was sexually abused. At a hearing on the motion, the State advised the court that no one had been indicted for sexually abusing the victim and that “[w]e did not intend to put that evidence out.” The trial court granted the appellant’s motion and asked the State, “Your witnesses will be instructed accordingly?” The State answered, “Yes, sir.” At trial, Dr. LaBoy testified that he found no evidence of sexual abuse to the victim. When Sergeant Merritt took the stand, the State asked him how he became involved in the case, and he testified that he was asked to investigate the victim’s death. He also stated, “She had passed away and she had some evidence of physical and sexual abuse.” Defense counsel objected, and the parties approached the bench. The State acknowledged, “I did not advise him. . . . This is . . . my fault.” Defense counsel asked for a mistrial, but the trial court denied the motion, stating, “It was just one little comment that was made.” Moreover, the trial court instructed the jury as follows: Ladies and gentlemen, with regard to the comment about sexual -17- abuse, you’re to disregard that, that testimony. The examination that was done, and there’s no evidence of sexual abuse, so that statement, please disregard it. You can use it for no reason. A mistrial should be declared in criminal cases only in the event that a manifest necessity requires such action. State v. Millbrooks, 819 S.W.2d 441, 443 (Tenn. Crim. App. 1991). In other words, a mistrial is an appropriate remedy when a trial cannot continue or a miscarriage of justice would result if it did. State v. McPherson, 882 S.W.2d 365, 370 (Tenn. Crim. App. 1994). The decision to grant a mistrial lies within the sound discretion of the trial court, and this court will not interfere with the exercise of that discretion absent clear abuse appearing on the face of the record. See State v. Hall, 976 S.W.2d 121, 147 (Tenn. 1998). Additionally, the burden of establishing the necessity for mistrial lies with the party seeking it. State v. Williams, 929 S.W.2d 385, 388 (Tenn. Crim. App. 1996). In this case, Dr. LaBoy had already informed the jury that he conducted an internal and external examination of the victim and found no evidence of sexual abuse. Moreover, after Sergeant Merritt’s improper comment, the trial court immediately instructed the jury to disregard it because no evidence of sexual abuse existed. Ordinarily, juries are presumed to follow the instructions given by a trial court. State v. Young, 196 S.W.3d 85, 111 (Tenn. 2006). Therefore, we conclude that the trial court did not err by denying the appellant’s motion for a mistrial. E. Closing Arguments The appellant claims that the trial court erred by failing to give a curative instruction when the State argued facts outside the record during closing arguments. The State argues that the appellant has waived the issue because he failed to request a curative instruction. We conclude that the appellant is not entitled to relief. While Martavion was testifying during the Rule 404(b) hearing, the State asked him, “When [the appellant] was hitting you, did he ever tell you what you should do, how you should take it?” Martavion said the appellant told him, “‘Take it like a man.’” During the State’s rebuttal closing argument, the prosecutor said, “And then after Nekela Oliver came off her story and that house of cards tumbled, then what did he do? Did he man up like he told Martavion to do when he took his whippings? What did he do? He didn’t man up.” Defense counsel interrupted and objected, stating, “That’s not in evidence.” The trial court answered, “I’ll allow it. It’s basically based on the testimony. I’ll allow it. It’s argument.” It is well-established that closing argument is an important tool for both parties during a trial and, therefore, that counsel is generally given wide latitude during closing argument. -18- See State v. Carruthers, 35 S.W.3d 516, 577-78 (Tenn. 2000) (appendix). Nevertheless, “arguments must be temperate, based upon the evidence introduced at trial, relevant to the issues being tried, and not otherwise improper under the facts or law.” State v. Goltz, 111 S.W.3d 1, 5 (Tenn. Crim. App. 2003). “In determining whether statements made in closing argument constitute reversible error, it is necessary to determine whether the statements were improper and, if so, whether the impropriety affected the verdict.” State v. Pulliam, 950 S.W.2d 360, 367 (Tenn. Crim. App. 1996). In connection with this issue, we must examine the following factors: “(1) the conduct complained of viewed in context and in light of the facts and circumstances of the case[;] (2) the curative measures undertaken by the court and the prosecution[;] (3) the intent of the prosecutor in making the statement[;] (4) the cumulative effect of the improper conduct and any other errors in the record[; and] (5) the relative strength or weakness of the case.” Id. (quoting Judge v. State, 539 S.W.2d 340, 344 (Tenn. Crim. App. 1976)). In Goltz, 111 S.W.3d at 6, this court outlined “five general areas of prosecutorial misconduct” that can occur during closing argument: (1) intentionally misleading or misstating the evidence; (2) expressing a personal belief or opinion as to the truth or falsity of the evidence or defendant’s guilt; (3) making statements calculated to inflame the passions or prejudices of the jury; (4) injecting broader issues than the guilt or innocence of the accused; and (5) intentionally referring to or arguing facts outside the record that are not matters of common public knowledge. Moreover, “[t]he prosecution is not permitted to reflect unfavorably upon defense counsel or the trial tactics employed during the course of the trial.” State v. Gann, 251 S.W.3d 446, 460 (Tenn. Crim. App. 2007). Turning to the instant case, Martavion did not testify at trial that the appellant told him to “take it like a man.” Therefore, the prosecutor’s argument was not based on evidence introduced at trial and was improper. No curative measures were taken. However, the prosecutor’s statement was brief, and there is no evidence she intended to unduly prejudice the appellant by her remarks. Moreover, we have found no other errors in the record, and the -19- State’s case was strong. Therefore, we conclude that the appellant is not entitled to relief. F. Oliver’s Favorable Treatment Finally, the appellant claims that the trial court erred by refusing to grant his motion for a new trial when the State failed to disclose that Oliver received favorable treatment in exchange for her testimony. The State claims that the appellant is not entitled to relief. We agree with the State. On direct examination, Oliver testified that as a result of the victim’s death, the State indicted her for being an accessory after the fact. The State asked, “Are you here today testifying because we have offered you any type of deal?” Oliver answered, “No, ma’am.” The State asked, “Matter of fact, you have no idea what’s going to happen with that case, do you?” Oliver stated, “No, ma’am.” On cross-examination, the following exchange occurred: Q. And you’re expecting if you -- for your testimony to receive some favorable treatment, aren’t you? A. No, sir. Q. You’re not expecting any? A. What [do] you mean? A deal or something? Q. Some sort of deal? A. No, sir. Q. You haven’t been told by your lawyer that for your testimony that you’re not going to get some consideration for your testimony today against [the appellant]? A. No, sir. Q. Nothing at all? A. No, sir. Q. Are you just supposed to wait and see what happens? -20- A. Wait and see what happens. Less than two months after the jury convicted the appellant, the State nolle prosequied the charge against Oliver. In his amended motion for new trial, the appellant claimed that he was entitled to a new trial because the State failed to disclose that Oliver was going to receive favorable treatment for her testimony. At the motion for new trial hearing, the State advised the trial court, “What I can tell you unequivocally is that there was no deal.” However, the State also told the court, “The agreement was that [Oliver] wanted to testify because we felt like she would help our case against [the appellant], that if she testified truthfully after she testified we would decide what we wanted to do with her case.” The State advised the court that it had informed defense counsel before trial of the “agreement” and that defense counsel’s cross-examination of Oliver reflected that the State had informed defense counsel. Martha Jackson testified for the State that she was the Court Reporter Administrator for the criminal courts. At the State’s request, Jackson played an audio recording of part of defense counsel’s cross-examination of Oliver. During the portion played, Oliver stated that she was going to “[w]ait and see what happens” to her pending charge of being an accessory after the fact. Jennifer Nichols and Carrie Shelton, the assistant district attorneys general who represented the State at the appellant’s trial and at the motion for new trial hearing, also testified. Nichols stated that she informed defense counsel before trial that Oliver had been granted judicial diversion for the misdemeanor committed against Martavion. Nichols said she also informed defense counsel that Oliver would be testifying against the appellant, that the State had not made a “deal” with Oliver, and that Oliver “was supposed to give truthful testimony and that after that was over we would decide [what to do about her charge for being an accessory after the fact].” Nichols acknowledged that she did not inform defense counsel before the appellant’s trial that the charge would be nolle prosequied. She said she did not inform him because “[we] did not know what we were going to do with the case.” Shelton testified that she had never prosecuted a case for accessory after the fact. After the appellant’s sentencing hearing, Shelton was concerned about the State’s ability to prove its case against Oliver. Shelton also realized that Oliver “finally understood . . . that she had one-hundred percent failed her child.” Shelton said that after she read the victim impact statement Oliver prepared, she “felt that it would not have served justice at this point to prosecute her.” Therefore, Shelton decided not to pursue the case against Oliver. As this court has stated, -21- It is a fundamental principle of law that an accused has the right to cross-examine prosecution witnesses to impeach the credibility or establish the motive or prejudice of the witness. This includes the right to cross-examine a prosecution witness regarding any promises of leniency, promises to help the witness, or any other favorable treatment offered to the witness. State v. Spurlock, 874 S.W.2d 602, 617 (Tenn. Crim. App. 1993). When the State enters into an agreement with a witness in exchange for the witness’ cooperation, basic fairness dictates that all of the compromise is open for scrutiny and inquiry. State v. Ingram, 638 S.W.2d 428, 430 (Tenn. Crim. App. 1982). The trial court found that the State had an agreement with Oliver “for everyone to sit down afterwards and maybe the lawyers would be able to convince the prosecutors and the prosecutors [would] either dismiss, agree to probation, whatever.” However, in a written order, the trial court ruled that the appellant was not entitled to relief because “an intentional failure to communicate to the defendant details of the agreement between the State and Oliver did not occur.” The trial court also held that, regardless, any error was harmless due to the strength of the State’s case. We agree with the trial court that the appellant is not entitled to relief on this issue. In Asata Lowe v. State, No. E2006-02028-CCA-MR3-PC, 2008 Tenn. Crim. App. LEXIS 176, at *75 (Knoxville, Mar. 10, 2008), this court held that an “arrangement,” like the one in this case, between the State and a testifying witness “is simply too vague to be an ‘offer’ of favorable treatment and does not have to be disclosed to a defendant.” In any event, Nichols informed defense counsel that the State would decide what to do about Oliver’s case after she testified truthfully against the appellant, and defense counsel questioned Oliver about “hav[ing] to wait and see what happens.” Therefore, the trial court properly denied the appellant’s motion for a new trial. III. Conclusion Based upon the record and the parties’ briefs, we affirm the judgments of the trial court. _________________________________ NORMA McGEE OGLE, JUDGE -22-

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37 F.3d 423 Jennifer JONES, Appellant,v.RYOBI, LTD; A.B. Dick Corporation, Appellees. No. 93-2719. United States Court of Appeals,Eighth Circuit. Submitted Feb. 14, 1994.Decided Oct. 12, 1994.Rehearing Denied Nov. 21, 1994. Heaney, Senior Circuit Judge, filed dissenting opinion. Fritz Faerber, Belleville, IL, argued (Fritz G. Faerber and Charles R. Scanlon, on the brief), for appellant. James W. Reeves, St. Louis, MO, argued, for appellee A.B. Dick. John Galvin III, St. Louis, MO, argued (G. Keith Phoenix, John E. Galvin and Mark A. Smith, on the brief), for appellee Ryobi, Ltd. Before FAGG, Circuit Judge, HEANEY, Senior Circuit Judge, and LOKEN, Circuit Judge. FAGG, Circuit Judge. 1 Jennifer Jones was employed at Business Cards Tomorrow (BCT) as the operator of a small printing press known as an offset duplicator. Jones seriously injured her left hand when she caught it in the moving parts of the press. Alleging negligence and strict product liability for defective design, Jones brought this diversity lawsuit against Ryobi, Ltd. (the manufacturer) and A.B. Dick Corporation (the distributor). At trial, Jones dropped her negligence claims but she later moved to amend her complaint to reassert her negligence claim against the distributor. The district court denied Jones's motion to amend. At the close of Jones's case, the manufacturer and the distributor moved for judgment as a matter of law (JAML). The district court granted the manufacturer's and the distributor's motions for JAML. Jones appeals and we affirm. 2 The press involved in Jones's injury operates by passing blank paper through several moving parts, imprinting an image on the paper, and dispensing the printed paper through upper and lower "eject wheels." To avoid streaking the freshly printed image, on each job the operator must adjust the eject wheels to ensure the wheels do not touch the freshly printed area. The press was manufactured and sold to BCT equipped with both a plastic guard that prevented the operator from reaching into the moving parts to adjust the eject wheels, and an electric interlock switch that automatically shut off the press if the guard was opened. Sometime after the press was manufactured and delivered to BCT, the guard was removed and the interlock switch was disabled to allow the press to run without the guard. Because this modification increased production by saving the few seconds required to stop and to restart the press when the operator adjusted the eject wheels, the modification was a common practice in the printing industry. 3 Jones learned to operate the press by watching other BCT employees. Jones testified she knew the guard was missing and knew it was dangerous to have her hands near the unguarded moving parts, but her supervisor pressured her to save time by adjusting the eject wheels while the press was running. Jones feared she would be fired if she took the time to stop the press. While Jones was adjusting the eject wheels on the running press, a noise startled her. Jones jumped and her left hand was caught in the press's moving parts and crushed. 4 In granting the manufacturer's and the distributor's motions for JAML, the district court relied on the open and obvious nature of the asserted danger. See Restatement (Second) of Torts Sec. 402A cmt. i (1965) (consumer expectation test). The district court did not reach the manufacturer's and the distributor's other grounds for JAML. We review the district court's grant of JAML de novo; thus, we may affirm on another ground. See McAnally v. Gildersleeve, 16 F.3d 1493, 1496 (8th Cir.1994); B.B. v. Continental Ins. Co., 8 F.3d 1288, 1291 (8th Cir.1993). Because we conclude the district court's grant of JAML was proper on an alternate ground, we need not consider the ground relied on by the district court. 5 To recover on a theory of strict liability for defective design under Missouri law, Jones must prove she was injured as a direct result of a defect that existed when the press was sold. Jasinski v. Ford Motor Co., 824 S.W.2d 454, 455 (Mo.Ct.App.1992) (explaining elements of defective design claim). Jones had the burden to show the press had not been modified to create a defect that could have proximately caused her injury. Id. Jones failed to meet this burden because her evidence showed the press had been substantially modified by removing the safety guard and disabling the interlock switch, and showed the modification caused her injury. When a third party's modification makes a safe product unsafe, the seller is relieved of liability even if the modification is foreseeable. Gomez v. Clark Equip. Co., 743 S.W.2d 429, 432 (Mo.Ct.App.1987). Jones did not show who modified the press, but her evidence clearly showed that a third party, not the manufacturer or the distributor, was responsible for the modification. 6 Although the manufacturer provided tools for general maintenance of the press that could also be used to remove the guard, we do not believe this made the manufacturer responsible for the guard's removal. Jones produced no evidence that any representative of the manufacturer or the distributor removed the guard or instructed BCT to remove the guard from the press involved in Jones's injury. Indeed, the distributor's service representative testified he told BCT's owner several times the guard should be replaced, but BCT's owner shrugged off the suggestion. Because BCT knew the guard was missing and the interlock switch was disabled, but did not follow the distributor's advice to repair the disabled safety features, the distributor's service work on the press did not extend the distributor's liability to defects that were not present when the press was sold. See Winters v. Sears, Roebuck & Co., 554 S.W.2d 565, 572-73 (Mo.Ct.App.1977) (seller's servicing of product has effect of redelivery only if plaintiff produces evidence no third party altered product to create defect causing injury). 7 Jones argues the modification rule does not apply because the press was not safe even before the modification. We disagree. The press was safe before the modification because the press would not run without the safety guard covering the moving parts. The fact BCT encouraged Jones to operate the press without the safety features to increase production does not show the press was sold "in a defective condition [and thus] was unreasonably dangerous when put to a reasonably anticipated use." Jasinski, 824 S.W.2d at 455. Although several witnesses testified the press operated more efficiently without the safety guard and interlock switch, other witnesses testified similar presses operated satisfactorily with the designed safety features intact. The press could be operated safely without removing the guard because the eject wheels did not have to be adjusted while the press was running. Jones's expert witness opined the press was unsafe as designed, but the expert based his view on the printing industry's tendency to disable the press's safety features to achieve greater production. Thus, the expert's testimony does not show the press was unreasonably dangerous when used in the same condition as when it was sold. See id. 8 Because Jones's evidence showed a third party's modification, not a defect existing when the press was sold, was the sole cause of her injury, her strict product liability claim for defective design fails as a matter of law. See Gomez, 743 S.W.2d at 433. The district court thus properly granted the manufacturer's and the distributor's JAML motions. 9 Finally, Jones contends the district court committed error in refusing to allow her to amend her complaint to reassert her negligence claim against the distributor. We disagree. The district court did not abuse its discretion to deny the amendment because the evidence presented did not show colorable grounds for Jones's negligence theory. See Williams v. Little Rock Mun. Water Works, 21 F.3d 218, 224 (8th Cir.1994). 10 Accordingly, we affirm. 11 HEANEY, Senior Circuit Judge, dissenting. 12 Viewing the evidence in the light most favorable to Jones, as we must, I cannot subscribe to the majority's opinion that the offset duplicator was safe as originally manufactured. 13 The rule to which Missouri adheres, as correctly stated by the majority, is that a manufacturer is not liable where a modification is foreseeable, but the modification renders a safe product unsafe. Gomez v. Clark Equip. Co., 743 S.W.2d 429, 432 (Mo.Ct.App.1987). Representatives of ITEK Corp., the former distributor of the duplicator, testified that the guard was removed by customers or others a "vast majority" of the time, trial tr. at 57, 138, and that ITEK knew that the guard was "routinely removed." Id. at 82. Thus, the modification of the duplicator was entirely foreseeable. 14 The question that arises is whether the modification rendered an otherwise safe product unsafe. There is no dispute that the duplicator, as modified, was unsafe. The critical question, thus, is whether the duplicator as manufactured was unreasonably dangerous. 15 The testimony of Dr. Creighton, Jones's expert witness, is alone sufficient to support the inference that the offset duplicator was not safe as originally designed. Dr. Creighton testified that the electric interlock device was wired backwards and was not "fail-safe." Id. at 249-50, 52. He testified that the duplicator's guard, in addition to not being fail-safe, id. at 250, was made of material "that will break ... readily," id., did not allow for proper ventilation of the internal components of the machine, id., and invited removal. Id. at 253. He further testified that the design of the eject wheels, which essentially requires operators to make manual adjustments while the offset duplicator is running, was "absolutely not safe," id. at 242, indeed "the worst of situations from a human factors standpoint." Id. at 256. The duplicator could have been equipped, he noted, with external adjustment handles to enable operators to make adjustments to the eject wheels without placing their hands in close proximity to the moving parts of the machine. Id. at 251. 16 Further, although not direct proof that the duplicator was defectively designed, the fact that an overwhelming majority of machines had their guards removed after their delivery is evidence that the duplicator was incapable of operating efficiently according to industry standards. According to ITEK representative Brad Gruenewald, nearly ninety-eight percent of all machines he came into contact with had their safety covers removed. Id. at 138. Indeed, Gruenewald testified that he told duplicator operators in effect to remove the guard in order to alleviate problems with ink emulsification that occurred as a result of humidity which frequently became trapped inside the plastic shield. Id. at 62. 17 The majority does not address (nor need it, given the focus of its opinion) the open-and-obvious defense on which the district court relied in granting the defendants' motion for judgment as a matter of law. I touch on it briefly because, even assuming Ryobi is not relieved of liability under the substantial modification theory, the question still remains whether it can prevail based on the alleged open and obvious danger of the unguarded duplicator. 18 We have held that the obviousness of a defect or danger is material to the issue of whether a product is unreasonably dangerous. Linegar v. Armour of Am., Inc., 909 F.2d 1150, 1154 (8th Cir.1990). It does not, however, alone constitute a defense to a submissible case of strict liability under section 402A of the Restatement (Second) of Torts. McGowne v. Challenge-Cook Bros., Inc., 672 F.2d 652, 663 (8th Cir.1982). The issue under Missouri law, as we have construed it, "is not whether a jury can conclude that [the] danger is obvious or apparent, but ... whether the jury can conclude that the danger is obvious and apparent to the extent that the product was not 'unreasonably dangerous.' " Id. Stated otherwise, the question is not simply whether the danger was open and obvious, but whether the product was unreasonably dangerous taking into account the obviousness of the danger. 19 There is no question in my mind that there was sufficient evidence from which a jury, taking into account the obviousness of the conceded danger, could conclude that the offset duplicator was unreasonably dangerous. The district court relied on our holdings in Pree v. Brunswick Corp., 983 F.2d 863, 867 (8th Cir.), cert. denied, --- U.S. ----, 114 S.Ct. 65, 126 L.Ed.2d 35 (1993), and Linegar, 909 F.2d at 1154--cases which are analogous in precious few ways to the instant case--in holding that the open-and-obvious nature of the unguarded duplicator "was readily observable by everyone," trial tr. at 440, and therefore barred recovery by Jones. In Pree we held that an unguarded outboard motor on a boat was not unreasonably dangerous because no device existed that would provide protection from a propeller without rendering the motor more dangerous. 983 F.2d at 866. In Linegar we held that a bullet-proof vest that did not cover all parts of the body was not inherently dangerous because "[a]n otherwise completely effective protective vest cannot be regarded as dangerous, much less unreasonably so, simply because it leaves some parts of the body obviously exposed." 909 F.2d at 1154. In both cases we relied on the open-and-obvious nature of the alleged danger in holding that the products were not unreasonably dangerous and thus were not defectively designed. 20 In my judgment there was sufficient evidence to support the inference that the offset duplicator was unreasonably dangerous and thus was defectively designed. This case should have met its fate in the hands of the jury members, not the district court's and not now ours.

{ "pile_set_name": "FreeLaw" }

111 F.3d 653 65 USLW 2666, 1997-1 Trade Cases P 71,769,97 Cal. Daily Op. Serv. 2636,97 Daily Journal D.A.R. 4630 CHROMA LIGHTING, a California corporation; and Charles T.Von Der Ahe, an individual, Plaintiffs-Appellees,v.GTE PRODUCTS CORPORATION, a Delaware corporation, et al., Defendants,andSylvania Lighting Services Corporation, a Delawarecorporation, Defendant-Appellant. No. 94-55581. United States Court of Appeals,Ninth Circuit. Submitted Aug. 8, 1995.Decided April 10, 1997. M. Laurence Popofsky, Heller, Ehrman, White & McAuliffe, San Francisco, CA, for defendant-appellant. Barry R. Laubscher, Grant & Laubscher, Irvine, CA, for plaintiffs-appellees. Appeal from the United States District Court for the Central District of California, William D. Keller, District Judge, Presiding. D.C. No. CV-91-6424-WDK. Before: BROWNING, NORRIS, and REINHARDT, Circuit Judges. WILLIAM A. NORRIS, Circuit Judge. 1 Plaintiff Charles Von Der Ahe, d/b/a Chroma Lighting, was a distributor of Osram Sylvania lighting products. After going out of business, Von Der Ahe sued Sylvania for price discrimination in violation of § 2(a) of the Clayton Act, as amended by the Robinson-Patman Antidiscrimination Act of 1936, 15 U.S.C. § 13(a), and for recovery under California tort law. On the Robinson-Patman claim, Von Der Ahe alleged that Sylvania had given discounts to Von Der Ahe's larger competitors, without offering the same discounts to Von Der Ahe, and that Von Der Ahe had been injured by Sylvania's discriminatory practices. The jury found for Von Der Ahe on all counts and awarded treble damages of $3,525,000. ER at 719-20. After trial, Sylvania moved for judgment as a matter of law, alleging, inter alia, that there was insufficient evidence to support a finding of injury to competition on the Robinson-Patman claim. ER at 438-40. The district court denied the motion. Sylvania appeals from the denial of its post-trial motion and from the judgment. On appeal, Sylvania claims that the evidence at trial was insufficient as a matter of law to support the jury's finding of injury to competition.1 2 In FTC v. Morton Salt, 334 U.S. 37, 68 S.Ct. 822, 92 L.Ed. 1196 (1948), the Court held that competitive injury in a secondary-line2 Robinson-Patman case may be inferred from evidence of injury to an individual competitor. More specifically, Morton Salt permits a factfinder to infer injury to competition from evidence of a substantial price difference over time, because such a price difference may harm the competitive opportunities of individual merchants, and thus create a "reasonable possibility" that competition itself may be harmed. Id. at 46-47, 68 S.Ct. at 828-29. The question presented by Sylvania's appeal is whether the inference of competitive injury that arises from a showing of harm to an individual competitor in a secondary-line price discrimination case may be overcome by a showing that competition in the relevant market remains healthy. This question was left open by Morton Salt, and the circuits are divided on the issue. The D.C. Circuit, for example, has held that the inference of competitive injury may be rebutted by a showing of no actual harm to competition because the Robinson-Patman Act must be construed in light of the pro-competitive purpose of all other antitrust legislation. Boise Cascade Corp. v. FTC, 837 F.2d 1127, 1144 (D.C.Cir.1988). The Third Circuit, on the other hand, has held that the inference of competitive injury may not be overcome by evidence of no harm to competition because the Robinson-Patman Act was designed specifically to protect individual competitors rather than competition in general. J.F. Feeser, Inc. v. Serv-A-Portion, Inc., 909 F.2d 1524, 1532-33 (3d Cir.1990), cert. denied, 499 U.S. 921, 111 S.Ct. 1313, 113 L.Ed.2d 246 (1991). 3 Appellant Sylvania argues that we should follow Boise. Like Boise, Sylvania reasons that the Robinson-Patman Act condemns price discrimination only to the extent that the discrimination threatens to injure competition, and that the Act should be construed consistently with the broader policies of the antitrust laws to protect competition, not individual competitors. Appellee Von Der Ahe argues that injury to competition in a secondary-line Robinson-Patman case is conclusively established by proof of injury to a competitor, and that the inference of competitive injury that arises from proof of injury to a competitor may not be rebutted by evidence that competition was not adversely affected. We agree with Von Der Ahe and the Third Circuit, and affirm the jury verdict for Von Der Ahe on the Robinson-Patman claim. 4 * The Robinson-Patman Act reads in relevant part: 5 It shall be unlawful for any person engaged in commerce ... to discriminate in price between different purchasers of commodities of like grade and quality, ... where the effect of such discrimination may be substantially to lessen competition or tend to create a monopoly in any line of commerce, or to injure, destroy, or prevent competition with any person who either grants or knowingly receives the benefits of such discrimination, or with customers of either of them ... 6 15 U.S.C. § 13(a). In Boise, the D.C. Circuit held that the language of the Robinson-Patman Act, which prohibits price discriminations that tend "to injure, destroy, or prevent competition," indicates that Congress was concerned about the preservation of competition, and not the protection of individual competitors. Boise, 837 F.2d at 1143. In making this argument, the D.C. Circuit attempted to reconcile Robinson-Patman with other antitrust laws, whose purpose is to promote "pro-competitive efficiency and maximization of consumer welfare." Id. at 1138. Asserting that harm to competition is "the name of the Robinson-Patman game," id. at 1143, the D.C. Circuit reasoned that it would "def[y] both logic and the import of Morton Salt" to hold that an inference of competitive injury derived from evidence of harm to individual competitors may not be overcome when there is no actual harm to competition. Id. at 1144. 7 In dissent, Judge Mikva criticized the majority in Boise for following its own economic philosophy rather than interpreting the specific language and legislative history of the Robinson-Patman Act. Id. at 1152-53 (Mikva, J., dissenting). First, Judge Mikva accused the majority of overlooking the statutory language, which expressly proscribes price differentials that tend "to injure, destroy, or prevent competition with any person " who enjoys the benefits of the differential. Id. at 1157. This language, in Judge Mikva's view, shifts the focus of the statute from protecting competition to protecting individual disfavored buyers from the loss of business to favored buyers. 8 Judge Mikva cited Morton Salt 's language that "Congress intended to protect a merchant from competitive injury attributable to discriminatory prices." Id. (quoting Morton Salt, 334 U.S. at 49, 68 S.Ct. at 829-30). In his view, this intent to protect individual merchants explains why Morton Salt permits a finding of injury to competition based on a showing of injury to an individual competitor victimized by the discrimination. Id. (citing Morton Salt, 334 U.S. at 49, 68 S.Ct. at 829-30). Judge Mikva argued that this language in Morton Salt shows that the Court interpreted Robinson-Patman as dispensing with the need to show injury to competition. Id. at 1154. Finally, Judge Mikva noted that the Supreme Court had once addressed the issue of how to rebut the Morton Salt inference by creating a "specific type of rebuttal evidence"--"evidence breaking the causal connection between a price differential and [an individual competitor's] lost sales or profits"--and thus implicitly rejecting other methods for overcoming the inference. Id. (quoting Falls City Indus., Inc. v. Vanco Beverage, Inc., 460 U.S. 428, 435, 103 S.Ct. 1282, 1288-89, 75 L.Ed.2d 174 (1983)). 9 Judge Mikva found support for his position in the legislative history: 10 The existing law has in practice been too restrictive in requiring a showing of general injury to competitive conditions ... whereas the more immediately important concern is in injury to the competitor victimized by the discrimination. Only through such injury in fact can the larger, general injury result. Through this broadening of the jurisdiction of the act, a more effective suppression of such injuries is possible and the more effective protection of the public interest at the same time is achieved. 11 Id. at 1158 (quoting H.R.Rep. No. 2287, 74th Cong., 2d Sess. 8 (1936)). Judge Mikva chastised the majority for interpreting Robinson-Patman according to its own version of antitrust policy, when the statutory language and the legislative history both show that Congress has already adopted its own policy of protecting individual merchants as a means of protecting competition. Id. at 1153. 12 In Feeser, the Third Circuit agreed with Judge Mikva that the Robinson-Patman Act proscribes secondary-line price discrimination that injures individual competitors. Feeser, 909 F.2d at 1533. The Third Circuit pointed out that the language "may be substantially to lessen competition or tend to create a monopoly," which had been part of the 1914 version of the Clayton Act, refers generally to broad impacts on competition, while the Robinson-Patman Act added the language "to injure, destroy, or prevent competition with any person who either grants or knowingly receives the benefits of such discrimination" specifically to protect the ability of individual companies to compete. Id. at 1532. 13 The Third Circuit also found support in the legislative history. First, the Third Circuit cited the Senate Report to show that Congress had intended to target injury to individual competitors as an appropriate means to protect competition in the long run, i.e. "to catch the weed in the seed." Id. at 1533 (quoting S.Rep. No. 1502, 74th Cong., 2d Sess. 4 (1936)). Second, the floor statement of a congressman in charge of the Conference Report for the Robinson-Patman Act shows that the language "to injure, destroy, or prevent competition with any person" was added to prohibit injury to the "immediate competition with the grantor or grantee" of a price discrimination. Id. (quoting 80 Cong.Rec. H9417 (1936) (statement by Rep. Utterback)). Thus, the Third Circuit's reading of the legislative history is in accord with Judge Mikva's reading that Congress amended the Clayton Act to expand its protection to individual competitors. 14 The Third Circuit also relied on Morton Salt in stating that it is "self-evident" that when sellers sell their goods to some customers substantially cheaper than they sell like goods to the competitors of these customers, there is a reasonable possibility that competition may be harmed. Id. (citing Morton Salt, 334 U.S. at 50-51, 68 S.Ct. at 830-31). It also cited dictum from Monahan's Marine, Inc. v. Boston Whaler, Inc., 866 F.2d 525, 529 (1st Cir.1989) (Breyer, J.), that a Robinson-Patman claim differs in nature from a Sherman Act claim because the Sherman Act protects competition, while the Robinson-Patman Act protects "those who compete with a favored seller, not just the overall competitive practice." Id. at 1535 (quoting Monahan's Marine, 866 F.2d at 529).3II 15 We agree with Judge Mikva and the Third Circuit. We are persuaded that the language that the Robinson-Patman Act added to § 2(a) of the Clayton Act--"to injure, destroy, or prevent competition"--expresses Congressional intent to protect individual competitors, not just market competition, from the effects of price discrimination. As we said in Rebel Oil Co. v. Atlantic Richfield Co., 51 F.3d 1421, 1446 n. 18 (9th Cir.1995) (dicta), "[t]he purpose of this passage was to relieve secondary-line plaintiffs--small retailers who are disfavored by discriminating suppliers--from having to prove harm to competition marketwide, allowing them instead to impose liability simply by proving effects to individual competitors." See also 3 Earl W. Kintner & Joseph P. Bauer, Federal Antitrust Law §§ 19.2, 22.4 (1983) (addition of phrase "to injure, destroy, or prevent competition with any person" was to expand protection of original Clayton Act to individual competitors). 16 We also agree with the Third Circuit and Judge Mikva that the legislative history confirms that Congress amended the Clayton Act specifically to extend its protection to individual competitors. Congress passed the Robinson-Patman Act primarily out of concern for small retailers who could not compete with large chain-store purchasers because they could not buy in quantity. See Falls City, 460 U.S. at 436, 103 S.Ct. at 1289-90; FTC v. Morton Salt Co., 334 U.S. at 49, 68 S.Ct. at 829-30. The House Report shows that the Act was animated by concern for "the survival of independent merchants, manufacturers, and other businessmen." H.R.Rep. No. 2287, 74th Cong., 2d Sess. 3 (1936); see also Lawrence Anthony Sullivan, Handbook of the Law of Antitrust § 225(a) (finding support in legislative history for construing Robinson-Patman Act to protect individual small competitors irrespective of efficiency concerns). III 17 Sylvania also relies upon Foremost Pro Color, Inc. v. Eastman Kodak Co., 703 F.2d 534, 548 (9th Cir.1983), cert. denied, 465 U.S. 1038, 104 S.Ct. 1315, 79 L.Ed.2d 712 (1984), a secondary-line case which stated that the Robinson-Patman Act, like other antitrust laws, must be construed to protect competition, not individual competitors.4 Foremost Pro held that to survive a Rule 12(b)(6) motion, a plaintiff must allege injury to competition generally, not just injury to a specific competitor, because "[i]njury to a specific competitor is not enough from which a court may infer that an alleged price discrimination may 'substantially' injure competition." Id. Although Foremost Pro had no occasion to address the issue presented in this appeal--whether an inference of competitive injury may be overcome by a showing of no actual harm to competition--its sweeping statement that the Robinson-Patman Act must be construed to protect competition, not competitors, lends support to Sylvania's position that a defendant in a secondary-line price discrimination case must be permitted to make a showing of no harm to competition. 18 We believe, however, that Foremost Pro is no longer the law of this circuit because it was overruled, sub silentio, by Hasbrouck v. Texaco, Inc., 842 F.2d 1034, 1041 (9th Cir.1987), aff'd, 496 U.S. 543, 110 S.Ct. 2535, 110 L.Ed.2d 492 (1990). Without discussing Foremost Pro, Hasbrouck held that harm to competition in a secondary-line Robinson-Patman case may be inferred from evidence of harm to an individual competitor. Id. In so holding, Hasbrouck relied on Falls City, 460 U.S. at 435-36, 103 S.Ct. at 1288-90, a case decided after Foremost Pro. Falls City held that injury to competition may be inferred from proof of a substantial price discrimination between competing purchasers over time. Id. at 435, 103 S.Ct. at 1288-89. By relying on Falls City rather than on Foremost Pro, Hasbrouck appears to have interpreted Falls City as undermining the holding of Foremost Pro. See Landreth v. Internal Revenue Service, 859 F.2d 643, 648 (9th Cir.1988) (three judge panel may reconsider Ninth Circuit precedent if intervening Supreme Court decision undermines that precedent). We note in addition that Hasbrouck's holding is consistent with Morton Salt's reasoning that the Robinson-Patman Act "was intended to justify a finding of injury to competition by a showing of 'injury to the competitor victimized by the discrimination.' " Morton Salt, 334 U.S. at 49, 68 S.Ct. at 830 (quoting S. Rep. No. 1502, 74th Cong., 2d Sess. 4 (1936)). Because we are no longer bound by the reasoning of Foremost Pro, we are free to decide the question left open by Morton Salt, Falls City, and Hasbrouck, i.e. whether proof of harm to an individual competitor gives rise to an irrebuttable presumption of competitive injury in a secondary-line price discrimination case. IV 19 Finally, Sylvania relies on Brooke Group Ltd. v. Brown & Williamson Tobacco Corp., 509 U.S. 209, 113 S.Ct. 2578, 125 L.Ed.2d 168 (1993). Brooke Group, a primary-line price discrimination case, reasons that "[b]y its terms, the Robinson-Patman Act condemns price discrimination only to the extent it threatens to injure competition," and therefore holds that the Act must be construed consistently with the broader policies of the antitrust laws to protect competition, not competitors. Id. at 219-21, 113 S.Ct. at 2586. Sylvania claims that the Brooke Group reasoning applies with equal force to secondary-line price discrimination claims. 20 We decline to extend the reasoning of Brooke Group to secondary-line cases because of the significant differences between primary- and secondary-line claims. First and foremost, Congress' concern for the fate of individual competitors, as expressed in the legislative history of the Robinson-Patman Act, focussed on secondary-line, not primary-line competition. Coastal Fuels of Puerto Rico, Inc. v. Caribbean Petroleum Corp., 79 F.3d 182, 191-92 (1st Cir.), cert. denied, --- U.S. ----, 117 S.Ct. 294, 136 L.Ed.2d 214 (1996); Henry v. Chloride, 809 F.2d 1334, 1339 (8th Cir.1987); 3 Phillip Areeda & Donald F. Turner, Antitrust Law p 720c (1978). Since the original Clayton Act addressed only primary-line injury, Congress passed the Robinson-Patman Act to add protection against secondary-line injury, more specifically against injury to small retailers. Coastal Fuels, 79 F.3d at 192. Thus, the language added to the Clayton Act by the Robinson-Patman Act, and the legislative history that expresses Congress' solicitude for individual buyers, are still applicable in secondary-line cases, even though they are not applicable in primary-line cases after Brooke Group. See id. at 191-93 (Morton Salt's inference of competitive injury still good law after Brooke Group because Brooke Group applies only to primary-line injury cases). Second, Brooke Group said that Robinson-Patman protects competition, not competitors, in the context of analogizing primary-line price discrimination claims to Sherman Act predatory pricing claims. The same analogy may not be made to secondary-line price discrimination claims. Id. at 193. Conclusion 21 We hold that in a secondary-line Robinson-Patman case, the Morton Salt inference that competitive injury to individual buyers harms competition generally may not be overcome by proof of no harm to competition. 22 We AFFIRM the judgment on the Robinson-Patman claim. 1 All other issues raised by Sylvania's appeal are disposed of in a memorandum disposition filed herewith 2 Secondary-line price discrimination affects competition between buyers of a discriminating seller's goods, while primary-line discrimination affects competition between a discriminating seller and others who sell the same goods 3 Several other circuits have addressed this issue, though without the same depth of analysis found in Boise and Feeser. Compare Alan's of Atlanta, Inc. v. Minolta Corp., 903 F.2d 1414, 1418 n. 6, 1426 (11th Cir.1990) (Robinson-Patman Act focuses on injury to competitors, not to competition), with Richard Short Oil Co. v. Texaco, Inc., 799 F.2d 415, 420 (8th Cir.1986) (alternative holding) (Robinson-Patman Act focuses on injury to competition, not to competitors), and Motive Parts Warehouse v. Facet Enterprises, 774 F.2d 380, 395 (10th Cir.1985) (same) 4 Foremost Pro was later cited with approval by the D.C. Circuit in Boise, 837 F.2d at 1143

{ "pile_set_name": "FreeLaw" }

Filed 5/20/14 P. v. Villa CA2/4 NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115. IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA SECOND APPELLATE DISTRICT DIVISION FOUR THE PEOPLE, B252469 Plaintiff and Respondent, (Los Angeles County Super. Ct. No. MA047883) v. MARCELINO VILLA, Defendant and Appellant. APPEAL from an order of the Superior Court of Los Angeles County, Christopher G. Estes, Judge. Affirmed. California Appellate Project, Jonathan B. Steiner, Executive Director, and Richard B. Lennon, under appointment by the Court of Appeal, for Defendant and Appellant. No appearance for Plaintiff and Respondent. On March 2, 2010, defendant Marcelino Villa entered into a negotiated disposition in which he pleaded no contest to a felony violation of Penal Code section 4573.61 (unauthorized possession of a controlled substance in prison) and admitted a prior felony strike conviction. In return, defendant received a four-year state prison sentence. On April 4, 2013, defendant filed a handwritten “petition for a sentence reduction,” claiming he was “not familiar with the proceedings enough to understand, at that time, that the ‘plea’ was actually NOT the same as what attorney Hovsepyan had earlier declared [sic] with me.” Defendant also argued that he was entitled to a reduction of his sentence under the Three Strikes Reform Act, added by Proposition 36. (§ 1170.126.)2 On September 19, 2013, the trial court denied defendant’s “petition for modification of sentence.” With regard to the March 2, 2010 negotiated disposition, the trial court stated in its September 19, 2013 order that, pursuant to the parties’ agreement, it “approved the negotiated plea bargain and the defendant was sentenced to four years in state prison. [¶] The court has read and considered the transcript of the March 2, 2010 proceedings wherein the court discussed the negotiated disposition, the constitutional 1 All further statutory references are to the Penal Code. 2 “On November 6, 2012, voters approved Proposition 36, the Three Strikes Reform Act of 2012 (the Act). Under the three strikes law (Pen. Code, §§ 667, subds. (b)-(i), 1170.12) as it existed prior to Proposition 36, a defendant convicted of two prior serious or violent felonies would be subject to a sentence of 25 years to life upon conviction of a third felony. Under the Act, however, a defendant convicted of two prior serious or violent felonies is subject to the 25-year-to-life sentence only if the third felony is itself a serious or violent felony. If the third felony is not a serious or violent felony, the defendant will receive a sentence as though the defendant had only one prior serious or violent felony conviction, and is therefore a second strike, rather than a third strike, offender. The Act also provides a means whereby prisoners currently serving sentences of 25 years to life for a third felony conviction which was not a serious or violent felony may seek court review of their indeterminate sentences and, under certain circumstances, obtain resentencing as if they had only one prior serious or violent felony conviction. According to the specific language of the Act, however, a current inmate is not entitled to resentencing if it would pose an unreasonable risk of danger to public safety.” (People v. Superior Court (Kaulick) (2013) 215 Cal.App.4th 1279, 1285-1286, fn. omitted.) 2 rights and consequences with the defendant. The defendant acknowledged that he understood his rights and the consequences of his plea and admission. [¶] The court finds no legal basis to grant the relief requested. Therefore, the petition for modification of sentence is denied.” On October 21, 2013, defendant filed a notice of appeal from the September 19, 2013 order denying his petition for modification of sentence.3 On December 12, 2013, we appointed counsel to represent defendant. On December 13, 2013, we filed an order stating that the appeal was “limited to non- certificate issues.” (See § 1237.5; People v. Johnson (2009) 47 Cal.4th 668, 677-678 [no certificate of probable cause is required where the defendant is challenging errors that occurred after his plea was entered as to the penalty to be imposed].) After reviewing the record, counsel filed an opening brief requesting this court to independently review the record pursuant to the holding of People v. Wende (1979) 25 Cal.3d 436, 441. On 3 The question whether an appeal may be taken from the order denying a petition to recall a sentence pursuant to section 1170.126 is pending before the Supreme Court in: (1) Teal v. Superior Court (2013) 217 Cal.App.4th 308, review granted July 31, 2013, S211708 (Second Dist., Div. Seven; order denying § 1170.126 petition is not appealable, but appellate court may treat the appeal as a petition for writ of mandate or habeas corpus); (2) People v. Hurtado (2013) 216 Cal.App.4th 941, review granted July 31, 2013, S212017 (Second Dist., Div. One; denial is appealable because Act confers substantial right); (3) People v. Leggett (2013) 219 Cal.App.4th 846, review granted December 18, 2013, S214264 (Third Dist.; order denying § 1170.126 petition is not appealable if petition was erroneously filed by individual whose sentence is based on conviction for serious or violent felony, but is appealable in all other instances); and (4) People v. Wortham (2013) 220 Cal.App.4th 1018, review granted January 15, 2014, S214844 (First Dist., Div. Four; order denying a § 1170.126 petition is appealable). Most recently, in In re Martinez (2014) 223 Cal.App.4th 610, 614, 615, review granted May 14, 2014, S216922, the Fourth District, Division One, acknowledged this split of authority and exercised its discretion to treat the defendant’s appeal as a writ of habeas corpus. In People v. Haynes (Apr. 24, 2014, F067275) ___ Cal.App.4th ___ [2014 Cal. App. LEXIS 358], the Fifth District held that a denial of a request for resentencing under section 1170.126 is appealable. Rather than add to the appealability debate while the matter is pending before our Supreme Court, we conclude that because the order is reviewable, whether by appeal or writ petition, it is appropriate to address the merits. 3 February 3, 2014, we directed counsel to send the record on this appeal and a copy of the opening brief to defendant. On that date, we also notified defendant that he had 30 days within which to personally submit any contentions or issues that he wished us to consider. We have received no response from him. We have examined the entire record and determined that defendant, who received a four-year prison sentence rather than an indeterminate sentence that falls under the provisions of section 1170.126, is not eligible for a reduction of his sentence under that statute. (See § 1170.126, subds. (b) & (e)(1).) We are satisfied that defendant’s attorneys have fully complied with their responsibilities and that no arguable appellate issue exists. (Smith v. Robbins (2000) 528 U.S. 259, 278; People v. Kelly (2006) 40 Cal.4th 106, 110.) DISPOSITION The order is affirmed. NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS EDMON, J.* We concur: EPSTEIN, P. J. MANELLA, J. *Judge of the Los Angeles Superior Court, assigned by the Chief Justice pursuant to article VI, section 6 of the California Constitution. 4

{ "pile_set_name": "FreeLaw" }

615 S.W.2d 831 (1981) CITY OF HOUSTON, Appellant, v. R. W. WALKER, Appellee. No. 17788. Court of Civil Appeals of Texas, Houston (1st Dist.). February 12, 1981. Rehearing Denied March 12, 1981. *832 Dale M. Tingleaf, Sr. Asst. City Atty., Adolph R. Guerra, Jr., Asst. City Atty., Houston, for appellant. Kirklin, Boudreaux & Joseph, Charles B. Kirklin, Houston, for appellee. Before COLEMAN, C. J., and PEDEN and SMITH, JJ. COLEMAN, Chief Justice. This is a suit for damages arising under Title 42, § 1983, United States Code. Judgment was entered on a jury verdict for both actual and exemplary damages. In 1972, appellee purchased lots 211 and 212 in block 7 of Colonial Gardens, an addition in Harris County, according to the map or plat thereof recorded in Volume 13, Page 4 of the Map Records of Harris County, Texas from Howard H. Maughn and wife, Lurline M. Maughn. The deed provided that the conveyance was made subject to the restrictions, conditions, easements and covenants, if any, applicable to and enforceable against the above described property as reflected in the records of the County Clerk of Harris County, Texas. Mr. Walker purchased this land as a building site for a commercial building and had already made arrangements for the sale of the lots together with the building to be erected thereon. Mr. Walker owned some 86% of the stock of a corporation through which he engaged in construction of metal buildings. This corporation submitted plans and specifications to the City's Planning Commission for the commercial building to be erected on the lots which he had just purchased. The corporation was granted a permit and proceeded to prepare the lots for construction. The Corporation was in the process of preparing the foundation when served with a "stop order" on January 22, 1972. Article 974a-2, V.A.T.S., provides in § 3(a), thereof that a person who desires a commercial building permit shall file with his application a certified copy of any instrument which contains a restriction on the use of or construction on the property described in the application, together with a certified copy of any amendment, judgment or other document effecting the use of the property. Paragraph (b) of Section 3 provides that when an applicant has complied with this act and local ordinances relating to commercial building permits, the department shall issue a permit for construction or repair which conforms with all restrictions relating to the use of the property described in the application. Section 5(c) provides that any commercial permit obtained without full compliance with the Act is void. Section 7 of the Act provides that an administrative refusal to issue a commercial permit on the grounds of violation of restrictions contained in a deed or other instrument shall be reviewable by a court of appropriate jurisdiction and that in the event of changed conditions within a subdivision or any other legally sufficient *833 reason that restrictions should be modified, a person refused a commercial building permit can petition a court of appropriate jurisdiction to alter the restrictions to better conform with present conditions. Section 10-3 of Article 1, Chapter 10, of the Code of Ordinances of the City of Houston, Texas, provides that no building permit shall be issued until an affidavit containing designated language has been submitted to the building official. The affidavit states that the proposed construction, alteration or repair described in the application and the use to which the improvement will be put will not violate any deed restriction or restrictive covenants running with the land, which restriction concerns the health, safety or general welfare of the citizens of the City of Houston. The affidavit must also contain a statement that should such construction or such use be in violation of any deed restriction or restrictive covenant running with the land to which the property is subject, that the building permit shall automatically become void and have no effect, without the necessity of any action on the part of the City of Houston, Texas, or any property owner in any subdivision in which such land is located. Section 3 of Article 974a-2, V.A.T.S., places the burden on the person desiring the building permit to ascertain whether or not there are one or more written instruments filed in the office of either the District or County Clerks which contains a restriction on the use of the property. The statute does not exempt from this requirement instruments which have been held ineffective by a court of law. On the contrary it requires that a copy of such a judgment also be filed. The copies of the instruments required to be filed must be certified copies of recorded instruments. If the applicant fails to comply with these requirements the permit issued to him is void. There is no evidence that an instrument containing restrictions on the use of all of the lots contained in the Colonial Gardens Subdivision was filed for record by the subdivider. A map or plat of the subdivision was filed and recorded in Volume 13, p. 4 of the Map Records of Harris County, Texas. Several deeds executed by Allen C. Hutcheson conveyed lots out of that subdivision. Printed on these deeds were identical "residence building restrictions." The deeds offered into evidence state that a conveyance is made subject to the following restrictions and reservations: "Residence building restrictions: All lots except lots nos. (1), (42), (43), (44), (119), (120), (180), (181) are designated as residence lots and restricted for residence purposes only." A deed dated October 26, 1937, by which Allen C. Hutcheson conveyed lots 211 and 212, lot no. 7, Colonial Gardens, "as shown by plat" to Austin Copeland contained these restrictions and is recorded in Volume 2694 at page 561 of the Deed Records of Harris County, Texas. In plaintiff's original petition, which was filed on March 9, 1973, Mr. Walker alleged under oath: Your Plaintiff would further show that property owned by him on which he is erecting commercial improvements is within a subdivision affected by changing conditions which physically alter, amend and change, modify and exempt same from the original restrictions placed upon said subdivision when platted and, therefore, falls within Article 948a subsection 7 of V.A.T.S. In his prayer he asks that the restrictions "recorded" in Volume 2694, Page 561 of the Deed Records be set aside; that same may affect the plaintiff's property and be determined invalid and unenforceable. In the seventh amended original petition, filed after the case was called for trial, the plaintiff alleged: [T]he property owned by him upon which he was erecting commercial improvements was and is within a subdivision, affected by changing conditions which physically alter, amend and change, modify and exempt same from the original restrictions placed upon said subdivision when platted and, therefore, these deed restrictions were and are unenforceable and invalid. *834 At the trial Mr. Walker introduced into evidence a plat of the Colonial Gardens subdivision on which he had marked all lots which he contended were being used for business purposes. He prepared this exhibit within two or three weeks after the stop order was issued. He used a recorded instrument to determine the deed restrictions. The restrictions in this instrument were the same as those found in the conveyance from Hutcheson to Copeland. Mr. Walker testified that the restrictions found in this deed were the same for all the lots in the subdivision. He testified that he made a business judgment at the time he purchased the lot that the deed restrictions would be held null and void. He further testified that he knew that if he erected a building in violation of valid business restrictions there was the possibility that he might be required to tear the building down. He stated that in this case he was prepared to take the risk. The deed conveying lots 211 and 212 to Mr. Walker recited that the conveyance was subject to the restrictions "if any" on record. The restrictions were not set out in the deed. The City did not introduce a chain of title from Allen C. Hutcheson to Mr. Walker. However, the City did prove that at the time Mr. Walker applied for a commercial building permit in the City of Houston there was on file in the District Clerk's office an instrument which contained a restriction on the use of the property described in his application. The issue is not whether the restrictions placed on the property by the instrument were valid at the time the application was made, but whether there was an instrument containing restrictions. Both of the building permits for lots 211 and 212 obtained by Mr. Walker were obtained without full compliance with Article 974a-2, V.A.C.S., and were void. Mr. Walker contends that the City does not have the power to issue "stop orders" or even to deny building permits on the basis of a determination by the City that the relevant property is subject to enforceable deed restrictions, because the statute that the City relies on for such authority, § 974a-2, Tex.Rev.Civ.Stat., violates the Texas Constitution by purporting to confer judicial powers on executive officials in violation of Article 2, § 1 of the Constitution of the State of Texas. This act provides that the department shall issue a permit for construction which conforms with all restrictions relating to the use of the property described in the application. The implication is that should the application be for construction or repair which does not conform with the restrictions relating to the use of the property the City would be authorized by the act to deny the application. The act provides that an administrative refusal to issue a commercial permit on the grounds of violation of restrictions contained in a deed or other instrument shall be reviewable by a court of appropriate jurisdiction. Rather than conferring judicial powers on executive officials, this act specifically denies the City officials the right to determine whether or not deed restrictions are enforceable. They must assume that they are enforceable until they are supplied with a court judgment to the contrary. The evidence establishes that the agency of the City of Houston which has the authority and responsibility for issuing commercial building permits was never furnished a certified copy of the instrument which contained the restrictions on the use of the property owned by Mr. Walker. The two permits which were issued on the basis of the information furnished to the department were void. The department properly notified Mr. Walker that the permits were no longer considered good by the department. Mr. Walker should not be heard to complain of the issuance of the stop order by the City officials. On receipt of this order Mr. Walker stopped further building and within a few weeks instituted this suit which then had as its purpose a determination of whether or not the restrictions were valid. Mr. Walker was charged with notice of the statute authorizing the City to deny a commercial building permit in an area restricted to residential uses. At the time *835 he purchased this property he was charged with notice of the fact that he was required to file certified copies of all instruments containing a restriction on the use of the property and that unless he complied with the act any permit which he received would be void. It cannot be seriously contended at this late date that covenants restricting the use of a tract of land for the benefit of another tract owned by the same person are illegal or unenforceable in the courts. Article 974a-1, V.A.T.S., merely authorizes incorporated cities, towns or villages to assist in the enforcement of these restrictive covenants. The act is a regulation of the right to build commercial buildings on city property. The burden placed on the property by the act did not cause a disproportionate diminution in economic value and certainly not a total destruction of the value. In enacting this law the State was acting as a neutral governmental arbitrator to resolve conflicts between its citizens. It provides a method for the orderly settlement of potential disputes between its citizens by court action. It constitutes a valid exercise of governmental power. City of Austin v. Teague, 570 S.W.2d 389 (Tex.1978). The determination of whether or not restrictive covenants on the use of land are valid and enforceable is a proper subject for judicial action. City of Houston v. Emmanuel United Pentecostal Church, Inc., 433 S.W.2d 680 (Tex.1968). The statute is not void as being violative of § 1, Art. 2 of the Constitution of the State of Texas providing for the division of the power of government into three departments: Legislative, Executive, and Judicial. Gulf Refining Co. v. City of Dallas, 10 S.W.2d 151 (Tex.Civ. App.-Dallas, 1928, writ dism'd). The statute is not unconstitutional as authorizing the taking, damaging, and destroying of property without due process or as denying equal protection of the law. Lombardo v. City of Dallas, 124 Tex. 1, 73 S.W.2d 475 (1934). An applicant for a commercial building permit in the City of Houston is under the burden of showing that there are no restrictions on the property prohibiting a commercial use. Section 10-3, Article 1, Chapter 10, Code of Ordinances of the City of Houston, Texas provides: No building permit shall be issued until an affidavit has been submitted to the building official stating that construction, alteration or repair for which the building permit is sought, and the use to which the improvement is to be put will not violate any deed restrictions or restrictive covenants running with the land to which the property may be subject.... The ordinance does not authorize the building official to make a determination as to whether deed restrictions or restrictive covenants running with the land are valid. We are cited to no ordinance authorizing an administrative decision as to the validity of a restriction on the use of property. The ordinance contemplates that the validity of use restrictions on property be determined by court action. The City ordinances are not invalid as denying procedural due process or authorizing an arbitrary and capricious use of power. Neither does the ordinance provide a method for depriving a property owner of his property without due process of law. This case was submitted to a jury on special issues. In answer to special issue no. 1 the jury found that the "residence purposes only" deed restrictions as to the Colonial Gardens Subdivision was not enforceable in January of 1973 and in April of 1978. The evidence shows that stop work orders were issued during those months. In answer to special issue no. 2 the jury found that the issuance of the stop work orders was arbitrary and capricious. The jury further found that the issuance of the stop work orders was the proximate cause of damage to Mr. Walker and found the amount of the damage. The jury found that two members of the City Legal Department acted willfully, intentionally and maliciously in issuing the stop orders, and awarded Mr. Walker exemplary damages. It appears that the judgment rests on the finding that the deed restrictions were unenforceable, and thus, the issuance of the *836 stop work order was arbitrary and capricious. In effect this places the burden on the City of making an administrative decision as to the validity of the deed restrictions. In entering a judgment based on these special issues the court failed to give effect to the provision of Article 974a-2, V.A.T.S., declaring void a commercial permit obtained without full compliance with the act. The issuance of a stop work order to one proceeding with construction under a void permit is not an arbitrary and capricious action. The plaintiff did not allege a cause of action based upon any fault on the part of the City of Houston in failing or refusing to issue to him a commercial building permit. No issues were requested or submitted on such a cause of action. The plaintiff alleged in general terms a cause of action under Title 42 U.S.C. § 1983, which provides: Every person who, under color of any statute, ordinance, regulation, custom, or usage of any state or territory, subjects, or causes to be subjected, any citizen of the United States or other person within the jurisdiction thereof to the deprivation of any rights, privileges, or immunity secured by the Constitution and laws shall be liable to the party injured in an action at law, suit in equity, or other proper proceeding for redress. Mr. Walker has no right or privilege protected by the Constitution of the United States to proceed under a commercial building permit declared void by a valid law of the State of Texas for failure to furnish required information to the agency authorized to issue the permit. In order to prevail against a political subdivision on a § 1983 cause of action the plaintiff must prove that the action complained of must constitute a custom or policy of the local government which violated a constitutional right enjoyed by the plaintiff. Issues were not submitted to establish that the City officials alleged to have issued the stop orders were authorized to do by written law or by custom or usage. A local government may not be sued under § 1983 for an injury inflicted solely by its employees or agents. In enacting § 1983 Congress did not intend municipalities to be held liable unless action pursuant to official municipal policy of some nature caused a constitutional tort. A city may not be held liable solely because an employee commits an actionable tort. It is when execution of a government's policy or custom, whether made by its lawmakers or by those whose edicts or acts may fairly be said to represent official policy, inflicts injury that the government as an entity is responsible under § 1983. Monell v. Dept. of Social Services of City of New York, 436 U.S. 658, 98 S.Ct. 2018, 56 L.Ed.2d 611 (1978); Familias Unidas v. Briscoe, 619 F.2d 391 (5th Cir. 1980). While it is not entirely clear there is support in the record for a finding that the "stop work" order was issued by the public works department at the suggestion of an Assistant City Attorney. There is no evidence to support a finding that the lawyers in the City Attorney's office had authority to make policy or that similar action was so widespread as to establish custom. Under the facts of this case, the issuance of the stop orders did not amount to a compensable taking under Article 1, § 17 of the Texas Constitution, as interpreted in City of Austin v. Teague, 570 S.W.2d 389 (Tex.1978). The plaintiff's cause of action was not based upon an arbitrary refusal to issue a building permit. In addition the evidence shows that he failed to submit a proper application for such building permit. Building permits obtained by plaintiff Walker were void upon issuance due to his failure to comply with Article 974a-2, V.A. T.S., hence, the City, as a matter of law, cannot be liable in damages for stopping work which was proceeding under a void permit. The City's points of error 1 through 4 are sustained. The judgment of the trial court is reversed and judgment is here rendered that the plaintiff take nothing.

{ "pile_set_name": "FreeLaw" }

96 Cal.App.2d 112 (1950) MARY JENSEN, Petitioner, v. SUPERIOR COURT OF LOS ANGELES COUNTY, Respondent. Civ. No. 17375. California Court of Appeals. Second Dist., Div. Three. Feb. 17, 1950. Lane & McGinnis for Petitioner. William E. Simpson, District Attorney, and Jere J. Sullivan, Deputy District Attorney, for Respondent. SHINN, P. J. Petitioner Mary Jensen was named as one of four defendants joined in an indictment charging the abortion and murder of a 17-year-old girl whom we shall refer to as Miss B. She made a motion under section 995, Penal Code, to quash the indictment and the same having been denied, she has applied for prohibition upon the ground that the indictment is void as to her because of the absence of any evidence before the grand jury to connect her with the charged offenses. The salient facts are stated in the companion case of Bunker v. Superior Court, ante, p. 107 [214 P.2d 825], this day decided, and are referred to as supplementing the facts to be hereinafter stated. [1a] The evidence before the grand jury, insofar as it relates in any manner to petitioner, consists of testimony as to the following facts: Petitioner was a nurse employed by Dr. Frank Bunker at his office at 4230 South Figueroa Street in Los Angeles; Mrs. B, mother of deceased, testified that about 6 or 7 o'clock in the evening of May 20th, she received a telephone call from someone who did not identify himself, but whom she believed to be Dr. Eisoff, telling her to have her daughter at 4230 South Figueroa at 7:30 the next morning. The caller also stated, "When you get there, say you are Dr. Arons' patient." These instructions were followed. Upon arrival at the stated address, they were met by Mary Jensen and Dr. Leonard Arons. Mary told them to get Miss B undressed, which they did, putting a hospital nightgown on her. Dr. Arons came in and felt the girl's stomach. At his direction, Mary also felt her stomach. As she did so, Dr. Arons said, "Here, feel here. Oh, nothing to it. That's just liquid." The parents were then taken to a separate room where the proposed abortion was discussed, and where the father paid Dr. Arons $500. Mary Jensen was not present when the money was paid, but as they were leaving this room, Dr. Arons asked Mary, "Did you give her a capsule?" The parents went home. About 10 a. m., Mrs. B received a phone call from Mary: "She said, 'Oh, Mrs. [name], I think you better come down.' She said, 'The doctor decided we needed surgery. ... They're going to take her to the South Hoover *114 Hospital, and doctor is over there now,' she said, 'making arrangements for surgery.' And she said, 'When they take her over there she will go in as an acute appendectomy.' I said, 'Mary, tell me first, is there anything wrong?' She said, 'No, don't worry, just come down.' And she did say that when [name] came out of the ether to tell her that if the nurses asked her anything to say it was appendicitis." The parents went back to Dr. Arons' office. Mary met them, and said "nothing was wrong," but "the doctor decided she better be taken to the hospital." The ambulance came, and Mary said to lay her down flat, for "it's an acute appendectomy." The patient was taken away. At Mary's request the parents signed a statement releasing Dr. Bunker from liability in connection with the case. Later, at the hospital, when the girl came out of the ether, she said, "Where is Mary? Mother, Mary is awfully nice." Mr. B, the father, testified that late in the afternoon of May 20th they received a phone call from an unidentified person who stated that an appointment had been arranged for Miss B for 7:30 the next morning "at a clinic at 42nd and Figueroa," and that they were to "ask for Mary" and say that they had "come to see Dr. Arons." They followed these instructions. He did not learn that the address to which they took their daughter was that of Dr. Bunker's offices until after the attempted abortion took place. When Dr. Arons entered the office to speak to them, Mary left the room. Dr. Arons said he would "pack" the patient and it would not be dangerous at all. He then asked for the money, and was paid $500 in cash. Dr. Bluechel: At about 9:45 a. m., May 21st, he received a phone call from Mary, the nurse at Dr. Bunker's office. Mary "stated that Dr. Arons, who was working in Dr. Bunker's office, had a surgical case, acute appendicitis, and wanted to know if I would operate." She did not mention the name of the patient, nor any treatment that Dr. Arons might have given the patient. Officer Jokisch: He and his partner arrested Mary on May 30th. As they were admitted to her apartment the phone rang. It was an attorney. Mary spoke to him, and then stated that "she had been advised not to give us a statement or not to talk to us regarding this case." She was hysterical and crying, and, except for giving her name and occupation, refused to answer any questions without the advice of her attorney. [2] The law is clear that in this type of proceeding the courts may not inquire into the sufficiency of evidence to support an indictment, provided there is some evidence to support *115 it; but an indictment is void, and confers no jurisdiction upon a trial court to proceed with trial, where there is no evidence to connect the accused with the crime charged. (Greenberg v. Superior Court, 19 Cal.2d 319 [121 P.2d 713].) In determining whether there is such evidence to support the indictment of Mary Jensen, we may assume that the uncorroborated testimony of the parents, who were accomplices (People v. Wilson, 25 Cal.2d 341, 346 [153 P.2d 720]; People v. Stone, 89 Cal.App.2d 853, 870 [202 P.2d 333]; People v. Powell, 34 Cal.2d 196, 201, 203 [208 P.2d 974]), would be sufficient to support the indictment if it supplied some evidence of guilt, although such testimony would not by itself justify a conviction. (See Greenberg v. Superior Court, supra, 19 Cal.2d at p. 322, commenting upon In re Kennedy, 144 Cal. 634 [78 P. 34, 103 Am.St.Rep. 117, 1 Ann.Cas. 840, 67 L.R.A. 406]; Stern v. Superior Court, 78 Cal.App.2d 9, 17 [177 P.2d 308]; Abbott v. Superior Court, 78 Cal.App.2d 19, 21 [177 P.2d 317].) Our inquiry is thus confined to the sole question whether the testimony heretofore related, including that of the parents, when considered in relation to the record as a whole, discloses a rational basis for an assumption of Mary Jensen's guilt. It is perhaps trite to observe that the legal, as well as practical, consequences of otherwise identical facts frequently vary as the accompanying context and environment vary. And where the evidence touching the accused is purely circumstantial, as it is here, the weight to be given to each circumstance must be relative to its influence upon the complete picture. These truisms are peculiarly important here in view of the unusual situation which was thrust upon petitioner. Accordingly, in viewing the evidence, it must be constantly remembered that Mary Jensen was Dr. Bunker's nurse, and not Dr. Arons' nurse. There is no evidence whatsoever that she was employed by Dr. Arons, that she was paid by him, nor as to the extent of her services for him. So far as appears, her services, such as they were, might have been included in the arrangement between the two physicians. There was no evidence that she was aware of the nature or details of Dr. Arons' practice, nor evidence as to the nature of the services she was supposed to render him. We have this day held that Dr. Bunker was not shown to have been implicated in the abortion in the slightest degree. There was no evidence that he had any suspicion of illegal practices on the part of Dr. Arons. *116 It must be presumed that his own practices, as well as the services which petitioner was accustomed to render to him, were in all respects lawful and ethical. [1b] With these facts in mind, it becomes exceedingly plain that no evidence was presented to the grand jury from which it might be rationally inferred that Mary Jensen was connected with the offense of which she was charged. As Dr. Bunker's nurse, who remained in his offices while Dr. Arons was using them, it would naturally be her duty under the circumstances to meet Dr. Arons' patients, assist them when requested, make telephone calls at the direction of Dr. Arons, and otherwise carry out his instructions. There is no evidence whatsoever that she knew an abortion was to take place, or that she even knew Miss B was pregnant, except insofar as she might have surmised as much from feeling her body. In connection with the latter testimony, however, we think it of the utmost significance that Dr. Arons said, when he directed Mary to place her hands upon the patient's abdomen. "That's just liquid." Since the mother, the only other person present, was fully aware that her daughter was pregnant, and had come to Dr. Arons to alleviate that condition, the only rational explanation of his remark is that it was designed to deceive and allay any suspicions of petitioner. This testimony, together with the evidence that Arons was careful not to discuss the proposed abortion or permit the money to be paid in the presence of petitioner, and the complete lack of any evidence that petitioner assisted Dr. Arons in any manner other than as stated, leads irresistibly to the conclusion that Dr. Arons surreptitiously attempted to procure the abortion without the knowledge or assistance of Mary Jensen. Every circumstance in evidence which bears upon the question of petitioner's knowledge of Dr. Arons' unlawful acts tends to prove that he concealed their character from her. It is only reasonable to assume that Mary's telephone calls to Dr. Bluechel and the parents were made pursuant to Dr. Arons' instructions. It is difficult to imagine that petitioner spoke of the patient's condition otherwise than as specifically directed by Dr. Arons. Since the representations that the patient had acute appendicitis clearly derived from Arons, and were no doubt made to arrange for surgery and hospitalization, their falsity in no way reflects upon petitioner's innocence. [3] We find no evidence in the record tending to prove that petitioner had knowledge of their falsity. In any event, even if it were permissible (which we *117 do not concede to be the case) to infer knowledge that an abortion had been committed from the equivocal statement of petitioner to the mother that the daughter would enter the hospital "as an acute appendectomy," and the request that she caution her "to say it was appendicitis," such knowledge and ensuing conduct was subsequent to the offense, and accordingly could not provide a basis for holding petitioner to answer for the offense charged. (People v. Viets, 79 Cal.App. 576, 591 [250 P. 588]; People v. King, 30 Cal.App.2d 185, 196 [85 P.2d 928].) In oral argument, the People placed considerable reliance upon petitioner's refusal to answer questions put to her by the arresting officer. It is argued that an inference of guilt arises from failure to deny accusatory statements. The obvious answer is that none of the questions was in any manner accusatory. In any event, the evidence is clear that just prior to her arrest, in the presence of the arresting officers, petitioner was advised by her attorney over the telephone not to speak about the case. In People v. Simmons, 28 Cal.2d 699, 715 [172 P.2d 18], it was said that advice of counsel is one out of many forms of restraint which may bar a free response to accusatory statements. One who has been placed under arrest is under no duty to engage in a general discussion of his conduct with the arresting officer. No legitimate inference of guilt consciousness could possibly be derived from petitioner's silence under the circumstances of the present case. [4] Where the evidence is wholly circumstantial and in every aspect is reasonably consistent with innocence, the mere fact that the circumstances may also be reconciled with guilt will not justify an indictment. The grand jury may not resolve all implications in favor of guilt by substituting a presumption of guilt for one of innocence. [1c] Upon thorough consideration of the record before us, we are compelled to conclude that there is a complete lack of any evidence to support the indictment as to petitioner. The most that can be said for the testimony relied upon by the district attorney is that it may create a suspicion of guilt. Our conclusion has been influenced somewhat by the fact that the grand jury upon the same evidence also returned an indictment against Dr. Bunker. If there had been evidence which justified an indictment of Dr. Bunker we would entertain a different view of the evidence as applied to Mary Jensen who was his employee, and not the employee of Dr. *118 Arons. Our conclusion in the case of Dr. Bunker was that he had no knowledge that Dr. Arons was using his office facilities for illegal purposes. We find no evidence that Dr. Arons did not maintain the same secrecy with respect to Mary Jensen. As we have seen, the only statement he made to her concerning the patient's condition before the operation was calculated to mislead her. It is our opinion that the unwarranted assumption by the grand jury that Dr. Bunker was a participant in the illegal acts of Dr. Arons led to the indictment of Mary Jensen and that she would not have been indicted had Dr. Bunker been exonerated. It is possible, of course, to suspect complicity with Dr. Arons upon the part of both Dr. Bunker and petitioner, but the only view of the evidence which appeals to us as reasonable is that both were the victims of circumstances brought about by the machinations of Dr. Arons. There was insufficient evidence to overcome "the right of a person to be free from prosecution for crime unless there is some rational ground for assuming the possibility that he is guilty." (Greenberg v. Superior Court, supra, 19 Cal.2d at p. 322.) We are convinced that it would be a grave injustice to petitioner if she were required to undergo the ordeal, ignominy, and expense of a trial under the circumstances. It is a proper case for the issuance of a writ of prohibition. Let the peremptory writ issue. Vallee, J., concurred. WOOD, J. I concur in the judgment. I do not approve the statements that an indictment against Bunker was not justified.

{ "pile_set_name": "FreeLaw" }

131 Ga. App. 162 (1974) 205 S.E.2d 450 JERNIGAN v. COLLIER. 48778. Court of Appeals of Georgia. Argued November 7, 1973. Decided March 6, 1974. Albert B. Wallace, William R. L. Latson, for appellant. Long, Weinberg, Ansley & Wheeler, Arnold Wright, Jr., for appellee. HALL, Presiding Judge. On December 18, 1970, Shirley Jernigan filed suit against Lena B. Collier for damages arising out of their March 1, 1969 automobile collision. After answering the suit, Lena B. Collier died on January 14, 1972. Pursuant to Code Ann. § 81A-125 (a)(1), on July 11, 1972 her former counsel suggested her death upon the record. One hundred and eighty days thereafter, no proper defendant had been substituted as allowed by the statute. However, no motion was made nor order taken dismissing the suit. Thereafter, on April 13, 1973 well over a year following the death of the original defendant plaintiff Jernigan paid the costs in the first action and brought a new suit, substantially like the original suit, against Frank S. Collier as executor under the will of Lena B. Collier, deceased. The defendant answered, pleading estoppel, laches, failure to state a claim, the statute of limitation, and asserting that the action was barred because brought after the expiration of the time allowed by the statute for the substitution of parties, and no substitution having been made, the first suit automatically stood dismissed upon the merits. The defendant then moved for judgment on the pleadings and plaintiff moved to strike certain defenses. The trial court, by order dated August 11, 1973 overruled the plaintiff's motion and granted defendant's motion for judgment on the pleadings. Plaintiff appeals from both orders. The sole question here is the proper construction of Code Ann. § 81A-125 (a) (1).[1] The defendant contends *163 that where no substitution is made within 180 days after service of a suggestion of death the action automatically stands dismissed and the dismissal is on the merits. The plaintiff agrees that an automatic dismissal occurred, but contends that the dismissal is not on the merits, citing decisions interpreting former Code Ann. § 3-512 and Code Ann. § 81A-141 (e) (providing for automatic dismissal of cases after five years where no written order is taken.) Both positions are in error to the extent to which they assume that an automatic dismissal occurred. For reasons detailed below, in the absence of an order dismissing the original suit, it is still pending. The Clerk of the Superior Court of Henry County in response to our inquiry has certified that no order of dismissal has been entered in the original suit filed by Shirley Jernigan against Lena B. Collier. It follows therefore that the original action is pending, and the defendant was not entitled to a judgment on his theory of res judicata, although an affirmative defense on the ground of the pendency of the original suit would require that the second suit be dismissed. Code § 3-601. Code Ann. § 81A-125 (a) (1) is practically identical to Federal Rule 25 except for the fact that the period is 90 days under the federal rule whereas it is 180 days under the CPA. Under the federal rule, "If there is no motion for substitution made within the 90 day period, the action may be dismissed. Dismissal is not mandatory, despite the use of the word `shall' in the amended rule, even under these circumstances." 7A Wright & Miller, Federal Practice and Procedure: Civil, p. 659, § 1955. Therefore, dismissal is not automatic. Any dismissal which is not automatic but which may be obtained, necessarily *164 requires, to effect a dismissal, the entry of an order of dismissal. Should such an order be sought and granted, and a dismissal effected, the next question is the effect of the dismissal. "Does a dismissal for failure to make substitution in a timely fashion under present Rule 25 (a) (1) operate as a dismissal upon the merits, which precludes another suit on the same cause of action? What little authority there was under original Rule 25 (a) (1) was in conflict, mainly because of the confused status of the original rule. We believe that a dismissal under present Rule 25 (a) (1) for failure to make timely substitution should operate as a dismissal on the merits. Present Rule 25 (a) (1), unlike original Rule 25 (a) (1), operates to give notice to all interested persons of the fact of the death of a party, and there is no time limit upon substitution until such notice has been given. And even this time limit is now subject to enlargement for good cause shown in the discretion of the court. Thus we think it fair to require that substitution be made in accordance with Rule 25 (a) (1) at pain of a judgment on the merits for failure to comply. This is consistent with other situations where a judgment upon the merits can ensure for failure to comply with one of the Federal Rules." 3B Moore's Federal Practice (2d Ed.) 25-278, § 25.06[3]. Under Code Ann. § 81A-125 (a) (1), therefore, there is no dismissal until the entry of an order to that effect, and the dismissal is an adjudication on the merits. A dismissal under this section is different in both respects from dismissal under Code Ann. § 81A-141 (e), which is automatically obtained and does not operate as an adjudication on the merits. Kalin v. Pfarner, 124 Ga. App. 816 (186 SE2d 365). However, if no notice of substitution is made within a period of 180 days after service of suggestion of death, and a defendant moves for a dismissal on this ground giving notice to the plaintiff (City of Cedartown v. Pickett, 194 Ga. 508, 512 (22 SE2d 318)), and the trial judge after a hearing dismisses the petition under Code Ann. § 81A-141 without specifying that it is "without prejudice," the dismissal would be a bar to any subsequent suit. See Cranford v. Carver, 124 Ga. App. 767 (186 SE2d 150). *165 But it should be noted that an order of dismissal for failure to make timely substitution need not necessarily be granted. Under the federal rule, "the court may extend the period for substitution if a request is made before the expiration of 90-day period. The court also may allow substitution on motion made after the expiration of the 90-day period on a showing that the failure to act earlier was the result of excusable neglect." 7A Wright & Miller, 659, supra. There being no order of dismissal in the previous action, the trial court was in error in its reasons for granting defendant's motion for a judgment on the pleadings; however, a judgment right for any reason will be affirmed by the appellate courts (Hill v. Willis, 224 Ga. 263, 267 (161 SE2d 281)). Because the original suit is still pending, its pendency provides grounds for granting defendant's motion and the trial court's order so granting it, being right for this reason, will be affirmed. Affirmance leaves the parties in the original suit to seek such belated substitution or dismissals as their interests may direct. The dismissal here (of the second suit) is, of course, without prejudice to the pending case and cannot be considered an adjudication on the merits. Because we reach the result that the second suit must be dismissed, plaintiff's appeal from the denial of her motion to strike certain defenses in the second suit has been mooted and we need not consider it. Judgment affirmed in part without prejudice to the rights of the parties in pending Case No. 5240, Henry County Superior Court. Bell, C. J., Eberhardt, P. J., Quillian and Stolz, JJ., concur. Pannell, J., concurs in the judgment. Deen, Evans and Clark, JJ., dissent. EVANS, Judge., dissenting. On December 18, 1970, Shirley Jernigan brought an *166 action for personal injuries and damage arising out of a collision of automobiles on March 1, 1969, driven by plaintiff and by defendant, Lena B. Collier. Service was accomplished on December 19, 1970, and an answer was filed on January 1, 1971. The defendant died on January 14, 1972, and on July 11, 1972, her death was suggested of record by counsel who had represented the deceased. No substitution of party was made, and by terms of the statute (Code Ann. § 81A-125 (a) (1)), at the expiration of 180 days the suit was dismissed. On April 13, 1973, the costs were paid in the first action, and another suit, in substantially the same form and substance, was brought against Frank S. Collier as executor under the will of Lena B. Collier, deceased. The defendant answered, and pleaded estoppel, laches, the mandatory dismissal of the former suit, and passage of more than two years since the time of the collision, all as a bar to this action. Plaintiff moved to strike these affirmative defenses. Defendant moved for judgment on the pleadings because no substitution of parties was ever made in the former suit as is provided for in Code Ann. § 81A-125 (a) (1). The present action has been brought after the expiration of the time allowed by law and is therefore barred. Plaintiff's motion to strike the affirmative defenses was denied, and defendant's motion for judgment on the pleadings was granted. Plaintiff appeals. 1. Defendant contends that under Code Ann. § 81A-125 (a) (1) a judgment in his favor, dismissing the action, was not only authorized but was demanded. To reach this conclusion said statute must be construed to mean that unless a motion for substitution of a new party is made not later than 180 days after death is suggested upon the record, the action shall be dismissed, and said dismissal shall be construed as a dismissal "on the merits," or "with prejudice." albeit the statute is silent respecting the words "on the merits" and "with prejudice." Of course, a dismissal "on the merits" or "with prejudice" is conclusive, and the plaintiff is not thereafter entitled to renew or re-file the action. (See Code Ann. § 81A-141.) *167 2. But why does the dismissal take place at all? Because after death of the defendant the suit can no longer proceed until his legal representative is substituted as a party defendant. In other words, the suit is dismissed because it lacks an "indispensable party." Our law especially provides that where a suit is dismissed because of want of an "indispensable party," said dismissal is not within the class of those where an adjudication on the merits is inherent in the dismissal. See the last sentence in Code Ann. § 81A-141 (b) as follows: "Unless the court in its order for dismissal otherwise specifies, a dismissal under this subdivision, and any dismissal not provided for in this section, other than a dismissal for lack of jurisdiction, or for improper venue, or for lack of an indispensable party, operates as an adjudication upon the merits." (Emphasis supplied.) This language clearly means that all cases that are dismissed, as was the one here, for lack of an indispensable party, are not within that category where the dismissal operates as an adjudication on the merits. 3. The statute here may be compared with Code Ann. § 3-512 (also Code Ann. § 81A-141 (e)), authorizing an automatic dismissal of cases after five years during which time no written order is taken. These statutes do not say whether or not the merits are thereby adjudicated; do not say whether or not the dismissal is with or without prejudice, but our appellate courts have consistently held that the dismissed action may be refiled. See City of Chamblee v. Village of North Atlanta, 217 Ga. 517, 523 (123 SE2d 663); Covil v. Stansell, 113 Ga. App. 179 (2) (147 SE2d 479); and Kalin v. Pfarner, 124 Ga. App. 816 (186 SE2d 365). 4. If the construction contended for by defendant were allowed, that would mean that the statute in question provides for a forfeiture of rights, or a penalty. Forfeitures and penalty are not favored, and if a statute may be construed as imposing or withholding a penalty, the latter construction will be adopted. Renfroe v. Colquitt, 74 Ga. 618 (2a); Roby v. Newton, 121 Ga. 679, 682 (49 SE 694). If it is intended to penalize those who did not strictly comply with this statute, the penalty should have been spelled out. It is not permissible to imply a *168 penalty, when the language used is silent as to such penalty. 5. Where a case is not dismissed on the merits, the plaintiff may re-file the same action within six months under Code Ann. § 3-808. See Rountree v. Fey, 71 Ga. 214; Atlanta, K. &c. R. Co. v. Wilson, 119 Ga. 781 (5) (47 SE 366); Clark v. Newsome, 180 Ga. 97 (178 SE 386). 6. Accordingly, there has been no affirmative dismissal of the original complaint with prejudice nor with an adjudication on the merits; and with the payment of the costs, the plaintiff was authorized to re-file the same action within six months. 7. The majority opinion argues that as there was no order dismissing in the first action, that the first action is therefore still pending. This is a completely untenable premise. The statute involved here, Code Ann. § 81A-125 (a) (1) provides that: "Unless the motion for substitution is made not later than 180 days after the death is suggested upon the record by service of a statement of the fact of the death as provided herein for the service of the motion, the action shall be dismissed as to the deceased party." Thus, the plaintiff does not have to enter an order of dismissal; the dismissal is automatic under the explicit language of the statute. As to whether the dismissal is with prejudice is an entirely different matter. Further, even if the majority were correct in its contention that plaintiff should have entered an order of dismissal (and we maintain it is completely erroneous in this respect), still the only way advantage could be taken of such failure would be through the defendant's filing a defense based on this ground. Rozetta v. Rozetta, 181 Ga. 494 (3) (182 SE 847). This he did nor do, expressly or impliedly, and neither the lower court nor this court can defend for him nor supply his deficiency in failing to plead in this respect. The majority opinion seeks to make much of 7A Wright & Miller, Federal Practice and Procedure, p. 659, § 1955, and 3B Moore's Federal Practice (2d Ed.), p. 25-278, § 25.06 (3); and argues therefore that an order of dismissal is required in order to effect a dismissal. I have studied these works carefully and find no reference to an *169 order of dismissal by plaintiff or his counsel as a requirement for dismissal. If I am in error, I ask the author of the majority to correct me, and point to chapter and verse. And let it be noted that in discussing the federal rule, Moore does not make any authoritative statement but hedges his language with "it is felt" and "it is believed." This is a far cry from an authority that may be cited to support a mooted question of law. This court has as much right to its opinion on matters of first impression as has Moore when he is reduced to "it is felt" and "it is believed," especially as we are a state court, dealing with state statutes, and he is exclusively dealing with federal rules and federal decisions, which are not binding on us. But, if the federal authorities were felt binding to any extent whatever, we point to Gertler v. United States (SD NY 1955) 18 FRD 307, wherein it is plainly shown that a dismissal under Federal Rule 25 (a) (1) does not preclude the right to bring a new action. The majority opinion cites City of Cedartown v. Pickett, 194 Ga. 508, 512 (22 SE2d 318), as to the question of notice of substitution within 180 days from service of suggestion of death, and a dismissal thereafter "without prejudice." I have studied this case very carefully and can find absolutely no mention of the above subject in it. 8. The lower court erred in overruling the motion to strike the affirmative defenses of laches, estoppel, and bar by statute of limitation, and in granting defendant's motion for judgment on the pleadings. I therefore dissent. I am authorized to state that Judges Deen and Clark join me in this dissent. NOTES [1] If a party dies and the claim is not thereby extinguished, the court may order substitution of the proper parties. The motion for substitution may be made by any party or by the successors or representative of the deceased party and, together with the notice of the hearing, shall be served on the parties as provided in section 81A-105 and upon persons not parties in the manner provided in section 81A-104 for the service of a summons. Unless the motion for substitution is made not later than 180 days after the death is suggested upon the record by service of a statement of the fact of the death as provided herein for the service of the motion, the action shall be dismissed as to the deceased party."

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678 S.E.2d 238 (2009) EVERGREEN CONSTRUCTION COMPANY, INC. v. CITY OF KINSTON, a North Carolina municipality, and the City of Kinston City Council. No. 33P09. Supreme Court of North Carolina. June 17, 2009. James P. Cauley, Wilson, for City of Kinston. *239 Robert Hornik, Chapel Hill, for Evergreen Construction. ORDER Upon consideration of the petition filed on the 20th of January 2009 by Respondent in this matter for discretionary review of the decision of the North Carolina Court of Appeals pursuant to G.S. 7A-31, the following order was entered and is hereby certified to the North Carolina Court of Appeals: Denied by order of the Court in conference, this the 17th of June 2009.

{ "pile_set_name": "FreeLaw" }

174 F.3d 987 99 Cal. Daily Op. Serv. 2515, 1999 DailyJournal D.A.R. 3282Christian Weaver TWORIVERS, Plaintiff-Appellant,v.Samuel A. LEWIS; Velasquez, Lt.; Fernandez, Sgt.; CSOKern; Kevin Scott Lewis; Ratliff, RN; RaulRodriguez-Bores, Dr.; Barbara Major, Nurse; B. Goodman,RN; S. Walters, NA, Defendants-Appellees. No. 97-15844. United States Court of Appeals,Ninth Circuit. Submitted Dec. 8, 1998.*Decided April 6, 1999. Christian Weaver TwoRivers, Winslow, Arizona, in pro se for plaintiff-appellant. Wanda E. Hofmann and Bruce E. Skolnik, Assistant Attorneys General, Tucson, Arizona, for defendants-appellees. Appeal from the United States District Court for the District of Arizona; Richard M. Bilby, Chief District Judge, Presiding. D.C. No. CV-96-00598-RMB. Before: BRIGHT,** FLETCHER and THOMPSON, Circuit Judges. BRIGHT, Circuit Judge: 1 Plaintiff Appellant Christian Weaver TwoRivers, an Arizona prisoner, appeals the district court's dismissal of his 42 U.S.C. § 1983 claim under Rule 12(b)(6) of the Federal Rules of Civil Procedure, on grounds that he failed to file suit within the applicable two year statute of limitations. TwoRivers' claim is time barred unless he can obtain the benefit of a provision under Arizona law which tolled the two year limitations for Arizona prisoners until after discovery of the prisoner's right to sue. Such statutory grace existed at the time TwoRivers discovered his right to bring his § 1983 action. However, before TwoRivers filed suit, Arizona amended its law deleting this grace period and requiring prisoners to bring their action within two years from the date of accrual. We conclude that the amended statute does not apply retroactively to bar TwoRivers' suit, and, therefore, we reverse and remand. I. FACTS AND PROCEDURAL BACKGROUND 2 TwoRivers' § 1983 claim arose from alleged deliberate indifference to his serious medical needs by Arizona Department of Corrections ("ADOC") employees after TwoRivers underwent a surgical procedure to remove a cancerous growth while incarcerated at the Tucson prison complex. We briefly review the factual background of TwoRivers' claim.1 3 On July 20, 1994, appellee Dr. Kevin Scott Lewis removed a cancerous growth from TwoRivers' back. Suffering from severe infection, ADOC transferred TwoRivers from the Tucson prison complex to St. Mary's Hospital where doctors treated his infection with intravenous antibiotics and bleach baths. ADOC subsequently transferred TwoRivers to another prison facility, the Central Unit at Florence, where he continued to undergo bleach baths, this time in bath tubs allegedly encrusted in fecal matter and what appeared to be scabs from other patients. These incidents form the basis for his claim. The incidents occurred prior to September 14, 1994, the date of TwoRivers' transfer back to the Tucson complex after he had received post-operative medical care.2 4 At the time of these events, the former § 12-502 of the Arizona Revised Statutes (A.R.S.) tolled the statute of limitations for prisoners until a prisoner discovered the right to bring the action or should have discovered that right with the exercise of reasonable diligence.3 See Vega v. Morris, 184 Ariz. 461, 464, 910 P.2d 6, 9 (1996) (en banc) (explaining that under former A.R.S. § 12-502, awareness of the legal right to assert a claim ends the disability provided to prisoners, not cognizance of the facts giving rise to the claim). Prior to the time TwoRivers filed suit but after he had discovered his right to bring a § 1983 claim, the Arizona legislature amended former A.R.S. § 12-502, deleting the special tolling provision for prisoners. The amended statute became effective on July 20, 1996.4 5 On October 8, 1996, TwoRivers filed suit in federal district court asserting a claim under § 1983.5 TwoRivers alleged that the named defendants had been deliberately indifferent to his serious medical needs in violation of the Eighth Amendment of the United States Constitution. TwoRivers further alleged that he had first learned of his right to file suit on October 26, 1994 (less than two years earlier), when his attorney at the time advised him of that right. The ADOC defendants challenged TwoRivers' claim on a motion to dismiss pursuant to Fed.R.Civ.P. 12(b)(6). The district court granted the defendants' motion, dismissing TwoRivers' amended complaint with prejudice. It reasoned that under the amended A.R.S. § 12-502, TwoRivers had failed to file his § 1983 claim in a timely manner. TwoRivers had filed suit over two years and three weeks after September 14, 1994, the date of TwoRivers' transfer back to the Tucson complex after receiving the alleged improper medical care. TwoRivers now appeals this order of dismissal. II. STANDARD OF REVIEW 6 We review de novo a dismissal under Fed.R.Civ.P. 12(b)(6) for failure to state a claim. Steckman v. Hart Brewing, Inc., 143 F.3d 1293, 1295 (9th Cir.1998). In such a case, we must accept all factual allegations of the complaint as true and draw all reasonable inferences in favor of the nonmoving party. See Usher v. City of Los Angeles, 828 F.2d 556, 561 (9th Cir.1987). Dismissal on statute of limitations grounds can be granted pursuant to Fed.R.Civ.P. 12(b)(6) "only if the assertions of the complaint, read with the required liberality, would not permit the plaintiff to prove that the statute was tolled." Vaughan v. Grijalva, 927 F.2d 476, 478 (9th Cir.1991) (quoting Jablon v. Dean Witter & Co., 614 F.2d 677, 682 (9th Cir.1980)). III. DISCUSSION 7 On appeal, TwoRivers claims that the district court erred by applying the amended A.R.S. § 12-502 and dismissing his § 1983 claim. In support of this contention, TwoRivers asserts that his claim accrued prior to the amendment of that statute. Therefore, according to TwoRivers, the district court should have applied the former A.R.S. § 12-502 and tolled commencement of the statute of limitations until October 26, 1994, the date his attorney apprised TwoRivers of his right to file suit. TwoRivers further argues that since he filed suit on October 8, 1996, less than two years after he learned of that right on October 26, 1994, proper application of the former A.R.S. § 12-502 would have precluded the district court from dismissing his claim on statute of limitations grounds. Before examining TwoRivers' argument on its merits, the court first turns to the time limitations governing § 1983 claims.6 A. 8 Section 1983 does not contain its own statute of limitations. Without a federal limitations period, the federal courts borrow the statute of limitations for § 1983 claims applicable to personal injury claims in the forum state. See Wilson v. Garcia, 471 U.S. 261, 279-80, 105 S.Ct. 1938, 85 L.Ed.2d 254 (1985). In Arizona, the courts apply a two-year statute of limitations to § 1983 claims. See Marks v. Parra, 785 F.2d 1419, 1420 (9th Cir.1986) (citing A.R.S. § 12-542). But in borrowing a state statute of limitations for a federal cause of action, "we borrow no more than necessary." West v. Conrail, 481 U.S. 35, 39-40, 107 S.Ct. 1538, 95 L.Ed.2d 32 (1987). Consistent with this maxim, federal, not state, law determines when a civil rights claim accrues. See Elliott v. City of Union City, 25 F.3d 800, 801-802 (9th Cir.1994). Under federal law, a claim accrues when the plaintiff knows or has reason to know of the injury which is the basis of the action. See Kimes v. Stone, 84 F.3d 1121, 1128 (9th Cir.1996). Here, TwoRivers knew or had reason to know of the ADOC employees' deliberate indifference to his medical needs by September 14, 1994, the date of TwoRivers' transfer back to the Tucson complex after receiving the alleged improper medical care. TwoRivers filed suit on October 8, 1996, more than two years after TwoRivers' § 1983 claim had accrued. Therefore, as we have observed, the two-year statute of limitations would bar the present action unless TwoRivers' incarceration tolled the limitations period sufficiently to permit him to proceed with this suit. 9 In actions like this one, where the federal courts borrow the state statute of limitations, we also borrow the forum state's tolling rules. See Hardin v. Straub, 490 U.S. 536, 539, 109 S.Ct. 1998, 104 L.Ed.2d 582 (1989); Board of Regents of the Univ. of New York v. Tomanio, 446 U.S. 478, 483-84, 100 S.Ct. 1790, 64 L.Ed.2d 440 (1980). Under former § 12-502, prisoners whose claims accrued while incarcerated were entitled to tolling until the prisoner knew or had reason to know that he or she had a right to file suit. By contrast, the amended § 12-502 deletes this provision for prisoners and subjects them to the same rules as most other § 1983 plaintiffs. Applying the tolling provision in the former A.R.S. § 12-502, TwoRivers filed suit within two years of October 26, 1994, the date that he learned of his right to bring suit, and thus within the statute of limitations for § 1983 actions filed in Arizona. But under the amended A.R.S. § 12-502, the clock began to run on September 14, 1994, the date of his transfer back to the Tucson complex after receiving post-operative care and when his cause of action accrued under the analysis of the district court. In short, the choice of the applicable limitations statute dictates the result in this case. The issue before us is whether the amended § 12-502 should be applied retroactively to bar this plaintiff's claim. B. 10 At the outset, we observe that neither the district court, nor the parties on appeal, addressed the threshold issue of whether a federal court borrowing a state statute of limitations also borrows the state retroactivity law. The district court applied the current Arizona law in ascertaining the appropriate limitation period and the related tolling provisions. The district court, however, did not discuss its decision to apply Arizona retroactivity law. Generally, where Congress does not create a federal statute of limitations, we look to state law for limitations provisions, see Johnson v. Railway Express Agency, Inc., 421 U.S. 454, 463-64, 95 S.Ct. 1716, 44 L.Ed.2d 295 (1975), because "the creation of a statute of limitations is not considered a suitable judicial task." Hemmings v. Barian, 822 F.2d 688, 689 (7th Cir.1987). We also reference corresponding state law tolling provisions under these circumstances, recognizing that "the chronological length of the limitation period is interrelated with provisions regarding tolling, revival, and questions of application." Tomanio, 446 U.S. at 485-86. "Since 'the actual length of time within which suit must be brought ... depends on the generosity of the tolling provisions as well as on the period of years, to borrow the latter without the former could distort the state's determination regarding that length of time.' " Mouradian v. John Hancock Cos., 930 F.2d 972, 974 (1st Cir.1991) (quoting Hemmings, 822 F.2d at 691). 11 But our reliance on state law in this context is not unlimited. The Supreme Court has admonished us to "borrow no more [state law] than necessary" when using a state statute of limitations and its related tolling provisions to implement federal statutory law. West, 481 U.S. at 39-40. The Supreme Court also has stated that "[i]n borrowing statutes of limitations for other federal claims, this court has generally recognized that the problem of characterization 'is ultimately a question of federal law.' " Wilson, 471 U.S. at 269-270 (citation omitted). Thus, where a court applies a state statute of limitations in construing a federal substantive claim, federal common law should fill the gaps in applying federal statutory law, except in very limited circumstances. See id. at 268-69 ("Only the length of the limitations period, and closely related questions of tolling and application, are to be governed by state law."); see also Vaughan, 927 F.2d at 480 (holding that federal law determines when a cause of action under § 1983 accrues and the statute of limitations begins to run). Moreover, when a federal court uses a state limitations period in connection with a federal statute without its own statute of limitations, the court is applying federal, not state law. See Hemmings, 822 F.2d at 689. In addition, the rationale underpinning the use of state tolling periods when borrowing a state limitations period--to respect the "[s]tate's wisdom in setting a limit, and exceptions thereto," Johnson, 421 U.S. at 464; accord Tomanio, 446 U.S. at 485-86,--does not hold for state retroactivity rules. Failure to borrow retroactivity rules, unlike tolling periods, does not give rise to the risks associated with selective borrowing of tolling rules. 12 Thus, in view of the principles set forth in West, Wilson, and Vaughan, we apply federal law, not state law, in deciding whether to apply the amended § 12-502 retroactively. See West, 481 U.S. at 39; Wilson, 471 U.S. at 269; Vaughan, 927 F.2d at 480; see also Hemmings, 822 F.2d at 691 (borrowing state limitations period and tolling rules but declining to borrow state retroactivity rules in construing federal RICO statute, which is also without a statutory period). C. 13 We examine the contours of federal retroactivity law. Absent clear legislative intent to the contrary, a presumption exists against retroactive application of new statutes. See Landgraf v. USI Film Products, 511 U.S. 244, 265, 114 S.Ct. 1483, 128 L.Ed.2d 229 (1994) (stating that "the presumption against retroactive legislation is deeply rooted in our jurisprudence"); Bowen v. Georgetown Univ. Hosp., 488 U.S. 204, 208, 109 S.Ct. 468, 102 L.Ed.2d 493 (1988) ("Retroactivity is not favored in the law."). Although "prospectivity remains the appropriate default rule," Landgraf, 511 U.S. at 272, "deciding when a statute operates 'retroactively' is not always a simple or mechanical task." Id. at 268. 14 The three stage analysis set forth in Landgraf assists the courts in this inquiry. See Jeffries v. Wood, 114 F.3d 1484, 1494 (9th Cir.1997) (citing Landgraf, supra, 511 U.S. 244, 114 S.Ct. 1483, 128 L.Ed.2d 229). We first determine whether the legislative body expressly stated its intent to apply the new statute retroactively or prospectively. Landgraf, 511 U.S. at 280. Without clear language directing that we apply the new statute retroactively, the court next discerns whether the new statute would have retroactive effect. Id. Three factors inform our decision in this regard: whether the statute "would impair rights a party possessed when he acted, increase a party's liability for past conduct, or impose new duties with respect to a transaction already completed." Id.; Hughes Aircraft Co. v. United States ex rel. Schumer, 520 U.S. 939, 947, 117 S.Ct. 1871, 138 L.Ed.2d 135 (1997) (stating that the three factors qualify as a "sufficient, rather than a necessary, condition for invoking presumption against retroactivity.") (emphasis in original). Ultimately, in this second inquiry, we must apply "ordinary judicial principles" and rely upon our "sound instincts" to determine whether "the new provision attaches new legal consequences to events completed before its enactment." Landgraf, 511 U.S. at 269-70. Third and finally, if the court determines that the statute operates retroactively, the traditional presumption in favor of prospectivity precludes application of the new statute "absent clear congressional intent favoring such a result." Id. at 280. 15 A plain reading of the existing A.R.S. § 12-502 and its legislative history evidence no legislative intent that this statute should operate retroactively so as to shorten the time of a claim that had already accrued. With the statute and its legislative history silent on this question, we turn to the second stage of this analysis in which the court examines whether the newly enacted statute has retroactive effect. To assist us in this inquiry, Landgraf identified three types of laws which generally do not have retroactive effect: those authorizing prospective relief, those conferring or removing jurisdiction, and those statutes properly characterized as procedural. See id. at 273-74. Thus, in contrast to statutes affecting settled contract and property rights, Covey v. Hollydale Mobilehome Estates, 116 F.3d 830, 835, amended by, 125 F.3d 1281 (9th Cir.1997), procedural statutes generally may be applied retrospectively without giving rise to concerns about retroactivity. See Landgraf, 511 U.S. at 285 n. 37 ("We have sometimes said that ... new 'procedural' [rules] should presumptively apply to pending cases."). 16 But the concerns underlying the presumption against retroactivity are not limited to substantive statutes. As acknowledged by Landgraf, "the mere fact a new rule is procedural does not mean that it applies to every pending case." Id.; see also Chenault v. U.S. Postal Serv., 37 F.3d 535, 539 (9th Cir.1994) ("Regardless of whether a statute is 'substantive' or 'procedural', it may not apply to cases pending at the time of enactment if the new statute would prejudice the rights of one of the parties."); Landgraf, 511 U.S. at 275 n. 29 ("[W]e do not restrict the presumption against statutory retroactivity to cases involving 'vested rights'.... Nor do we suggest that concerns about retroactivity have no application to procedural rules."). In short, "[c]ourts must look to the nature and posture of an individual case" to determine whether the statute has retroactive effect. Jeffries, 114 F.3d at 1498. 17 In Chenault, this court considered whether to apply retroactively an amended provision of the Civil Rights Act of 1964, which extended the filing period from thirty to ninety days in employment discrimination cases. Chenault, 37 F.3d at 537. Applying the principles set forth in Landgraf, we concluded that the provision could not be applied retroactively to revive a claim otherwise barred under the old statutory scheme, despite our determination that the statute of limitations provision was procedural. Id. at 538 (citing Gonzalez v. Aloha Airlines, Inc., 940 F.2d 1312, 1316 (9th Cir.1991)). We declined to rely exclusively on the substantive/procedural dichotomy, reasoning that characterization of a statute into one of these categories is not dispositive of whether retroactive application of a statute is appropriate. See Chenault, 37 F.3d at 539; see also Landgraf, 511 U.S. at 275 n. 29. 18 Likewise, although both the former and amended A.R.S. § 12-502, like other tolling statutes, are generally considered procedural, see Chenault, 37 F.3d at 539, that label does not preclude us from examining whether the amended § 12-502 has retroactive effect and whether it should be applied retroactively. This court has consistently rejected the retroactive application of procedural statutes which result in manifest injustice. Id. In addition, as recognized in Landgraf and Jeffries, certain statutes implicate both substantive and procedural issues. See Landgraf, 511 U.S. at 280-81; see also Jeffries, 114 F.3d at 1498. Thus, we decline to classify the amended § 12-502 as per se falling within that category of statutes without retroactive effect. See Jeffries, 114 F.3d at 1498. Instead, we look beyond the narrow categorization of statutes as procedural or substantive and incorporate other judicial principles into our analysis to determine whether to apply this statute retroactively. 19 The Supreme Court instructed that we focus our inquiry in the second part of this analysis on whether the newly enacted statute altered the legal consequences of the events giving rise to the claimant's suit. See Landgraf, 511 U.S. at 269-70. As a practical consequence, application of amended A.R.S. § 12-502 to this case bars TwoRivers from bringing suit while under former A.R.S. § 12-502, TwoRivers' October 1996 filing is timely. By foreclosing a cause of action which existed prior to the amendment, retroactive application of amended § 12-502 deprives TwoRivers of his right to file suit embodied in former § 12-502, which existed less than three months prior to the date he filed suit. Cf. Chenault, 37 F.3d at 539 ("[A] newly enacted ... statute of limitations may not be applied retroactively to revive a plaintiff's claim that was otherwise barred ... because to do so would 'alter the substantive rights' of a party ....") (emphasis added). We need not go so far as to hold that TwoRivers has a "vested right" in his tolled two-year statute of limitations. See Chase Secs. Corp. v. Donaldson, 325 U.S. 304, 311-14, 65 S.Ct. 1137, 89 L.Ed. 1628 (1945) (holding that the lapse of a limitations period does not provide a party defendant with a vested right in immunity from suit). It is enough to conclude that retroactive operation of the new statute results in "manifest injustice" and therefore its application here is inappropriate. See Chenault, 37 F.3d at 539 ("A newly enacted statute that shortens the applicable statute of limitations may not be applied retroactively to bar a plaintiff's claim that might otherwise be brought under the old statutory scheme because to do so would be manifestly unjust."); see also Usher, 828 F.2d at 560 (rejecting retroactive application of Wilson v. Garcia, 471 U.S. 261, 105 S.Ct. 1938, 85 L.Ed.2d 254 (1985), where such application would shorten the limitations period for § 1983 actions in California). 20 Relying on our "sound instincts," as instructed by Landgraf, it is apparent that application of the amended A.R.S. § 12-502 would not only be manifestly unjust, but would have genuine retroactive effect. See Calderon v. United States Dist. Court, 128 F.3d 1283, 1286-87 (9th Cir.1997), cert. denied, --- U.S. ----, 118 S.Ct. 899, 139 L.Ed.2d 884 (1998) (applying Antiterrorism and Effective Death Penalty Act's ("AEDPA") newly-enacted one-year limitation period from effective date of AEDPA "would impermissibly 'attach[ ] new legal consequences to events completed before its enactment' "), overruled on other grounds, Calderon, 163 F.3d 530 (9th Cir.1998) (en banc); see also United States v. Simmonds, 111 F.3d 737, 745-46 (10th Cir.1997) ("we hold application of the [AEDPA's] new time period to [petitioner's] § 2255 motion without first affording him a reasonable time to bring his claim impermissibly retroactive."); United States v. Craycraft, 167 F.3d 451, 455 (8th Cir.1999) ("a presumption against retroactive legislation applies whenever a claim depends upon a statute which was enacted after the events which gave rise to the claim"); Burns v. Morton, 134 F.3d 109, 111 (3d Cir.1998) (same). 21 Since Wilson, § 1983 plaintiffs in Arizona have received two years to file their § 1983 claims. See Wilson, 471 U.S. at 275-76. Prisoners under disability were entitled to the same period from the date they knew or had reason to know of their right to file suit. TwoRivers filed suit on October 8, 1996, less than two years after his attorney advised him of his right to bring an action under the circumstances of his case. Although TwoRivers could have brought his claim at an earlier time, Arizona law imposed no obligation on him to do so until July 20, 1996, the effective date of the amended statute, less than three months prior to the date he filed suit. See Landgraf, 511 U.S. at 265 ("Elementary considerations of fairness dictate that individuals should have an opportunity to know what the law is and conform their conduct accordingly"); see, e.g., General Motors Corp. v. Romein, 503 U.S. 181, 191, 112 S.Ct. 1105, 117 L.Ed.2d 328 (1992). 22 To apply the amended § 12-502 retroactively, as proposed by Arizona, would cut off TwoRivers' claims when, without the amendment, TwoRivers still could sue at any time during the following three months. Such application would foreclose TwoRivers' remedy prematurely, without providing him with a reasonable time to file suit after the amendment. See Ochoa v. Hernandez y Morales, 230 U.S. 139, 161-162, 33 S.Ct. 1033, 57 L.Ed. 1427 (1913) ( "[S]tatutes of limitations ... may be modified by shortening the time prescribed, but only if ... a reasonable time still remains for the commencement of an action before the bar takes effect."); see, e.g. Block v. North Dakota ex rel. Bd. of University and School Lands, 461 U.S. 273, 286 n. 23, 103 S.Ct. 1811, 75 L.Ed.2d 840 (1983). We hold that a time period of less than three months does not constitute a reasonable time for a prisoner to file suit.7 Accordingly, without clear legislative guidance urging retroactive application of the amended statute, we apply the former § 12-502 to this case, and we conclude that TwoRivers filed his suit in a timely manner. D. 23 We recognize that DeLuna v. Farris, 841 F.2d 312 (9th Cir.1988) reached a contrary result in construing a prior amendment to A.R.S. § 12-502. In DeLuna, we applied a prior amendment to A.R.S. § 12-502 retroactively to time bar the plaintiff DeLuna's § 1983 claim. DeLuna's claim, like that in this case, had accrued prior to the effective date of the amendment but had been filed subsequent to that date. Although this court acknowledges the factual likeness of this case to DeLuna, we, nevertheless, are not bound to follow the holding in that case for two reasons. First, DeLuna applied Arizona retroactivity law in reaching its conclusion without discussing whether federal or state retroactivity principles should govern the result in that case. Second, the Arizona Court of Appeals subsequently rejected DeLuna 's decision to apply the amended § 12-502 retroactively, holding that Arizona law dictated that the amendment be applied prospectively, not retroactively. See Vaughan, 927 F.2d at 479 n. 3 (citing Zuck v. State, 159 Ariz. 37, 41, 764 P.2d 772, 776 (App.1988)).8 24 Assuming arguendo, therefore, that we were to apply Arizona retroactivity law to this case, this court would be bound by the Zuck decision, not DeLuna, on an issue of Arizona state law. See Vaughan, 927 F.2d at 480 ("Where an intermediate appellate court has decided an issue of state law, that decision is not to be disregarded by a federal court unless it is convinced ... that the highest court of the state would decide otherwise.") (citation omitted). Taking this point to its logical conclusion, under the principles enunciated in Zuck, "plaintiff was obligated to file his civil rights [claim] ... within the two-year period of A.R.S. § 12-542(1) ..., from the time after the effective date of the amendment that he discovered or with reasonable diligence should have discovered his right to bring th[at] claim[ ]." Zuck, 159 Ariz. at 40, 764 P.2d at 775. TwoRivers filed suit on October 8, 1996, within two years from the date that he discovered his right to file suit. Therefore, we conclude that even under Arizona law TwoRivers would have filed his § 1983 claim in a timely manner.IV. CONCLUSION 25 The district court erred by applying the amended A.R.S. § 12-502 to this case and dismissing TwoRivers' claims as time-barred. TwoRivers filed suit within the two-year limitations period for § 1983 claims in Arizona. Accordingly, we REVERSE and REMAND to the district court for further proceedings on the merits of TwoRivers' § 1983 claim. We further award TwoRivers his costs on appeal. * The panel unanimously finds this case suitable for decision without oral argument. Fed.R.App. 34-4(a2) ** The Honorable Myron H. Bright, Senior United States Circuit Judge for the Eighth Circuit, sitting by designation 1 TwoRivers named the following in his amended complaint as defendants: Samuel A. Lewis, former director of the ADOC; Dr. Kevin Lewis, his treating physician at the Tucson prison complex; Lieutenant Velasquez; Sergeant Fernandez; C.S.O. Kern; Nurse Major; Nurse Ratliff; Nurse Goodman; NA Walters; Dr. Raoul Rodriguez-Bores at the Cimarron Unit; and L.P.N. Bottineau 2 In this proceeding, all parties assume that TwoRivers' right to bring his action accrued prior to September 14, 1994 3 Former A.R.S. § 12-502 provided in relevant part: § 12-502. Effect of minority, insanity or imprisonment. B. If a person entitled to bring an action other than those set forth in article 2 of this chapter is at the time the cause of action accrues imprisoned, the period of such disability shall exist only until such time as the person imprisoned discovers the right to bring the action or with the exercise of reasonable diligence should have discovered the right to bring the action, whichever occurs first, and such person shall have the same time after the disability ceases to exist which is allowed to others. A.R.S. § 12-502 (1992), amended by, A.R.S. § 12-502 (West Supp.1998). 4 A.R.S. § 12-502 now provides: § 12-502. Effect of minority or insanity If a person entitled to bring an action other than those set forth in article 2 of this chapter is at the time the cause of action accrues either under eighteen years of age or of unsound mind, the period of such disability shall not be deemed a portion of the period limited for commencement of the action. Such person shall have the same time after removal of the disability which is allowed to others. A.R.S. § 12-502 (West Supp.1998). 5 TwoRivers subsequently filed an amended complaint after the district court dismissed TwoRivers' original complaint for failure to allege exhaustion of his administrative remedies under the ADOC grievance procedure. The initial filing date controls the instant proceedings 6 In light of our holding in this case, we decline to address other arguments advanced by TwoRivers on appeal 7 Our conclusion is consistent with the courts' treatment of the recently enacted one-year limitations period under AEDPA. Rather than applying AEDPA's one-year limitations period to cut off prisoners' rights to file for habeas relief, this court, along with our sister circuits, have uniformly provided petitioners with a one-year grace period, commencing on the effective date of AEDPA, to file a first § 2254 petition or a § 2255 motion. See, e.g., Craycraft, 167 F.3d at 455; Ross v. Artuz, 150 F.3d 97, 100-03 (2d Cir.1998); United States v. Flores, 135 F.3d 1000, 1006 (5th Cir.1998); Burns, 134 F.3d at 111; Calderon, 128 F.3d at 1283, 1286-87; Simmonds, 111 F.3d at 745-46; Lindh v. Murphy, 96 F.3d 856, 866 (7th Cir.1996) (en banc), rev'd on other grounds, 521 U.S. 320, 117 S.Ct. 2059, 138 L.Ed.2d 481 (1997) 8 Zuck held, in part, that amended statutes under Arizona law were to be given prospective effect to extend the limitations period on claims existing at the time the amendment became effective. See Zuck, 159 Ariz. at 41, 764 P.2d at 776

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United States Court of Appeals Fifth Circuit F I L E D IN THE UNITED STATES COURT OF APPEALS June 23, 2005 FOR THE FIFTH CIRCUIT _____________________ Charles R. Fulbruge III Clerk No. 05-10040 _____________________ UNITED STATES OF AMERICA Plaintiff - Appellee v. ADAN RODRIGUEZ Defendant - Appellant --------------------- Appeal from the United States District Court for the Northern District of Texas, Dallas --------------------- Before JONES, BARKSDALE, and PRADO, Circuit Judges. PER CURIAM:1 IT IS ORDERED that Appellee’s unopposed motion to vacate the sentence is GRANTED. IT IS FURTHER ORDERED that Appellee’s unopposed motion to remand the case to the Northern District of Texas, Dallas Division for resentencing is GRANTED. 1 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. 47.5.4. MOT-21

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854 F.2d 1328 Unpublished DispositionNOTICE: Federal Circuit Local Rule 47.8(b) states that opinions and orders which are designated as not citable as precedent shall not be employed or cited as precedent. This does not preclude assertion of issues of claim preclusion, issue preclusion, judicial estoppel, law of the case or the like based on a decision of the Court rendered in a nonprecedential opinion or order.CHEMCAST CORPORATION, Plaintiff/Appellant,v.ARCO INDUSTRIES CORPORATION, Defendant/Cross-Appellant. Nos. 87-1537, 87-1538. United States Court of Appeals, Federal Circuit. July 22, 1988. E.D.Mich. AFFIRMED IN PART, REVERSED IN PART, VACATED IN PART AND REMANDED. Before EDWARD S. SMITH, BISSELL and ARCHER, Circuit Judges. EDWARD S. SMITH, Circuit Judge. DECISION 1 Chemcast Corporation (Chemcast) appeals that portion of the judgment of the United States District Court for the Eastern District of Michigan in Chemcast Corp. v. Arco Industries, Civil Action No. 82-70902 (E.D.Mich. July 30, 1987) (Freeman, J.), providing that claim 6 of United States patent No. 4,081,879 (the '879 patent) is invalid under 35 U.S.C. Sec. 112 and, on that basis, that Chemcast is not entitled to recover on its claim of infringement of claim 6. Arco Industries (Arco) cross-appeals paragraphs 1, and 3-7 of that judgment. We affirm in part, reverse in part, vacate in part, and remand. OPINION 2 The district court determined that, if valid, claim 6 of the '879 patent is infringed by Arco's grommet. However, because the district court concluded that claim 6 of the '879 patent is "invalid for failure to disclose the best mode contemplated by the inventor of carrying out his invention and for failure to particularly point out and distinctly claim the subject matter of the invention" disclosed by the '879 patent, Chemcast is not entitled to recover on its claim for infringement. In addition, the district court adjudicated numerous other counterclaims raised by Arco and reached the following conclusions: (1) the '879 patent is not invalid under either the written description requirement or the enablement requirements of section 112, first paragraph; (2) claim 6 is not invalid as obvious under section 103; (3) claim 6 is not invalid under section 132 for failure to comply with the prohibition against the introduction of new matter, by amendment, to the disclosure of the invention; and (4) if valid, the '879 patent is not unenforceable on the grounds of inequitable conduct. After a careful review of the record, and in view of the arguments presented to us by the parties, (1) we reverse the district court's decision under section 112, second paragraph, on the issue of claim particularity, (2) we vacate the district court's decision under section 112, first paragraph, on the best mode issue, and (3) we affirm all other issues contested by the parties on appeal. In view of our disposition of the best mode issue, we remand this proceeding to the district court for further action on that issue not inconsistent with this opinion. A. Best Mode: Section 112, First Paragraph 3 The district court based its best mode determination on its finding that the making and using of the grommet claimed by the '879 patent involves the use of products claimed as trade secrets by the producer of those products, Renosol. Because the district court found that Renosol is a custom formulator and does not reveal the composition of the products it sells and because the district court found that there were "at least eight other" producers who could have formulated satisfactory products, the district court concluded that the '879 patent must be found invalid for failure to meet the best mode requirement. We vacate the district court's decision on this issue because that court erred by failing to apply the proper legal standard for best mode. 4 Failure to comply with the best mode requirement amounts to concealing the preferred mode contemplated by the applicant at the time of filing. See Hybritech Inc. v. Monoclonal Antibodies, Inc., 802 F.2d 1367, 1384-85, 231 USPQ 81, 94 (Fed.Cir.1986), cert. denied, 107 S.Ct. 1606 (1987). In order for a district court to conclude that the best mode requirement is not satisfied, the focus must be, and the district court must determine, that the inventor knew of, i.e., "contemplated," and concealed a better mode than he disclosed. Id., 231 USPQ at 94. The focus for a best mode analysis is not simply on whether the patent discloses the most suitable material for carrying out the claimed invention. 5 Here, the district court did focus its best mode analysis on whether the '879 patent disclosed "the most suitable material" available at the time the application was filed. There is no requirement that the inventor know the most suitable material for carrying out his invention; rather, the only requirement of the best mode test is that the specification "set forth the best mode contemplated by the inventor of carrying out his invention." 35 U.S.C. Sec. 112 (emphasis supplied). Because compliance with the best mode requirement is a question of fact, we vacate the district court's decision and remand the proceeding to the district court to make this factual determination using the correct legal standard. 6 B. Enablement: Section 112, First Paragraph 7 Arco argues to us that the district court erred in reaching its decision on enablement in view of the district court's conclusions supporting its decision on claim particularity under section 112, second paragraph. Arco contends that the district court's conclusions underlying its decision on claim particularity necessarily support a conclusion that the '879 patent is invalid for failing to meet the enablement requirement of section 112, first paragraph. We disagree. 8 Enablement under section 112, first paragraph, and claim particularity under section 112, second paragraph, are separate requirements for patent validity even though both are contained in section 112. See Standard Oil Co. v. American Cyanamid Co., 774 F.2d 448, 452, 227 USPQ 293, 296 (Fed.Cir.1985). Enablement goes to the adequacy of the language of the specification whereas particularity goes to the adequacy of the claim language. A conclusion supporting a determination that the specification is enabling under section 112, first paragraph, may not support a determination that a claim meets the particularity requirement under section 112, second paragraph. Although we can conceive of situations wherein the same conclusion that is dispositive on the issue of enablement also will be dispositive on whether the claims comply with the claim particularity requirement, we find Arco's arguments along this line unpersuasive. Accordingly, we affirm the district court's conclusion on enablement. 9 C. Particularity: Section 112, Second Paragraph 10 The district court concluded that claim 6 is invalid for failure to particularly point out and distinctly claim the subject matter of the invention. As grounds for its conclusion, the district court stated that "given the wide range of hardnesses covered by the claim, a large amount of experimenting would be required to even figure out what specific hardness would be suitable to make a functional grommet." The district court reasoned: 11 Thus, a reasonable amount of experimentation is tolerated to formulate a material of a specific hardness if that hardness is disclosed to the experimentor, but an undue amount of experimentation would be required to actually make a grommet capable of sealing a hole in which it is inserted when there are no limits placed on the range of hardnesses for operative grommets. 12 We disagree. 13 Compliance with the claim particularity, or definiteness, requirement of section 112, second paragraph, is generally a question of law, which question is freely reviewable by us. See Shatterproof Glass Corp. v. Libbey-Owens Ford Co., 758 F.2d 613, 624, 225 USPQ 634, 641 (Fed.Cir.), cert. dismissed, 474 U.S. 976 (1985). The issue is whether, in light of the teachings of the prior art and of the particular invention, the claims set out and circumscribe a particular area with a reasonable degree of precision and particularity. See In re Moore, 439 F.2d 1232, 1235, 169 USPQ 236, 238 (CCPA 1971). 14 The amount of detail required to be included in claims depends on the particular invention and the prior art, and is not to be viewed in the abstract but in conjunction with whether the specification is in compliance with the first paragraph of section 112: "If the claims, read in the light of the specifications, reasonably apprise those skilled in the art both of the utilization and scope of the invention, and if the language is as precise as the subject matter permits, the courts can demand no more." Georgia-Pacific Corp. v. United States Plywood Corp., 258 F.2d 124, 136, 118 USPQ 122, 132 (2d Cir.), cert. denied, 358 U.S. 884 * * * (1958). 15 Shatterproof Glass, 758 F.2d at 624, 225 USPQ at 641. 16 We hold that the district court committed reversible error by concluding that claim 6 failed to meet the claim particularity requirement under section 112, second paragraph. Contrary to the district court's decision, patent claims are not required to set forth design parameters specific to every conceivable situation involving the claimed invention. Here, Chemcast's grommets are not restricted to a particular use, e.g., in an automobile firewall, and the district court specifically found that one skilled in the art would know how to "correct any deficiencies in function of the grommet by varying hole size or hardness of the grommet." (Emphasis supplied.) It is beyond reason that the claims of the '879 patent be required to set forth a specific hardness for each and every conceivable situation involving the claimed grommet. In view of both the particular invention involved and the prior art, we conclude that claim 6 is as precise as the subject matter requires and, accordingly, we reverse the district court's decision on this issue and hold that claim 6 meets the particularity requirements of section 112, second paragraph. D. Other Issues 17 Arco appeals the district court's judgment with respect to the issues of obviousness, inequitable conduct, and infringement of claim 6. After a thorough consideration of the parties' arguments and in view of the record, we conclude that the district court's determinations on these issues should stand. E. Costs 18 Each party shall bear its own costs on appeal.

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USCA1 Opinion May 24, 1995 [NOT FOR PUBLICATION] UNITED STATES COURT OF APPEALS FOR THE FIRST CIRCUIT ____________________ No. 94-2242 EDWARD V. ZOLOTAREVSKY, Plaintiff, Appellant, v. CITY OF WORCESTER, ET AL., Defendants, Appellees. ____________________ [Hon. Nathaniel M. Gorton U.S. District Judge] ___________________ APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MASSACHUSETTS ____________________ Before Cyr, Boudin and Stahl, Circuit Judges. ______________ ____________________ Edward V. Zolotarevsky on brief pro se. ______________________ David M. Moore, City Solicitor, and Diana H. Horan, Assistant _______________ _______________ City Solicitor, on brief for defendants-appellees, City of Worcester, Massachusetts and Worcester Police Department. Joseph T. Black, Black & McCue on brief for defendant-appellee, ________________ ______________ Worcester Polytechnic Institute's Security Department. ____________________ ____________________ Per Curiam. We have carefully reviewed the parties' ___________ briefs and the record on appeal. We affirm the district court judgment of November 14, 1994, essentially for the reasons stated in the magistrate judge's report and recommendation, dated August 30, 1994. We add only the following. Contrary to plaintiff's suggestion, the Americans with Disabilities Act of 1990, Pub. L. No. 101-336 (codified at 42 U.S.C. 12101, et seq.) ("ADA") does not entitle him to a free lawyer in a civil case. Indeed, the ADA is not directed at the federal government at all. See, e.g., Title II of the ___ ____ ADA, 42 U.S.C. 12131 et seq., (prohibiting disability discrimination by instrumentalities of state and local governments). In any event, the district court did not abuse its broad discretion in denying plaintiff's motion to appoint counsel in this civil case. Although plaintiff is legally blind, he was aided by his father in the drafting of the submitted papers. Plaintiff's request for appointed counsel was based on the not uncommon plea that, as a lay person, he is unschooled in the intricacies of the law. Nonetheless, the papers demonstrated an ability to research and argue the merits of his cause. His impaired vision did not adversely impact his ability to represent himself. In addition, the merits of the case and the relatively non-complex nature of the legal issues did not present the exceptional circumstances which would warrant the appointment of counsel. See DesRosiers v. Moran, 949 F.2d 15, 23-24 (1st Cir. 1991) ___ __________ _____ (outlining the considerations underlying the decision to appoint counsel in civil cases). Affirmed. _________ -3-

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543 U.S. 932 HARSHMANv.PENNSYLVANIA. No. 04-5736. Supreme Court of United States. October 12, 2004. 1 Super. Ct. Pa. Certiorari denied. Reported below: 815 A. 2d 1126.

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644 F.Supp. 1033 (1986) Joanne BIMBO, Plaintiff, v. BURDETTE TOMLIN MEMORIAL HOSPITAL, Defendant. Civ. A. No. 83-0793. United States District Court, D. New Jersey. October 2, 1986. *1034 Schwartz & Fioretti by Stacey L. Schwartz, Cherry Hill, N.J. and Kohn, Savett, Marion & Graf, P.C. by David H. Weinstein, William Lytton, Philadelphia, Pa., for plaintiff. Horn, Kaplan, Goldberg, Gorny & Daniels, P.C. by William M. Honan, Atlantic City, N.J., and Valore, McAllister, Westmoreland, Gould, Vesper & Schwartz by Nina Chase, Northfield, N.J., for defendant. COHEN, Senior District Judge: Plaintiff, Joanne Bimbo, a registered nurse, instituted this civil rights action pursuant to Title VII of the 1964 Civil Rights Act, 42 U.S.C. § 2000e et seq, alleging retaliatory treatment by her former employer, Burdette Tomlin Memorial Hospital, Cape May Court House, New Jersey, ("BTMH" or "the Hospital") for her opposition to practices she perceived to be unlawful discrimination. In addition, plaintiff asserts pendant state law claims, alleging breach of contract and wrongful discharge.[1] She seeks compensatory damages, back pay, and reinstatement. *1035 The record in the case was supplemented, by stipulation of counsel, see transcript of July 31, 1986 at pp. 10-11, with the record of the nine-week jury trial in Nanavati v. Burdette Tomlin Memorial Hospital, et al, Civil Action Nos. 83-0794 & 84-1790 (hereinafter "Nanavati trial"), in which Ms. Bimbo testified on behalf of Dr. Suketu Nanavati. In lieu of specific findings of fact and conclusions of law, we issue this opinion pursuant to Federal Rule of Civil Procedure 52(a). Plaintiff was employed by BTMH in its nursing department from July, 1972 until March 18, 1982. She served as Head Nurse of the hospital's intensive care unit ("ICU") for five years, from February 1, 1977 until February 18, 1982, at which time she was demoted from ICU Head Nurse to staff nurse. Plaintiff was informed, at the time of her demotion, that she could not serve as a staff nurse in the ICU but that she could do so in any other department in the Hospital. Immediately thereafter, plaintiff left BTMH on a previously-planned vacation. While on vacation, she tendered her resignation, informing Ms. Teresa Karter, BTMH's Directress of Nursing at that time, that she would not be returning to BTMH because her demotion made such a return untenable. Exhibit 5014. On June 8, 1982, plaintiff filed a charge of discrimination with the Equal Employment Opportunity Commission ("EEOC"), alleging that she had been demoted in retaliation for her support of a minority physician, Dr. Suketu H. Nanavati. See plaintiff's Exhibit 6016. Dr. Nanavati, a board-certified cardiologist and a native of Ahmedabad, India, became a member of the BTMH Medical Staff in March, 1979. Shortly thereafter, a personal and professional feud erupted a feud ignited by Dr. Nanavati's reference to Dr. Sorenson, in the presence of the entire BTMH Medical Staff, as "inferiorily qualified"between Dr. Nanavati and Dr. Robert J. Sorenson, the Chief of Cardiology at BTMH.[2] At a fairly early stage in this feud, see transcript of Nanavati trial, May 22, 1986 at pp. 49-50, Dr. Sorenson orally accused plaintiff and other nurses present in the ICU of being "Indian lovers," an outburst for which he subsequently apologized to only one of the nurses, which apology, it may be assumed, was related to the other nurses. At some point thereafter, plaintiff, having received, apparently by virtue of her position as Head Nurse of the ICU, as did other Head Nurses and Departmental heads, copies of correspondence from various persons, including Dr. Sorenson, complaining about Dr. Nanavati, wrote a letter to Dr. Marvin Podolnick, the Chief of the hospital's Medical Staff. That letter, dated January 9, 1982 but which was apparently not actually mailed until approximately the third week of January, see transcript of Nanavati trial, May 22, 1982 at p. 56, reads as follows: This letter is written in response to several letters I have received copies of over the past months. They concern an incident involving Dr. Suketu H. Nanavati and a Monitor Bed Unit staff member. First, let me say that in 9 years of employment at Burdette Tomlin Hospital I've never found myself involved in something so unprofessional. Secondly, I don't feel I should have received copies of these letters frankly, it was none of my business. However, an issue does concern me very much it seems to me that emotions are taking precedent over our actual purpose, that is to provide the highest quality of patient care possible to the people of Cape May County. The ICU staff recently held our monthly "staff" meeting where this issue was discussed. We discussed the main issue of the prior mentioned letters. The differences Dr. Nanavati may have with some of the MBU staff is again, frankly, none of our business. I must add a *1036 personal note here. I have known Dr. Nanavati since he came to Burdette Tomlin about 3 years ago. I have always felt I have an excellent working relationship with all members of the medical staff, here at Burdette. Dr. Nanavati has been no exception. Intensive care usually provides an environment of constant stress, emergencies, grief and grieving, and the need for a vast array of knowledge for quick problem solving for a staff member there. Dr. Nanavati has always been supportive of the ICU staff. He is always eager to teach and answer questions (sic) we may have regarding care of our patients. In my opinion, his patients get the most optimum medical care. I have gone on ambulance runs with his critical patients to other institutions where his diagnosis and care of the patient while at Burdette was met with the highest regard by the physicians there. I nor any of my staff members in ICU have ever been chastised nor ridiculed by Dr. Nanavati. I feel this is important to write since there seems to be so much negativism about Dr. Nanavati lately. I sincerely hope my feelings will be respected. May I add that the rest of my staff feels this way also. Lastly, I sincerely hope a professional and healthy solution comes of all this for everyones' well-being. Within a month of sending this letter, plaintiff was informed, at her annual performance evaluation, that she was being removed from her position as Head Nurse of ICU. See transcript of Nanavati trial, May 22, 1986 at pp. 59-67. The reasons given to plaintiff for her demotion included: excessive lateness, failure to attend Head Nurse Workshops or tardiness in attendance, failure to expedite transfers of patients to and from the ICU, failure to attend staff scheduling workshops, and failure to timely submit nursing staff schedules. Plaintiff asserts, in her present action, that these reasons were merely a pretext for demoting her. She maintains that the true reason for the Hospital's decision to demote her was her support of Dr. Nanavati, as evidenced by her January 9, 1982 letter and her sustained cooperative working relationship with him. See plaintiff's reply summation at p. 4. She further contends that the decision to demote her, and the repercussions of that decision, amounted to a constructive discharge because such decision rendered working conditions at BTMH so intolerable that a reasonable employee would have been forced to resign. Such a discharge, plaintiff argues, was either in retaliation for her support of Dr. Nanavati, as a minority, in violation of Title VII of the 1964 Civil Rights Act, or for her support of Dr. Nanavati as a person against whom the Hospital was committing allegedly illegal or improper acts, in contravention of state law. Finally, plaintiff urges that the procedures employed in effectuating her demotion, irrespective of the true reasons therefor, ran afoul of an implied employment contract she held with the Hospital. We shall consider each of plaintiff's contentions in turn. Retaliatory Treatment for Opposition to Unlawful Discrimination Plaintiff's federal claim is one for protection against retaliation for opposition to unlawful discrimination, pursuant to § 704(a) of the Civil Rights Act of 1964, 42 U.S.C. § 2000e-3(a). This statute provides, in pertinent part: It shall be an unlawful employment practice for an employer to discriminate against any of his employees ... because he has opposed any practice made an unlawful employment practice by this subchapter, or because he has made a charge, testified, assisted or participated in any manner in an investigation, proceeding or hearing under this subchapter. In order to prevail on an action pursuant to this section, the plaintiff must establish three elements. First, she must show that she engaged in some statutorily protected opposition to discrimination; second, that there was some adverse employment action; *1037 and finally, that there was a causal connection between her opposition and the adverse employment action. E.g., Grant v. Bethlehem Steel Corp., 622 F.2d 43, 46 (2d Cir.1980). See generally B. Schlei & P. Grossman, Employment Discrimination Law 533, 534 (2d ed. 1983). Because we find that there was no causal connection between plaintiff's opposition to whatever practices or actions she perceived as discriminatory and her demotion, we shall enter judgment in favor of the defendant, BTMH, on plaintiff's Title VII claim.[3] The sole item of proof supporting plaintiff's allegation that her demotion was caused by her opposition to unlawful discrimination is the timing of the letter she wrote to Dr. Podolnick in relation to the date of her discharge. Although, of course, a preliminary inference of causation can be drawn from the fact that Ms. Bimbo's demotion occurred shortly after she sent the January 9 letter, this inference was unequivocally overcome in this case by the defendant's proof of a legitimate non-discriminatory reason for its action. The submitted proofs included highly credible testimony by both the former Directress of Nursing, who had actually made the decision to demote plaintiff, Ms. Karter, and the Associate Directress of Nursing at BTMH, Ms. Doris Baker. These witnesses testified, inter alia, that the reasons given to plaintiff for her demotion were in fact problems perceived well in advance of her letter to Dr. Podolnick and that numerous conversations with plaintiff were held over a considerable period of time apprising her of the perceived need for improvement with respect to these elements of her job performance. The evidence further showed that plaintiff was, in fact, late for work at least 104 times in the calendar year immediately preceding her demotion,[4] a figure greater than twice the number of times plaintiff had been late in previous years. After careful consideration of all of the evidence, we are convinced that the Hospital's decision to demote plaintiff was based entirely on legitimate business reasons. The Hospital has demonstrated, as a factual matter, plaintiff's repeated failure to report to work on time, despite numerous attempts by the Hospital to accomodate the scheduling demands of plaintiff's personal concerns. Such a record of tardiness, particularly when displayed by the Head Nurse of an Intensive Care Unit which requires some overlap in nursing personnel in order to convey essential information regarding patient care, was understandably intolerable to the employer hospital. We find that there was no retaliatory motive on the part of the defendant in its demotion of plaintiff, and we find no causal connection *1038 between plaintiff's demotion and her actions with respect to Dr. Nanavati. Accordingly, we shall enter judgment in favor of the defendant, BTMH, on plaintiff's Title VII claim. Wrongful Discharge Plaintiff maintains that her demotion, which she argues amounted to a constructive discharge, was in violation of public policy as reflected in Title VII of the Civil Rights Act of 1964 and the Sherman Antitrust Act, 15 U.S.C. § 1 et seq. Accordingly, plaintiff urges, her demotion was a "wrongful discharge" entitling her to relief without regard to the existence, or lack thereof, of an employment contract. In Pierce v. Ortho Pharmaceutical Corp., 84 N.J. 58, 417 A.2d 505 (1980), the New Jersey Supreme Court adopted a public policy exception to the common law rule known as the "at will doctrine." This doctrine provides that, in the absence of an employment contract, employers are free to terminate an employment relationship without cause. The Pierce court, balancing the interests of the employer, his employees, and the public, recognized a cause of action, in tort or contract or both, id. at 72, 417 A.2d 505, to provide a remedy for employees who are wrongfully discharged. The court held that an employee has such a cause of action when the discharge is contrary to a clear mandate of public policy. Id. Accepting, arguendo, plaintiff's contentions that her demotion amounted to constructive discharge, we nonetheless do not find that plaintiff is entitled to prevail on her wrongful discharge claim. The evidence in this case simply does not support a finding that plaintiff's "discharge" was contrary to public policy. Plaintiff urges this Court to find that her "discharge" was contrary to public policy because it was motivated by a desire to punish her for her support of Dr. Nanavati, against whom, she maintains, the Hospital was either discriminating or was committing an antitrust violation.[5] Assuming, without deciding, that some unlawful actions were taken by the Hospital against Dr. Nanavati, we are still without proof that such actions, or plaintiff's reactions thereto, were related, in any way, to plaintiff's "discharge." The evidence in this case clearly demonstrates that plaintiff was demoted for legitimate business reasons, and not by reason of some desire to penalize her. There is no evidence to support her claim that her demotion was, in any respect, violative of a public policy. There was no constructive discharge here. The Hospital had valid reasons for relieving her of her administrative duties. No problem was found with her ability as a nurse. Every opportunity was afforded her to continue her relationship with the Hospital as a staff nurse in any department of her choice. She was not discharged. She resigned. Accordingly, we shall enter judgment in favor of defendant, BTMH, on plaintiff's pendant wrongful discharge claim. Breach of Contract Plaintiff's final contention is that BTMH, by the manner in which it demoted her, materially breached its employment contract with her. In so arguing, plaintiff relies not on an individual written employment contract, but upon BTMH's "Personnel Policies and Administrative Practices" brochure, ("personnel policy manual"), Exhibit 6000, and recent New Jersey case law which recognizes the existence of a cause of action for breach of contract based upon implied promises in an employment manual. The BTMH policy manual states, in pertinent part: COUNSELLING AND PROGRESSIVE DISCIPLINE PROCEDURE If an employee violates hospital policy that is not considered a cause for immediate *1039 dismissal, it is the procedure of the hospital to counsel that employee through the progressive discipline system as follows: First Offense The Department Head or Supervisor will discuss the policy infraction with the employee on a verbal basis. Second Offense Will be documented in writing, reviewed and acknowledged by the employee's signature on the employee counselling form. This will be filed in the personnel jacket. Third Offense Will be documented in writing, reviewed and acknowledged by the employee's signature on the employee counselling form. The third offense could result in probation; suspension; (both); or termination. A written warning will be removed and destroyed providing there were no other policy infractions within two years from the date of the warning. Plaintiff, contending without rebuttal that she was not provided with any written documentation of her infraction of the Hospital's policy regarding excessive and repeated tardiness, prior to her demotion, urges that a material breach of these provisions occurred upon her demotion. This, she argues, constituted a breach of contract, entitling her to relief. Plaintiff's contention that the policy manual constituted an employment contract rests upon an application of Woolley v. Hoffmann-La Roche, Inc., 99 N.J. 284, 491 A.2d 1257 (1985), in which the New Jersey Supreme Court held that "absent a clear and prominent disclaimer, an implied promise contained in an employment manual that an employee will be fired only for cause may be enforceable against the employer even when the employment is for an indefinite term and would otherwise be terminable at will." Id. at 285-86, 491 A.2d 1257. Because we hold that the Woolley decision is not applicable to the case at bar,[6] we shall enter judgment in favor of defendant, BTMH, on plaintiff's breach of contract claim. In its 1985 Woolley decision, the New Jersey Supreme Court held that the legal effect of the dissemination of a personnel policy manual by a company with a substantial number of employees should be determined by traditional contract doctrine. 99 N.J. 284, 289. In so holding, the Woolley Court, to the extent it went beyond ruling only that fundamental principles of basic fairness must be adhered to in employment relationships, id. at 309, 491 A.2d 1257, see also Pierce v. Ortho Pharmaceutical Corp., 84 N.J. 58, 417 A.2d 505 (1980), clearly broke new ground in New Jersey employment law. As such, the Woolley decision, in our opinion, should not be applied retroactively. E.G., Spiewak v. Rutherford Board of Education, 90 N.J. 63, 447 A.2d 140 (1982). To apply such a significant change in the law retroactively would be distinctly unfair to those effected thereby who had previously acted in reliance upon the prior state of the law. See, e.g., Buono v. Board of Trustees of Teachers Pension and Annuity Fund, 188 N.J. Super. 488, 457 A.2d 1214 (App.Div.1983). In the present case, the operative facts giving rise to plaintiff's complaint her demotion in February of 1982 occurred more than three years before the New Jersey Supreme Court's decision in Woolley. Accordingly, in light of our holding that Woolley is not to be applied retroactively, *1040 plaintiff herein, in the absence of an individual employment contract, has no cause of action for breach of contract. We shall therefore enter judgment in favor of defendant BTMH on plaintiff's breach of contract claim. NOTES [1] Plaintiff's complaint was deemed amended to include the pendant breach of contract claim by a ruling of this Court. See slip op. of April 28, 1986 at p. 12. [2] The precise nature of and reasons for this feud, and the legal ramifications thereof, are the subject of lawsuits between these doctors and the hospital. These actions, Civil Action Nos. 83-0794 & 84-1790, were consolidated and tried before a jury for nine weeks in the case previously referred to herein as the Nanavati trial. [3] Our finding that no causal connection existed between plaintiff's demotion and her alleged opposition to discrimination obviates the need for rulings on two significant points of contention between the parties herein. The first of these issues is the question whether the practice opposed by the person aggrieved by the alleged § 704(a) violation must be in fact and in law a violation of Title VII. This issue arises in relation to the first element of plaintiff's case by virtue of the fact that the individual whom plaintiff asserts she was defending was held not to have a viable Title VII claim, as a matter of law. See Nanavati v. Burdette Tomlin Memorial Hospital, et al, C.A. Nos. 83-0794 & 84-1790 slip op. at 3-10 (D.N.J. June 23, 1986). The second issue, the question whether plaintiff's demotion amounted to a constructive discharge, bears upon the type of relief to which plaintiff might be entitled. The standard to be applied in determining whether an employer's acts of discrimination constitute a constructive discharge for Title VII purposes was recently discussed by the Third Circuit. In Goss v. Exxon Office Systems Co., 747 F.2d 885 (3d Cir.1984), the court held that no finding of specific intent by the employer to bring about a discharge was required to invoke the constructive discharge doctrine, but that a court "need merely find that the employer knowingly permitted conditions of discrimination in employment so intolerable that a reasonable person subject to them would resign." Id. at 888. [4] This figure was based on BTMH's payroll policy regarding lateness, which provides for a 12-minute grace period a 12-minute time span after the commencement of an employee's scheduled shift before an employee is considered late. According to BTMH's "nursing policy" with respect to tardiness, which grants no grace period, plaintiff was late for work 171 times in 1981. See tr. of August 4, 1986 at pp. 66-68. The latter figure represents 67% of the total number of plaintiff's paid work days for that year. Id. [5] The jury in the Nanavati case, Civil Action Nos. 83-0794 & 84-1790, found that the Hospital had not engaged in racial discrimination against Dr. Nanavati, but had participated in a contract, combination or conspiracy in restraint of interstate commerce which harmed him. [6] If the Woolley decision were to be applied retroactively to the instant case, significant issues would be presented with respect to whether plaintiff, who was a managerial employee, and who was demoted from an administrative position rather than discharged from employment, would be entitled to the procedural safeguards set out in the manual. Moreover, a substantial question would arise regarding whether Woolley was intended to be limited to the factual situation where an employee receives no actual notice of poor job performance. In this case, the facts clearly illustrate that the purpose of the notice requirement to allow the employee the opportunity to improve performance was satisfied by the Hospital's repeated attempts to solve the problems with Ms. Bimbo's administrative failings.

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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. 09-15215 ELEVENTH CIRCUIT MAY 6, 2010 Non-Argument Calendar JOHN LEY ________________________ CLERK Agency Nos. A095-894-831, A095-886-866 ANA DE TORRES HERNANDEZ, OLGA YURANY TORRES, LOUREN TATHIANA GAITAN, Petitioners, versus U.S. ATTORNEY GENERAL, Respondent. ________________________ Petition for Review of a Decision of the Board of Immigration Appeals _________________________ (May 6, 2010) Before EDMONDSON, BIRCH and CARNES, Circuit Judges. PER CURIAM: Ana de Torres Hernandez, along with her daughter and granddaughter, filed a petition for review with this Court on October 16, 2009.1 The petition states that Torres Hernandez seeks review of the BIA’s September 16, 2009 decision, which denied her motion for reconsideration. Torres Hernandez’s brief, however, challenges the BIA’s February 24, 2009 decision dismissing her appeal from the Immigration Judge’s decision denying her claims for withholding of removal and relief under the Convention Against Torture. Torres Hernandez’s brief fails to present any arguments about the BIA’s September decision denying her motion for reconsideration. I. “We review de novo our subject-matter jurisdiction.” Sanchez Jimenez v. United States Att’y Gen., 492 F.3d 1223, 1231 (11th Cir. 2007). A petition for review challenging an order of removal must be filed within 30 days of the date of the final order of removal. 8 U.S.C. § 1252(b)(1). The 30-day time period is “mandatory and jurisdictional” and is not subject to equitable tolling. Dakane v. United States Att’y Gen., 399 F.3d 1269, 1272 n.3 (11th Cir. 2005) (quotation marks omitted). Furthermore, filing a motion to reconsider will not stop the 30- day time-to-appeal clock from running. See Stone v. I.N.S., 514 U.S. 386, 405, 1 Torres Hernandez’s daughter, Olga Yurany Torres, is a co-petitioner, and her granddaughter, Louren Tathiana Gaitan, is a derivative petitioner. This opinion will refer to all three petitioners collectively as “Torres Hernandez.” 2 115 S.Ct. 1537, 1549 (1995) (“[A] deportation order is final, and reviewable, when issued. Its finality is not affected by the subsequent filing of a motion to reconsider.”). We lack jurisdiction to consider Torres Hernandez’s challenge to the BIA’s February 2009 decision dismissing her appeal. The petition for review was not filed until October 2009, which was long past the 30-day deadline, and the filing of the motion for reconsider did not stop that deadline from passing. We must dismiss the petition for lack of jurisdiction in this respect. II. As for Torres Hernandez’s challenge to the BIA’s decision denying her motion to reconsider, her initial brief presented no arguments at all on the subject. “When an appellant fails to offer argument on an issue, that issue is abandoned.” Sepulveda v. United States Att’y Gen., 401 F.3d 1226, 1228 n.2 (11th Cir. 2005). Similarly, “[t]his court has a well-established rule that issues and contentions not timely raised in the initial brief are deemed waived or abandoned.” United States v. Day, 405 F.3d 1293, 1294 n.1 (11th Cir. 2005). Although Torres Hernandez filed a timely petition for review of the BIA’s September 2009 decision, her initial brief does not address the standard of review, legal requirements, or factual arguments pertaining to the denial of her motion for 3 reconsideration. Accordingly, any argument on that issue is abandoned.2 DISMISSED IN PART, DENIED IN PART. 2 Torres Hernandez has also filed a motion for leave to file an amended brief, submitting an amended brief along with that motion. The amended brief addresses the BIA’s denial of her motion for reconsideration. The motion for leave to file an amended brief is DENIED. We do not consider issues that are not timely raised in the initial brief, nor do we permit supplemental briefs that seek to raise new issues on appeal. See United States v. Levy, 379 F.3d 1241, 1242 (11th Cir. 2004). 4

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IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE THE HONORABLE KAREN WELDIN ) STEWART, CIR-ML, INSURANCE ) COMMISSIONER OF THE STATE OF ) DELAWARE, IN HER CAPACITY AS ) THE RECEIVER OF SECURITY PACIFIC ) INSURANCE COMPANY, INC. IN ) LIQUIDATION, SPI-202, INC. IN ) LIQUIDATION, SPI-203, INC. IN ) C.A. No. 9306-VCP LIQUIDATION, and SPI-204, INC. IN ) LIQUIDATION, ) ) Plaintiff, ) ) v. ) ) WILMINGTON TRUST SP SERVICES, ) INC., JOHNSON LAMBERT & CO., LLP, ) JOHNSON LAMBERT, LLP, McSOLEY ) McCOY & CO., JAMES M. JACKSON, ) PAUL D. KING, KEVIN R. DAVIS, and ) STEPHEN D. KANTNER, ) ) Defendants. ) OPINION Date Submitted: November 20, 2014 Date Decided: March 26, 2015 Diane J. Bartels, Esq., Wilmington, Delaware; Jeffrey B. Miceli, Esq., BLACK & GERNGROSS, P.C., Philadelphia, Pennsylvania; Attorneys for Plaintiff The Honorable Karen Weldin Stewart, CIR-ML, Insurance Commissioner of the State of Delaware, in her Capacity as the Receiver of Security Pacific Insurance Company, Inc. in Liquidation, SPI-202, Inc. in Liquidation, SPI-203, Inc. in Liquidation, and SPI-204, Inc. in Liquidation. C. Malcolm Cochran, IV, Esq., Chad M. Shandler, Esq., Blake Rohrbacher, Esq., RICHARDS, LAYTON & FINGER, P.A., Wilmington, Delaware; Attorneys for Defendants Wilmington Trust SP Services, Inc. and Stephen D. Kantner. Kevin A. Guerke, Esq., SEITZ VAN OGTROP & GREEN P.A., Wilmington, Delaware; Kevin M. Murphy, Esq., Alexander M. Gormley, Esq., CARR MALONEY P.C., Washington, D.C.; Attorneys for Defendants Johnson Lambert & Co. LLP and Johnson Lambert LLP. John D. McLaughlin, Jr., Esq., CIARDI CIARDI & ASTIN, LLC, Wilmington, Delaware; Jonathan S. Ziss, Esq., Seth L. Laver, Esq., GOLDBERG SEGALLA LLP, Philadelphia, Pennsylvania; Attorneys for Defendant McSoley McCoy & Co. PARSONS, Vice Chancellor. The key issue in this Opinion is when, under Delaware law, a corporation may state claims against third parties, like auditors, who are implicated in the alleged misconduct of the corporation‘s directors and officers. The plaintiffs here are four Delaware-domiciled captive insurance companies, with the Insurance Commissioner of the State of Delaware prosecuting their claims as their receiver in liquidation. The complaint alleges an array of fraudulent conduct on the part of the four companies‘ president, CEO, and sole stockholder. The other directors of the corporations also are alleged to have breached their fiduciary duties by either assisting or failing to catch and report those fraudulent acts. As relevant here, the complaint also includes claims against the companies‘ auditors and their administrative management company for breaches of fiduciary duty, breach of contract, negligence, and aiding and abetting breaches of fiduciary duty. Those defendants moved to dismiss, contending that the wrongdoing of the companies‘ officers and directors is imputed to each of the corporations themselves, and that the doctrine of in pari delicto bars the court from intervening to adjudicate claims between wrongdoers. In addition, the moving defendants seek dismissal of the claims against them based on the defense of laches and for failure to allege the necessary elements of certain of the putative causes of action. The receiver disputes the applicability of these defenses and denies that in pari delicto should bar her claims for several different reasons. I first conclude that Delaware law governs the entirety of the pending motions. Next, I reject the moving defendants‘ laches defense as without merit in the circumstances of this case. After that, I briefly address the motions of the auditors, the 1 administrative management company, and its defendant-employee to dismiss the various claims for breach of fiduciary duties. I grant this aspect of the motions as to those defendants, except the defendant-employee who was a director of the plaintiff insurance companies. I then take up the issue of whether in pari delicto requires dismissal of the remaining claims. For the reasons stated in this Opinion, I conclude that in pari delicto does apply in this case, and that it effectively would bar the relevant claims against the moving defendants, unless I found applicable one of the exceptions urged by the receiver. In the circumstances of this case, the well-known ―adverse interest‖ exception does not apply. The receiver also contends that the Court should set aside the in pari delicto doctrine on public policy grounds tied to the specific concerns involved in the insurance receivership context. But, I conclude that the facts of this case do not support such a result. Finally, I address the argument that Delaware law should recognize an ―auditor exception‖ to the in pari delicto rule, as some states have done. Because I do not read the applicable Delaware cases as supporting the conclusion the receiver urges, and I am not convinced that Delaware public policy would be well-served by a broad auditor exception, I reject that argument as it relates to the claims for breach of contract and negligence and dismiss those claims on grounds of in pari delicto. I decline to dismiss the claims for aiding and abetting a breach of fiduciary duty on that basis, however, because I conclude, based on Delaware case law and the relevant policy concerns, that the well-established ―fiduciary duty‖ exception to in pari delicto would cover those claims. 2 Finally, I examine the aiding and abetting claims against each of the auditors and the administrative management company. Based on the allegations in the Complaint, I deny the motions to dismiss those claims, except as they relate to the auditor that was retained second. I. BACKGROUND1 A. The Parties This case concerns Security Pacific Insurance Company, Inc. (―Security Pacific‖), SPI-202, Inc. (―SPI-202‖), SPI-203, Inc. (―SPI-203‖), and SPI-204, Inc. (―SPI-204,‖ and collectively, the ―SPI Entities‖). All of the SPI Entities are Delaware corporations. From December 31, 2007, to June 15, 2011, they operated as Delaware-domiciled special purpose captive insurance companies. On June 15, 2011, this Court entered an order in a related action placing the SPI Entities into liquidation pursuant to 18 Del. C. § 5906 (the ―Liquidation Action‖).2 Plaintiff in this action is the Honorable Karen Weldin Stewart, the Insurance Commissioner of the State of Delaware, who brings this action as Receiver of the SPI Entities in liquidation. The Complaint initially named eleven Defendants: Wilmington Trust SP Services, Inc. (―Wilmington Trust‖); Johnson Lambert & Co., LLP; Johnson 1 All facts recited herein are drawn from the well-pled allegations of Plaintiff‘s Verified Complaint (the ―Complaint‖). 2 In re Liquid. of Sec. Pac. Ins. Co., C.A. No. 6317-VCP, at 17 (Del. Ch. June 15, 2011) (ORDER) (the ―Liquidation Order‖); see also In re Liquid. of Sec. Pac. Ins. Co., C.A. No. 6317-VCP (Del. Ch. June 28, 2011) (the ―Motion for Liquidation Transcript‖). 3 Lambert, LLP; McSoley McCoy & Co. (―McSoley McCoy‖); Ryan Building Group, Inc. (―Ryan Building Group‖); Kevin R. Davis; James M. Jackson; James L. Jackson; Stephen D. Kantner; Paul D. King; and Anthony P. Muñoz.3 As relevant to this Opinion, Wilmington Trust, a Delaware corporation with its principal place of business in Wilmington, Delaware, provided management and administrative services to the SPI Entities. Defendant Kantner, an individual residing in Delaware, was an employee of Wilmington Trust and also a member of the boards of directors of the four SPI Entities. Johnson Lambert & Co., LLP, is a South Carolina limited liability partnership based in South Carolina, and Johnson Lambert, LLP, is a Virginia limited liability partnership based in North Carolina (together, ―Johnson Lambert‖).4 As discussed in further detail below, Johnson Lambert and McSoley McCoy, a Vermont corporation with its principal place of business in Vermont, each provided certified public accountant and independent auditor services to the SPI Entities. Currently before the Court are motions to dismiss filed by Johnson Lambert and McSoley 3 The Receiver voluntarily dismissed the claims against Ryan Building Group on April 10, 2014. As noted infra in Section I.C, I dismissed the Complaint as it relates to James L. Jackson and Anthony Muñoz on August 12, 2014. 4 The Receiver alleges that Johnson Lambert & Co., LLP‘s rights, duties, and liabilities were assumed by Johnson Lambert, LLP in 2012. Compl. ¶ 14. Johnson Lambert asserts that the underlying company always has been the same; it simply changed its name from the former to the latter. Because this point is immaterial to the pending motions, I refer only to ―Johnson Lambert‖ for the remainder of this Opinion. 4 McCoy (together, the ―Auditor Defendants‖), and by Wilmington Trust and Kantner (collectively, the ―Moving Defendants‖). B. Facts 1. The SPI Entities In 2005, Defendant James M. Jackson formed Security Pacific Insurance Company, Inc., as a captive insurance company incorporated in the District of Columbia (―SPIC-DC‖). In general terms, a ―captive insurance company‖ is a business entity formed as a subsidiary of a non-insurance parent company for the purpose of insuring the parent‘s business risk, or the risk of the parent‘s affiliates or customers. It is a self- insurance mechanism in which the insurer is wholly owned by the insured. In the State of Delaware, captive insurance companies, like all commercial insurers, are subject to extensive regulatory oversight and requirements, ranging from licensure and reporting to minimum capital and reserve thresholds.5 Jackson,6 through a wholly owned holding company, was the sole owner of SPIC- DC. He also owned an insurance brokerage company, nonparty J. Mading Financial and Insurance Services, Inc. (―J. Mading‖), which, in collaboration with SPIC-DC, designed and marketed insurance solutions using captive insurance companies. For example, Ryan Building Group, a client of J. Mading‘s, was insured by a subsidiary of SPIC-DC, and nonparty OOM, LLC was insured by another. Those two clients, which engaged in 5 See generally 18 Del. C. §§ 6901 to 6983. 6 Because Defendant James L. Jackson has been dismissed from this action, the use of the name ―Jackson‖ in this Opinion refers to Defendant James M. Jackson. 5 residential construction, apparently entered into participation agreements by which SPIC- DC and its ―cells,‖ or subsidiary captives, would provide warranty reimbursement, general liability, property, excess, and environmental liability insurance coverage. Beginning in July 2007, Jackson sought to re-domicile SPIC-DC and its subsidiary cells to Delaware. According to Jackson‘s plan, SPIC-DC would merge into Security Pacific, the Delaware corporation at issue in this case, and SPIC-DC‘s cells would merge into the newly incorporated SPI-202 and SPI-203 entities. SPI-204 would be created to insure the risk of Alexa Holding Company, LLC, another entity solely owned by Jackson. Pursuant to the relevant statutory provisions, Jackson submitted an application for authorization to the Delaware Department of Insurance (―DDOI‖). In the application documents, Jackson represented that the SPI Entities would hold initial capital amounts, in the aggregate, of roughly $2.7 million, with some additional reserves in the form of letters of credit.7 Included in these application documents were SPIC-DC‘s audited financial statements covering the time period from its inception in 2005 to December 31, 2006, which reported that SPIC-DC had total assets of roughly $4.8 million.8 Those audited financial statements were prepared and certified by Johnson Lambert. In October 2007, SPIC-DC entered into a Management Services Agreement (the ―MSA‖) with Wilmington Trust, whereby Wilmington Trust agreed to serve as Security 7 According to the application documents, Jackson represented that Security Pacific, SPI-202, SPI-203, and SPI-204 would hold initial capital amounts, respectively, of $962,792; $639,051; $349,356; and $698,968. Compl. ¶¶ 63-67. 8 Compl. ¶¶ 68-69; id. Ex. B. 6 Pacific‘s ―captive manager‖ in Delaware by providing administrative, compliance, and other related services.9 Wilmington Trust also would ensure that the SPI Entities conformed with certain statutory requirements, by, for example, providing a ―place of business‖ in Delaware, and retaining all of the SPI Entities‘ original documentation and books and records here.10 Consistent with the legal requirements, Defendant Kantner, who was employed as an Accounting Supervisor at Wilmington Trust, served as a ―resident‖ director on the boards of each of the SPI Entities.11 As relevant here, the captive management services provided by Wilmington Trust included bookkeeping, financial account reconciliation and review, and preparation of unaudited financial statements. In this regard, Wilmington Trust regularly reviewed information regarding the SPI Entities‘ bank accounts. The Complaint alleges that Jackson provided monthly financial statements for the relevant accounts via an online data link run through J. Mading.12 The Complaint also avers that Jackson‘s position as the intermediary between Wilmington Trust and Bank of America, Wells Fargo, and Wachovia—the banks housing the SPI Entities‘ financial accounts—was critical to his fraudulent scheme.13 9 Id. ¶¶ 71-80; id. Ex. C. 10 18 Del. C. §§ 6903(b), 6923. 11 Compl. ¶¶ 74, 88. 12 Id. ¶¶ 81-82. 13 Id. ¶¶ 83-85. 7 In November 2007, SPIC-DC engaged Johnson Lambert to prepare audited financial statements for the calendar year ending December 31, 2007 (the ―2007 Audited Financial Statements‖).14 On December 31, 2007, the DDOI approved the SPI Entities‘ application for a certificate of authorization, contingent on satisfactory receipt of the 2007 Audited Financial Statements, and Security Pacific, SPI-202, SPI-203, and SPI-204 were incorporated in Delaware as special purpose captive insurance companies. 2. The 2007 Audited Financial Statements are prepared and approved amidst irregularities The allegations relating to the 2007 Audited Financial Statements span 120 paragraphs and over 40 pages of the Complaint. They describe in remarkable detail a process in which Wilmington Trust and Johnson Lambert, from February to December 2008, struggled to obtain the necessary confirmations to complete the audit. In the interests of brevity and clarity, I recount the well-pled facts relating only to the most significant areas of irregularity in this process. The first such area involved confirming the cash surrender value of a ―key man‖ life insurance policy issued by Hartford Life and Annuity Insurance Company (―Hartford Life‖) in December 2005, which insured the life of Jackson for a face value amount of about $23.5 million (the ―Key Man Policy‖). 15 That policy was owned by SPIC-DC, and its purported cash value comprised the bulk of the assets Security Pacific claimed in its application to the DDOI. The 2005 and 2006 14 Id. ¶ 89; id. Ex. D [hereinafter the ―2007 Johnson Lambert Engagement Letter‖]. 15 Id. ¶¶ 64, 100, 103. 8 audited financial statements of SPIC-DC, prepared by Johnson Lambert, certified that the Key Man Policy had a cash value of $628,783 as of December 31, 2006. As discussed below, the audited financial statements for 2007, 2008, and 2009 continued to ―confirm‖ the policy‘s cash value. In reality, the policy had lapsed in May 2006 and was worthless. A second area in which Wilmington Trust and Johnson Lambert encountered difficulty in producing audited financial statements for the SPI Entities was confirming the cash and cash equivalents held in the several accounts they maintained at Bank of America, Wachovia Bank, Wachovia Securities, and Wells Fargo. As with the Key Man Policy, Johnson Lambert had confirmed the balances in these accounts in connection with the 2005 and 2006 audits of SPIC-DC.16 By the time the Receiver took control of the SPI Entities in 2011, however, several of the bank accounts were basically empty, even though the 2007, 2008, and 2009 audits had ―confirmed‖ that they had held several million dollars in the aggregate in those years. a. The Key Man Policy The interactions between Jackson, Wilmington Trust, and Johnson Lambert in connection with the confirmation of the Key Man Policy exemplify the larger pattern of delay tactics, deception, and otherwise questionable conduct that the Receiver ascribes to Jackson. In February 2008, Johnson Lambert asked Allan Drost of Wilmington Trust to obtain from Jackson a full, signed copy of the Key Man Policy. Drost emailed Jackson, who responded that he would assemble the necessary documents later that same day. 16 Id. ¶¶ 100-101. 9 Several months passed, however, without any follow-up from Jackson.17 In early June 2008, Drost sent a series of confirmation forms to Jackson for him to sign and submit to Johnson Lambert. Around the same time, Drost advised Thomas Bolton of Johnson Lambert that Wilmington Trust intended to send a letter to the DDOI, advising it that the SPI Entities‘ audited financials were delayed, but would be provided by the end of July. Bolton agreed that that timeframe was not a problem.18 On July 23, 2008, Justine Holeman of Johnson Lambert received a letter from Hartford Life informing Johnson Lambert that, because the confirmation inquiry they had submitted to Hartford Life was not signed by Jackson, they had forwarded the requested information to Jackson rather than to Johnson Lambert directly.19 On the same day, Hartford Life sent Jackson a letter informing him that the Key Man Policy lapsed on May 21, 2006, and ―does not have any value or coverage at this time.‖20 A week later, Colleen Handy of Johnson Lambert emailed Jackson to ask if there was ―any resolution‖ on the Key Man Policy confirmation and request that ―someone from your office forward it on to us,‖ because Hartford Life told Johnson Lambert that they sent it to Jackson.21 17 Id. ¶¶ 106-108. 18 Id. ¶¶ 110-114. 19 Id. ¶¶ 127-128. 20 Id. ¶ 130. 21 Id. ¶ 132. 10 The Receiver alleges that Johnson Lambert knew, or should have known, that it was a breach of its internal policies and generally accepted auditing standards for it to seek the requested confirmation from Jackson, instead of directly from Hartford Life.22 In any event, ten weeks went by without Jackson providing Johnson Lambert any confirmation regarding the Key Man Policy. Handy again emailed Jackson on September 29, 2008. He still did not respond.23 Unbeknownst to Handy, that same day Jackson faxed another confirmation request to Hartford Life. By letter dated October 10, 2008, Hartford Life responded, again informing Jackson that the Key Man Policy was no longer active. The Receiver alleges that this second request from Jackson was a ruse, and that he sent it simply to obtain the name and title of a different Hartford Life employee, which he got in the October 10 letter.24 According to the Complaint, Jackson used this information to alter the original confirmation inquiry form Johnson Lambert had sent to Hartford Life in July 2008. On October 24, 2008, nearly eight months after her initial request, Handy of Johnson Lambert reported to Drost of Wilmington Trust that she had received confirmation that the Key Man Policy was current and held a cash value of $716,000 as of December 31, 2007.25 This confirmation was a forgery, allegedly sent via facsimile to 22 Id. ¶¶ 129, 133. 23 Id. ¶¶ 167-168. 24 Id. ¶¶ 184-185. 25 Id. ¶ 187. 11 Handy from Jackson, who had disguised the transmission as having come from Hartford Life. The faxed confirmation form stated that the original would be mailed, but no original ever arrived. Yet, Johnson Lambert never inquired further.26 b. The bank account confirmations The alleged irregularities surrounding the SPI Entities‘ bank account confirmations are even more suspicious than the long-delayed and apparently forged Key Man Policy confirmation. The bank confirmation process unfolded during the same time period as that regarding the Key Man Policy, starting in June 2008. As with the Key Man Policy, Jackson delayed or failed to respond to the initial requests from Wilmington Trust. In mid-July, Jackson signed request forms that Handy sent to the banks, with the instruction that the banks should confirm the relevant account balances and return the original confirmation requests, or ―confirms‖ as they were called, by mail directly to Johnson Lambert.27 Six bank account confirms evidently were needed to prepare the 2007 Audited Financial Statements. In late July and August 2008, as Handy at Johnson Lambert was receiving the account confirms from the banks, she was having difficulty matching them up with the account statements that Jackson had given to Wilmington Trust. 28 In addition, one of the larger accounts, a Wachovia Securities money market account, could 26 Id. ¶¶ 189-191. 27 Id. ¶¶ 121-123. 28 Id. ¶¶ 135-137. 12 not be confirmed because, according to Wachovia, Jackson had not paid the nominal confirmation processing fee.29 As August drew to a close, Drost emailed Jackson a list of issues that were preventing Johnson Lambert from completing its audit. The issues included that: (1) Johnson Lambert needed to contact Jackson‘s person at Wachovia to expedite the confirms on several of the banking accounts; (2) a Wachovia Securities account confirm showed a balance that was $300,000 less than the corresponding bank statement Jackson provided; (3) the confirm for a Wells Fargo money market account owned by SPI-203 reflected a balance of only $104, while the corresponding statement submitted by Jackson showed a balance of $2,361,706; (4) another Wells Fargo account was apparently closed, while Jackson‘s statement showed it open and holding a $10,000 balance; and (5) there were discrepancies with three Bank of America confirms, but the bank would not discuss them with Johnson Lambert.30 One would think that item (3), at least, screamed for attention. Patrick Theriault of Wilmington Trust emailed Jackson, saying that these issues were ―puzzling to say the least,‖ and that the ―significant variances . . . do not appear to make sense.‖31 On September 4, Handy emailed Drost of Wilmington Trust to say that she still had not received a signed request form from Jackson. Although Jackson told her that he tried to send it, but it ―got bounced back to him,‖ Handy considered that odd 29 Id. ¶¶ 138-141. 30 Id. ¶ 147. 31 Id. ¶ 145. 13 because Jackson had emailed her that day, and he ―does have the right email address.‖32 Around the same time period, Drost and Theriault told Jackson that these ―logistical difficulties‖ could be avoided if Wilmington Trust had direct access to the bank accounts. Jackson allegedly ignored the request, and never took steps to give Wilmington Trust such access.33 As the process dragged on, the Wells Fargo, Wachovia Bank, and Wachovia Securities accounts proved the most difficult for Johnson Lambert to confirm and reconcile. In September 2008, Jackson instructed Wilmington Trust and Johnson Lambert that, instead of going through the audit departments at the banks, they should speak directly with Jackson‘s contacts—Joe Lobe or his assistant Pamela Goyette at Wells Fargo, and ―Alpesh‖ or his assistant ―Rachel‖ at Wachovia. 34 The Receiver avers that an Alpesh Patel was employed during this time by Wachovia Securities, but that the ―Alpesh‖ and ―Rachel‖ to whom Jackson referred were in fact ―accomplices of [Jackson], if they existed at all.‖35 Jackson apparently never provided the last name of ―Alpesh.‖ Moreover, the Complaint alleges that ―a simple internet search‖ at that time would have revealed that the phone number Jackson provided for ―Alpesh‖ was not a Wachovia 32 Id. ¶ 149. 33 Id. ¶¶ 152-153. 34 Id. ¶ 156. 35 Id. ¶ 157. 14 number.36 Instead, it appears that Jackson‘s own J. Mading used that phone number. Indeed, J. Mading had included it on its website and in other publications.37 On September 29, 2008, Handy notified Drost that the Wells Fargo and Wachovia account confirms were ―rec‘d and tied,‖ without any further explanation. The Wachovia confirms allegedly were provided by ―Rachel,‖ the purported assistant of ―Alpesh.‖38 A day later, Handy told Drost and Theriault that she had attempted unsuccessfully to call ―Alpesh‖ and Lobe multiple times. In response, Drost asked whether ―the Wachovia contact [was] a different person for the Wachovia Securities confirm, or is this a contact for the regular retail banking accounts?‖ He also indicated that they should be ―curious‖ about the Wells Fargo and Wachovia Securities confirmations, because of their ―sudden resolution.‖39 When Handy confirmed that ―Alpesh‖ was the contact Jackson had given for both Wachovia Bank and Wachovia Securities, Drost observed that, ―This is a little odd as Wachovia Securities is on the Trust side of the Wachovia structure,‖ and that in his experience, ―Most banks . . . have definitive separation . . . between their retail banking side of the business and the trust (investment) side.‖40 Drost concluded that it ―maybe, and hopefully is, OK,‖ but that he would ―try to contact both of them as well, to 36 Id. ¶¶ 160, 162. 37 Id. ¶ 162. 38 Id. ¶¶ 165-166. 39 Id. ¶¶ 171-172. 40 Id. ¶ 174. 15 confirm if there was any specific reasons why suddenly now they are able to satisfy all the confirmations.‖41 Nearly a month later, as of late October, Handy still had not heard from either ―Alpesh‖ or Lobe despite having left messages and asked Jackson several times to instruct them to call her, or to set up a conference call for all of them. The discrepancies between the statements provided by Jackson and the confirms received from Wachovia— which allegedly had exceeded $2,000,000—were the only things preventing the 2007 Audited Financial Statements from being completed. Through an email to Jackson, Drost joined in Handy‘s pleas. Their efforts persisted through November and most of December. It was not until December 29, 2008, however, that Bolton of Johnson Lambert received a call from a person identifying himself as ―Alpesh.‖ The caller explained that the bank confirmation discrepancies purportedly appeared because ―they sold ars [sic] securities before year end that took a while to clear.‖42 Bolton attempted to verify this information with Drost, but Drost could not find any trades that might fit Alpesh‘s description. In a communication to Drost, Bolton stated that he thought ―maybe they were sold from another account [and] then deposited into this one? At any rate does this 41 Id. ¶ 175. 42 Id. ¶ 204. 16 make sense to you? He caught me at a bad time and the reception was not good, so it was hard to hear him.‖43 Drost, admitting that he was ―being optimistic,‖ thought that the explanation given by ―Alpesh‖ potentially could be chalked up to internal errors at the bank, and the lengthy delays and inconsistencies to the bank wanting to ―save face.‖ In any event, based on the new documents provided by ―Rachel‖ and ―Alpesh,‖ Drost considered the bank confirmation to have been completed satisfactorily. According to the Receiver, in preparing the final 2007 Audited Financial Statement, Johnson Lambert used the fraudulent bank account balances from the documents that Jackson provided and ―Alpesh‖ confirmed, rather than the different and significantly lesser amounts reflected in the written confirmations that it obtained directly from the banks.44 As a result, the 2007 Audited Financial Statement, which was completed at the end of December 2008, reported that SPIC-DC held about $7.1 million in assets as of December 31, 2007. c. The SPI Entities’ Boards approve the 2007 Audited Financial Statements Special meetings of the boards of directors of Security Pacific, SPI-202, SPI-203, and SPI-204 were held at the Delaware offices of Wilmington Trust on February 3, 2009 (the ―February 2009 Meetings‖). The boards of the SPI Entities were identical; they consisted of Jackson, James L. Jackson, King, Davis, and Kantner. Drost and Theriault 43 Id. ¶ 206. 44 Id. ¶ 209. 17 allegedly attended the February 2009 Meetings in person or by teleconference, and one of them served as secretary and recorded the meeting minutes. Notably, the audited financials were accompanied by a letter addressed to the SPI Entities‘ boards from Johnson Lambert (the ―Significant Matters Letter‖). 45 The Letter discussed the significant delay in completing the audit, and noted that six of the seven bank account confirmations diverged from the relevant account statements by ―significant amounts ($2,361,602 in one case)‖ and that several follow-up inquiries were needed to resolve the discrepancies.46 Johnson Lambert also addressed a letter to Jackson, as President and Chairman of Security Pacific, outlining several recommendations for improving operations (the ―Jackson Letter‖). The Jackson Letter, which was provided to the entire Board, indicated that the identified issues were ―not considered to be material weaknesses.‖47 The minutes allegedly indicate that the directors reviewed the 2007 Audited Financial Statements and approved them with ―no substantive discussions or debate.‖ 48 3. The 2008 Audited Financial Statements are prepared and approved Wilmington Trust‘s MSA automatically renewed at the end of 2008, and it therefore remained the captive manager for the SPI Entities. Johnson Lambert again was 45 Id. Ex. F [hereinafter ―Significant Matters Letter‖]. 46 Id. ¶ 217. 47 Id. ¶ 218; id. Ex. G [hereinafter ―Jackson Letter‖]. 48 Id. ¶ 216. 18 retained to serve as the SPI Entities‘ certified public accountant and independent auditor for the preparation of the audited financial statements for the calendar year ending December 31, 2008 (the ―2008 Audited Financial Statement‖).49 Wilmington Trust and Johnson Lambert began the process of preparing that statement early in 2009. The Receiver‘s allegations with respect to the 2008 Audited Financial Statement are substantially similar to those relating to the 2007 Audited Financial Statement. In particular, the Complaint alleges that Jackson engaged in delay tactics and obfuscation in his dealings with Wilmington Trust and Johnson Lambert.50 On June 23, 2009, Jackson allegedly delivered to Johnson Lambert another fraudulent confirmation for the Key Man Policy, after he had corresponded again with Hartford Life and received a second indication that the Key Man Policy lapsed in October 2006 and was worthless.51 After receiving the fraudulent facsimile confirmation of the Key Man Policy from Jackson, Johnson Lambert never obtained the original or otherwise followed up with Hartford Life. 49 Id. ¶¶ 223-224. 50 Id. ¶¶ 227-238. 51 Id. ¶¶ 239-253. In this regard, I also note that Johnson Lambert received a letter from Hartford Life in June 2009, indicating that Johnson Lambert‘s confirmation form could not be processed because it was not signed by the policy owner. According to the Receiver, this was another red flag because Johnson Lambert had not sent a confirmation form to Hartford Life; rather, it is alleged that Jackson had emailed Hartford Life a form that was intended for Handy of Johnson Lambert to submit to Hartford Life. Id. ¶¶ 243-244. 19 Also in June of 2009, Wilmington Trust and Johnson Lambert received allegedly fraudulent bank account confirmations from Jackson or his accomplice ―Alpesh.‖ Using that information, Johnson Lambert completed the 2008 Audited Financial Statement. As of September 2009, however, Johnson Lambert allegedly still was waiting for bank statements and other items from Jackson so that it could perform the confirmations needed for the ―subsequent events‖ aspect of the audit.52 The boards of the SPI Entities held their annual meetings on October 8, 2009, at Wilmington Trust‘s Delaware office (the ―October 2009 Meetings‖). As of that date, the composition of the boards had changed. The directors for each of the SPI Entities in October 2009 consisted of Jackson, Muñoz, King, Davis, and Kantner. Drost and Theriault also attended the October 2009 Meetings.53 At those meetings, the boards approved the 2008 Audited Financial Statement, again with little or no discussion. Notably, there is no indication that Johnson Lambert ever followed up on the Significant Matters Letter or the Jackson Letter. As discussed above, those letters were provided to the Board in connection with the previous audit. They recommended that the SPI Entities change their procedures to conduct bank reconciliations on a monthly basis, and confirm accounts with the banks on a quarterly basis, in light of the ―numerous differences‖ experienced in the 2007 Audited Financial Statements.54 In a similar vein, 52 Id. ¶ 269. 53 Id. ¶¶ 270-272. 54 Jackson Letter 2. 20 Wilmington Trust had requested during the preparation of the 2007 Audited Financial Statements to have direct access to the bank accounts. The Complaint suggests that none of those recommended changes were made in the months between the February 2009 Meetings and the October 2009 Meetings. Indeed, it appears that neither Johnson Lambert, nor Wilmington Trust, nor any of the SPI Entities‘ directors inquired at the October 2009 Meetings as to the status of either of those previously reported deficiencies or suggested procedural improvements.55 In any event, the recommended changes were never made. 4. The 2009 Audited Financial Statements are prepared and approved At the October 2009 Meetings, Jackson notified the SPI Entities‘ boards that he did not intend to re-engage Johnson Lambert for the companies‘ next audit. Wilmington Trust‘s contract automatically renewed and in its continuing role as the captive manager, it assisted in seeking a new accounting and audit firm. Pursuant to an agreement dated April 23, 2010, McSoley McCoy was engaged to perform the SPI Entities‘ audit for the year ending December 31, 2009 (the ―2009 Audited Financial Statement‖).56 In May 2010, Drost forwarded to Nicholae Lungu of McSoley McCoy the bank and Key Man Policy confirmations used in connection with the prior year‘s audit. In his email to Lungu, Drost explained that, ―In previous years, all of the Wachovia and Wachovia Securities confirmations were additionally faxed to a representative there 55 Compl. ¶¶ 274-279. 56 Id. ¶ 282; id. Ex. I. 21 named Alpesh, since he was able to make sure these were responded to right away, and avoided the new $25 audit confirmation response fee that they were initiating.‖57 Drost copied Jackson on the email and asked him to ―please confirm this person‘s full name, and his contact information,‖ saying that he only had a phone number for Alpesh‘s assistant, and was not having ―any success getting through, or even getting an opportunity to leave a message.‖58 About two months later, either Jackson or ―Alpesh‖ complied with Drost‘s request for bank confirmations. The documents provided, however, were fraudulent confirmations as to the bank accounts, and yet another forged Key Man Policy confirmation, which showed the Policy as still effective and having a $700,000 cash value.59 Like Johnson Lambert, McSoley McCoy never obtained the original policy from Hartford Life or otherwise communicated directly with them regarding the Key Man Policy. McSoley McCoy completed the 2009 Audited Financial Statements at the end of July 2010. As with the 2007 and 2008 Audited Financial Statements, this one ―confirmed‖ that the SPI Entities‘ total capitalization was around $7 million. The SPI Entities‘ boards again met at Wilmington Trust on December 15, 2010 (the ―2010 Meetings‖). By the time of that meeting, only Jackson, Davis, and Kantner remained as 57 Id. ¶ 287. 58 Id. 59 Id. ¶ 291. 22 directors of the boards of Security Pacific, SPI-202, SPI-203, and SPI-204.60 The Complaint does not address when, how, or why Muñoz and King left the boards or the reasons for the director turnover between the February 2009 and October 2009 Meetings. As with the previous two meetings, Drost and Theriault attended the 2010 Meetings on behalf of Wilmington Trust. At those Meetings, the boards approved the 2009 Audited Financial Statement with ―no substantive discussions or debates.‖61 5. Wilmington Trust finally blows the whistle In March 2011, for reasons not alleged in the Complaint, Wilmington Trust decided to inform the DDOI that it had noted certain irregularities or discrepancies involving Wachovia bank statements provided by Jackson on behalf of the SPI Entities. On March 15, 2011, Richard Klumpp, President and CEO of Wilmington Trust, sent an email to the DDOI in which he listed several of the SPI Entities‘ Wachovia accounts and compared the balances as reported in their recent statement to the Department (based on figures they had received from Jackson) to those reflected in confirmations they had received directly from Wachovia.62 Jackson‘s figures portrayed the six accounts as holding values ranging from $25,000 to $1.7 million, and totaling $4.6 million in the 60 Id. ¶ 299. 61 Id. ¶ 302. 62 Id. Ex. K. 23 aggregate. In reality, those accounts held a few hundred dollars each, except for one account, which seemed to be closed.63 On March 25, 2011, the DDOI sought and obtained from this Court a ―Confidential Seizure and Injunction Order‖ pursuant to 18 Del. C. § 5943. The Department undertook further investigation, and ultimately obtained the Liquidation Order on June 15, 2011. In her capacity as Receiver of the SPI Entities in liquidation, the Commissioner investigated their financial condition. She concluded that ―the assets of each of these entities is minimal when compared to the assets that were reflected in the entities‘ audited financial statements and fraudulent bank statements‖ that were provided by Jackson.64 The Receiver‘s Complaint focuses on certain fraudulent bank statements Jackson gave to Wilmington Trust around July 2009, but also specifically alleges that Jackson‘s deception ―both pre-existed and post-dated July of 2009.‖65 C. Procedural History As noted above, the Liquidation Action commenced on March 25, 2011. The Receiver filed this action on January 31, 2014, on behalf of the SPI Entities in liquidation. Counts 1 through 3 of the Complaint, respectively, accuse Wilmington Trust of breach of fiduciary duties, breach of contract, and negligence. The same basic charges are leveled against Johnson Lambert (Counts 4–7) and McSoley McCoy (Counts 8–10).66 63 Id. 64 Id. ¶ 311. 65 Id. ¶¶ 312-316. 24 Count 11 includes a claim for breach of fiduciary duties against directors Jackson, Davis, King, and Kantner, and against Wilmington Trust. Finally, Count 12 charges Wilmington Trust, Johnson Lambert, McSoley McCoy, and Kantner with aiding and abetting the directors‘ alleged breaches of fiduciary duty. James L. Jackson, Muñoz, and Ryan Building Group also were named as defendants in relation to the claim in Count 11 for breach of fiduciary duties against the SPI Entities‘ directors. As noted above, Ryan Building Group was dismissed voluntarily. James L. Jackson and Muñoz sought dismissal of the Complaint as it related to them under Court of Chancery Rule 12(b)(6). On August 12, 2014, I granted that motion.67 Currently before me are motions to dismiss filed by Wilmington Trust and Kantner, Johnson Lambert, and McSoley McCoy. Wilmington Trust and Kantner‘s motion was fully briefed and argued September 9, 2014. Because those two Defendants joined in several of the arguments raised by Johnson Lambert and McSoley McCoy in support of their motions, I reserved judgment and determined to decide all three motions 66 As to Johnson Lambert, two separate counts for breach of contract are pled, one each for the 2007 and 2008 engagement agreements. 67 Stewart v. Wilm. Trust SP Servs., Inc., C.A. No. 9306-VCP, at 25-26 (Del. Ch. Aug. 12, 2014) (TRANSCRIPT). In that ruling, I concluded based on the factual allegations in the Complaint that it was not reasonably conceivable that Muñoz or James L. Jackson could be found liable on a Caremark theory of director oversight liability. In part, I based that conclusion on the fact that the boards had retained and received reports from independent auditors, Johnson Lambert and McSoley McCoy. Id. at 16-17, 25. 25 together. The separate motions filed by Johnson Lambert and McSoley McCoy were argued November 20, 2014.68 This Opinion resolves all three of these motions. D. Parties’ Contentions In seeking dismissal, Wilmington Trust, Kantner, Johnson Lambert, and McSoley McCoy raise a slew of arguments that overlap to a significant degree. All of the Moving Defendants assert that the Complaint should be dismissed on grounds of in pari delicto. They also join in arguing that the claims at issue are time-barred. Putting aside those common arguments, each Moving Defendant also seeks dismissal of the various counts in the Complaint against them for failure to state claims upon which relief could be granted. Johnson Lambert asserts that the breach of fiduciary duty, negligence, and aiding and abetting claims against it are barred because, among other reasons, they are precluded by the contractual relationship it has with the SPI Entities. Johnson Lambert challenges the claim for breach of contract for failure to allege causation. McSoley McCoy makes similar arguments. Wilmington Trust similarly contends that the Receiver cannot recover on her fiduciary duty and negligence theories because those allegations sound in breach of contract. It also asserts that the contract claim is defective, because it seeks to impose 68 The briefing on these motions is voluminous, consisting of three separate briefs in both the opening and reply rounds—one each for Wilmington Trust and Kantner, Johnson Lambert, and McSoley McCoy. The Receiver filed two answering briefs, one in response to Wilmington Trust and Kantner, and one combined response to the Auditor Defendants‘ motions. I cite the briefs as, for example, ―Wilm. Trust Opening Br.,‖ ―Receiver‘s Answering Br. to Auditor Defs.,‖ and so on. 26 duties that go beyond the terms of the MSA. Wilmington Trust further argues that the aiding and abetting claim must be dismissed for lack of requisite ―knowing participation.‖ Kantner seeks dismissal of the indirect aiding and abetting claim against him on grounds that any conduct of his as a director of an SPI Entity that would rise to the level of aiding and abetting would, in itself, be a direct breach of fiduciary duty. Kantner also contends that the claim for breach of fiduciary duty against him should be dismissed for failure to state a claim. II. ANALYSIS A. Choice of Law As a threshold matter, I conclude that Delaware law governs my analysis of the pending motions to dismiss. None of the parties strongly contends otherwise,69 but Johnson Lambert suggests that the applicable law arguably could be that of Delaware, South Carolina (the location of Johnson Lambert‘s audit team), California (Jackson‘s principal place of business), or the District of Columbia (the place of incorporation of the SPI Entities‘ predecessors).70 The Receiver seems to argue that Delaware law should apply in this situation, but she hedges by suggesting that material issues of fact may exist as to the correct choice of law.71 69 Wilm. Trust Opening Br. 31; McSoley McCoy Opening Br. 15 n.1. 70 Johnson Lambert Opening Br. 30, 33-37. 71 Receiver‘s Answering Br. to Auditor Defs. 46-47. 27 The causes of action here include claims sounding in breach of fiduciary duty, breach of contract, and tort, which are subject to different considerations for purposes of determining what law applies. Although the parties did not squarely address the question of choice of law, I consider it necessary to decide that issue, because whether and how I apply the doctrines of in pari delicto and laches might differ depending on which state‘s law governs.72 Delaware law applies, however, at a minimum, to the claims for breach of fiduciary duties, because the SPI Entities are Delaware corporations.73 Thus, each of the Moving Defendants is defending against at least one claim that will be governed by Delaware law.74 72 I am mindful that, depending on the law of the states whose law arguably might apply, there may not be a conflict and the choice of law issue would be moot. See Deuley v. DynCorp Int’l, Inc., 8 A.3d 1156, 1161 (Del. 2010) (―As we explain below, the result would be the same under both Delaware and Dubai law. Therefore ‗[a]ccording to conflicts of law principles . . . there is a ‗false conflict,‘ and the Court should avoid the choice-of-law analysis altogether.‘‖). But it is difficult to assess that question on the incomplete briefing record before me. I therefore provide the analysis that follows in the interest of completeness and to facilitate appellate review. 73 See VantagePoint Venture P’rs 1996 v. Examen, Inc., 871 A.2d 1108, 1113 (Del. 2005) (―It is now well established that only the law of the state of incorporation governs and determines issues relating to a corporation‘s internal affairs.‖) (citing CTS Corp. v. Dynamics Corp. of Am., 481 U.S. 69, 89-93 (1987)). 74 Counts 1, 4, 8, and 11 plead claims for breaches of fiduciary duty against Wilmington Trust, Johnson Lambert, McSoley McCoy, and the SPI Entities‘ directors (including Kantner). 28 The internal affairs doctrine, however, does not extend to claims ―where the rights of third parties external to the corporation are at issue.‖75 Hence, the claims for breach of contract and negligence against Wilmington Trust and the Auditor Defendants are subject to the ―most significant relationship test‖ of the Restatement (Second) of Conflicts of Laws.76 For torts, the relevant factors of that test are: ―(a) the place where the injury occurred, (b) the place where the conduct causing the injury occurred, (c) the domicil, residence, nationality, place of incorporation and place of business of the parties, and (d) the place where the relationship, if any, between the parties is centered.‖77 For breach of contract claims, the factors differ slightly. They are: ―(a) the place of contracting, (b) the place of negotiation of the contract, (c) the place of performance, (d) the location of the subject matter of the contract, and (e) the domicil, residence, nationality, place of 75 VantagePoint Venture P’rs 1996, 871 A.2d at 1113 n.14. 76 See Travelers Indem. Co. v. Lake, 594 A.2d 38, 41, 47 (Del. 1991). Although I need not reach the issue, I would expect to apply Delaware law to the aiding and abetting causes of action here. Wilmington Trust and Kantner assert that aiding and abetting liability sounds in tort, and there is support for that proposition. See, e.g., In re Rural/Metro Corp. S’holders Litig., 102 A.3d 205, 220 n.1 (Del. Ch. 2014). Because liability for aiding and abetting a breach of fiduciary duty depends in part on the finding of an underlying fiduciary duty and a breach of that duty— issues that in this case, under the internal affairs doctrine, would turn on Delaware law—it would seem illogical to apply another state‘s law to the ―tort‖ of aiding and abetting such a breach, even if the most significant relationship test pointed to that result. Cf. In re Am. Int’l Gp., Inc. Consol. Deriv. Litig., 965 A.2d 763, 822 (Del. Ch. 2009) [hereinafter ―AIG I‖], aff’d sub nom. Teachers’ Ret. Sys. of La. v. PricewaterhouseCoopers LLP, 11 A.3d 228 (Del. 2011). 77 RESTATEMENT (SECOND) OF CONFLICT OF LAWS § 145 (1971). 29 incorporation and place of business of the parties.‖ 78 Under both the tort and contract analyses, the relevant factors are to be evaluated according to their relative importance with respect to the particular issue involved.79 Having considered the relevant factors of the test applicable in both the contract and tort contexts, I conclude that Delaware law should apply to all of the claims in this action. Admittedly, several alleged facts slightly favor other states. Those facts include that: Jackson allegedly lived and operated his business in California during the relevant time period;80 the SPI Entities‘ predecessors were incorporated in the District of Columbia;81 Theriault and Drost worked out of Wilmington Trust‘s office in Burlington, Vermont;82 several of the relevant Johnson Lambert actors, including Bolton and Handy, worked in the firm‘s South Carolina offices;83 and McSoley McCoy evidently also is based in Vermont.84 It is not clear from the Complaint precisely where the accounting and auditing services actually were performed by Johnson Lambert and McSoley McCoy. At this relatively early stage, I consider it reasonable to infer, however, that it occurred in 78 Id. § 188. 79 TrustCo Bank v. Mathews, 2015 WL 295373, at *9 (Del. Ch. Jan. 22, 2015). 80 Compl. ¶¶ 29, 43-46. 81 Id. ¶ 42. 82 Id. ¶ 87. 83 Id. ¶ 97. 84 Id. Ex. I. 30 other states. Likewise, it fairly may be inferred that Theriault and Drost performed much of their captive services management work for Wilmington Trust in Vermont. In contrast, many of the pertinent factors identified in the Restatement weigh in favor of Delaware, and I find that their cumulative effect eclipses that of factors that weigh in favor of applying California, D.C., South Carolina, or Vermont law. Regarding the negligence claims, I consider the alleged injury to have occurred in Delaware, where certain Defendants are alleged to have fraudulently inflated the SPI Entities‘ financial situation in order to deceive, primarily, the DDOI. As relevant to both the tort and contract analyses, while some of the Defendants may be incorporated in or reside elsewhere, all of the SPI Entities, whose legal and equitable claims the Receiver asserts in liquidation here, are Delaware corporations. Perhaps most persuasively, each of the three meetings of the SPI Entities‘ boards, upon which the Complaint‘s narrative of Defendants‘ alleged wrongdoing focuses, took place at Wilmington Trust‘s office in Delaware. Thus, of the states discussed by the parties, Delaware has the strongest claim to being ―the place where the relationship, if any, between the parties is centered.‖ The subject matter of the relevant contracts, i.e., the provision of audit or management services to Delaware-domiciled captive insurance companies, supports the same conclusion. Consequently, without even delving into the myriad issues related to the nature of captive insurance as a highly regulated industry under Delaware law, or the fact that the Insurance Commissioner has brought this action pursuant to her statutory authority as the receiver of these companies in liquidation, I conclude that Delaware law should govern not only the claims that implicate the internal affairs doctrine, but also the 31 breach of contract and negligence claims as well. It is also true, however, that, ―[i]n applying Delaware law, [this Court may] look, as courts often do, to well-reasoned precedent from federal courts, courts of our sister states, and our Anglo–American jurisprudential tradition.‖85 Accordingly, I will not hesitate to do so. B. Standard of Review A motion to dismiss under Rule 12(b)(6) must be denied ―unless the plaintiff could not recover under any reasonably conceivable set of circumstances susceptible to proof.‖86 In determining whether the Complaint meets this pleading standard, this Court will draw all reasonable inferences in favor of Plaintiffs and ―accept all well-pleaded factual allegations in the Complaint as true.‖87 The Court, however, need not ―accept conclusory allegations unsupported by specific facts or . . . draw unreasonable inferences in favor of the non-moving party.‖88 C. Laches Does Not Bar These Claims All of the Moving Defendants contend that the Complaint is untimely. 89 They focus on the three-year statute of limitations applicable to the claims for breach of contract, negligence, and breach of fiduciary duty, and argue that each of the causes of 85 In re Am. Int’l Gp., Inc., Consol. Deriv. Litig., 976 A.2d 872, 882 (Del. Ch. 2009) [hereinafter ―AIG II‖]. 86 Cent. Mortg. Co. v. Morgan Stanley Mortg. Capital Hldgs. LLC, 27 A.3d 531, 536 (Del. 2011). 87 Id. 88 Price v. E.I. duPont de Nemours & Co., Inc., 26 A.3d 162, 166 (Del. 2011). 32 action accrued more than three years before the Receiver filed her Complaint on January 31, 2014.90 The Receiver does not contest that proposition, but contends that the statute of limitations either should not apply because it would lead to an inequitable result, or did not begin to run until March 25, 2011, when she was appointed as Receiver.91 Because I agree with the first of those arguments, I do not address the second. To determine whether an action was timely filed, this Court adheres to the doctrine of laches, the ―equitable analog of the statute of limitations defense.‖92 While the statute of limitations is not controlling in this Court, a suit in equity generally ―will not be stayed for laches before, and will be stayed after, the time fixed by the analogous statute of limitations at law.‖93 Nevertheless, in cases where ―unusual conditions or extraordinary circumstances make it inequitable to allow the prosecution of a suit after a briefer, or to forbid its maintenance after a longer period than that fixed by the statute,‖ this Court has the power to set aside the statutory limitation period and analyze whether the claim was untimely based on laches principles.94 The Court must consider all the relevant facts in 89 Wilm. Trust Opening Br. 28-30; Johnson Lambert Opening Br. 24-28; McSoley McCoy Opening Br. 21-23. 90 See 10 Del. C. § 8106; Sunrise Ventures, LLC v. Rehoboth Canal Ventures, LLC, 2010 WL 363845, at *6 (Del. Ch. Jan. 27, 2010), aff’d, 7 A.3d 485 (Del. 2010). 91 Receiver‘s Answering Br. to Wilm. Trust 19-26; Receiver‘s Answering Br. to Auditor Defs. 48-56. 92 TrustCo Bank, 2015 WL 295373, at *5. 93 IAC/InterActiveCorp v. O’Brien, 26 A.3d 174, 177 (Del. 2011). 94 Id. at 177-78. 33 this regard, as there is no specific definition of ―unusual or extraordinary circumstances.‖95 Based on the circumstances of this case, I am not inclined to mechanically apply the three-year statute of limitations under the laches rubric. Rather, I must analyze the timeliness of the Complaint based on the principles of laches more generally. To begin with, while this action was not filed until January 2014, the Receiver has been ―pursuing‖ these claims at least since March 2011, when the Liquidation Action was commenced and the SPI Entities were placed into receivership. Notably, in effectuating service of process of the papers in the Liquidation Action on the SPI Entities, the Commissioner served Wilmington Trust as their registered agent.96 Further, from its inception until early 2014, the Liquidation Action involved fairly extensive litigation activity, including, for example: (1) contested motions concerning whether and how the Receiver could pay the ongoing administrative and legal expenses 95 Id. at 178. Factors that guide this analysis include: ―1) whether the plaintiff had been pursuing his claim, through litigation or otherwise, before the statute of limitations expired; 2) whether the delay in filing suit was attributable to a material and unforeseeable change in the parties‘ personal or financial circumstances; 3) whether the delay in filing suit was attributable to a legal determination in another jurisdiction; 4) the extent to which the defendant was aware of, or participated in, any prior proceedings; and 5) whether, at the time this litigation was filed, there was a bona fide dispute as to the validity of the claim.‖ Id. 96 See In re Liquid. of Sec. Pac. Ins. Co., C.A. No. 6317-VCP, Docket Item (―D.I.‖) Nos. 5-8. 34 of the SPI Entities;97 (2) periodic reports as to the financial status of the SPI Entities, some of which were objected to;98 (3) a petition for the Court to set a bar date for claims against the SPI Entities;99 and (4) numerous motions and hearings relating to former Defendant Ryan Building Group‘s claim regarding SPI-202, which ultimately resulted in a settlement shortly before the trial of that claim.100 Unlike a situation in which a plaintiff is injured and then merely waits for years to file her action, the circumstances of this case arguably required the Receiver first to achieve certain successes in the Liquidation Action before completing her efforts to gather and marshal the facts necessary to plead non- conclusory allegations on behalf of the SPI Entities. Much of the Receiver‘s activity in that regard was occasioned by the positions taken by certain parties to this action, most notably Ryan Building Group. Meanwhile, the Receiver engaged in an extensive investigation to uncover the facts relating to the allegedly fraudulent conduct and related breaches of the Moving Defendants. As is evident from the face of the Complaint, the Receiver obtained and reviewed documents from at least some of the Moving Defendants, because the Complaint quotes extensively from emails and other communications that could not 97 Id., D.I. Nos. 44, 70; see also In re Liquid. of Sec. Pac. Ins. Co., C.A. No. 6317- VCP, at 1 (Del. Ch. May 10, 2012). One of the original Defendants in this action, Ryan Building Group, disputed the authority of the Receiver in that regard in the Liquidation Action. 98 E.g., In re Liquid. of Sec. Pac. Ins. Co., C.A. No. 6317-VCP, D.I. Nos. 48-51, 54. 99 Id., D.I. No. 52. 100 Id., D.I. Nos. 107, 114, 144, 145, 158. 35 otherwise have been known.101 This circumstance undermines any element of unfair surprise the Moving Defendants might claim with respect to the timeliness of this action. Indeed, taking into account all of the facts, I conclude that this case exhibits sufficiently ―unusual or extraordinary‖ circumstances, based on the factors the Delaware Supreme Court has considered material in determining whether grounds exist for declining to apply the statutory limitation period.102 Instead, I find it more appropriate to consider whether laches would apply to bar these claims. A laches analysis calls for a context-specific application of the maxim that ―equity aids the vigilant, not those who slumber on their rights.‖103 While there is ―no hard and fast rule as to what constitutes laches,‖ establishing the elements of the defense generally requires: (1) knowledge by the claimant; (2) unreasonable delay in bringing the claim; and (3) resulting prejudice to the defendant.104 The defense of laches is ―not ordinarily well-suited‖ for treatment on a Rule 12(b)(6) motion.‖105 Because there is neither unreasonable delay on the Receiver‘s part, nor prejudice to the Moving Defendants, I conclude that laches does not support dismissal of these claims. 101 E.g., Compl. ¶¶ 171-175, 205-209. 102 See IAC/InterActiveCorp, 26 A.3d at 178. 103 Reid v. Spazio, 970 A.2d 176, 183 (Del. 2009) (quoting 2 JOHN NORTON POMEROY, EQUITY JURISPRUDENCE §§ 418, 419 (5th ed. 1941)). 104 Reid, 970 A.2d at 183. 105 Id. 36 An ―unreasonable delay‖ for purposes of laches can range from one month to many years.106 ―The length of the delay is less important than the reasons for it.‖107 In this case, there are two components of alleged delay. The first is from the time that the DDOI knew or was on inquiry notice that there might be a problem with the SPI Entities until the time the Receiver took action to prosecute these claims. The Moving Defendants contend that no later than the February 2009 Meetings,108 the SPI Entities‘ directors—and, by extension, the Commissioner—were on notice as to the possibility of accounting irregularities based on the Significant Matters Letter. They conclude that because the DDOI was on inquiry notice as of early 2009 at the latest, the filing of the Complaint in January 2014 was unreasonably delayed. I do not consider it appropriate or helpful, however, to look at the period from early 2009 to early 2014, as one undifferentiated time period. In reality, there are two distinct periods: (1) from the time the claims accrued in or around 2009 until the Commissioner placed the SPI Entities into receivership and began the process of stating claims on their behalf; and (2) from the establishment of the receivership until the filing 106 IAC/InterActiveCorp, 26 A.3d at 177. 107 Id. 108 Defendant McSoley McCoy did not provide audit services until 2010 in connection with the 2009 Audited Financial Statements. Because the claims against McSoley McCoy arose significantly later than the claims against Wilmington Trust and Johnson Lambert, but otherwise also are affected by the alleged fraud by Defendant Jackson and wrongdoing by the Moving Defendants, referenced infra, I consider it unnecessary to discuss separately McSoley McCoy‘s laches defense in this regard. 37 of this action. The Moving Defendants‘ argument regarding inquiry notice relates to the former period, beginning in early 2009, and not the latter. In view of the allegations in the Complaint regarding fraud by Defendant Jackson and wrongdoing by the Moving Defendants in connection with the 2007, 2008, and 2009 Audited Financial Statements, I find that it is at least reasonably conceivable the Receiver will be able to show that neither she, as Insurance Commissioner, nor the DDOI engaged in any unreasonable delay before she was appointed Receiver in March 2011.109 The second alleged period of delay is from the appointment of the Receiver in March 2011 until the filing of this action in January 2014. As just discussed, there was a substantial amount of litigation activity in the related Liquidation Action, and it is reasonable to infer at this preliminary stage that the Receiver‘s tardiness in filing this action was caused in large part by that activity. Moreover, as noted, when the Receiver took control of the SPI Entities in March of 2011, she had to begin unraveling a complicated web of facts as to how the SPI Entities ended up in the position they were in. It is reasonable to infer that investigation took a considerable amount of time because of its factual complexity rather than delay on the part of the Receiver. Based on these circumstances, the Receiver‘s good faith prosecution of the related Liquidation Action, the depth and complexity of this factual record, and the specificity and comprehensiveness of the Complaint she ultimately filed, I am not convinced that the Receiver‘s alleged delay, although significant, was unreasonable. 109 In that regard, I note that the DDOI sought appointment of the Receiver less than a month after they were advised by Wilmington Trust that there might be a problem. 38 Additionally, the Moving Defendants suffered little or no prejudice due to the fact that the Receiver filed her Complaint in January 2014. As noted above, Wilmington Trust had actual notice from the very outset of the Liquidation Action that the SPI Entities were entering receivership and that any claims of theirs would be prosecuted by the Receiver. Based on the positions they occupied vis-à-vis the SPI Entities and the incomplete information they allegedly had regarding them, I consider it reasonable to infer that in or around March 2011 Wilmington Trust, Johnson Lambert, and McSoley McCoy all recognized the possibility of future claims against them as to those entities. As mentioned above, one or more of those Defendants probably participated in the Receiver‘s investigation by providing access to documents or other information in their possession, with which the Complaint is replete. I conclude, therefore, that the Moving Defendants could not reasonably have been unaware of the possibility of future claims against them arising out of their dealings with the SPI Entities, and thus were not materially prejudiced when the Receiver waited until January 2014 to file this action. For those reasons, I reject the Moving Defendants‘ argument that the Complaint should be dismissed as untimely, and proceed to consider other aspects of their motions to dismiss. D. Claims for Breach of Fiduciary Duty110 Counts 1, 4, and 8 of the Complaint lodge claims for breach of fiduciary duty against, respectively, Wilmington Trust, Johnson Lambert, and McSoley McCoy. In 110 As discussed below, the in pari delicto defense is not applicable to well-pled claims for breach of fiduciary duty, so I do not address that defense in this section of the Opinion. See infra notes 148-53 and related text. 39 Count 11, the Receiver also pleads breach of fiduciary duty as to the SPI Entities‘ directors, and she includes Kantner and Wilmington Trust in that category.111 Wilmington Trust and the Auditor Defendants seek dismissal of these Counts, contending that they owed no fiduciary duties to the SPI Entities, and that the factual allegations in this regard are duplicative of the claims for breach of contract. Kantner has moved to dismiss Count 11 as it relates to him on grounds that the Complaint does not allege facts sufficient to give rise to a non-exculpated claim for breach of a fiduciary duty. 1. The claims against Wilmington Trust and the Auditor Defendants As to Wilmington Trust and the Auditor Defendants, I conclude that the claims against them for breach of fiduciary duty must be dismissed. To state a claim for breach of a fiduciary duty, the factual allegations in a complaint must be such that they reasonably could support a finding that a fiduciary duty existed and the defendant breached that duty.112 Neither Wilmington Trust nor the Auditor Defendants owed a fiduciary duty to the SPI Entities, however. The Receiver emphasizes that the SPI Entities trusted and relied on the Auditor Defendants‘ specialized experience in auditing generally and with captive insurance clients specifically. Without those services, the SPI Entities could not have functioned or been licensed in Delaware, and for that reason the Receiver asserts a fiduciary 111 Compl. ¶ 371. 112 See In re Mobilactive Media, LLC, 2013 WL 297950, at *21 (Del. Ch. Jan. 25, 2013). 40 relationship existed between those entities and the Auditor Defendants.113 Even accepting those allegations as true and drawing all reasonable inferences in favor of the Receiver, however, the Complaint fails to allege the existence of a fiduciary relationship under Delaware law. The core principle of a fiduciary duty is that ―one who controls property of another may not, without implied or express agreement, intentionally use that property in a way that benefits the holder of the control to the detriment of the property or its beneficial owner.‖114 The duties of care and loyalty flow from that ―central aspect‖ of the fiduciary relationship.115 Inherent in the fiduciary relationship, ―which derives from the law of trusts,‖ is that the fiduciary exercises control over the property of another, and by virtue of that control, is obliged to act with care and loyalty to interests of the beneficial owner.116 In normal circumstances, an auditor‘s interests do not align perfectly with those of the client; in order properly to discharge its ―watchdog‖ function, the auditor must ―maintain total independence from the client at all times.‖117 113 Receiver‘s Answering Br. to Auditor Defs. 64-67. 114 In re USACafes, L.P. Litig., 600 A.2d 43, 48 (Del. Ch. 1991). 115 Id. (―There are, of course, other aspects—a fiduciary may not waste property even if no self interest is involved and must exercise care even when his heart is pure— but the central aspect of the relationship is, undoubtedly, fidelity in the control of property for the benefit of another.‖). 116 Crosse v. BCBSD, Inc., 836 A.2d 492, 495 (Del. 2003); accord USACafes, 600 A.2d at 48-49. 117 United States v. Arthur Young & Co., 465 U.S. 805, 818 (1984). Many courts that have addressed the question have declined to find a fiduciary relationship between auditor and client. See, e.g., Franklin Supply Co. v. Tolman, 454 F.2d 1059, 1065 (9th Cir. 1971); Resolution Trust Corp. v. KPMG Peat Marwick, 844 F. Supp. 431, 41 Moreover, an auditor normally does not exercise any control over the affairs of the corporation. It is not surprising, therefore, that the Complaint is devoid of factual allegations suggesting that there was some extraordinary circumstance here that would have caused the Auditor Defendants to do so with respect to the SPI Entities. The mere provision of audit services does not of itself convert an auditor into a fiduciary of the corporation. ―Our courts have been cautious when evaluating entreaties to expand the number and kinds of relationships that are denominated as ‗fiduciary.‘‖118 Consistent with that approach, I see no basis for finding that the Auditor Defendants had a fiduciary relationship with the SPI Entities, where the pillars of the fiduciary relationship—control over the property of another and alignment of the controller‘s interests with those of the beneficial owner—cannot reasonably be inferred from the well-pled allegations of the Complaint. The situation is no different with Wilmington Trust, despite the Receiver‘s twofold contention otherwise. First, she argues that, as with the Auditor Defendants, because Wilmington Trust marketed itself to the SPI Entities as having special expertise in captive management, and the SPI Entities relied on the management services provided, 436 (N.D. Ill. 1994); Mishkin v. Peat, Marwick, Mitchell & Co., 744 F. Supp. 531, 552 (S.D.N.Y. 1990). The Receiver has not cited any case that reached the opposite conclusion. 118 Bird’s Const. v. Milton Equestrian Ctr., 2001 WL 1528956, at *4 (Del. Ch. Nov. 16, 2001). 42 a fiduciary relationship existed that included duties of care and loyalty. 119 The Complaint alleges that Wilmington Trust provided substantial administrative and ministerial assistance relating to the day-to-day operation of the SPI Entities, especially in terms of their compliance and regulatory obligations. Control of the SPI Entities, however, was in the hands of their officers and boards of directors, who were charged, for example, with causing the SPI Entities to contract with Wilmington Trust for the provision of captive management services, and with reviewing and approving the financial statements that were produced with the assistance of Wilmington Trust. Notwithstanding how fraudulently those managers allegedly acted, the SPI Entities were managed by sophisticated business persons. That factual reality negates the kind of control and interest-alignment between Wilmington Trust and the SPI Entities that our case law requires for the existence of a fiduciary relationship. Instead, the SPI Entities and Wilmington Trust had a contractual relationship, defined by the MSA. The Receiver‘s second argument as to Wilmington Trust—that it was a ―de facto director‖ of the SPI Entities—is similarly unpersuasive.120 The cases cited by the Receiver in which courts have applied that theory have involved claims under the federal securities and antitrust laws. She offered no support for the proposition that, under Delaware common law, this Court should consider a third-party business entity as a ―de 119 Receiver‘s Answering Br. to Wilm. Trust 28-30. 120 Receiver‘s Answering Br. to Wilm. Trust 30-32. 43 facto director‖ because its employee sat on the board of the client corporation.121 The board of directors of a corporation organized under the Delaware General Corporation Law (―DGCL‖) ―shall consist of 1 or more members, each of whom shall be a natural person.‖122 In the absence of any case law or persuasive logic supporting the Receiver‘s position, I reject the notion that a corporate employer of an employee designated to serve as a director of another company could be deemed a de facto director of that other company. 2. The claims against Kantner The only remaining Moving Defendant, Kantner, clearly owed fiduciary duties of care and loyalty to the SPI Entities, because he was a director of each of those entities during the relevant time period.123 Kantner seeks dismissal of the breach of fiduciary duty claim in Count 11 as it relates to him on grounds of exculpation. He argues that each of the SPI Entities‘ charters contains an exculpation provision consistent with 8 Del. C. § 102(b)(7), and the Complaint fails to allege bad faith or any other form of 121 Id. (citing Blau v. Leman, 368 U.S. 403 (1962); U.S. v. Cleveland Trust Co., 392 F. Supp. 699 (N.D. Ohio 1974)). In discussing the Receiver‘s use of the term ―de facto director‖ here, I do not intend any reference to, or to engender any confusion with, the cases in which ―de facto director‖ means ―one who is in possession of and exercising the powers of that office under claim and color of an election, although he is not a director De jure and may be removed by proper proceedings.‖ Prickett v. Am. Steel & Pump Corp., 253 A.2d 86, 88 (Del. Ch. 1969) (emphasis added); see also Hockessin Cmty. Ctr., Inc. v. Swift, 59 A.3d 437, 459-60 (Del. Ch. 2012). The theory the Receiver advances in this regard has nothing to do with the line of cases dealing with disputed elections and contested board seats. 122 8 Del. C. § 141(b). 123 See, e.g., Gantler v. Stephens, 965 A.2d 695, 708-09 (Del. 2009). 44 unexculpated conduct on his part. Kantner further contends that, as a director, he was entitled to rely on the Auditor Defendants and Wilmington Trust, and is therefore protected from liability under Section 141(e).124 Because neither of those contentions is conclusive at this preliminary stage, I deny Kantner‘s motion to dismiss Count 11. The crux of the Complaint‘s allegations against Kantner relate to a claim for failure of oversight, on a Caremark theory of liability.125 Directors can be liable on Caremark grounds for: (1) utterly failing to implement any reporting or information system or controls; or (2) consciously failing to monitor or oversee such a system, thereby disabling themselves from being informed of risks or problems requiring their attention.126 In either situation, oversight liability requires ―a showing that the directors knew that they were not discharging their fiduciary obligations,‖ resulting in a breach of the duty of loyalty for failure to act in good faith.127 Proving liability under the Caremark line of cases ―is possibly the most difficult theory in corporation law upon which a plaintiff might hope to win a judgment.‖128 The Complaint contains sufficient non-conclusory factual allegations for it to be reasonably conceivable that Kantner ultimately may be liable on this theory. Kantner‘s 124 Wilm. Trust Opening Br. 34-39; Wilm. Trust Reply Br. 31-33. 125 Receiver‘s Answering Br. to Wilm. Trust 48-60; see In re Caremark Int’l Inc. Deriv. Litig., 698 A.2d 959 (Del. Ch. 1996). 126 Stone ex rel. AmSouth Bancorp. v. Ritter, 911 A.2d 362, 370 (Del. 2006). 127 Id. 128 In re Caremark, 698 A.2d at 967. 45 tenure as a director of the SPI Entities covered each of the February 2009 Meetings, the October 2009 Meetings, and the 2010 Meetings, at which the entities‘ boards approved the audited financial statements with little or no substantive discussion, despite warnings that significant irregularities occurred and the companies‘ procedures needed to be changed. In terms of oversight, I note first that, based on the allegations in the Complaint regarding those events, I do not consider it reasonably conceivable that Kantner could be liable on grounds that he utterly failed to implement a monitoring or reporting system for the SPI Entities. The boards of the SPI Entities authorized the retention of Wilmington Trust and the Auditor Defendants to provide such a monitoring mechanism. Whether I reasonably can infer from the Complaint that Kantner consciously disregarded a known duty to oversee that monitoring system depends on how I view the Significant Matters Letter, in which Johnson Lambert indicated to the boards that Johnson Lambert met with considerable difficulty in preparing the 2007 Audited Financial Statements, including several extraordinary balance discrepancies in the SPI Entities‘ accounts. The Receiver urges me to conclude that the Letter included ―red flags‖ and that the directors‘ failure to follow up on those concerns reasonably could amount to a conscious disregard of their oversight responsibilities. Kantner, on the other hand, contends that, because the Significant Matters Letter implied that remedial actions had been taken and the Jackson Letter suggested that the problems were ―not considered material,‖ he and the other directors were justified in relying on the Auditor Defendants‘ representations and not inquiring further into the issues. 46 That argument might hold water as to some of the directors, but it reasonably could be inferred from the allegations in the Complaint that Kantner, as an employee of Wilmington Trust, actually knew or constructively knew more about the seriousness of the problems Wilmington Trust and the Auditor Defendants were having with Jackson. The Complaint is replete with allegations that Drost, Theriault, and others at Wilmington Trust had actual notice of the fact that something material was amiss with Jackson and his purported financial information. Their extensive dealings with the mysterious ―Alpesh‖ are just one example of Wilmington Trust‘s awareness of Jackson‘s highly unorthodox business practices. The picture that emerges from the facts alleged is that Jackson‘s conduct did not pass the sniff test. Nevertheless, Wilmington Trust and the Auditor Defendants allegedly held their noses and looked the other way in order to get the audits finished, file the paperwork, collect their fees, and move on. The Complaint further supports an inference that Drost, Theriault, or some other person at Wilmington Trust, consistent with Wilmington Trust‘s internal policies or common sense business practices, shared their misgivings with Kantner. The Complaint conceivably also could support the opposite inference—that that information never made its way to Kantner, because, for example, Drost and Theriault worked in Wilmington Trust‘s Vermont office, while he was in Delaware. I cannot say, however, that such a contrary inference is the only reasonable inference that could be supported by the Receiver‘s allegations. At the motion to dismiss stage, it would be improper to make that leap, as Kantner urges me to do. I therefore conclude that, regardless of whether the Significant Matters Letter and the Jackson Letter would have misled one or more 47 directors into thinking that all was well at the SPI Entities, Kantner was positioned differently than the others by virtue of his position as Accounting Manager at Wilmington Trust and its designated director on the SPI Entities‘ boards.129 The Complaint contains numerous allegations about Kantner‘s colleagues‘ repeated, and largely unsuccessful, attempts to get Jackson to provide information, or sign a form, or set up a call with the elusive ―Alpesh,‖ or provide direct access to the bank accounts. A reasonable inference can be drawn from the Complaint—and at this stage, I am required to draw such inferences—that Kantner was made aware of these problems through communications with Drost or Theriault, discussions made all the more likely because of Kantner‘s position as the statutorily required ―resident director‖ on the SPI Entities‘ boards. Yet, Jackson apparently went about his fraudulent scheme year after year, while the Board unquestioningly approved the annual audited financial statements and failed to follow up on the suggested operating procedure improvements. Kantner allegedly went along without raising a peep. In their reliance on Jackson, Wilmington Trust, the Auditor Defendants, Kantner, and the other directors may have 129 See 18 Del. C. § 6906(f) (―In the case of a captive insurance company . . . [f]ormed as a corporation, at least 1 of the members of the board of directors or other governing body shall be a resident of, or have that member‘s principal place of business in, this State . . .‖); id. § 6903(b) (requiring a Delaware captive insurance company, inter alia, to maintain its principal place of business in this State, and hold at least one board meeting per year here); see also Compl. ¶¶ 7, 74. 48 been overly supine.130 Taking all allegations in the Complaint as true, however, Kantner‘s disengagement conceivably could amount to a conscious disregard of his duties based on what he reasonably may be assumed to have known about the SPI Entities‘ deficiencies. As a result, I consider it reasonably conceivable that Kantner knowingly disregarded his oversight responsibility, and thereby subjected himself to potential liability on a Caremark claim. Thus, I deny his motion to dismiss that aspect of the Complaint. E. Claims for Breach of Contract, Negligence, and Aiding and Abetting Unlike claims for a breach of fiduciary duty, claims for breach of contract, negligence, and aiding and abetting arguably may be subject to the defense of in pari delicto. In this section of the Opinion, I take up the Moving Defendants‘ contention that in pari delicto bars those claims as a matter of law. After reviewing the in pari delicto doctrine under Delaware law and concluding that it may provide a bar, I examine whether any of the exceptions to that doctrine could apply here and enable the relevant claims to go forward. 1. In pari delicto a. Basics of the doctrine In pari delicto is an affirmative defense by which ―‗a party is barred from recovering damages if his losses are substantially caused by activities the law forbade 130 I express no opinion as to the potential Caremark liability of any of the SPI Entities‘ directors other than Kantner, because only Kantner is before me on the pending motions to dismiss. 49 him to engage in.‘‖131 The doctrine provides that rather than adjudicating a suit by one wrongdoer against her counterpart, courts will ―‗leave them where their own acts have placed them.‘‖132 In pari delicto serves at least two important policy goals: deterring wrongful conduct by refusing wrongdoers any legal or equitable relief, and protecting the judicial system from having to use its resources to provide an accounting among wrongdoers.133 Thus, courts have recognized that the rule ―‗is adopted, not for the benefit of either party and not to punish either of them, but for the benefit of the public.‘‖134 Like most American jurisdictions, Delaware embraces this venerable doctrine.135 Although the literal translation is ―in equal fault,‖ courts have eschewed a strict requirement that the party asserting the defense demonstrate that the degree of his fault is the same as or less than that of the party against whom he asserts it. The rule therefore has been held to apply ―to situations more closely analogous to those encompassed by the ‗unclean hands‘ doctrine, where the plaintiff has participated ‗in some of the same sort of 131 AIG II, 976 A.2d at 883 (quoting In re LJM2 Co–Inv., L.P., 866 A.2d 762, 775 (Del. Ch. 2004)). 132 Id. at 882 (quoting AM. JUR. 2d Actions § 40). 133 Id. at 882 n.21; see also, e.g., Bateman Eichler, Hill Richards, Inc. v. Berner, 472 U.S. 299, 306 (1985); Stone v. Freeman, 82 N.E.2d 571, 572 (N.Y. 1948) (―[N]o court should be required to serve as paymaster of the wages of crime, or referee between thieves.‖) 134 AIG II, 976 A.2d at 882 n.21 (quoting Lewis v. Davis, 199 S.W.2d 146, 151 (Tex. 1947)); see also 3 POMEROY, supra note 103, § 940 n.5. 135 AIG II, 976 A.2d at 882. 50 wrongdoing‘ as the defendant.‖136 For that reason, in pari delicto may be raised against a plaintiff wrongdoer even if that plaintiff ―was led into a path of crime by one more culpable.‖137 Moreover, because the main purpose of in pari delicto would be undermined by fact intensive proceedings comparing the culpability of the wrongdoers, the defense may be raised successfully on a motion to dismiss, unless the complaint is devoid of grounds for invoking the rule.138 As relevant here, in pari delicto applies to bar claims between wrongdoers regardless of whether the plaintiff wrongdoer is a natural person or a corporation. A basic tenet of corporate law, derived from principles of agency law, is that the knowledge and actions of the corporation‘s officers and directors, acting within the scope of their 136 Pinter v. Dahl, 486 U.S. 622, 632 (1988). In this regard, I note that the full rendition of the legal maxim, in pari delicto potior est conditio defendentis, has been translated as, ―In a case of equal or mutual fault, the position of the defending party is the better one.‖ Berner, 472 U.S. at 306. It is the mutuality of fault that gives the doctrine its logical force; if emphasis were to be placed on the equality or relative degree of fault, the court probably would have to find facts and engage in a balancing analysis that would defeat the purpose of having the rule in the first place. See AIG II, 976 A.2d at 883-34. ―‗[H]ypertechnical interpretation of the in pari delicto doctrine is outdated‘ as ‗it is not necessary that [the] wrongdoing of plaintiff and defendant be clearly mutual, simultaneous, and relatively equal.‘‖ In re Oakwood Homes Corp., 389 B.R. 357, 371-72 (D. Del. 2008) (quoting Peltz v. SHB Commodities, Inc., 115 F.3d 1082, 1090 (2d Cir. 1997)), aff’d, 356 F. App‘x 622 (3d Cir. 2009)). 137 1 AM. JUR. 2D Actions § 40; see also Kirschner v. KPMG LLP, 938 N.E.2d 941, 950 (N.Y. 2010). 138 See, e.g., AIG II, 976 A.2d at 878; Oakwood Homes Corp., 389 B.R. at 372. 51 authority, are imputed to the corporation itself.139 Delaware law adheres to this general rule of imputation—of holding a corporation liable for the acts and knowledge of its agents—even when the agent acts fraudulently or causes injury to third persons through illegal conduct.140 Though at superficial level it may appear harsh to hold an ―innocent‖ corporation (and, ultimately, its stockholders) to answer for the bad acts of its agents, such ―corporate liability is essential to the continued tolerance of the corporate form, as any other result would lack integrity.‖141 These considerations are central to the in pari delicto doctrine: the practice of imputing officers‘ and directors‘ knowledge to the corporation means that, as a general rule, when those actors engage in wrongdoing, the corporation itself is a wrongdoer.142 As such, the company generally is barred from stating a legal or equitable claim against a third party that participated in the scheme of wrongdoing. b. Exceptions to the rule A principal, however, is not presumed to have knowledge of or be liable for the actions of an agent that abandons the principal‘s interests.143 Likewise, corporations have 139 See, e.g., Teachers’ Ret. Sys. of La. v. Aidinoff, 900 A.2d 654, 671 n.23 (Del. Ch. 2006); Albert v. Alex. Brown Mgmt. Servs., Inc., 2005 WL 2130607, at *11 (Del. Ch. Aug. 26, 2005). 140 See In re Brandywine Volkswagen, Ltd., 306 A.2d 24, 27 (Del. Super.), aff’d sub nom. Brandywine Volkswagen, Ltd. v. State Dep’t of Cmty. Affairs & Econ. Dev., 312 A.2d 632 (Del. 1973). 141 AIG II, 976 A.2d at 893. 142 Id. at 883-84. 52 not been held to the general rule of in pari delicto ―when the corporate agent responsible for the wrongdoing was acting solely to advance his own personal financial interest, rather than that of the corporation itself.‖144 This departure from the general rule of imputation, known as the ―adverse interest exception,‖ is one of three major ways that courts adhering to the traditional in pari delicto rule have avoided application of the doctrine in a specific context. The adverse interest exception, if applied correctly, should cover only the ―unusual‖ case in which the allegations support a reasonable inference of ―the type of total abandonment of the corporation‘s interests‖ that is characteristic of, for example, outright stealing from the corporation.145 Because most instances of fraud or illegal misconduct by corporate actors confer at least some benefit on the corporation, the adverse interest exception may not apply even when the ―benefit‖ enjoyed by the corporation is outweighed by the long-term damage that is done when the agent‘s mischief comes to light.146 Nevertheless, where agents act purely in pursuit of their own interest to the detriment of the principal to whom they owe fiduciary duties, the societal interest in deterring such action is strong enough that the policies underlying the in pari 143 Id. at 891 n.50. 144 Id. at 891 (emphasis added). 145 Id. at 891 (citing In re CBI Hldg. Co., 529 F.3d 432, 453 (2d Cir. 2008)). 146 AIG II, 976 A.2d at 892. 53 delicto doctrine give way and the acts and knowledge of the faithless agent are not imputed to the corporation. Deciding when a countervailing public policy should trump the policies animating in pari delicto often proves difficult. The in pari delicto doctrine has manifest appeal in the classic case of, for example, a thief who is injured in commission of a crime; it would be absurd to allow him to sue a co-felon who stole the injured thief‘s share of the loot, or the burglarized homeowner whose negligent maintenance caused a slip-and-fall.147 When the rule is invoked against a corporation attempting to sue a party that previously joined in or facilitated its wrongdoing, however, the policy rationale of the case can be less clear-cut. A prototypical instance involves ―innocent‖ stockholders bringing suit derivatively on behalf of the corporation to recoup some of the losses caused by the fraudulent actions of its officers and directors, who may well have been removed from the company already. While equitable considerations may not come into play in the case of the plaintiff thief, they might in the case of the corporation-as-derivative-plaintiff—or, as relevant here, the receiver of entities driven to insolvency by faithless fiduciaries— because innocent stockholders or creditors may gain or lose depending on the way the doctrine is applied. That specific concern animates a second carve-out from in pari delicto: the fiduciary duty exception. Under that exception, perhaps the most expansive, the doctrine 147 Cf. Kirschner, 938 N.E.2d at 950. 54 has no force in a suit by a corporation against its own fiduciaries.148 Although various rationales have been advanced as supporting this exception,149 the underlying justification is that parties like receivers, trustees, and stockholder derivative plaintiffs must be able to act on the corporation‘s behalf to hold faithless directors and officers accountable. ―To hold otherwise would be to let fiduciaries immunize themselves through their own wrongful, disloyal acts,‖150 a ―transparently silly‖ result.151 The fiduciary duty exception to the in pari delicto doctrine ensures that stockholders (and, in cases of insolvent entities, creditors) have a remedy for the wrongdoing that caused them harm. That consideration is paramount in a court of equity, such as this Court, which ―will suffer no wrong without a remedy.‖152 The existence of the fiduciary duty exception, therefore, re- frames the fundamental inquiry involved in deciding whether to apply in pari delicto or 148 AIG II, 976 A.2d at 876, 889-95. 149 Id. at 889-90; see also In re HealthSouth Corp. S’holders Litig., 845 A.2d 1096, 1107 (Del. Ch. 2003), aff’d, 847 A.2d 1121 (Del. 2004). 150 AIG II, 976 A.2d at 876. 151 HealthSouth Corp., 845 A.2d at 1107. 152 2 POMEROY, supra note 103, § 363. This maxim ―is the source of the entire equitable jurisdiction, exclusive, concurrent, and auxiliary.‖ Id. at § 423. The doctrine of in pari delicto, of course, implicates another of our first principles— that ―he who comes into equity must come with clean hands.‖ Id. at §§ 363, 397. Cf. Seacord v. Seacord, 33 Del. 485, 139 A. 80, 81 (Del. Super. 1927) (discussing ―the rule of pari delicto or the equitable maxim, ‗He who comes into court must come with clean hands‘‖). 55 set it aside: the issue is ―not whether stockholders can seek relief on the corporation‘s behalf, but from whom stockholders can seek that relief.‖153 A similar rationale underlies a third category of cases in which courts have avoided in pari delicto, even where by its terms it would apply: i.e., the exception that applies ―when another public policy is perceived to trump the policy basis for the doctrine itself.‖154 Cases falling under this seemingly diffuse ―public policy exception‖ are united by fact patterns involving statutory schemes like the federal securities laws that rely in significant part on private causes of action for their enforcement. 155 In such instances where the claim at issue directly furthers an established policy, courts may defer to that policy by setting in pari delicto aside and allowing the action to go forward. c. AIG I and AIG II—the leading Delaware cases on in pari delicto Because it is the central authority on which the parties rely for their statement of the in pari delicto doctrine in Delaware, and because it is perhaps easiest to envision the doctrine‘s application by way of example, I review briefly this Court‘s decisions in In re 153 AIG II, 976 A.2d at 889. 154 Id. at 888. 155 See Perma Life Mufflers, Inc. v. Int’l Parts Corp., 392 U.S. 134, 136 (1968) (reversing lower federal court rulings that ―seemed to threaten the effectiveness of the private action as a vital means for enforcing the antitrust policy of the United States‖); see also Pinter, 486 U.S. at 633 (stating that, in the context of the federal securities laws, courts must ensure that ―judge-made law‖ like in pari delicto ―does not undermine the congressional policy favoring private suits as an important mode of enforcing federal securities statutes‖); Berner, 472 U.S. at 315. 56 American International Group, Inc. Consolidated Derivative Litigation.156 That action arose out of a wide-ranging array of financial misconduct by several high-level officers and directors of American International Group, Inc. (―AIG‖). In particular, it was alleged that AIG‘s Chairman and CEO, Maurice R. Greenberg, and several of his top lieutenants orchestrated a series of transactions designed to inflate AIG‘s perceived financial strength, engaged in illegal schemes to avoid taxes, sold illegal financial products to other companies, and conspired with competitors to rig certain insurance markets.157 When the various schemes were discovered, AIG had to restate years‘ worth of its financials, which ultimately resulted in a reduction of the stockholders‘ equity of $3.5 billion. Additionally, the company was forced to pay nearly $2 billion to resolve various criminal and civil proceedings lodged against it.158 Certain stockholders, derivatively on AIG‘s behalf, brought a litany of claims against various defendants.159 Greenberg, his inner circle of corporate officers, and multiple directors and employees of AIG were sued for, among other things, breaches of fiduciary duty. The derivative complaint also leveled claims for fraud, conspiracy, and 156 AIG I, 965 A.2d 763; AIG II, 976 A.2d 872. 157 See AIG I, 965 A.2d at 782-94. 158 Id. at 793-94. 159 Id. at 775-76. Consistent with the decision of a special litigation committee of the AIG board, AIG itself also became a plaintiff in the litigation to pursue direct claims for breach of fiduciary duty against Greenberg and another officer. See id. Unless otherwise noted, all claims discussed in this section pertain to the derivative aspects of the AIG I and AIG II decisions. 57 aiding and abetting against General Re Corporation (―Gen Re‖), with which AIG had engaged in several illegal transactions designed to misrepresent the strength of AIG‘s insurance reserves.160 In connection with AIG‘s scheme to rig bids in an insurance brokerage market, the derivative complaint further included counts for fraud and conspiracy against Marsh & McLennan Companies, Inc. (―Marsh‖), ACE Limited (―ACE‖), and an ACE executive; Marsh additionally was sued for aiding and abetting a breach of fiduciary duty and for unjust enrichment.161 Finally, the derivative plaintiffs sued PricewaterhouseCoopers LLP (―PwC‖), AIG‘s independent auditor, for breach of contract and malpractice, on the theory that they wrongly had certified AIG‘s financial statements as accurate and GAAP-compliant, when they ultimately had to be restated by billions of dollars.162 In AIG I, Chief Justice Strine, then writing as Vice Chancellor, addressed motions to dismiss filed by the AIG defendants—Greenberg and his inner circle, and several former and current AIG employees—and PwC.163 The Court dismissed the claims against the employee defendants on personal jurisdiction grounds, but largely refused to dismiss the claims against Greenberg and his top lieutenants.164 Although it was not 160 AIG II, 976 A.2d at 879. 161 Id. at 880-81. 162 AIG I, 965 A.2d at 776. 163 Id. 164 Id. at 795-815. 58 discussed in AIG I, a necessary predicate of that aspect of the opinion was the fact that, as corporate officers and directors who owed fiduciary duties to AIG and its stockholders, none of those defendants were able to invoke the in pari delicto defense.165 More pertinent to this Opinion, however, was the treatment in AIG I of PwC‘s motion to dismiss. In that regard, the complaint asserted that PwC committed malpractice and breached its contract with AIG by failing to discover widespread fraud that occurred at the upper levels of AIG management, and that AIG suffered greater losses than it would have if PwC‘s auditing had conformed to generally accepted auditing standards (―GAAS‖). PwC invoked the defense of in pari delicto, arguing that AIG was a wrongdoer in that situation, and because the claim was AIG‘s—even if pursued derivatively on its behalf by various stockholders—the company was barred from stating a claim against a fellow wrongdoer under the law of New York, which PwC claimed governed. The choice of law issue was addressed first. Relying on the most significant relationship test, the Court agreed that New York law governed AIG‘s claims against PwC.166 After reviewing the applicable New York precedent relating to in pari delicto, the Court concluded that, if it were to apply the in pari delicto doctrine as the New York Court of Appeals likely would, AIG‘s derivative claims against PwC would be barred by the rule of imputation. It also determined that the narrow adverse interest exception 165 AIG II, 976 A.2d at 876. 166 AIG I, 965 A.2d at 818-22. 59 could not be invoked because the complaint suggested that the alleged wrongdoing of Greenberg and other AIG officials had not been committed solely for the benefit of the insiders themselves.167 AIG itself had benefitted from the financial machinations of the insiders‘ fraud, even if those benefits turned out to be short-lived once the misconduct came to light.168 Thus, in pari delicto applied, and the claims against PwC were dismissed. In reaching that decision, then-Vice Chancellor Strine expressed discomfort with the result of New York‘s rule, and two aspects of his obiter dictum comments in that regard are particularly relevant to this case. First, he indicated that, if PwC had been accused of aiding and abetting a breach of fiduciary duty, his choice of law determination might have been different.169 Because of Delaware‘s ―paramount‖ interest in policing alleged breaches of fiduciary duties within Delaware corporations, he posited that the gravity of a claim for aiding and abetting such a breach potentially could trump another state‘s interest in adjudicating issues of professional misconduct according to its own laws.170 Second, then-Vice Chancellor Strine stated that, even as to AIG‘s breach of contract and malpractice claims against PwC, if Delaware law were applicable, he 167 Id. at 823-30. 168 Id. 169 Id. at 822. 170 Id. 60 ―would be chary about following the New York approach.‖171 In so doing, he questioned some of the assumptions that appeared to underlie the rationale of New York‘s in pari delicto doctrine as it presumably would apply to corporate advisors like PwC. Two further aspects of the AIG litigation are noteworthy here. After this Court‘s decision in AIG I, the Delaware Supreme Court certified to the New York Court of Appeals (the ―New York Court‖) the issue of whether, under New York law, the in pari delicto defense was effective to bar AIG‘s derivative claims against PwC.172 In Kirschner v. KPMG LLP, the New York Court answered that question and a closely related one arising out of an action in the federal courts of the Second Circuit.173 As to both questions, the Court upheld New York‘s strict in pari delicto rule by refusing to adopt a contrary position advocated by the stockholder derivative plaintiffs in AIG I and the analogous position of a litigation trustee in a bankruptcy action. In so ruling, the New York Court explicitly declined ―to alter our precedent relating to in pari delicto, and imputation and the adverse interest exception, as we would have to do to bring about the expansion of third-party liability sought by plaintiffs here.‖174 Finally, in AIG II, the Court of Chancery addressed motions to dismiss brought by Gen Re, Marsh, and ACE. As discussed above, those defendants were subject to claims 171 Id. at 828 n.246. 172 Teachers’ Ret. Sys. of La. v. PricewaterhouseCoopers, LLP, 998 A.2d 280 (Del. 2010). 173 938 N.E.2d 941, 945 (N.Y. 2010). 174 Id. 61 on behalf of AIG for fraud, conspiracy, and aiding and abetting breaches of fiduciary duty. Notably, in ruling on the motions to dismiss, then-Vice Chancellor Strine applied Delaware law. He concluded that Delaware‘s in pari delicto defense applied to bar AIG from stating claims against any of those three alleged co-conspirators.175 In reaching that decision, the Court rejected two arguments that the derivative plaintiffs advanced to avoid the in pari delicto doctrine. First, as a factual matter, the Court ruled that the allegations in the complaint reasonably could support an inference that AIG was ―in equal fault‖ with the co-conspirators as to the alleged fraudulent transactions.176 Second, the Court held that, as a matter of Delaware law, there was no policy justification for setting aside the in pari delicto doctrine to allow a corporation guilty of wrongdoing to sue its alleged co-conspirators.177 In this regard, it found unpersuasive the derivative plaintiffs‘ argument that because the stockholders themselves had done nothing wrong, it would be unjust to prevent them from recouping some of their losses. The Court observed that accepting that line of reasoning ―would eviscerate the in pari delicto doctrine and contravene the policy judgments upon which that doctrine rests.‖178 The Court noted that the AIG stockholders already had the benefit of the major exception to the in pari delicto rule: the ability to sue corporate insiders, such as directors 175 Id. at 882, 895. 176 Id. at 885-88. 177 Id. at 888. 178 Id. at 889. 62 and officers whose actions precipitated the claimed losses, on behalf of the company. ―The issue,‖ it stated, ―is therefore not whether stockholders can seek relief on the corporation‘s behalf, but from whom stockholders can seek that relief.‖179 Allowing stockholders to expand this exception, however, by suing parties ―outside of the borders of their corporation would not be socially useful.‖180 The important policy considerations animating the in pari delicto doctrine—principally, sparing the court from wasting its resources to provide an accounting among wrongdoers—would be severely undermined by allowing the kind of claims brought by the derivative plaintiffs to go forward. As for the purported benefits of setting aside the rule, the Court observed that companies like Gen Re, Marsh, and ACE needed little added incentive to follow the law, based on ―the potent public enforcement that exists as to many important laws that regulate‖ such businesses.181 2. The question presented here, and the relevant contentions In summary, Delaware law adheres to the doctrine of in pari delicto, and where it applies, the doctrine precludes the court from hearing claims as between wrongdoers unless the wrongdoer-plaintiff against whom it is invoked can avail herself of an exception to the rule. Guided by the foregoing principles, my analysis of this issue as it pertains to the present motions consists of asking: first, should in pari delicto apply to the 179 Id. 180 Id. 181 Id. at 895 n.59. 63 Receiver‘s claims against Wilmington Trust and the Auditor Defendants? And if so, is there an exception that would save those claims from dismissal? In this regard, the Moving Defendants contend that the doctrine applies here, because the alleged misconduct of the SPI Entities‘ fiduciaries—most clearly, Jackson— is imputed to the SPI Entities, making them at least substantially equal in fault to the Moving Defendants. They contend that even though the Receiver has brought this action on behalf of the SPI Entities and their stakeholders, she has only the rights of, and is subject to the same defenses as, the SPI Entities themselves. Finally, the Moving Defendants argue that no exception to the doctrine is available to prevent the dismissal of the SPI Entities‘ claims. The Receiver challenges all three of those contentions. In particular, she asserts that the well-established adverse interest exception applies here. The Receiver also contends that in pari delicto should not apply because this case involves an insurance liquidation receivership action. Thus, for the public policy reasons embodied in Delaware‘s insurance statute and related regulations, she argues that this Court should decline to apply the general rule of imputation by which in pari delicto operates to bar claims. Finally, she maintains that, even if in pari delicto applies and the adverse interest exception is unavailable, Delaware law should not permit an auditor to invoke the doctrine, because of the special role auditors play in informing corporate fiduciaries. I discuss these issues in turn. 64 At the outset, however, I note that, by the Complaint‘s own terms, the SPI Entities bear ―substantially equal responsibility‖182 for the alleged schemes by which money was stolen from the policyholders and the DDOI was misled about the SPI Entities‘ true financial condition. For example, the Complaint accuses James M. Jackson of fraud, and takes issue with the Moving Defendants‘ failure to detect and prevent that fraud. It is clear, however, that the relevant actions in this regard were taken on behalf of the SPI Entities, so that they could obtain the DDOI‘s approval to operate as captive insurers.183 Thus, the general doctrine of in pari delicto applies to bar the SPI Entities‘ claims against the Moving Defendants, unless the Receiver can avail herself of some exception to that doctrine.184 3. Can the Receiver avail herself of the adverse interest exception to the in pari delicto doctrine? The Receiver contends that, even if it applies, in pari delicto does not bar the claims against the Moving Defendants because she may take advantage of the ―adverse interest exception.‖ As discussed above, this exception is derived from the same body of agency law imputation principles that gave rise to the in pari delicto rule itself.185 That 182 See AIG II, 976 A.2d at 883; Berner, 472 U.S. at 310. 183 See, e.g., Compl. ¶¶ 56, 62-70, 78, 94-95, 102, 263-66. 184 The Receiver does not seriously contend that the SPI Entities do not bear fault for their present situation, but rather advances several exceptions that she argues should apply here to preclude the Moving Defendants‘ in pari delicto defense. I address those arguments in the next sections. 185 See supra notes 143-146; see also RESTATEMENT (THIRD) OF AGENCY § 5.03 cmt.b (2006). 65 is, in a case where the agent‘s action is totally adverse to the interests of his principal, the law will not impute knowledge of the bad act to the principal, because it seems nonsensical to presume that a thieving agent would tell his principal about the theft. 186 In the corporate context, and as relevant here, where a corporate fiduciary acts ―solely to advance his own personal financial interest, rather than that of the corporation itself,‖ the adverse interest exception comes into play and permits the corporation to state a claim against the faithless fiduciary‘s co-conspirator.187 This type of total abandonment, such as siphoning corporate funds or other outright theft, is likely to be a ―highly unusual case.‖188 Thus, the adverse interest exception is applied narrowly, lest it be expanded to the point of covering more terrain than the rule itself.189 As a result, the exception will not enable a party to avoid application of in pari delicto if the illegal scheme furthers both the faithless fiduciary‘s interests and those of the corporation itself.190 186 See RESTATEMENT (THIRD) OF AGENCY § 5.04 (―For purposes of determining a principal‘s legal relations with a third party, notice of a fact that an agent knows or has reason to know is not imputed to the principal if the agent acts adversely to the principal in a transaction or matter, intending to act solely for the agent‘s own purposes or those of another person.‖) 187 AIG II, 976 A.2d at 891. 188 Id. 189 Id. at 894. 190 Id. at 892-94 (holding that the traditional, narrow approach to the adverse interest exception was the correct statement of Delaware law); see also Kirschner, 15 N.Y.3d at 466-67, 938 N.E.2d 941, 952 (noting that the traditional, narrow formulation of the adverse interest exception ―avoids ambiguity where there is a benefit to both the insider and the corporation,‖ and therefore is suitable only where the insider‘s misconduct benefits only himself or a third party). 66 On the facts of this case, the adverse interest exception is unlikely to save the Receiver‘s claims. The allegations in the Complaint conceivably could support a reasonable inference that at least Jackson was involved in siphoning money from the SPI Entities‘ bank accounts, which could be the sort of total adversity required to sustain the exception. Another equally plausible reading of the Complaint, however, is that there never was any money in the bank accounts during the relevant time periods, but rather that the entire structure was a sham. Because this action is before me on motions to dismiss, I must draw all reasonable inferences in favor of the Receiver. Accordingly, I assume that at some point during the relevant time period, at least Jackson stole funds from the SPI Entities‘ accounts. While Jackson‘s alleged theft is indicative of an intent to act ―to advance his own personal financial interest,‖ the Complaint also suggests that his activities furthered the SPI Entities‘ interests. The Complaint is replete with allegations that, if not for the misrepresented financial statements, the SPI Entities never would have been authorized as Delaware-domiciled captive insurers. This may have been a temporary benefit, which proved illusory once the fraud came to light, but it is clear from the face of the Complaint that the SPI Entities‘ position was improved, if only for a time, by Jackson‘s machinations.191 191 Cf. Kirschner, 938 N.E.2d at 953 (―Consistent with these principles, any harm from the discovery of the fraud—rather than from the fraud itself—does not bear on whether the adverse interest exception applies. . . . If that harm could be taken into account, a corporation would be able to . . . disclaim virtually every corporate 67 Even if I were to assume that Jackson completely had abandoned the SPI Entities‘ interests and that those entities obtained no benefit from his conduct, however, the Receiver still cannot invoke the adverse interest exception in the circumstances of this case. The reason is because the SPI Entities are subject to an exception to the adverse interest exception—the ―sole actor‖ exception.192 Courts have applied the sole actor exception where the agent committing the fraud was the sole stockholder of the corporation, or otherwise ―dominated‖ the corporation.193 As discussed above, the adverse interest exception is based on the presumption that a completely faithless agent would not communicate his knowledge to his principal, and that the principal would not benefit from the agent‘s adverse action. The sole actor rule overrides the adverse interest exception where the principal and the agent are the same, because it is absurd to presume that the one actor involved and affected somehow could keep secrets from himself, and because the principal, as the same sole owner, benefits from the fraud.194 Thus, in the corporate context, where a high-level officer or fraud—even a fraud undertaken for the corporation‘s benefit—as soon as it was discovered and no longer helping the company.‖). 192 See Official Comm. of Unsecured Creditors v. R.F. Lafferty & Co., 267 F.3d 340, 359 (3d Cir. 2001). 193 Id. at 359-60; see also In re Jack Greenberg, Inc., 212 B.R. 76, 86 (Bankr. E.D. Pa. 1997). 194 See, e.g., In re Mediators, Inc., 105 F.3d 822, 827 (2d Cir. 1997); RESTATEMENT (THIRD) OF AGENCY § 5.04 cmt.d (2006) (―[I]f the agent controls the principal‘s decisionmaking, the principal is charged with notice of the agent‘s wrongdoing. 68 director also solely owns or otherwise dominates the corporation, the principal-agent distinction virtually disappears. In terms of a claim against a third party that dealt with the corporation, therefore, the adverse interest exception will not aid an agent-principal who does wrong by protecting the corporation he controls from the effect of in pari delicto. In this case, Jackson was at all relevant times the President and Chairman of Security Pacific, SPI-202, SPI-203, and SPI-204, and held 100 percent of those companies‘ stock.195 The Receiver does not dispute that Jackson solely owned and dominated the SPI Entities. Rather, she contends that the sole actor rule should not apply here because of the nature of the insurance business, in which policyholders and the public at large have a stake in the solvency of insurers. According to the Receiver, it therefore would be unjust for this Court to presume that there is a ―complete unity of interest between a sole stockholder who loots his own insurance company and the company itself.‖196 Taken to its extreme, this would mean that the existence of policyholders and other innocent creditors in the insurance context should cause the adverse interest exception to apply and avoid the in pari delicto doctrine, because the This rule, often termed the ‗sole actor doctrine,‘ treats principal and agent as one.‖). 195 Compl. ¶¶ 30, 44, 96. See Receiver‘s Answering Br. to Auditor Defs. 2-3, 42. 196 Receiver‘s Answering Br. to Auditor Defs. 43 (quoting Reider v. Arthur Andersen, LLP, 784 A.2d 464, 474 (Conn. Super. Ct. 2001) (refusing to use the sole actor rule to override the adverse interest exception, and allowing the state insurance commissioner to bring claims against liquidated insurer‘s former auditor)). 69 fraudulent corporate insider was acting adversely to the public‘s interests, even if not to those of the corporation‘s owners.197 That reasoning, if accepted, would mean that the in pari delicto defense cannot apply to any case in which the claims are being asserted by an insurance company, either in receivership or as a derivative plaintiff. I cannot square such a result with the decision in AIG II, which involved one of the most systemically important insurance companies in the world.198 For that reason, I reject the Receiver‘s attempt to avoid application of the ―sole actor‖ rule.199 I therefore conclude that the adverse interest exception—even if it 197 Cf. Reider, 784 A.2d at 474-75 (―Therefore, when a sole owner seeks to loot his own insurance company, every person with a legally protected interest in the insurer‘s continuing solvency is not a knowing and willing participant in the owner‘s fraud. Like an innocent minority shareholder whose interests in a corporation are harmed by a conspiracy of the other shareholders . . . the public is an innocent stake holder in the solvency of the insurer.‖). This type of argument was expressly rejected in AIG II because it would make in pari delicto a dead letter. AIG II, 976 A.2d at 893 (―[A]n innocent insider exception, like the plaintiffs‘ personal interest exception, would allow corporations to sue their own co-conspirators for actions that were undertaken, at least in part, for the corporation‘s own interest, giving corporations rights that natural persons do not have.‖) 198 AIG II involved in pari delicto defenses raised by third-party co-conspirators, not auditors, and is there somewhat distinct from the claims against the Moving Defendants in this case. Nevertheless, if Delaware embraced the type of ―innocent stakeholder‖ exception the Receiver urges in this regard, it would gut the in pari delicto defense regardless of who was raising it. I address in the next Section the specific arguments regarding whether auditors should be treated differently than other defendants. 199 In addition to the holding AIG II, at least two other reasons support this conclusion. First, insurance companies are not the only companies that are relied on by their customers and creditors, nor are they unique in being systemically important. Because similar considerations apply to many regulated industries 70 conceivably could apply, which is dubious based on the allegations of the Complaint— cannot be invoked here because of the sole actor rule. 4. Should in pari delicto be set aside on grounds that its application would frustrate an established public policy of this State? As discussed above, while courts generally will refuse to hear claims as between wrongdoers, ―that rule has always been regarded by courts of equity as without controlling force in all cases in which public policy is considered as advanced by allowing either party to sue for relief against the transaction.‖200 The Receiver‘s contention in this regard is twofold: (1) that receivers are not, or should not be, barred by the in pari delicto defense; and (2) that important public policy interests are served by the Receiver here, in the specific context of insurance liquidation. I do not find either contention persuasive. I begin with the suggestion that because the Receiver is innocent of wrongdoing when she ―steps into the shoes‖ of the liquidated entities, she cannot be subject to the defenses to which the entities themselves would be subject. If accepted, this principle would eviscerate in pari delicto. In the typical case in which the doctrine plausibly is (e.g., financial institutions, food and drug companies, utilities, railroads, and aviation, etc.), the purportedly ―unique‖ or narrow carve-out urged here easily could sweep much of the economy within its ambit. Second, I note again that the innocent parties involved here are not without remedy. The issue again is ―not whether [they] can seek relief on the corporation‘s behalf, but from whom [they] can seek that relief.‖ AIG II, 976 A.2d at 889. 200 AIG II, 976 A.2d at 888 n.43 (quoting Seacord v. Seacord, 33 Del. 485, 139 A. 80, 81 (Del. Super. 1927)). 71 invoked, it is because faithless corporate insiders committed misconduct that an innocent party later wished to disavow in order to state a claim on behalf of the corporation. By definition, if the insiders‘ fraud were ongoing, the innocent claimant either would not have discovered the misconduct yet, or the entity in question might not yet have become insolvent. Sometimes, it is stockholder derivative plaintiffs who bring claims in the name of the corporation after an insider‘s wrongdoing is discovered and, often, the bad actor or actors have been removed from their position. In other situations, a receiver or trustee may bring claims on behalf of the delinquent or bankrupt entity. In either case, it is tempting to view the innocent claimant as the true plaintiff and to set aside the in pari delicto doctrine so as to allow the claim to be brought. As a Vice Chancellor, Chief Justice Strine heard essentially identical arguments in AIG II, however, and he rejected them.201 The same reasoning applies with equal force here. I see no cogent reason for sparing the innocent Receiver the effect of in pari delicto while equally innocent stockholders or policyholders would be barred from relief in the derivative context.202 201 AIG II, 976 A.2d at 889 (―According to the plaintiffs, in such situations the traditional rule is unjust because the stockholders themselves did not act wrongfully, and therefore the traditional in pari delicto rules should be set aside so that the corporation can be made whole and thus the economic interests of the innocent stockholders can be protected. But, the exceptions that the plaintiffs request would eviscerate the in pari delicto doctrine and contravene the policy judgments upon which that doctrine rests.‖) 202 I reject as unpersuasive the suggestion that parties like trustees or receivers should be able to avoid in pari delicto and similar defenses merely because they do not ―voluntarily step‖ into the shoes of the defunct entity, but rather are ―thrust into‖ those shoes. See F.D.I.C. v. O’Melveny & Myers, 61 F.3d 17, 19 (9th Cir. 1995). Stockholder derivative plaintiffs are no less ―thrust into‖ a position of having to 72 Nor is the avoidance of in pari delicto supported by the Receiver‘s appeal to the public policy interests extant in the context of insurance company delinquency generally, or that of captive insurance companies in particular. As the Receiver points out, insurance is a heavily regulated industry in Delaware and every other state. An entire title (Title 18) of the Delaware Code governs insurance companies, and an entire chapter therein is devoted to captive insurers.203 Pursuant to the Insurance Code, the State has vested the Insurance Commissioner with significant authority to enforce the relevant law and its corresponding administrative regulations.204 There are strong reasons for creating and maintaining a robust regulatory framework regarding insurance. In general, the ―reach of influence and consequence‖ of insurance companies have long been considered ―beyond and different from that of the bring suit on behalf of an entity betrayed by its fiduciaries. Further, the idea that the party raising in pari delicto ―enjoys a windfall,‖ id., misses the point of the doctrine—sparing the court from becoming entangled in claims between wrongdoers. See 3 POMEROY supra note 103, § 940 n.5. In any case, it is not clear that O’Melveny & Myers stands for a proposition that is helpful to the Receiver. See, e.g., In re Imperial Corp. of Am., 92 F.3d 1503, 1509 (9th Cir. 1996) (clarifying that O’Melveny does not mean that ―equitable defenses can never be asserted against FDIC acting as a receiver‖); In re Bartoni-Corsi Produce, Inc., 130 F.3d 857, 862 (9th Cir. 1997) (clarifying that O’Melveny was focused on ―the question of fiduciary liability,‖ and finding O’Melveny inapposite in the context of determining whether a third party non-fiduciary is liable to a corporation) (emphasis added). 203 See 18 Del. C. §§ 101 to 8412 (the ―Insurance Code‖); id. §§ 6901 to 6983 (relating to captive insurers). 204 See id. §§ 301 to 333. 73 ordinary business.‖205 As relevant to this case, Delaware has a particularly significant interest in regulating insurance companies domiciled here, whose assets purportedly exceed $500 billion in the aggregate, making the Department of Insurance the largest consumer protection agency in the state.206 All these considerations buttress the proposition that the public has an interest in keeping insurers solvent and in overseeing or facilitating the orderly disposition of insolvent or delinquent ones. Accepting the Receiver‘s premise, however, does not lead inexorably to the conclusion she urges. For starters, the claims subject to the pending motions to dismiss are the SPI Entities‘ claims, not the Insurance Commissioner‘s. Moreover, even setting that aside, the expansive and intricate statutory and regulatory framework governing Delaware-domiciled insurance companies arguably cuts against the Receiver‘s position that in pari delicto should not apply, not in favor of it. The essence of her argument is that, if I decline on the basis of public policy to allow Wilmington Trust and the Auditor Defendants to invoke the in pari delicto defense, the State‘s policy goals will be furthered in two ways: (1) the Moving Defendants, if ultimately held liable, can contribute to making the SPI Entities‘ innocent policyholders whole; and, (2) the Commissioner can incentivize better behavior on the part of firms providing management and auditing services to captive insurers. 205 German Alliance Ins. Co. v. Lewis, 233 U.S. 389, 414 (1914). 206 Karen Weldin Stewart – Biography, DEL. DEPT. OF INS. (last accessed Mar. 23 2015), http://www.delawareinsurance.gov/bio.shtml. 74 As discussed above, the proper inquiry in considering whether to apply the ―public policy‖ exception to in pari delicto—which itself serves important public policy objectives—is whether ―preclusion of suit would not significantly interfere with the effective enforcement‖ of a statutory policy scheme.207 In the case of Delaware insurance regulation, however, no private enforcement scheme exists; to the contrary, the DDOI has been given significant authority to achieve the goals of making innocent insurance policyholders whole, and deterring bad conduct on the part of firms providing professional services to insurers.208 The statute does not suggest that the Legislature intended private causes of action to play a part in its enforcement,209 and the Receiver has not cited any case law indicating otherwise. In this regard, I also note that, with respect to captive insurance companies specifically, the Commissioner has even broader authority: in addition to the numerous reporting and minimum capitalization requirements noted in Section I.B supra, captive insurance companies are required to select from among audit firms and ―captive 207 See Berner, 472 U.S. at 311; Pinter, 486 U.S. at 635. 208 See, e.g., 18 Del. C. § 318 (Commissioner may examine any Delaware insurance company in her sole discretion); id. § 319 (same as to insurance agents, brokers, and the like). 209 See, e.g., id. § 313 (granting the Commissioner broad authority to institute proceedings through the Attorney General to enforce ―any order or action‖ of the Commissioner, and to refer criminal violations of the insurance code to the Attorney General). 75 managers‖ that are pre-approved by the Insurance Commissioner.210 In other words, if the misconduct in this case is deemed to be grave enough, the Commissioner presumably could impose some sort of administrative sanction against Wilmington Trust, Johnson Lambert, or McSoley McCoy, or, perhaps, even remove one or more of them from the list of pre-approved service providers. If the Commissioner is unable to achieve what she deems appropriate levels of consumer protection and industry deterrence, she has been delegated the authority to promulgate further regulations consistent with the insurance statute.211 Finally, if the statutory tools thus far granted to the DDOI are insufficient, it is the province of the Delaware General Assembly, not this Court, to provide a tailored solution, in a process open to all relevant stakeholders and capable of balancing the numerous, and sometimes competing, considerations democratically. For all of the foregoing reasons, I am not convinced that public policy would be better served by preventing defendants from relying on the defense of in pari delicto merely because the commercial backdrop is that of insurance. Indeed, because of the highly regulated nature of insurance in this State, I do not consider it appropriate to undermine the policies advanced by the in pari delicto doctrine, when the purported benefits of doing so here appear to be achievable within the robust regulatory framework that already exists. 210 18 Del. Admin. C. §§ 302-2.4, 302-4.2. 211 18 Del. C. § 311. 76 5. Should Delaware law recognize a common law “auditor exception” to in pari delicto? At this point in my analysis, the imputation of Jackson‘s knowledge and actions to the SPI Entities is presumed, and in pari delicto applies to bar the Receiver from asserting the SPI Entities‘ claims, unless I accept the Receiver‘s final argument in favor of a special ―auditor exception‖ to the doctrine. In asking this Court to recognize an ―auditor exception‖ to the in pari delicto doctrine, the Receiver seeks adoption of her interpretation of the dictum in AIG I to the effect that, were he able to address the applicability of in pari delicto to bar AIG‘s claims against PwC under Delaware law, then-Vice Chancellor Strine may not have applied the doctrine. Viewing the dictum in AIG I in context with the rest of Delaware corporate case law, I do not read our precedent as supporting the broad carve-out from in pari delicto that the Receiver urges. I do agree, however, with the sentiment voiced in AIG I and AIG II that auditors are different from genuine third parties when it comes to analyzing whether in pari delicto should apply, and they ought not be afforded the protection of that rule based on a rote application of agency law principles. As those considerations relate to the particular facts of this case, I conclude, for the reasons that follow, that the claims against Wilmington Trust and the Auditor Defendants for breach of contract and negligence must be dismissed. I decline to dismiss, however, the claims against those Defendants for aiding and abetting breaches of fiduciary duty. Before focusing on Delaware law, I note that several states have created specific exceptions from in pari delicto to allow corporations claims‘ against auditors to proceed. 77 For example, in NCP Litigation Trust v. KPMG LLP, the Supreme Court of New Jersey held that a liquidation trustee was not barred from bringing a negligence claim against an auditor whose alleged negligence contributed to the damages caused by the fraud of the liquidated corporation‘s insiders.212 The court placed limitations on the holding in NCP Litigation Trust, however. Specifically, an auditor retains the right to raise the ―imputation defense,‖ as it is called there, against a stockholder who had participated in the fraud, or defendants who by reason of their role in the company should have known about the fraud but did not, or stockholders whose stake in the company was large enough that they should have been able to exercise some oversight over company operations.213 Because the NCP rule is intended to allow ―only ‗innocent‘ shareholders to recover,‖ the court expressly noted that the assessment of relative fault in this regard is a factual question that generally requires development of the factual record through discovery and trial.214 The Supreme Court of Pennsylvania also responded to a fact pattern involving alleged auditor participation in corporate insiders‘ fraud by qualifying its in pari delicto doctrine, although it took a slightly different tack.215 There, the Pennsylvania Court 212 901 A.2d 871, 882-83 (N.J. 2006). 213 Id. at 885-86. 214 Id.; see also id. at 886 n.3. 215 Official Comm. of Unsecured Creditors of Allegheny Health Educ. & Research Found. v. PricewaterhouseCoopers, LLP, 989 A.2d 313 (2010) [hereinafter ―AHERF‖]. 78 based its determination of whether the insiders‘ fraud should be imputed to the corporation to bar claims against co-wrongdoers (including auditors) on a test of good faith. That is, while imputation generally applies under Pennsylvania law, the court precluded reliance on the in pari delicto defense by an auditor that ―has not dealt materially in good faith with the client-principal,‖ with the goal of foreclosing application of the doctrine in ―scenarios involving secretive collusion between officers and auditors to misstate corporate finances to the corporation‘s ultimate detriment.‖216 As noted above, the Court of Appeals of New York in Kirschner strictly adhered to the traditional in pari delicto defense. The discussions and reasoning contained in the NCP Litigation Trust, AHERF, and Kirschner decisions are enlightening on this issue, but none of them are controlling, nor do I consider their logic dispositive of the issue before me. a. Neither the case law nor public policy support a blanket “auditor exception” to in pari delicto The Receiver asks this Court to interpret Delaware‘s formulation of the in pari delicto doctrine as not applying to any claims against auditors. In making that argument, she relies on: (1) AIG I and AIG II; and (2) policy-based reasoning.217 I am not persuaded that either the rationale of the AIG decisions or general policy considerations support such a sweeping exception to in pari delicto. 216 Id. at 339. 217 Receiver‘s Answering Br. to Auditor Defs. 37-41. 79 First, as the Receiver correctly notes, AIG I does suggest that Delaware law should approach on its own terms the question of whether auditors can raise in pari delicto, and not mechanically follow the approach of New York or any other state. When read alongside AIG II, as it must be, however, the rationale of AIG I does not support veering to the opposite extreme by entirely setting aside in pari delicto to allow any and all claims against auditors. The AIG I opinion observes, for example, that ―one can quibble with [the New York approach] while still having doubt about the public policy utility of exposing audit firms to uncapped liability for their negligent failure to detect financial fraud by corporate managers.‖218 In that vein, then-Vice Chancellor Strine briefly noted that ―a more thoughtful tact‖ would not involve simply allowing any and all causes of action against auditor defendants to proceed, but rather would seek responsibly to calibrate the auditors‘ ex post liability through the use of heightened standards of pleading, liability, and proof, and damages caps.219 In that regard, the Court noted in AIG I that ―[a]lthough audit fees are lucrative, they arguably pale in comparison to the potential liability the auditors face,‖ and going too far in the direction of imposing ex post liability can backfire.220 218 AIG I, 965 A.2d at 828 n.246. 219 Id. 220 Id.; see also id. (―The even larger disproportion between independent directors fees and liability inspired § 102(b)(7) as well as the gross negligence standard Delaware corporate law applies in cases when a § 102(b)(7) clause does not apply. One can therefore understand the concern about the need to keep the auditor industry healthy, or to avoid the possibility that audit firms will suffer huge 80 Moreover, in deciding which law applied in AIG I, the Court expressly considered the Delaware public policy interests that could have been furthered by refusing to apply New York law (and possibly precluding PwC from asserting the in pari delicto defense).221 The Court ultimately concluded, however, that those considerations do not trump our choice-of-law principles and the policy goals they protect. To the extent the Receiver relies on AIG I as supporting the proposition that all other policy interests must yield to the benefits that arguably flow from precluding auditors from raising the in pari delicto defense, I find that reliance misplaced. Second, I question the policy arguments the Receiver makes in favor of a broad exception to in pari delicto for any and all claims against auditors. A theme of the Receiver‘s argument in this case, and in decisions like AHERF and NCP, is that allowing in pari delicto to bar claims against auditors essentially would subvert two policy goals in that: (1) innocent stockholders and creditors who were harmed would be deprived of a remedy for that harm; and (2) auditor misconduct, either knowing or negligent, would go unpunished. I consider both of those contentions misguided. With the first, a flawed premise is disguised by noble sentiment. For starters, in pari delicto only acts to bar claims that in fact belong to the corporation, so it would not verdicts by fact-finders desirous of holding anyone they can liable for a fraud- based corporate meltdown or whose judgment about the auditor‘s capability to have detected the fraud through the use of professional diligence is compromised by hindsight bias.‖). 221 Id. at 821-22. 81 preclude a stockholder or creditor who suffered a direct harm from bringing a direct claim to redress it. Even in cases where it might apply, however, in pari delicto will not bar the corporation from suing its faithless fiduciaries, because of the fiduciary duty exception. Thus, the corporation has at least some remedy for wrongs done and a source for recoupment of its losses. Even if concern for innocent stockholders were considered the most important factor, however, making the defense of in pari delicto unavailable to auditor defendants would be problematic. Adopting such a rule would mean that a wrongdoer-corporation gets to sue its auditor and cause the innocent residual claimants of that firm to bear the cost of the lawsuit and any damages, while residual claimants of true third-party co- conspirators (like Gen Re, Marsh, or ACE in AIG II) would enjoy the protection of in pari delicto. The imbalance of such a rule is especially pronounced where the audit firm is allegedly negligent, while the corporation‘s fiduciaries and the agents of the third-party co-conspirators are accused of purposefully engaging in fraud. A second main policy contention proffered by the Receiver—that carving out an auditor exception from in pari delicto would undermine efforts to encourage auditors to do a better job monitoring—takes a blinkered view of the world. It is one thing to accept the premise that our corporate law should not automatically dismiss on in pari delicto grounds all claims against auditors in cases involving serious corporate misconduct. It is a significant leap, however, to conclude from that premise that the best policy answer is to open a floodgate of ex post auditor liability. 82 The independent auditor undoubtedly plays a central role in effectuating important public policies implicated in corporate law, such as investor protection, efficient capital markets, and good corporate governance. Auditors are so central, in fact, that there are numerous governmental and non-governmental bodies currently regulating and otherwise overseeing the audit industry.222 Thus, to the extent it is suggested that the blunt instrument of ex-post liability in contract or tort will cause auditors to do their jobs better, it is questionable whether this Court would have much to add in this already well-covered field. The best-case scenario is that the Court adequately understands and applies the 222 Depending on who their client is, for example, auditors are subject to ―authoritative‖ standard-setting by, among others: the Federal Accounting Standards Advisory Board; the Financial Accounting Standards Board; the Governmental Accounting Standards Board; the Public Company Accounting Oversight Board (―PCAOB‖); the International Accounting Standards Board; and the International Auditing and Assurance Standards Board, in addition to the relevant boards and committees of the American Institute of CPAs, such as the Auditing Standards Board. See Authoritative Standards, AM. INST. OF CERTIFIED PUBLIC ACCOUNTANTS (last accessed Mar. 23, 2015), http://www.aicpa.org/Publications/AuthoritativeStandards/Pages/AuthoritativeSta ndards.aspx. See also 15 U.S.C.A. § 7211(c) (conferring upon the Securities and Exchange Commission (―SEC‖) the power to register and inspect public accounting firms, issue rules governing public company audits, investigate and discipline registered auditors, and otherwise ―enforce compliance‖ with Sarbanes- Oxley, PCAOB rules, professional standards, and the federal securities laws); John C. Coffee, Jr., Gatekeeper Failure and Reform: The Challenge of Fashioning Relevant Reforms, 84 B.U. L. REV. 301, 336-37 (2004). This structure of audit regulation does not disappear as the focus narrows from the national level and public companies to the particular facts of this case. In Delaware, as in presumably most states, the legislature has created a State Board of Accountancy to protect the public from incompetent auditing. 24 Del. C. § 101. That Board has the power to develop standards assuring professional competence, monitor and adjudicate complaints brought against practitioners, promulgate rules and regulations, and impose sanctions where necessary. 83 applicable audit standards and generally accepted accounting principles (―GAAP‖) equally as well as the relevant regulatory body whose core jurisdiction such issues fall under. Even if the Court succeeds at that endeavor, the results—from the perspective of auditor monitoring and deterrence—ideally should be duplicative. Thus, the benefits in terms of auditor deterrence would likely be more limited than the Receiver suggests. For those reasons, I find that the purported benefits (in terms of investor protection and auditor deterrence) of creating an exception to in pari delicto for all claims against auditors are not sufficient to justify undermining the policy principles girded by the doctrine, which protect the Court from accounting among wrongdoers. In addition to the lack of persuasive benefits associated with that kind of sweeping exception, some negative outcomes likely would flow from it. In that regard, one consideration is whether it makes sense for a court of equity to purport to place itself on the level of, for example, the SEC, the PCAOB, the AICPA, or the State Board of Accountancy in terms of evaluating the performance of auditors. With respect to monitoring auditors, the experience and sophistication of those or other relevant audit and accounting regulatory bodies is beyond that of law-trained judges, and their capacity to govern the audit industry is appropriate for the scale of that endeavor. In my view, this Court should avoid entangling itself unnecessarily in time- and resource-consuming inquiries about whether GAAP and relevant audit standards were met, which would be the foreseeable outcome if, for example, in pari delicto did not bar contract and negligence claims in cases like this one. Because regulatory bodies exist for conducting such inquiries, I 84 consider it ill-advised to insert this Court into matters within the core mandate of those bodies. b. Well-pled aiding and abetting claims against defendants like auditors should not be barred by in pari delicto Although the AIG decisions and the public policy considerations just discussed do not point to a sprawling exception from in pari delicto for any and all claims against auditors, they do support a more limited exception grounded in both the nature of the claim asserted and the party likely to raise in pari delicto to bar that claim. As discussed, Delaware law sets aside in pari delicto when a receivership trustee or derivative plaintiff seeks to sue the corporation‘s own fiduciaries for breach of their fiduciary duties. Applying the same reasoning, I conclude that Delaware law should do the same where an auditor or similar defendant is alleged to have aided and abetted such breach. Rather than create an expansive new ―auditor exception‖ to in pari delicto, therefore, I determine that the fiduciary duty exception extends to cover well-pled aiding and abetting claims against defendants like auditors. Thus, in this case, the claims against the Wilmington Trust and the Auditor Defendants for breach of contract and negligence will be barred by in pari delicto, but the claims against them for aiding and abetting breaches of fiduciary duty will not. Both AIG I and AIG II recognize that defendants like auditors should be treated differently than other third parties when it comes to in pari delicto. AIG I also made the nuanced observation that claims against a defendant like PwC for aiding and abetting a breach of fiduciary duty would be materially different from breach of contract or 85 negligence claims against PwC. Then-Vice Chancellor Strine placed ―an important caveat‖ on his decision not to apply Delaware law in AIG I, observing that had the stockholder derivative plaintiffs there stated claims against PwC for aiding and abetting breaches of fiduciary duty, his choice of law analysis might have been ―quite different.‖223 But ―[b]ecause PWC only face[d] claims for malpractice and breach of contract, rather than claims that it consciously aided wrongful managerial misconduct,‖ he applied New York law and ultimately dismissed all claims as New York law required him to.224 I agree that claims for aiding and abetting breaches of fiduciary duty differ materially from contract and negligence claims, because with the former, the corporation‘s internal affairs are the focus of the claim.225 The policy goals advanced by in pari delicto, while important enough to outweigh this Court‘s interest in adjudicating breaches of contract and negligence claims at the periphery of a corporation‘s affairs, 223 AIG I, 965 A.2d at 822. 224 Id. 225 The elements for establishing such a claim are well known: (1) a fiduciary relationship; (2) breach of the fiduciary‘s duty; (3) knowing participation in the breach by the alleged aider-and-abettor; and (4) causation of damages. Malpiede v. Townson, 780 A.2d 1075, 1096 (Del. 2001). In this regard, I note that, because of the significant overlap in their respective elements, much of the evidence for proving an aiding and abetting claim already would be coming in to prove the breach of fiduciary duty claim under the fiduciary duty carve-out to in pari delicto. Claims for breach of an audit contract or for professional negligence involve little or no such salutary overlap, which both reinforces the fundamental difference in the nature of the claims, and adds a practical reason for drawing this distinction. 86 should not outweigh the importance of this Court‘s ability to adjudicate core fiduciary duty claims arising out of entities organized under Delaware law. AIG II gives a further, equally critical insight, however: not all aiding and abetting claims are created equal. Thus, in AIG II, the Court applied Delaware law to dismiss aiding and abetting claims that the stockholder derivative plaintiffs sought to prosecute against the third-party co-conspirators (Gen Re and Marsh). The lack of analogous aiding and abetting claims was notable in AIG I, but that distinction was mentioned only in passing in AIG II.226 The distinction in the AIG cases between third parties like ACE, Gen Re, and Marsh on one hand and PwC on the other comports with the reality that non-fiduciaries like auditors, who occupy a position of trust and materially participate in the traditional insiders‘ discharge of their fiduciary duties, are different from other third parties with whom the corporation may transact business.227 For purposes of the motions currently before me, I need not dilate upon this distinction, because it is evident from the face of the Complaint that both Wilmington Trust and the Auditor Defendants are alleged to 226 AIG II, 976 A.2d at 879 (―[T]he plaintiffs have brought claims for fraud, conspiracy, and aiding and abetting a breach of fiduciary duty against Gen Re.‖); id. at 881 (―[T]he Complaint pleads counts of fraud and conspiracy against Marsh & McLennan, ACE, and Rivera, as well as counts of aiding and abetting a breach of fiduciary duty and unjust enrichment against Marsh.‖). 227 See AIG II, 976 A.2d at 895; see also id. at 895 n.60 (―Suits against corporate agents like outside auditors are best conceived of as also within the confines of a single corporate conspirator and are consistent with the traditional acceptance of derivative suits against corporate insiders.‖). 87 have played a ―gatekeeper‖ role vis-à-vis the SPI Entities. On that basis alone, the aiding and abetting claims against them are fundamentally unlike those that were dismissed in AIG II. I conclude, therefore, that in pari delicto does not provide grounds for dismissing the aiding and abetting claims against Wilmington Trust and the Auditor Defendants. c. The Complaint states claims for aiding and abetting breaches of fiduciary duty against Wilmington Trust and Johnson Lambert, but not McSoley McCoy For the reasons stated in the preceding Sections, the Receiver‘s claims against Wilmington Trust and the Auditor Defendants for breach of contract and negligence are dismissed on grounds of in pari delicto, but the claims for aiding and abetting breaches of fiduciary duty are not. As I next discuss, the Complaint adequately states aiding and abetting claims as to Wilmington Trust and Johnson Lambert, but not as to McSoley McCoy.228 To survive a motion to dismiss, a complaint must allege facts that satisfy the four elements of an aiding and abetting claim: (1) the existence of a fiduciary relationship, (2) 228 The Complaint purports to name Kantner as a Defendant in connection with the aiding and abetting claims in Count 12. Compl. ¶ 381. As discussed above, Kantner owes fiduciary duties to the SPI Entities by reason of his position as a director, and is accused of breaching those duties. Any conduct of Kantner‘s that conceivably might rise to the level of aiding and abetting a breach of fiduciary duty in this regard would simply be a further breach of Kantner‘s own duties. Accordingly, Count 12 is dismissed as to Kantner. See, e.g., Gilbert v. El Paso Co., 490 A.2d 1050, 1057 (Del. Ch. 1984), aff’d, 575 A.2d 1131 (Del. 1990); Penn Mart Realty Co. v. Becker, 298 A.2d 349, 351 (Del. Ch. 1972); see also Higher Educ. Mgmt. Gp., Inc. v. Mathews, 2014 WL 5573325, at *13 (Del. Ch. Nov. 3, 2014). 88 a breach of the fiduciary‘s duty, (3) knowing participation in that breach by the defendants, and (4) damages proximately caused by the breach.229 As to the existence of fiduciary duties, alleged breaches thereof, and resulting damages, the Complaint contains allegations sufficient to support a reasonable inference of two general types of breach, both amply discussed in this Opinion: (1) the purposeful fraud ascribed to James M. Jackson; and (2) the alleged failure on the part of at least the SPI Entities‘ director Kantner to exercise sufficient oversight, in breach of his duty of loyalty. Thus, as with most cases involving aiding and abetting liability, the sufficiency of the claims against the Moving Defendants in this regard ―largely come[s] down to what constitutes ‗knowing participation.‘‖230 Specifically, the relevant inquiry is whether it is reasonably conceivable, based on the non-conclusory allegations in the Complaint and all reasonable inferences drawn from them, that Wilmington Trust, Johnson Lambert, and McSoley McCoy ―knowingly participated‖ in either of the alleged breaches described in items (1) and (2) here. At this preliminary stage of the litigation, I cannot rule out the possibility, based on the allegations in the Complaint, that Wilmington Trust and Johnson Lambert knowingly participated in James M. Jackson‘s fraudulent scheme in breach of his fiduciary duties. I need not decide that question for purposes of the pending motions to 229 Malpiede v. Townson, 780 A.2d 1075, 1096 (Del. 2001). 230 Carlton Invs. v. TLC Beatrice Int’l Hldgs., Inc., 1995 WL 694397, at *15 (Del. Ch. Nov. 21, 1995). 89 dismiss the aiding and abetting claim, however, because it also is reasonably inferable that Wilmington Trust and Johnson Lambert knowingly participated in, at least, the breaches of fiduciary duty allegedly committed by the SPI Entities‘ other directors, in the critical sense that they ―created the unreasonable process and informational gaps that led to the Board‘s breach of duty.‖231 Drost and Theriault of Wilmington Trust worked hand-in-glove with Handy and Bolton of Johnson Lambert to prepare the 2007 and 2008 Audited Financial Statements. Those processes were replete with alleged irregularities, and it is reasonable at this stage to infer that both Wilmington Trust and Johnson Lambert knew something was significantly wrong within the SPI Entities‘ operations. In one of the more glaring episodes detailed in the Complaint, after receiving bank account confirmations from Wachovia and Bank of America that widely diverged from the information provided by Jackson, Handy and Drost followed Jackson‘s instructions to talk to ―Alpesh‖ in order to straighten things out. At one point, Drost and Handy actually discussed how strange it was that their given contact person for Wachovia bank was the same as for Wachovia Securities, in light of the strict separation of those units normally observed within Wachovia‘s structure. Drost knew something was wrong, or at least it is reasonably inferable that he did, when he stated ―maybe, and hopefully [it was] OK‖ that ―Alpesh‖ was the contact person for both. But Drost‘s disbelief was evident in his saying that they should try to contact both sides of the Wachovia structure to figure out why all of the 231 In re Rural Metro, 88 A.3d at 99. 90 huge discrepancies ―suddenly‖ were explained away.232 Lengthy and unexplained delays occurred, but were not challenged by Wilmington Trust or Johnson Lambert in trying to resolve this issue. When, months after he initially inquired, Bolton finally heard from ―Alpesh,‖ the explanation Alpesh gave did not convince either Bolton or Drost. Nevertheless, Drost concocted what he admitted was an ―optimistic‖ re-interpretation of Alpesh‘s story, and on that basis he checked the final boxes and Wilmington Trust and Johnson Lambert marked the 2007 Audited Financial Statements complete, nearly a year after they set out to complete it.233 These alleged facts are only examples, and perhaps they and the numerous other relevant facts alleged in the Complaint conceivably could be explained away as negligence, or perhaps gross negligence, on the part of Wilmington Trust and Johnson Lambert. One instance where they conceivably cross the threshold of ―scienter,‖ however, is in connection with those entities advising the SPI Entities‘ Boards at the meetings in February and October 2009. Drost, Theriault, and (presumably) Kantner of Wilmington Trust were in attendance at those Meetings, at which the Johnson Lambert 232 See Compl. ¶¶ 165-175. 233 Id. ¶¶ 204-209. I note also that when he was briefing McSoley McCoy after they were retained for the 2009 audit, Drost said that in trying to call ―Alpesh,‖ he didn‘t ―seem to have any success getting through, or even getting an opportunity to leave a message.‖ Id. ¶ 287. That was in May 2010. After two full years of communicating with ―Alpesh,‖ Drost still had a hard time getting in touch with him. Drawing all inferences in favor of the Receiver on the pending motions to dismiss, I cannot rule out the possibility that, on the facts alleged, she could show that Wilmington Trust and Johnson Lambert knew that something about this was extremely suspicious. 91 audited financial statements were approved with little or no discussion. In connection with the February 2009 Meeting and the 2007 Audited Financial Statements, Johnson Lambert advised the directors in the Significant Matters Letters that the audit irregularities already had been addressed. The facts alleged in the Complaint, however, suggest that they knew otherwise—as evidenced, at least, by the fact that the same difficulties came up the following year. The Jackson Letter further suggested that certain procedures should be improved in connection with the bank account reconciliations. At a later point, Wilmington Trust advised Jackson that they wanted to have direct access to the bank accounts so that they could confirm balances without going through Jackson. Those suggestions and requests were ignored by Jackson, but neither Wilmington Trust nor Johnson Lambert ever attempted to follow up with the other directors. Though the situation in terms of the audit irregularities apparently did not improve between the February 2009 Meeting and the October 2009 Meeting, Johnson Lambert did not send another Significant Matters Letter or otherwise update the Boards. It is reasonably inferable, therefore, that both Wilmington Trust and Johnson Lambert knew that the directors were not informing themselves and not exercising their oversight responsibility, when those Defendants arguably first presented the ―significant matters‖ as being less of a problem than they actually were, and then allowed the directors to ignore the letters and the suggestions contained within them. This knowing lack of follow-up directly created the ―unreasonable process‖ and ―informational gaps‖ that are alleged to have led to the 92 234 Board‘s breaches of fiduciary duties. Accordingly, I refuse to dismiss the claims asserted by the Receiver against Wilmington Trust and Johnson Lambert for aiding and abetting a breach of fiduciary duty. The situation is materially different with respect to McSoley McCoy. It reasonably might be inferred that they conducted their audit process in a negligent or even grossly negligent manner because, like Johnson Lambert, McSoley McCoy apparently relied on the mysterious Alpesh, and unquestioningly accepted the forged fax copy of the confirmation form regarding the Key Man Policy without following up to obtain the original of that document from Hartford Life. But, McSoley McCoy entered the picture much later than Johnson Lambert, and the Complaint alleges that it largely followed the process that Wilmington Trust laid out as being ―routine‖ for the SPI Entities‘ audits. The critical link in the factual allegations regarding Wilmington Trust and Johnson Lambert was their knowing failure to follow up on the original warnings they provided to the Board in connection with the first audit, despite experiencing very similar irregularities the next year. McSoley McCoy, however, was not around long enough to have engaged in such a dereliction of their responsibilities. Thus, the Complaint fails to allege sufficient facts as to McSoley McCoy to support a reasonable inference that it ―knowingly‖ participated in the Board‘s alleged breaches of fiduciary duty. I therefore dismiss the aiding and abetting claim as it relates to McSoley McCoy. 234 Rural Metro, 88 A.3d at 97-100. 93 III. CONCLUSION For the reasons stated in this Opinion, I dismiss the claims for breach of fiduciary duty against Wilmington Trust and the Auditor Defendants for failure to state a claim. The motion to dismiss the claim for breach of fiduciary duty against Kantner, however, is denied. The claims for negligence and breach of contract as to Wilmington Trust and the Auditor Defendants are dismissed on grounds of in pari delicto. I further conclude that the claims against those Defendants for aiding and abetting a breach of fiduciary duty are not subject to the in pari delicto defense, and that the claims in that regard against Wilmington Trust and Johnson Lambert are well-pled. Accordingly, I deny the motion to dismiss the aiding and abetting claims against Wilmington Trust and Johnson Lambert. I grant the motion of McSoley McCoy, however, to the extent it seeks dismissal of the aiding and abetting claim against it, because in that respect the Complaint fails to state a claim upon which relief could be granted. In summary, I grant the motions to dismiss Counts 1 through 10. Count 11 is dismissed as to Wilmington Trust, but not as to Kantner.235 I grant dismissal of Count 12 as to McSoley McCoy and Kantner, but not as to Wilmington Trust or Johnson Lambert. IT IS SO ORDERED. 235 Count 11 also accuses Defendants James M. Jackson, King, and Davis of breaching their fiduciary duties. As those Defendants are not before me on the pending motions to dismiss, Count 11 is not dismissed as it relates to them. 94

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986 So.2d 1224 (2007) Richard Keith DUCKER v. STATE of Alabama. CR-06-0436. Court of Criminal Appeals of Alabama. August 31, 2007. *1225 Thomas M. Goggans, Montgomery, for appellant. Troy King, atty. gen., and Marc Bass, asst. atty. gen., for appellee. WELCH, Judge. Richard Keith Ducker pleaded guilty to first-degree theft, a violation of § 13A-8-3, Ala.Code 1975. The trial court adjudicated Ducker guilty and sentenced him to 20 years' imprisonment. The trial court also fined him $5,000 and ordered him to pay an assessment of $2,500 to the crime victims compensation fund. At the plea hearing, Ducker was represented by his attorneys of record, Derek E. Yarbrough and William C. White II. The prosecution stated at the hearing that it expected the evidence to show that Ducker, a Houston County sheriff's deputy, also worked at Southern Outdoor Sports, a retail sporting-goods store, from October 15, 2003, to May 11, 2005. The prosecution alleged that, while working at the store, Ducker stole more than $20,000 worth of sporting goods. Ducker acknowledged that the State's allegations were true. Before Ducker entered his plea, the trial court informed him that he could be sentenced to a prison term of between 2 and 20 years and fined up to $10,000. Ducker indicated that he understood the sentencing range and went forward with his guilty plea. Ducker was sentenced at a separate hearing. Derek Yarbrough accompanied him as his attorney at the sentencing hearing. At the hearing, Yarbrough argued that Ducker's sentence of 20 years' imprisonment was excessive for a first-time offender. After reviewing the victim-impact statements submitted in this case, hearing arguments from the attorneys, and hearing testimony, the trial court sentenced Ducker to 20 years in prison. In doing so, the trial court noted that Ducker had breached the trust placed in him as a law-enforcement officer and that he had shown no remorse for his actions. After sentencing, Ducker, through Yarbrough, filed a motion to withdraw his *1226 guilty plea on the grounds that Ducker's sentence was excessive and that the trial court failed to follow the voluntary sentencing standards, § 12-25-30 et seq., Ala. Code 1975, which became effective October 1, 2006. Again, a separate hearing was held on the motion to withdraw the guilty plea. At the outset of that hearing, William White was allowed to withdraw from the case because of "a conflict in [his] representation of Mr. Ducker." (Sentencing Record, p 4.) Ducker requested a continuance so he could retain counsel; however, that request was denied. Ducker's motion to withdraw his guilty plea was also denied. I. Ducker contends that the trial court's failure to consider the voluntary sentencing standards of the Alabama Sentencing Reform Act of 2003, § 12-25-30 et seq., Ala.Code 1975, ("the Act") constitutes reversible error requiring that Ducker be resentenced. The stated purpose of the Act is "to protect public safety by providing a fair, effective, and efficient criminal justice system" through a variety of means, including the use of "[v]oluntary sentencing standards used to guide judicial decision makers in determining the most appropriate sentence for convicted felony offenders." § 12-25-31(a)(1), Ala.Code 1975. Ducker is correct in saying that the record does not reflect that the trial court considered the voluntary sentencing standards when determining Ducker's sentence. However, the Act specifically provides that "[f]ailure to follow any or all of the provisions of this section [use of voluntary sentencing standards], or failure to follow any or all of the provisions of this section in the prescribed manner, shall not be reviewable on appeal or the basis of any other post-conviction relief." § 12-25-35(f), Ala.Code 1975 (emphasis added). Accordingly, although it appears that the trial court in this case failed to consider the voluntary sentencing standards, that failure does not provide a legal basis for setting aside Ducker's conviction or resentencing him. Ducker's argument to the contrary is without merit. II. Ducker also argues that the trial court violated his right to counsel under the Sixth and Fourteenth Amendments of the United States Constitution by forcing him to proceed on his motion to withdraw his guilty plea without the benefit of counsel even though Ducker had requested a continuance to give him time to obtain counsel for the hearing. As mentioned above, Ducker's attorney William White was granted permission to withdraw from his representation of Ducker at the outset of the hearing on Ducker's motion to withdraw the guilty plea. From the record, it does not appear that Ducker's other attorney, Yarbrough, was present at that hearing, and no explanation is given on the record for his absence. Additionally, the record does not indicate that Yarbrough ever withdrew from his representation of Ducker. After the trial court granted White's motion to withdraw, the following colloquy took place: "THE COURT: Mr. Ducker, are you going to represent yourself this morning? "MR. DUCKER: I'd just ask for a continuance. "THE COURT: It is denied. You've had plenty of time to get an attorney. You've got the money to get an attorney. That is denied. This Court is going ahead. *1227 "Okay. I'll hear you on your motions, since you are representing yourself, sir. "MR. DUCKER: I would like to ask to withdraw my guilty plea or ask for a reduced sentence...." ".... "THE COURT: Okay, I'll hear you. Go ahead. "MR. DUCKER: I'd just like, with the Thanksgiving holidays, I haven't had a chance to get an attorney. And I'd like to withdraw my guilty plea and have the time to get an attorney. "THE COURT: Well, you have got to have reasons for that, you understand, don't you? Have you got any reasons for it? "MR. DUCKER: For "THE COURT: For withdrawing your guilty plea. You got up here and pled guilty before the Court, and the Court went through all your rights. Have you got a reason why you want to "MR. DUCKER: Yes, sir. I think the maximum sentence on a first time offense "THE COURT: Well, I'll hear from the State." (Hearing on Motion to Withdraw Plea, R. 4-6.) No other discussions regarding Ducker's request for an attorney were had during the hearing. This Court recently held that the trial court improperly deprived a defendant of his right to counsel when it denied that defendant's request to be represented by counsel for purposes of his motion to withdraw his guilty plea. Casteel v. State, 976 So.2d 505 (Ala.Crim.App.2007). In reaching that holding, this Court explained its rationale as follows: "`The Sixth Amendment guarantees the right of counsel to the accused in all criminal prosecutions. U.S. Const. Amend. VI. This right to counsel encompasses all federal and state criminal prosecutions that result in imprisonment. Argersinger v. Hamlin, 407 U.S. 25, 92 S.Ct. 2006, 32 L.Ed.2d 530 (1972); Gideon v. Wainwright, 372 U.S. 335, 83 S.Ct. 792, 9 L.Ed.2d 799 (1963). This right is applicable to the states by virtue of the Fourteenth Amendment. Gideon v. Wainwright. The right attaches at the initiation of adversary judicial proceedings, and extends to every critical stage of the proceedings. United States v. Wade, 388 U.S. 218, 87 S.Ct. 1926, 18 L.Ed.2d 1149 (1967). A critical stage is any stage where a substantial right of an accused may be affected, Mempa v. Rhay, 389 U.S. 128, 88 S.Ct. 254, 19 L.Ed.2d 336 (1967), and can arise in pre-trial as well as post-trial proceedings. See Moran v. Burbine, 475 U.S. 412, 106 S.Ct. 1135, 89 L.Ed.2d 410 (1986) (pre-trial right to presence of attorney violated during any interrogation occurring after the first formal charging proceedings, absent a valid waiver); Brewer v. Williams, 430 U.S. 387, 97 S.Ct. 1232, 51 L.Ed.2d 424 (1977) (pre-trial right to counsel violated where judicial proceedings had been initiated and confession obtained without the presence of counsel and in absence of a valid waiver); Johnston v. Mizell, 912 F.2d 172 (7th Cir. 1990), cert. denied, 498 U.S. 1094, 111 S.Ct. 982, 112 L.Ed.2d 1067 (1991) (post-trial motion for new trial critical stage in criminal proceedings); Menefield v. Borg, 881 F.2d 696 (9th Cir.1989) (post-trial motion for new trial critical stage requiring counsel or valid waiver); King v. State, 613 So.2d 888 (Ala.Crim.App. 1993) (post-trial motion for new trial critical stage requiring counsel, absent a valid waiver). Courts have held that a motion to withdraw a guilty plea is a critical stage in a criminal proceeding [ ], requiring effective assistance of counsel. See, e.g., United States v. White, 659 *1228 F.2d 231 (D.C.Cir.1981); United States v. Crowley, 529 F.2d 1066 (3rd Cir.1976). In recognizing that a defendant in Alabama has a right to counsel at sentencing and in the first appeal, this court stated in King v. State, 613 So.2d at 891, "It would appear that if an indigent defendant is constitutionally entitled to the assistance of counsel at sentencing and in the first appeal as a matter of right, that defendant would be entitled to the assistance of counsel in the interim period, absent a waiver." "`Based upon the foregoing authorities, we find that a motion to withdraw a guilty plea is a critical stage in a criminal proceeding requiring representation of counsel or a valid waiver of the right to counsel. "`The right to counsel does not depend upon a request by the accused. Brewer v. Williams, 430 U.S. 387, 97 S.Ct. 1232, 51 L.Ed.2d 424 (1977); Kitchens v. Smith, 401 U.S. 847, 91 S.Ct. 1089, 28 L.Ed.2d 519 (1971). "[I]f an accused does not waive counsel and does not retain acceptable counsel, the court must appoint counsel." United States v. Turnbull, 888 F.2d 636, 638 (9th Cir. 1989), cert. denied, 498 U.S. 825, 111 S.Ct. 78, 112 L.Ed.2d 51 (1990). If a defendant in a criminal proceeding is not represented by counsel, the state must prove an intentional relinquishment of that right. Johnson v. Zerbst, 304 U.S. 458, 58 S.Ct. 1019, 82 L.Ed. 1461 (1938). If an accused waives his right to counsel, that waiver must be intelligently and understandingly made and cannot be presumed from a silent record. Carnley v. Cochran, 369 U.S. 506, 82 S.Ct. 884, 8 L.Ed.2d 70 (1962). "`"But it is settled that where the assistance of counsel is a constitutional requisite, the right to be furnished counsel does not depend on a request.... "`".... "`"... Presuming waiver from a silent record is impermissible. The record must show, or there must be an allegation and evidence which show, that an accused was offered counsel but intelligently and understandingly rejected the offer. Anything less is not waiver." "`Id. at 513-16, 82 S.Ct. at 889-90. "`The constitutional "right to counsel, or waiver thereof, is an essential jurisdictional prerequisite to the authority to convict an accused[, and c]onviction without this safeguard is void." People v. Carroll, 140 Cal. App.3d 135, 140, 189 Cal.Rptr. 327, 331 (Cal.App. 2 Dist.), cert. denied, 464 U.S. 820, 104 S.Ct. 83, 78 L.Ed.2d 93 (1983) (citing Johnson v. Zerbst). Unless a defendant has or waives assistance of counsel, the Sixth Amendment is a jurisdictional bar to a valid conviction and sentence. Johnson v. Zerbst; Stokes v. Singletary, 952 F.2d 1567 (11th Cir.1992); Boruff v. United States, 310 F.2d 918 (5th Cir.1962). See also Lancaster v. State, [638 So.2d 1370, 1373] (Ala.Cr.App.1993) ("the appellant's ... right to have counsel appointed on appeal [is a] jurisdictional matter[ ]; Lake v. City of Birmingham, 390 So.2d 36, 38 (Ala.Cr.App. 1980) (a record failing to reveal any of the circumstances surrounding the appellant's self-representation "will not support the trial court's judgment wherein the appellant was sentenced to a loss of liberty").'" "Berry v. State, 630 So.2d 127, 129-30 (Ala.Crim.App.1993) (footnotes omitted)." Casteel, 976 So.2d at 506-08. In this case, one of Ducker's attorneys was allowed to withdraw at the outset of the hearing on Ducker's motion to withdraw *1229 his guilty plea. Although no explanation is provided for the absence from the hearing of Ducker's other attorney of record, Yarbrough, it is clear from the record that Yarbrough was not present. Equally clear from the record is Ducker's unequivocal request to be represented by counsel at the hearing, which the trial court denied. The hearing went forward with Ducker acting pro se. Because a hearing on a motion to withdraw a guilty plea is a critical stage in the proceedings carrying with it the right to be represented by counsel, and because it is clear from the record that Ducker did not waive his right to counsel, the trial court erred in requiring Ducker to proceed with the motion hearing without an attorney. Casteel, supra. Accordingly, this cause is remanded, and the trial court is directed to conduct a new hearing on Ducker's motion to withdraw his guilty plea. At that hearing, Ducker is to be represented by counsel in accordance with the requirements of Rule 6.1, Ala. R.Crim.App., unless he clearly waives the right to such representation on the record. For the reasons set forth above, this cause is remanded for further proceedings consistent with this opinion. The return to remand shall include a transcript of the proceeding. The circuit court shall take all necessary action to ensure that the circuit clerk makes due return to remand at the earliest possible time and no later than 56 days from the date of this opinion. REMANDED WITH DIRECTIONS.[*] BASCHAB, P.J., and McMILLAN, SHAW, and WISE, JJ., concur. NOTES [*] Note from the reporter of decisions: On December 14, 2007, on return to remand, the Court of Criminal Appeals affirmed, without opinion.

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117 F.3d 1417 Central Bank of Houstonv.U.S.** NO. 96-20969 United States Court of Appeals,Fifth Circuit. June 05, 1997 Appeal From: S.D.Tex. ,No.CAH954674 1 Affirmed. ** Local Rule 36 case

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897 F.Supp. 342 (1990) Rita GREEN, et al., Plaintiffs, v. AIM EXECUTIVE, INC., et al., Defendants. No. 3:90CV7670. United States District Court, N.D. Ohio, Western Division. December 28, 1990. *343 *344 Barry W. Fissel, Eastman & Smith, Toledo, OH, for Rita Green and Daryl Dent. Stephen A. Rothschild, Shumaker, Loop & Kendrick, Toledo, OH, for AIM Executive Inc., Jeffrey L. Deperro, and Scott R. Deperro. John J. Siciliano, Fuller & Henry, Toledo, OH, David C. Weiss, Duane, Morris & Heckscher, Wilmington, DE, for Delaware Charter Guarantee and Trust Co. Irwin S. Haiman, McCarthy, Lebit, Crystal & Haiman, Cleveland, OH, for Prudential Securities Inc. James Lee Rogers, Barry W. Fissel, Mark C. Abramson, Eastman & Smith, Toledo, OH, for Martha Dent. MEMORANDUM AND ORDER JOHN W. POTTER, Senior District Judge. This action is before the Court on defendants' motion for partial summary judgment, plaintiffs' opposition and motion for partial summary judgment, defendants' reply and opposition to plaintiffs' motion for partial summary judgment, plaintiffs' first and second supplemental authority, and defendants' response. This is a class action brought under the Employee Retirement Income Security Act of 1974, as amended, 29 U.S.C. § 1001 et seq. (ERISA), by employees to obtain benefits under an employee profit sharing retirement plan maintained by their employer, AIM Executive, Inc. (AIM). The class consists of all present and former non-shareholder employees of defendant AIM who, during their employment by AIM, fulfilled the eligibility and participation requirements of the AIM Executive, Inc. Profit Sharing Plan in one or more plan years between 1983 and 1989. Under the Federal Rules of Civil Procedure, summary judgment is proper only where there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law. Fed. R.Civ.P. 56(c). The Supreme Court has recently stated that the inquiry is "whether the evidence presents a sufficient disagreement to require submission to a jury or whether it is so one-sided that one party must prevail as a matter of law." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 251-252, 106 S.Ct. 2505, 2512, 91 L.Ed.2d 202 (1986).... In reviewing a motion for summary judgment, however, all inferences "`must be viewed in the light most favorable to the party opposing the motion.'" See Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S.Ct. 1348, 1356-57, 89 L.Ed.2d 538 (1986) (quoting United States v. Diebold, Inc., 369 U.S. 654, 655, 82 S.Ct. 993, 994, 8 L.Ed.2d 176 (1962)). Ralph Shrader, Inc. v. Diamond International Corp., 833 F.2d 1210, 1213 (6th Cir. 1987). Matsushita demands only that the nonmoving party's inferences be reasonable in order to reach the jury, a requirement that was not invented, but merely articulated in that decision. If the [nonmoving party's] theory is ... senseless, no reasonable jury could find in its favor, and summary judgment should be granted. Eastman Kodak Co. v. Image Technical Servs., Inc., 504 U.S. 451, 468-469, 112 S.Ct. 2072, 2083, 119 L.Ed.2d 265 (1992) (footnote omitted). The party moving for summary judgment "always bears the initial responsibility of informing the district court of the basis for its motion, and identifying those portions of `the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits if any' which [he] believes demonstrate the absence of a genuine issue of material fact." Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 2553, 91 L.Ed.2d 265 (1986). The substantive law of the case identifies which facts are material. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 2510, 91 L.Ed.2d 202 (1986). Therefore, only disputes of facts affecting the outcome of the suit under the applicable substantive law will preclude the entry of summary judgment. Id. A moving party may discharge its burden "by `showing'that is, pointing out to the district courtthat there is an absence of evidence to support the nonmoving party's case." Celotex, 477 U.S. at 324-325, 106 *345 S.Ct. at 2554. Where the moving party has met its initial burden, the adverse party "must set forth specific facts showing that there is a genuine issue for trial." Anderson, 477 U.S. at 250, 106 S.Ct. at 2511. [W]here the nonmoving party will bear the burden of proof at trial on a dispositive issue, a summary judgment motion may properly be made in reliance solely on the "pleadings, depositions, answers to interrogatories, and admissions on file." ... Rule 56(e) therefore requires the nonmoving party to go beyond the pleadings and by her own affidavits, or by the "depositions, answers to interrogatories, and admissions on file," designate "specific facts showing that there is a genuine issue for trial." Celotex, 477 U.S. at 324, 106 S.Ct. at 2553. The focus of the parties' motions is on the remedies plaintiffs may seek under ERISA. Plaintiffs allege, inter alia, that AIM failed to make proper employer contributions to the profit sharing plan. Consequently, on termination of the plan, plaintiffs allege that they did not receive all of the benefits to which they were entitled. Plaintiffs seek to recover, not only the unpaid contributions owed under the plan, but also taxes that will allegedly be owed by the individual plan participants together with lost tax-deferred growth income for each participant's interest in the plan until each participant reaches age 70. The Court will first address defendants' motion for partial summary judgment. Defendants move for a declaratory judgment that, under ERISA, plaintiffs may not recover as damages the value of lost tax-deferred growth income and anticipated tax losses. The civil enforcement remedies codified at 29 U.S.C. § 1132 were intended to be the exclusive remedies in an ERISA action. Warren v. Society Nat'l Bank, 905 F.2d 975, 981 (6th Cir.1990). Section 1132(a) provides in relevant part: A civil action may be brought (1) by a participant or beneficiary * * * * * * (B) to recover benefits due to him under the terms of his plan, to enforce his rights under the terms of the plan, or to clarify his rights to future benefits under the terms of the plan; (2) by the Secretary, or by a participant, beneficiary or fiduciary for appropriate relief under section 1109 of this title; (3) by a participant, beneficiary, or fiduciary (A) to enjoin any act or practice which violates any provision of this subchapter or the terms of the plan, or (B) to obtain other appropriate equitable relief (i) to redress such violations or (ii) to enforce any provisions of this subchapter or the terms of the plan. First, Defendants argue that plaintiffs cannot recover as damages the anticipated tax losses and lost tax-deferred growth income for claims arising under § 1132(a)(3)(B). While plaintiffs rely heavily on Warren v. Society Nat'l Bank, 905 F.2d 975 (6th Cir.1990) in arguing that such damages are recoverable under § 1132(a)(3)(B), defendants contend that the Sixth Circuit's reasoning in that opinion was rejected in Mertens v. Hewitt Assoc., ___ U.S. ___, 113 S.Ct. 2063, 124 L.Ed.2d 161 (1993).[1] In Warren, plaintiff brought suit pursuant to § 1132(a)(3)(B) against an ERISA fiduciary for breach of a contractual duty to make a single lump sum distribution of proceeds from his retirement plan. As a result, the plaintiff was unable to roll over the proceeds into a tax deferred IRA account. The injuries alleged by the plaintiff included income tax and tax interest liability, and loss of investment earnings that were the direct result of the fiduciary's breach. Warren, 905 F.2d at 980. In finding that the damages sought by plaintiff constituted "other equitable relief," the Court found Justice Brennan's concurrence in Massachusetts Mutual Life Ins. Co. v. Russell, 473 U.S. 134, 105 S.Ct. 3085, 87 *346 L.Ed.2d 96 (1985), to be instructive and stated:[2] We believe Justice Brennan's conclusion is correct that under the law of trusts, a beneficiary is entitled to a remedy that will put him in the position he would have been in if the fiduciary had not committed a breach of trust, and that such a remedy includes monetary damages.... It is the historic purpose of equity to secure complete justice, and courts may adjust their remedies so as to grant the necessary relief. Equitable relief may include monetary damages if necessary to do complete justice. Id. at 982 (internal citations omitted). The Court then concluded that In light of the plain language of the statute, the common law of trusts, and the role of courts in equity, we find that the damages sought by [plaintiff] are recoverable as "other appropriate equitable relief" under section [1132(a)(3)(B)(I)]. Id. The Court found its holding in Warren distinguishable from the holdings of other courts of appeal that have disallowed extracontractual damages under § 1132(a)(3) in that plaintiffs in other cases sought punitive damages or compensatory damages for such clearly consequential injuries as emotional distress. By contrast, in Warren, the plaintiff was deprived of a benefit to which he was entitled under the terms of the plan (i.e. a single lump sum distribution) which directly resulted in plaintiff being subject to tax liability. The focus in Warren, then, was on the role of courts in equity together with the direct nature of the injury resulting from a contractual breach of fiduciary duty. However, in its 1993 decision in Mertens, the Supreme Court specifically addressed the issue of "appropriate equitable relief" under § 1132(a)(3) and, in effect, rejected the reasoning employed by the Sixth Circuit in Warren. The Court noted that, although petitioners maintained that the object of their suit was "appropriate equitable relief," they were not seeking "a remedy traditionally viewed as `equitable,' such as injunction or restitution." Mertens, ___ U.S. at ___, 113 S.Ct. at 2068. Petitioners in Mertens argued that reading "equitable relief" to preclude awards for compensatory damages under § 1132(a)(3) fails to acknowledge ERISA's roots in the common law of trusts and that such relief for breach of duty has traditionally been obtained in courts of equity and, therefore is, by definition, equitable relief. Id. at ___, 113 S.Ct. at 2068. However, the Supreme Court rejected this argument stating that "Equitable relief" can also refer to those categories of relief that were typically available in equity (such as injunction, mandamus, and restitution, but not compensatory damages).... Since all relief available for breach of trust could be obtained from a court of equity, limiting the sort of relief obtainable under [§ 1132(a)(3)] to "equitable relief" in the sense of "whatever relief a common-law court of equity could provide in such a case" would limit the relief not at all. We will not read the statute to render the modifier superfluous. Id. at ___, 113 S.Ct. at 2069 (internal citations omitted). Thus, the Sixth Circuit's reliance *347 on the common law of trusts and the role of courts in equity in finding compensatory damages recoverable in Warren is no longer valid. See Richards v. General Motors Corp., 850 F.Supp. 1325, 1335 (E.D.Mich. 1994) ("To the extent that other courts (including the Sixth Circuit in Warren v. Society Nat'l Bank [citation omitted]) have allowed extracontractual compensatory damages under [1132(a)(3)], they are now overruled by the Supreme Court's holding in Mertens...."). The Sixth Circuit has acknowledged that, "in light of Mertens," the question is whether the relief requested is an equitable or legal remedy. Schwartz v. Gregori, 45 F.3d 1017, 1022 (6th Cir.1995). In Chauffeurs, Teamsters and Helpers Local No. 391 v. Terry, 494 U.S. 558, 110 S.Ct. 1339, 108 L.Ed.2d 519 (1990), the Court discussed generally the attributes which justify the characterization of a money award as equitable in determining whether or not a party is entitled to a jury trial. The Court stated that damages can be characterized as equitable where they are restitutionary or where they are incidental to or intertwined with injunctive relief. However, as indicated earlier, Mertens limited the definition of "equitable" relief in an ERISA context to preclude awards for damages simply because an equity court has the power (i.e. incident to its injunctive power) to award such damages. The Sixth Circuit recognized this limitation in Schwartz. In that case, plaintiff brought an action under § 510 of ERISA, 29 U.S.C. § 1140, alleging retaliatory discharge for filing suit to enforce her rights under an employer's pension plan. The relief sought by plaintiff included both back and front pay. Section 1132(a)(3) governs the relief available for claims brought pursuant to § 1140. Although the parties drew no distinction between back and front pay, the Court assessed each remedy separately. Id. In finding the requested back pay to be restitutionary relief, the court stated: Under Mertens, we cannot characterize relief as equitable solely because a court sitting in equity has the power to award it.... Thus, if Terry had characterized the back pay approved in [Mitchell v. Robert DeMario Jewelry, Inc., 361 U.S. 288, 80 S.Ct. 332, 4 L.Ed.2d 323 (1960)] as equitable simply because it was within the power of a court sitting in equity to award, Mertens would preclude a determination that back pay is equitable in nature and available under [§ 1132(a)(3)]. However, Terry characterized the back pay in Mitchell as restitutionary, a remedy expressly recognized by Mertens as equitable. Schwartz, 45 F.3d at 1022 n. 4. The court also found that front pay was an equitable remedy where the preferred remedy of reinstatement is not appropriate or feasible relying on the court's "historical assessment of the nature of front pay". Id. at 1023. In the case sub judice, the damages at issue include anticipated tax losses and lost tax-deferred growth income. The tax and growth benefits claimed by plaintiffs are not benefits required by the terms of the plan. As plaintiffs are seeking damages for benefits not required by the plan, the Court is unable to characterize such benefits as restitutionary. Rather, these damages are traditional compensatory damages which are not recoverable under § 1132(a)(3). The Court notes that, while the broader remedial view espoused in Justice Brennan's concurrence in Russell and followed in Warren might better serve the ends of justice in the case at bar, such a view is inconsistent with the reasoning of Mertens. See Harsch v. Eisenberg, 956 F.2d 651, 659 (7th Cir.1992). Schwartz and Howe v. Varity Corp., 36 F.3d 746 (8th Cir.1994), cited by plaintiffs, do not persuade the Court otherwise. Plaintiffs argue that, for reasons similar to those stated in Schwartz, the lost tax-deferred growth income being sought by plaintiffs should be considered restitutionary in nature. Specifically, plaintiffs cite language found in the court's discussion of the restitutionary nature of back pay that "a court may restore the plaintiff to the position he formerly occupied `either by the return of something which he formerly had or by receipt of its equivalent in money.'" See Schwartz, 45 F.3d at 1022. However, the Court does not, in light of Mertens, read this language to include such consequential damages as sought by plaintiffs in the case sub judice. In finding front *348 pay an equitable remedy, the Sixth Circuit relied on its historical assessment of the nature of front pay. No such historical assessment applies to the damages at issue in the instant action. Rather, the Sixth Circuit, in Warren, characterized the same relief as compensatory in nature. See Warren, 905 F.2d at 981; see also Armstrong v. Jefferson Smurfit Corp., 30 F.3d 11, 13 (1st Cir.1994) (tax liabilities incurred after lump sum payments from plan are compensatory legal damages). Likewise, Howe does not support plaintiffs' position. In Howe, the district court entered a judgment for compensatory damages. The Eighth Circuit held that "[s]uch a judgment is legal relief, not equitable, and is not available under Section [1132(a)(3)]." The court then found that plaintiffs were entitled to receive only an award in the nature of restitution to compensate them for plan benefits of which they had been deprived. Howe, 36 F.3d at 756. Recovery of anticipated tax losses and lost tax-deferred growth income as are sought in the case sub judice are not provided as benefits under the terms of the plan. Such relief is not restitutionary but, rather, consists of traditional compensatory legal damages which are not recoverable under § 1132(a)(3). Next, defendants contend that plaintiffs cannot recover as damages the tax losses and lost growth income to age 70 for claims arising under § 1132(a)(2). As set forth above, this section allows a plan participant to seek relief under § 1109. Section 1109 of Title 29 provides: (a) Any person who is a fiduciary with respect to a plan who breaches any of the responsibilities, obligations, or duties imposed upon fiduciaries by this subchapter shall be personally liable to make good to such plan any losses to the plan resulting from each such breach, and to restore to such plan any profits of such fiduciary which have been made through use of assets of the plan by the fiduciary, and shall be subject to such other equitable or remedial relief as the court may deem appropriate, including removal of such fiduciary. The Sixth Circuit has held that § 1109 authorizes relief only to the plan itself, not to individuals. See Bryant v. International Fruit Prod. Co., Inc., 886 F.2d 132, 135 (6th Cir.1989). In Bryant, the court stated that "ERISA contemplates that breaches of fiduciary duties injure the plan, not individual beneficiaries, and any recovery thus goes to the plan." Id. Therefore, to recover the damages at issue in this motion, plaintiffs must be able to demonstrate a loss to the plan. See also Roth v. Sawyer-Cleator Lumber Co., 16 F.3d 915 (8th Cir.1994) ("if individual plan participants suffer losses, but the plan does not, the [fiduciary] is not personally liable for damages under [§ 1109]"). Plaintiffs argue that the damages at issue are a loss to the plan in that the plan is not able to distribute to the beneficiaries payments that are eligible for preferential tax treatment; thus, the value of the benefits to the plan participants is diminished. This does not, however, demonstrate a loss to the plan. As defendants correctly assert, the tax burdens are personal losses which belong to the individual participants and not the plan. See Oscar A. Samos, M.D., Inc. v. Dean Witter Reynolds, Inc., 772 F.Supp. 715, 717-718 (D.R.I.1991) (tax penalties and loss income are personal losses). Consequently, the plan does not suffer a loss for taxes that might have to be paid by the beneficiaries. Plaintiffs also seek as damages lost growth income until age 70 of each plan participant. However, the plan does not require defendants to maintain the plan for any specified time period. Rather, it expressly provides that "[t]he Employer may terminate the Plan by appropriate corporate action." See Plan at Article XV. Once the plan was terminated, it could not possibly suffer damages for lost growth income.[3] Thus, the Court concludes that the damages at issue are not damages for losses to the plan. Consequently, plaintiffs cannot recover damages for anticipated *349 tax losses and lost growth income under §§ 1132(a)(2) and 1109. Finally, defendants argue that damages for tax losses and lost growth income are not recoverable under § 1132(a)(1)(B). As set forth above, this section permits plan participants to recover specific benefits due under the terms of a plan. The damages at issue in the instant motion do not represent benefits due under the terms of the plan, and plaintiffs do not argue otherwise. Therefore, the Court must determine whether extracontractual damages are recoverable under § 1132(a)(1)(B). In Russell, the Supreme Court stated that the statutory provision explicitly authorizing a beneficiary to bring an action to enforce his rights under the plan [§ 1132(a)(1)(B)], ... says nothing about the recovery of extracontractual damages, or about the possible consequences of delay in the plan administrators' processing of a disputed claim. Thus, there really is nothing at all in the statutory text to support the conclusion that such a delay gives rise to a private right of action for compensatory or punitive relief. Russell, 473 U.S. at 144, 105 S.Ct. at 3091. The Court also stated that "[t]he six carefully integrated civil enforcement provisions found in [§ 1132] ... provide strong evidence that Congress did not intend to authorize other remedies that it simply forgot to incorporate expressly." Id. at 146, 105 S.Ct. at 3092. Since Russell, courts have concluded that extracontractual damages are not available to a plan participant under § 1132(a)(1)(B). See e.g. International Union UAW Local 91 v. Park-Ohio Indus., Inc., 876 F.2d 894 (Table), 1989 WL 63871, 1989 U.S.App. LEXIS 8677 (6th Cir. June 15, 1989); Harsch v. Eisenberg, 956 F.2d 651, 655 (7th Cir.1992); Reinking v. Philadelphia American Life Ins. Co., 910 F.2d 1210, 1220 (4th Cir.1990); Medina v. Anthem Life Ins. Co., 983 F.2d 29, 33 (5th Cir.1993). The Court finds that extracontractual damages for anticipated tax losses and lost growth income are not recoverable under § 1132(a)(1)(B). The Court next addresses plaintiffs' motion wherein plaintiffs move for partial summary declaratory judgment that the Court has the equitable power under ERISA to require the defendants to take all necessary action to enter into a closing agreement with the Internal Revenue Service pursuant to the Employment Plans Closing Agreement Program (CAP).[4] In so doing, plaintiffs contend that there exists the possibility of correcting all plan defects and of restoring tax qualification of the balance of contributions allegedly owed to plaintiffs. After reviewing the documents submitted by the parties, the Court is unable to determine whether or not CAP is even available to defendants to correct alleged plan defects. However, if CAP is available, it appears to be an appropriate equitable remedy to redress injuries to plaintiffs not otherwise recoverable under ERISA. Section 1132(a)(3) permits a participant or beneficiary to obtain "other appropriate equitable relief" not only for violations of the terms of the plan, but for violations of "any provision of this subchapter." Plaintiffs have alleged violations of fiduciary duties set forth in § 1104. See Complaint at ¶ 74(D).[5] Thus, plaintiffs may obtain equitable relief to redress such violations. The Court concludes that it has the power to order the equitable relief requested. As plaintiffs ask only for a declaration of the Court's power to order such a remedy, the Court will grant plaintiffs' motion for partial summary judgment.[6] THEREFORE, for the foregoing reasons, good cause appearing, it is *350 ORDERED that defendants' motion for partial summary judgment be, and hereby is, GRANTED; and it is FURTHER ORDERED that plaintiffs' motion for partial summary judgment be, and hereby is, GRANTED. NOTES [1] In plaintiffs' opposition, they concede that "[i]f Mertens precludes recovery of direct compensatory damages under [§ 1132(a)(3)], even under the distinct circumstances of Warren, then the class would have to look elsewhere in ERISA for relief." Plaintiffs' Opp. at 2. [2] In Russell, the plaintiff sought compensatory and punitive damages relying entirely on section 1109(a). Russell, 473 U.S. at 139 n. 5, 105 S.Ct. at 3088 n. 5. The Court expressly reserved the question whether extracontractual damages might be one form of "other appropriate equitable relief" under section 1132(a)(3). Id. However, in his concurring opinion, Justice Brennan discussed what he believed to be the proper approach in determining what damages are appropriate under section 1132(a)(3). He stated that courts should begin by ascertaining the extent to which trust and pension law as developed by state and federal courts provide for recovery by the beneficiary above and beyond the benefits that have been withheld; this is the logical first step, given that Congress intended to incorporate trust law into ERISA's equitable remedies. If a requested form of additional relief is available under state trust law, courts should next consider whether allowance of such relief would significantly conflict with some other aspect of the ERISA scheme. Id. at 157, 105 S.Ct. at 3098. However, he did not believe that a given form of monetary relief should be withheld "simply because a beneficiary's remedies under ERISA are denominated `equitable.'" Id. at 154 n. 10, 105 S.Ct. at 3096 n. 10. As set forth later in this opinion, the Supreme Court rejected similar reasoning in its Mertens decision. [3] Defendants concede that if they are found liable for breach of fiduciary duties, they could be liable to the plan for the profits they might have earned on assets that should have been a part of the plan during the years when the plan existed. The parties disagree on the method of calculating those profits; however, that issue is not before the Court at this time. [4] The CAP program is published in Chapter 11 of Internal Revenue Manual 7(10)54. [5] Plaintiffs allege that defendants breached their fiduciary duties by "failing to administer the Profit Sharing Plan for the exclusive benefit of all participants and beneficiaries, and failing to act with the appropriate care, skill, and prudence of a reasonable man as required by 29 U.S.C. § 1104." Complaint at ¶ 74(D). [6] It is within the sound discretion of the court to award appropriate equitable relief. At this time, plaintiffs have not demonstrated to the Court that defendants are even eligible to participate in the CAP program.

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560 F.3d 964 (2009) Scott Lynn PINHOLSTER, Petitioner-Appellee, v. Robert L. AYERS, Jr., Warden, Respondent-Appellant. Scott Lynn Pinholster, Petitioner-Appellant, v. Robert L. Ayers, Jr., Warden, Respondent-Appellee. Nos. 03-99003, 03-99008. United States Court of Appeals, Ninth Circuit. March 20, 2009. Sean K. Kennedy, Lawrence B. Berroya, Anthony J. Cavalluzzi, Dean R. Gits, Sean *965 K. Kennedy, Federal Public Defender's Office, Los Angeles, CA, Michael R. Snedeker, Snedeker, Smith & Short, Portland, OR, for Petitioner-Appellee. Kristofer Jorstad, Office of the California Attorney General, Los Angeles, CA, for Respondent-Appellant. ORDER KOZINSKI, Chief Judge: Upon the vote of a majority of nonrecused active judges, it is ordered that this case be reheard en banc pursuant to Circuit Rule 35-3. The three-judge panel opinion shall not be cited as precedent by or to any court of the Ninth Circuit.

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163 S.W.3d 471 (2005) STATE of Missouri, Plaintiff/Respondent, v. Ricky A. BLAKE, Defendant/Appellant. No. ED 84411. Missouri Court of Appeals, Eastern District, Division Five. April 5, 2005. Rehearing Denied May 16, 2005. Linda Lemke, Assistant Attorney General Jefferson City, MO, for respondent. Amy M. Bartholow, Columbia, MO, for appellant. Before MARY K. HOFF, P.J., KATHIANNE KNAUP CRANE, J. and LAWRENCE E. MOONEY, J. ORDER PER CURIAM. Defendant, Ricky A. Blake, appeals from the judgment entered on his conviction by a jury of trafficking drugs in the first degree, in violation of section 195.222 RSMo (2000), and possession of a controlled substance, in violation of section 195.202 RSMo (2000). The trial court found defendant to be a prior drug offender and sentenced him to concurrent terms of 20 years imprisonment and 7 years imprisonment, respectively. No error of law appears and no jurisprudential purpose would be served by a written opinion. However, the parties have been furnished with a memorandum opinion for their information only, setting forth the facts and reasons for this order. The judgment is affirmed in accordance with Rule 30.25(b).

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In The Court of Appeals Seventh District of Texas at Amarillo ________________________ No. 07-15-00209-CV ________________________ IN RE STEVEN EDWARD BOYD, RELATOR Original Proceeding Arising from Proceedings Before the 47th District Court Randall County, Texas Trial Court No. 24,143-A; Honorable Dan Schaap, Presiding July 10, 2015 MEMORANDUM OPINION ON ORIGINAL PROCEEDING Before QUINN, C.J., and HANCOCK and PIRTLE, JJ. Relator, Steven Edward Boyd, proceeding pro se and in forma pauperis, seeks a writ of mandamus to compel the Honorable Dan Schaap to declare void the judgment in trial court cause number 24,143-A in which Relator was convicted of robbery. He also asserts the trial judge had a ministerial duty to suppress evidence in his robbery case because the State failed to meet its burden of proof. For the reason expressed herein, we deny Relator’s request for mandamus relief. After Relator was convicted of robbery, he executed a Trial Court’s Certification of Defendant’s Right of Appeal acknowledging that he waived his right of appeal. The certification was also signed by his trial counsel.1 The certification notwithstanding, he filed a pro se notice of appeal raising numerous complaints. Based on the certification, on August 1, 2014, this court dismissed Relator’s direct appeal. See Boyd v. State, No. 07- 14-00245-CR, 2014 Tex. App. LEXIS 8445, at *1-2 (Tex. App.—Amarillo Aug. 1, 2014, no pet.) (mem op., not designated for publication). See also TEX. R. APP. P. 25.2(d). On rehearing, this court addressed Appellant’s contention that he retained the right to appeal the trial court’s denial of his pretrial motion to suppress—concluding that Relator’s waiver of his right to appeal foreclosed any review of that issue. Boyd v. State, No. 07-14-00245-CR, 2014 Tex. App. LEXIS 9377, at *2-3 (Tex. App.—Amarillo Aug. 22, 2014, on reh’g). MANDAMUS STANDARD OF REVIEW Mandamus relief is extraordinary. In re Braswell, 310 S.W.3d 165, 166 (Tex. App.—Amarillo 2010, orig. proceeding) (citing In re Southwestern Bell Telephone Co., L.P., 235 S.W.3d 619, 623 (Tex. 2007) (orig. proceeding)). Mandamus issues only to correct a clear abuse of discretion or the violation of a duty imposed by law when there is no other adequate remedy by law. Walker v. Packer, 827 S.W.2d 833, 839 (Tex. 1992) (orig. proceeding) (quoting Johnson v. Fourth Court of Appeals, 700 S.W.2d 916, 917 (Tex. 1985) (orig. proceeding)). To show entitlement to mandamus relief, a relator must satisfy three requirements: (1) a legal duty to perform; (2) a demand for 1 The record reflects Appellant entered a plea of guilty to the offense of robbery in exchange for a recommended sentence of 30 years and dismissal of another charge pending in trial court cause number 24,142-A. As a part of that plea-agreement, Appellant waived his right to appeal. 2 performance; and (3) a refusal to act. Stoner v. Massey, 586 S.W.2d 843, 846 (Tex. 1979). ANALYSIS In a criminal case, the “normal method” for challenging pretrial orders is through appeal. Dickens v. Second Court of Appeals, 727 S.W.2d 542, 550 (Tex. Crim. App. 1987). Relator had an adequate remedy at law to complain of the trial court’s suppression ruling but chose to waive that right.2 Relator cannot now contest the lawfulness of the search of his vehicle that resulted in his arrest and conviction via a petition for writ of mandamus. Relator’s contention that the trial judge had a ministerial duty to suppress evidence in his robbery case has no merit. Under no circumstances may an appellate court tell a trial judge what his decision should be in a discretionary matter. See In re Shredder Co., 225 S.W.3d 676, 680 (Tex. App.—El Paso 2006, orig. proceeding). See also In re Layton, No. 07-10-00330-CV, 2010 Tex. App. LEXIS 7418, at *2 (Tex. App.— Amarillo Sept. 8, 2010, orig. proceeding) (mem op., not designated for publication) (concluding that dissatisfaction with a trial judge’s discretionary ruling is not the proper subject of a mandamus proceeding but may be remedied by ordinary appeal). Additionally, although Relator’s petition satisfies many of the requirements of Rule 53.2 of the Texas Rules of Appellate Procedure, he has not included copies of the judgment or suppression order that are the basis of his request for mandamus relief. Relator’s pro se status does not exempt him from complying with rules of procedure. 2 Relator entered into a plea bargain from which he had no right to appeal the robbery conviction. 3 See Pena v. McDowell, 201 S.W.3d 665, 667 (Tex. 2006); Mansfield State Bank v. Cohn, 573 S.W.2d 181, 184-85 (Tex. 1978). CONCLUSION Consequently, Relator’s request for mandamus relief is denied. Patrick A. Pirtle Justice 4

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603 F.2d 225 Sheppard Holdings, Inc.v.U. S. No. 77-3066, 77-3052, 77-3170, 77-3176 United States Court of Appeals, Ninth Circuit 6/25/79 1 C.D.Cal. AFFIRMED

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287 B.R. 822 (2002) In re Deanna Kathleen GARDNER, Debtor. Educational Credit Management Corporation, Appellant, v. Deanna Kathleen Gardner, Appellee. Bankruptcy No. 00-42099-13, Adversary No. 01-4036-SAC. United States District Court, D. Kansas. October 30, 2002. *823 Michael F. Brunton, Topeka, KS, for Debtor. N. Larry Bork, Goodell, Stratton, Edmonds & Palmer, Topeka, KS, for Appellant. Michael F. Brunton, Topeka, KS, for Appellee. Jan M. Hamilton, Topeka, KS, trustee. MEMORANDUM AND ORDER CROW, Senior District Judge. Educational Credit Management Corporation ("ECMC") appeals a single bankruptcy court order that was entered in the following three bankruptcy cases: In re Leana Rachele Wright and Daniel Ray Wright, 279 B.R. 886 (D.Kan.2002); In re Gary Darnell Green, 287 B.R. 827 (D.Kan.2002); and In re Deanna Kathleen Gardner, Bkcy. No. 00-42099-13. In that order, the bankruptcy court sustained ECMC's objection to the debtors' attempts to obtain an undue hardship discharge of student loans through the chapter 13 plan confirmation process, but the court denied ECMC's request to adopt "a per se rule that sanctions will be imposed for using that procedure." (Dk.5, Appx.A, p. 11). ECMC has appealed that order in each of these chapter 13 cases and has filed briefs in each case that are substantially the same.[1] ECMC argues the bankruptcy *824 court erred in not declaring a per se rule that it is a sanctionable event to file a chapter 13 plan containing this discharge language. The first appeal, In re Leana Rachele Wright and Daniel Ray Wright, 279 B.R. 886 (D.Kan.2002), was assigned to Judge Rogers who filed his decision affirming the bankruptcy court on April 29, 2002. In re Wright, 279 B.R. 886 (D.Kan.2002). The second appeal, In re Deanna Kathleen Gardner, No. 01-4036-SAC, and the third appeal, In re Gary Darnell Green, 287 B.R. 827 (D.Kan.2002), were assigned to Judge Crow. The three appeals raise the same issues of law and the facts in each appeal do not bear on those legal issues. As the bankruptcy court explained in its order, ECMC was not seeking sanctions in those cases but only sought "a declaratory judgment so that such [plan] provisions would be sanctionable in future cases." (Dk.5, Appx.A, p. 2). Even though the parties did not request consolidation, these cases should have been consolidated on appeal under these circumstances. STANDARD OF REVIEW The court reviews the bankruptcy court's findings of fact for clear error. In re Pena, 155 F.3d 1108, 1110 (9th Cir.1998). "Where there are two permissible views of the evidence, the factfinder's choice between them cannot be clearly erroneous." Anderson v. City of Bessemer City, N.C., 470 U.S. 564, 574, 105 S.Ct. 1504, 84 L.Ed.2d 518 (1985). "Review under the clearly erroneous standard is significantly deferential, requiring a definite and firm conviction that a mistake has been committed." Concrete Pipe & Prods. v. Construction Laborers Pension Trust, 508 U.S. 602, 603, 113 S.Ct. 2264, 124 L.Ed.2d 539 (1993). The court reviews de novo the bankruptcy court's legal conclusions. In re Primeline Securities Corp., 295 F.3d 1100, 1105 (10th Cir.2002). The bankruptcy court's order does not include any findings of fact. The court shall review de novo the bankruptcy court's conclusion that the objectionable student loan discharge plan provision is not per se sanctionable. RELEVANT LAW The Bankruptcy Code creates a presumption making student loans non-dischargeable in the absence of undue hardship to the debtor or the debtor's dependents. 11 U.S.C. § 523(a)(8)(B). This provision "was enacted to prevent indebted college or graduate students from filing for bankruptcy immediately upon graduation thereby absolving themselves of the obligation to repay their student loans." In re Hornsby, 144 F.3d 433, 437 (6th Cir.1998). The burden of proving an undue hardship rests with the debtor. In re Woodcock, 45 F.3d 363, 367 (10th Cir.), cert. denied, 516 U.S. 828, 116 S.Ct. 97, 133 L.Ed.2d 52 (1995). The debtor must carry this burden by a preponderance of evidence. In re Brightful, 267 F.3d 324, 327 (3rd Cir.2001). The Tenth Circuit in In re Andersen, 179 F.3d 1253 (10th Cir.1999), held that a bankruptcy court's order confirming a chapter 13 plan which contained language that summarily discharged an educational loan as an undue hardship was res judicata on the issue of undue hardship in a subsequent adversary proceeding. The Circuit reasoned that while the debtor may have the burden of proof, the creditor also "has a duty to ensure that its interests are adequately protected." 179 F.3d at 1257. Addressing arguments about the propriety of a plan containing such a provision and of *825 a procedure that would discharge an education loan without an adversary proceeding, the Tenth Circuit observed: That is, ECMC contends that, although no timely objection to the plan was filed and no appeal was taken following confirmation, Andersen had the burden of initiating an adversary proceeding in order to prove the otherwise uncontested fact of undue hardship. Without a judicial finding of such hardship at the close of an adversary proceeding, ECMC contends that the student loans cannot be discharged. We disagree. While Andersen surely had the burden of proving undue hardship, and while a discharge granted without such proof is inconsistent with the Code, it is critical that HEAF, as the party affected by this determination, failed to properly challenge the language at issue, the interim rulings of the bankruptcy court, or the confirmed plan. As we discussed above, it is absolutely incumbent upon a creditor to take an active role in protecting its interests, and a creditor which fails to do so is in a poor position to later complain about an adverse result. We echo the wisdom of the Third Circuit that, "[w]hile we do not understate the importance of the obligation of the bankruptcy court or the trustee to determine that a plan complies with the appropriate sections of the Bankruptcy Code prior to confirmation of the plan, we nonetheless recognize that the affirmative obligation to object to the . . . plan rested with [HEAF], not with the bankruptcy court or the trustee." In re Szostek, 886 F.2d [1405] at 1414 [(3rd Cir.1989)]. 179 F.3d at 1257-58. In justifying its holding, the Tenth Circuit relied not only on the creditor's failure to protect itself but also on "the strong policy of finality" protecting chapter 13 confirmed plans. 179 F.3d at 1258. Agreeing with the analysis in In re Evans, 242 B.R. 407 (Bankr.S.D.Ohio 1999), the bankruptcy court in the Western District of Oklahoma held that the inclusion of a student loan discharge provision in a chapter 13 plan is a sanctionable event and that the Andersen decision provides no protection from sanctions. In re Hensley, 249 B.R. 318, 322-23 (Bankr.W.D.Okla.2000). Characterizing such plan drafting as simply an attempt to "trap an unwary student loan creditor" and as a type of impermissible "gamesmanship," the bankruptcy court rejected any reading of Andersen that would encourage the practice of including such plan provisions and highlighted the fact that the student loan creditor did not try to collect in Andersen until after the debtor had completed the plan payments and received a discharge of the student loan debt. 249 B.R. at 319-21. Finally, the court in Hensley saw the inclusion of a student loan discharge provision as analogous to a debtor's claim of an improper exemption, both made in the hope of no timely objection. 249 B.R. at 323. The court noted that the latter situation was one where the Supreme Court had recognized the availability of sanctions to deter such conduct. 249 B.R. at 324. BANKRUPTCY COURT'S DECISION The bankruptcy court disagreed with the reasoning in In re Hensley, 249 B.R. 318, 320-23 (Bankr.W.D.Okla.2000), and In re Evans, 242 B.R. 407, 409-13 (Bankr.S.D.Ohio 1999), insofar as their conclusion that the debtor's filing of an adversary proceeding is "absolutely essential to any kind of undue hardship declaration." (Dk.5, Appx.A, p. 8). The bankruptcy court construed the bankruptcy rules as permitting an undue hardship determination to be made either in an adversary proceeding or as a contested matter and opined that "the litigation would proceed in essentially in the same manner" under *826 either procedure. (Dk.5, Appx.A, p. 4). The bankruptcy court was "unwilling to assume," as ECMC had done, that debtors and their counsel would include these student loan discharge provisions in the plan "when they have no basis in fact." (Dk.5, Appx.A, p. 8). Instead, it assumed that the debtors and their counsel by including provisions in their plan knew they were "certifying that to the best of their `knowledge, information, and belief, formed after an inquiry reasonable under the circumstances, . . . (3) the allegations and other factual contentions have evidentiary support.' Fed. R. Bankr.P. 9011(b)." (Dk.5, Appx.A, p. 8). The bankruptcy court agreed with the Hensley decision that it would be improper and sanctionable for the debtors' counsel to use such plan provisions on the mere hope of trapping an unwary student loan creditor. (Dk.5, Appx.A, pp. 8-9). It further observed that an undue hardship determination at the time of plan confirmation ordinarily would be "premature" and only "advisory" and that not until the plan was completed and debtor entitled to discharge would the court be likely to have all the information relevant and necessary in making this determination. (Dk.5, Appx.A, p. 9-10). The court, however, recognized that a debtor could have unusual circumstances where his financial situation was "almost certain to remain unimproved for the foreseeable future," such as debtor with "some permanent disability," and then an undue hardship determination could be made near the time of the plan's confirmation. The bankruptcy court concluded: [T]he Court is convinced that, in nearly all factual circumstances, seeking an undue hardship determination at the time of confirmation is inappropriate, and therefore, including an Andersen provision in a plan would likewise be inappropriate. In effect, including such a provision in a plan constitutes an allegation that excepting the debt from discharge will impose an undue hardship on the debtor and the debtor's dependents under the circumstances that will exist in three to five years, not under those at the time the plan is proposed. Debtors and their counsel can properly include Andersen provisions in chapter 13 plans only when it is reasonable to make such an allegation. (Dk.5, Appx.A, p. 10-11). Thus, the bankruptcy court sustained ECMC's objections to the debtors' inclusion of these plan provisions here but denied ECMC's request for "a per se rule that sanctions will be imposed" against debtors including such provisions in future chapter 13 plans. CONCLUSION Judge Rogers in In re Wright, 279 B.R. 886 (D.Kan.2002), affirmed the bankruptcy court for the following reasons: The difference between the ruling of the bankruptcy court here and that in Hensley is one of degree. Both courts condemned the practice of filing plans with the aforementioned language. Both courts acknowledged that inclusion of this language was unethical and sanctionable. In Hensley, however, the bankruptcy court took the step of informing bankruptcy counsel that sanctions would be imposed in the future in every instance where such language was included in proposed Chapter 13 plans. The bankruptcy court here was unwilling to go that far. While acknowledging that such language was subject to sanctions, the court indicated that it would examine each individual case to determine if sanctions should be applied. The bankruptcy court made a reasoned and appropriate analysis of the issue presented by ECMC. The court is persuaded by the reasoning and conclusions reached by the bankruptcy court. As correctly pointed out by the bankruptcy court, the inclusion of these provisions in *827 a plan in the hope that they will trap the unwary student loan creditor should result in the imposition of sanctions. The court, however, does not believe that a per se rule should be adopted. Debtors' counsel are on notice that the filing of plans containing this language will not be allowed unless there is a good faith basis for them. This court believes, as did the bankruptcy court, that these matters can be handled when they arise. "[I]t is perfectly reasonable to expect interested creditors to review the terms of a proposed plan and object if the terms are unacceptable, vague, or ambiguous." In re Harvey, 213 F.3d 318, 322 (7th Cir.2000). 279 B.R. at 889. This court fully concurs with Judge Roger's reasoning and conclusion in Wright. Consequently, the court affirms the bankruptcy court's order in these two companion bankruptcy appeals for substantially the same reasons expressed in Wright. IT IS THEREFORE ORDERED that the bankruptcy court's order of February 22, 2001, is affirmed. NOTES [1] In the appeal of In re Gary Darnell Green, 287 B.R. 827 (D.Kan.2002), ECMC filed an additional reply brief. Unlike like the other two cases, the debtor Green filed a brief on appeal. The reply brief does not address any facts or arguments unique to that case, nor does it raise any material issues not otherwise found in ECMC's original brief that was filed in all three appeals.

{ "pile_set_name": "FreeLaw" }

FILED NOT FOR PUBLICATION JAN 30 2017 UNITED STATES COURT OF APPEALS MOLLY C. DWYER, CLERK U.S. COURT OF APPEALS FOR THE NINTH CIRCUIT CONTEMPORARY SERVICES No. 14-56636 CORPORATION, a California Corporation, D.C. No. 8:09-cv-00681-BRO-AN Plaintiff-Appellant, v. MEMORANDUM* LANDMARK EVENT STAFFING SERVICES, INC., a Delaware Corporation; PETER KRANSKE, an individual; MICHAEL HARRISON, an individual, Defendants-Appellees, Appeal from the United States District Court for the Central District of California Beverly Reid O’Connell, District Judge, Presiding Argued and Submitted October 5, 2016 Pasadena, California Before: PREGERSON, PAEZ, and TALLMAN**, Circuit Judges. * This disposition is not appropriate for publication and is not precedent except as provided by Ninth Circuit Rule 36-3. ** Judge Tallman was drawn to replace Judge Noonan after oral argument. He has read the briefs, viewed the recorded argument, and studied the record. Contemporary Services Corporation (“CSC”) appeals the district court’s grant of summary judgment in favor of Landmark Event Staffing Services, Inc. (“Landmark”) as to its claims for misappropriation of trade secrets under the California Uniform Trade Secrets Act (“CUTSA”), Cal. Civ. Code § 3426 et seq., and breach of contract. We affirm in part, reverse in part, and remand for proceedings consistent with this decision. 1. We review a district court’s grant of summary judgment de novo. Surfvivor Media, Inc. v. Survivor Prods., 406 F.3d 625, 630 (9th Cir. 2005). Summary judgment is appropriate where “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). 2. CSC asserted a CUTSA claim for misappropriation of trade secrets, alleging that Landmark acquired and used numerous CSC-created documents. “[A] prima facie claim for misappropriation of trade secrets requires the plaintiff to demonstrate: (1) the plaintiff owned a trade secret, (2) the defendant acquired, disclosed, or used the plaintiff’s trade secret through improper means, and (3) the defendant’s actions damaged the plaintiff.” Cytodyn, Inc. v. Amerimmune Pharm., Inc., 72 Cal. Rptr. 3d 600, 607 (Cal. Ct. App. 2008) (internal quotation marks omitted). 2 3. A trade secret is “information, including a formula, pattern, compilation, program, device, method, technique, or process that: (1) Derives independent economic value, actual or potential, from not being generally known to the public or to other persons who can obtain economic value from its disclosure or use; and (2) Is the subject of efforts that are reasonable under the circumstances to maintain its secrecy.” Cal. Civ. Code, § 3426.1(d). Here, CSC raised material triable issues as to whether its customer lists (CSC California #17-18), its deployment workbook (CSC California #12), and its PowerPoint disclosing financial information (CSC California #2) qualify as trade secrets.1 See Abba Rubber Co. v. Seaquist, 286 Cal. Rptr. 518, 526 (Cal. Ct. App. 1991) (where a customer list qualified as a trade secret); id. at 529 n.9 (noting that “ease of ascertainability is irrelevant to the definition of a trade secret”); Whyte v. Schlage Lock Co., 125 Cal. Rptr. 2d 277, 287-88 (Cal. Ct. App. 2002) (where specific and unique financial information qualified as a trade secret). In addition, CSC raised a triable issue as to whether Landmark unlawfully ratified employee Grant Haskell’s misappropriation of CSC trade secrets when Landmark failed to cease the use of CSC documents, disavow Haskell’s conduct, or terminate Haskell’s employment 1 To the extent CSC’s misappropriation of trade secrets claim was based on other documents, we affirm the district court’s ruling that CSC failed to raise a triable issue as to whether those documents qualify as trade secrets. 3 after Landmark “had reason to know” of Haskell’s misappropriation. Cal. Civ. Code § 3426.1(b)(2)(B); see also PMC, Inc. v. Kadisha, 93 Cal. Rptr. 2d 663, 675 (Cal. Ct. App. 2000) (finding triable issue where employer made “no real attempt to determine” whether trade secret misappropriation had occurred). 4. We therefore reverse the district court’s summary judgment ruling, and conclude that CSC satisfied the first two elements of a misappropriation of trade secrets claim under the CUTSA. The district court declined to decide whether CSC demonstrated causation and damages, however, and we therefore leave those issues for the district court’s consideration on remand. 5. Because CSC’s breach of contract claim was derivative of its misappropriation of trade secrets claim, we reverse the district court’s grant of summary judgment to Landmark on that claim. 6. In light of our disposition, we vacate the award of attorney’s fees to Landmark as premature. 7. We also GRANT the Request for Judicial Notice by Appellees Landmark Event Staffing Services, Inc., Peter Kranske, and Michael Harrison, filed on Oct. 5, 2015, ECF No. 36. 8. The parties shall bear their own costs on appeal. 4 For the foregoing reasons, we AFFIRM IN PART and REVERSE IN PART the district court’s grant of summary judgment, REMAND for proceedings consistent with this disposition, and VACATE the award of attorney’s fees in favor of Landmark. 5

{ "pile_set_name": "FreeLaw" }

356 S.W.3d 881 (2012) James BUTLER, Movant/Appellant, v. STATE of Missouri, Respondent/Respondent. No. ED 96365. Missouri Court of Appeals, Eastern District, Division Three. January 17, 2012. Timothy J. Forneris, St. Louis, MO, for Movant/Appellant. Shaun J. Mackelprang, Jessica P. Meredith, Jefferson City, MO, for Respondent/Respondent. Before ROBERT G. DOWD, JR., P.J., MARY K. HOFF, J., and SHERRI B. SULLIVAN, J. ORDER PER CURIAM. James Butler appeals from the motion court's judgment denying his amended Motion to Vacate, Set Aside or Correct Judgment and Sentence filed pursuant to Rule 24.035[1], following an evidentiary hearing. We have reviewed the briefs of the parties and the record on appeal and conclude the judgment of the motion court is not clearly erroneous. Rule 24.035(k). An extended opinion would have no precedential value. We have, however, provided a memorandum setting forth the reasons for our decision to the parties for their use only. We affirm the judgment pursuant to Missouri Rule of Civil Procedure 84.16(b). NOTES [1] All rule references are to Mo. R.Crim. P.2010, unless otherwise indicated.

{ "pile_set_name": "FreeLaw" }

50 B.R. 460 (1985) In the Matter of K & B MOUNTING, INC., Debtor. Bankruptcy No. 84-30804. United States Bankruptcy Court, N.D. Indiana, South Bend Division. April 22, 1985. *461 Patrick Whisler, Thomas Sciortino, Elkhart, Ind., for debtor. Scott C. Soldon, Milwaukee, Wis., for Union Local. ORDER ROBERT K. RODIBAUGH, Bankruptcy Judge. On January 31, 1985, debtor in possession K & B Mounting filed motion for rejection of collective bargaining agreement. Hearing on the motion was held on February 28, 1985, and trial was conducted on March 12, 1985. The time for filing of briefs having passed, the Court took the motion under advisement on March 29, 1985. K & B Mounting is engaged in the business of selling and installing truck equipment. Its president, Frank McNamee, filed a voluntary chapter 11 petition on behalf of the company on August 17, 1984. The Statement of Financial Affairs states that the company is located in South Bend, Indiana; however, Mr. McNamee testified at trial that its business operations were in Detroit, Michigan. He also testified that K & B Mounting has eleven employees, eight of whom are covered by a union contract. 1. Jurisdiction The court has jurisdiction over the parties and subject matter of the action. 28 U.S.C. § 1334, and the General Order of Reference of the District Court for the Northern District of Indiana dated July 11, 1984, entered pursuant to 28 U.S.C. § 157. 2. Motion for rejection of collective bargaining agreement. In its motion to reject the collective bargaining agreement K & B Mounting alleged that, although it had contacted Teamsters Union Local 299 of Detroit, Michigan, on numerous occasions in an effort to discuss the employment contract, the union had cut off the discussions. Because continued adherence to the collective bargaining agreement has caused the debtor serious cash flow problems, the debtor proposed modifications to the existing agreement. K & B Mounting alleged that the union had neither accepted nor rejected the proposal at the time the debtor had filed the motion to reject. The proposal of K & B Mounting was made by letter to Stanley Baker, business representative of Teamsters Local Union No. 299, by Thomas P. Sciortino, attorney for the debtor. While making clear that the offer was not all-inclusive or final, counsel for the debtor presented the following proposal of K & B Mounting: The employer is requesting terms in the contract indicating a one cent per mile reduction in the truckaway volume; a five cent per mile reduction in the driveaway rates; a fifteen cent per hour reduction in the wages of all hourly employees; and a suspension of payments under the health, welfare and pension plan. As a substitute for payments under the health, welfare and pension plan, the employer would join a plan under Blue Cross/Blue Shield, and pay one-half of the cost of that. The employee would pay the other one-half of the cost. Additionally, each employee who is receiving payments under the pension plan would receive a $2,000.00 contribution towards an IRA, such contribution to commence during the fiscal year which ends after our present one. Letter of September 5, 1984, from attorney Sciortino to union representative Baker. See Motion for Rejection of Bargaining Agreement, exhibit B, filed January 31, 1985. On November 7, 1984, Mr. Baker responded by letter to the debtor's proposal. He reported that the result of a meeting between himself and the employees of K & B Mounting "was a unanimous vote for the rejection of the Company's proposal." He then presented a counter-offer. The employees have instructed Teamsters Local Union No. 299, to negotiate *462 the National Master Automobile Transporters Agreement in its entirety. Letter of November 7, 1984, from Baker to Sciortino. See Motion for Rejection of Bargaining Agreement, Exhibit A, filed January 31, 1985. 3. Negotiations prior to motion. Two years prior to bankruptcy K & B Mounting had withdrawn from the Multi-Employer Bargaining Unit and had notified Local No. 299 of its intent to negotiate a separate collective bargaining agreement. See letter of January 13, 1982, Union's Trial Exhibit 6. Since then the union and employer K & B Mounting had been operating on an informal day-to-day basis with no signed collective bargaining agreement. However, K & B Mounting has maintained full payments of the insurance and pension benefits and has complied with the other terms and conditions of the collective bargaining agreement negotiated with other employers in the multi-employer bargaining unit. See Pretrial Brief of Local Nos. 299 and 364 at p. 2, filed February 22, 1985. On August 15, 1984, attorney Sciortino notified Mr. Baker by letter of the company's filing for relief in bankruptcy, and suggested a meeting in his offices "to discuss both the [labor] contracts and the matters surrounding the Union/K & B relationship." Union's Trial Exhibit 7. However, the parties were unable to agree on a meeting place. Therefore on September 5, 1984 Mr. Sciortino opened negotiations through the mail. He presented the proposal of K & B Mounting and offered alternative locations for a meeting to discuss the modifications. Union's Trial Exhibit 8. Mr. Baker refused to negotiate with Mr. Sciortino until he had received notification from company president McNamee that Mr. Sciortino in fact represented the company. He then responded to the debtor's proposal by rejecting the company's suggested modifications and by offering the master agreement under which the company had been working prior to 1982. Movant's Trial Exhibit N. Since the parties still could not agree on the location for negotiations, no further communication was established. The debtor filed its motion for rejection of the collective bargaining agreement on January 31, 1985. 4. 11 U.S.C. § 1113. The Bankruptcy Amendments and Federal Judgeship Act of 1984 [BAA] created a new Bankruptcy Code section that governs the rejection of collective bargaining agreements in Chapter 11 proceedings. Section 1113 was written by the Congress in response to the Supreme Court decision N.L.R.B. v. Bildisco and Bildisco,[1] 465 U.S. 513, 104 S.Ct. 1188, 79 L.Ed.2d 482, [11 BCD 564] (1984). As a result, rejection of a collective bargaining agreement is no longer governed by 11 U.S.C. § 365[2], but rather by 11 U.S.C. § 1113, which delineates the procedures to be followed and the standards to be applied in rejecting a labor contract.[3] The pertinent provisions follow: *463 § 1113. (a) The debtor in possession, or the trustee if one has been appointed under the provisions of this chapter, other than a trustee in a case covered by subchapter IV of this chapter and by title I of the Railway Labor Act, may assume or reject a collective bargaining agreement only in accordance with the provisions of this section. (b)(1) Subsequent to filing a petition and prior to filing an application seeking rejection of a collective bargaining agreement, the debtor in possession or trustee (hereinafter in this section "trustee" shall include a debtor in possession), shall (A) make a proposal to the authorized representative of the employees covered by such agreement, based on the most complete and reliable information available at the time of such proposal, which provides for those necessary modifications in the employees benefits and protections that are necessary to permit the reorganization of the debtor and assures that all creditors, the debtor and all of the affected parties are treated fairly and equitably; and (B) provide, subject to subsection (d)(3), the representative of the employees with such relevant information as is necessary to evaluate the proposal. (2) During the period beginning on the date of the making of a proposal provided for in paragraph (1) and ending on the date of the hearing provided for in subsection (d)(1), the trustee shall meet, at reasonable times, with the authorized representative to confer in good faith in attempting to reach mutually satisfactory modifications of such agreement. (c) The court shall approve an application for rejection of a collective bargaining agreement only if the court finds that (1) the trustee has, prior to the hearing, made a proposal that fulfills the requirements of subsection (b)(1); (2) the authorized representative of the employees has refused to accept such proposal without good cause; and (3) the balance of the equities clearly favors rejection of such agreement. The first and only reported case that has analyzed this new law[4] comes from the Minnesota Bankruptcy Court. In re American Provision Co., 44 B.R. 907 (Bkrtcy.D. Minn.1984). That court found that nine requirements must be met for court approval of the rejection of collective bargaining agreements. 1. The debtor in possession must make a proposal to the Union to modify the collective bargaining agreement. 2. The proposal must be based on the most complete and reliable information available at the time of the proposal. 3. The proposed modifications must be necessary to permit the reorganization of the debtor. 4. The proposed modifications must assure that all creditors, the debtor and all of the affected parties are treated fairly and equitably. 5. The debtor must provide to the Union such relevant information as is necessary to evaluate the proposal. 6. Between the time of the making of the proposal and the time of the hearing on approval of the rejection of the existing collective bargaining agreement, the *464 debtor must meet at reasonable times with the Union. 7. At the meetings the debtor must confer in good faith in attempting to reach mutually satisfactory modifications of the collective bargaining agreement. 8. The Union must have refused to accept the proposal without good cause. 9. The balance of the equities must clearly favor rejection of the collective bargaining agreement. Id. at p. 909. Two bankruptcy commentators have also examined the procedural framework required and the substance of the section 1113 rejection standard. Judge Stanley B. Bernstein, in his Bankruptcy Practice After the Amendments Act of 1984,[5] emphasized that the new Code section 1113 provided a "process" by which labor contracts may be rejected. There are now a defined set of discrete stages in the rejection process, with varying alternatives if the process aborts or bogs down at any stage. Id. at p. 121. He also analogized the section as a "barrier to the rejection of union contracts . . . [that] must be scaled before the bankruptcy court may consider an application to reject the contract." Id. at p. 122. Richard H. Gibson, in his article "The New Law on Rejection of Collective Bargaining Agreements in Chapter 11: An Analysis of 11 U.S.C. § 1113," 58 Am. Bankr.L.J. 325 (Fall, 1984), describes section 1113 as a three-step procedure set up in order to encourage collective bargaining. 58 Am.Bankr.L.J. at p. 328. The first stage is the mandatory proposal by the debtor to the union. The debtor is obligated to make a proposal for modification of the labor contract to the collective bargaining representative after filing the Chapter 11 petition but before seeking court approval for rejection of the labor contract. By implication, it is not sufficient for the debtor to claim that it bargained to an impasse with the union before it filed its Chapter 11 petition. Bernstein, supra, at p. 122. The proposal must meet certain statutory requirements. The proposed modifications must be necessary for the success of the debtor's reorganization. [O]nly modifications which are necessary to a successful reorganization may be proposed. Therefore, the debtor will not be able to exploit the bankruptcy procedure to rid itself of the unwanted features of the labor agreement that have no relation to its financial condition and its reorganization and which earlier were agreed to by the debtor. The word "necessary" inserted twice into this provision clearly emphasizes this required aspect of the proposal which the debtor must offer and guarantees the sincerity of the debtor's good faith in seeking contract changes. 130 Cong.Rec. S8898 (daily ed. June 29, 1984) (Sen. Packwood). They must evidence fair and equitable treatment of the creditors, debtor and all interested parties. The fair and equitable language was intended by the conference to insure that the type of balancing that takes place when the court finally rules on rejection also takes place during these preliminary negotiations. 130 Cong.Rec. S8892 (daily ed. June 29, 1984) (Sen. Hatch). . . . According to the conferees, that basically means that the economies in operation are now being borne solely or primarily by the employees covered by the union contract. Indeed, a strong inference may be drawn that the debtor has to prove that substantial concessions have been given to the debtor by suppliers, its secured creditors, state and local taxing agencies, and management and non-union employees. . . . In the end, fairness and equity in connection with proposals for modifications of union contracts means that no significant participant in the reorganization *465 process gets a free ride; everybody shares in aiding the debtor, not just the covered employees. Bernstein, supra, at pp. 123-124. In addition, the proposal must be soundly based upon "the most complete and reliable information available," and all information necessary to evaluate the proposal must be provided to the collective bargaining agent. 11 U.S.C. § 1113(b)(1)(A) and (B). The second step or stage of this process occurs in the interval between the presentation of the proposal to the union and the judicial hearing on the application for rejection. During that period the debtor must engage in good faith negotiations with the union, pursuant to the requirement of 11 U.S.C. § 1113(b)(2). The amount of flexibility allowed the debtor in meeting this obligation is also a "good faith" test: the number of meetings and the reasonableness of the time spent in negotiation depends upon the complexity and detail of the proposal and of the data given to the union for its evaluation. It is interesting to note that Senator Packwood intertwined the interpretation of what constitutes the debtor's "good faith" negotiation and the union's "good cause" rejection. The `without good cause' language provides an incentive of pressure on the debtor to negotiate in good faith. In practical terms, this language imposes no barrier to rejection if the debtor's proposal has contained only the specified `necessary' modifications. Thus, the language serves to prohibit any bad faith conduct by an employer, while at the same time protecting the employer from a union's rejection of the proposal without good cause. 130 Cong.Rec. S8898 (daily ed. June 29, 1984) (Statement of Sen. Packwood). In other words, a debtor negotiates in good faith when it meets the requirement of section 1113(b)(1) by offering only necessary modifications which affect all parties equally. Furthermore, a union probably has good cause to reject "any proposal that is not necessary for the reorganization of the debtor or that unfairly burdens the unionized workers relative to other parties." Gibson, supra, 58 Am.Bankr.L.J. at 341. The Minnesota Bankruptcy Court has also linked the "good faith" and "good cause" interpretations by placing on the union the burden of coming forth with the evidence for these two requirements. . . . [O]nce the debtor has shown that it has met with the Union representatives, it is incumbent upon the Union to produce evidence that the debtor did not confer in good faith. And . . ., once the debtor has shown that the Union has refused to accept its proposal the Union must produce evidence that it was not without good cause. Again, once the Union has come forward with evidence on these . . . elements, the ultimate burden of persuasion on each still lies with the debtor. In re American Provision Co., 44 B.R. 907, 910 (Bkrtcy.D.Minn.1984). No definition of "good cause" has been provided. However, bankruptcy courts are not meant to follow labor law decisions in determining what constitutes good cause. Senator Thurmond stated that this requirement "is obviously not intended to import traditional labor law concepts into the bankruptcy forum or to turn the bankruptcy courts into a version of the National Labor Relations Board." 130 Cong.Rec. S8888 (daily ed. June 29, 1984) (as cited in 58 Am.Bankr.L.J. at p. 340). The final stage is the debtor's filing for court approval of rejection of the labor agreement. Although the application for rejection may be filed at any time after the proposal is made, there must be evidence of good faith negotiations with the union before the debtor turns to the court. It must be kept in mind that one of the main purposes of the new Code section is to encourage solution of the employer's labor problems through collective bargaining rather than by means of the debtor's unilateral action and recourse to the bankruptcy court. Gibson, supra, 58 Am.Bankr.L.J. at *466 327. Furthermore, once the application has been made, the hearing on that application must commence not later than fourteen days after the date of the filing.[6] 11 U.S.C. § 1113(d)(1). It is at this point that the court must evaluate the equities of the case, and must find that "the balance of the equities clearly favors rejection" of the collective bargaining agreement. Judge Bernstein believes that the standard established in section 1113(c) for approving or denying the rejection of a union contract naturally suggests a two-stage hearing. The first stage will consider the issues found in § 1113(c)(1) and (2); the second stage, an analysis of the "balancing of the equities," will be heard if the debtor prevails in its first stage of proofs.[7] The first stage addresses the related questions raised by § 1113(b) whether (i) the debtor's proposal included only necessary modifications of the union contract, (ii) the debtor's proposal was "based on the most complete and reliable information available at the time" of the proposal, (iii) the proposal assures that all creditors, the debtor and all of the affected parties are treated fairly and equitably, (iv) the debtor provided the "relevant information": for evaluating the proposal, (v) the debtor met at reasonable times to confer in good faith over the modifications, and (vi) the union refused to accept the proposal "without good cause." [O]nly if the court finds on those issues [under ¶ 1113(c)(1) and (2)] in favor of the debtor will the second stage issue on the "balancing of the equities" be heard.[7] Bernstein, supra, at p. 132. Once this balancing stage is reached, the test is a broad equitable one, lacking rigidity. As both the language of section 1113(c)(3) and its legislative history suggest, this balancing test is a statutory codification of the central element in the Bildisco case. Gibson, supra, 58 Am.Bankr. L.J. at p. 343. However, the weighing of equities is not a new test; a substantial body of case law had used and interpreted that standard prior to the Supreme Court's Bildisco decision.[8] Therefore, although the legislative comments of this subsection give little guidance, earlier decisions have presented both the factors that the courts felt should be considered and those that the courts found controlling. A bankruptcy court should examine these precedents in determining which factors are applicable to the case at bar and in considering the weight to be assigned to each factor. Bernstein, supra, at p. 135. One commentator has suggested that the factors boil down to one issue: the reallocation of economic risks and the choice of the parties best able to bear those risks. Bernstein, supra, at p. 138. To another commentator the most important factor is whether the labor contract is truly a serious impediment to reorganization. When [examining the factors that controlled the precedents], the long lists of equities quickly melts [sic] down to the one, single question which is almost always controlling: what effect will rejection of the agreement have on the firm's prospects for reorganization? Gibson, supra, 58 Am.Bankr.L.J. at p. 345. 5. The burden of proof. Minnesota Bankruptcy Judge Kressel carefully analyzed the burden of proof of showing that the nine requirements of section 1113 have been met. In re American *467 Provision Co., 44 B.R. 907, 909 (Bkrtcy.D. Minn.1984). The court found that the debtor must prove, by a preponderance of the evidence, that all nine elements have been satisfied before a court may approve rejection of a collective bargaining agreement. [S]ince these nine requirements form the bases of the debtor's motion, the debtor bears the burden of persuasion by the preponderance of the evidence on all nine elements. However that is not to say that the burden of going forward with the evidence should in all instances be on the debtor. Regardless of where the ultimate burden of persuasion lies, assignment of the initial burden of production depends on the circumstances. Idem. However, the union is required to produce evidence in elements 5, 7, and 8. In particular, as to elements 5, 7 and 8, I think that to a certain extent the burden of production of evidence should lie with the Union. As to element 5, I think that it is incumbent upon the debtor in the first instance to show what information it has provided to the Union. It is then incumbent upon the Union to produce evidence that the information provided was not the relevant information which was necessary for it to evaluate the proposal. Id. at pp. 909-10.[9] After analyzing the language of section 1113(c)(3), Judge Bernstein argues that the debtor's burden of proof is heavier than the "preponderance" burden in the final test of balancing the equities. [T]he debtor's counsel has the burden of proving that the balance of the equities clearly favors rejection. The modifying adverb suggests that a preponderance of the evidence will not be sufficient. Bernstein, supra, at p. 134. 6. Application of the requirements of § 1113 to the debtor K & B Mounting. The court applied the section 1113 requirements to the facts herein, accumulated from the evidence and testimony of trial, the parties' briefs, and the record herein. In the first stage of analysis, the debtor must prove by a preponderance of the evidence that he has fulfilled the requirements of sections 1113(c)(1) and (2). The debtor's proof, however, was woefully inadequate. K & B Mounting did assert that it had serious cash flow problems, and its bankruptcy schedules revealed that its only major indebtedness was its obligation to the employees' health, welfare and pension plan. In his letter of September 5, 1984, counsel for the debtor asserted the following: . . . It is necessary for everyone to accept the lesser benefit package in order for the company to survive. I need not explain to you the consequences to the employees were it to become necessary for the company to liquidate. Thus the debtor does insist that the modifications suggested in its proposal are necessary for reorganization of the company. However, neither the union nor the court could assess the necessity of these modifications, since the debtor did not substantiate its proposal with "relevant" information selected from "the most complete and reliable information available" when the debtor made its proposal. As stated above, the debtor's bankruptcy filings are hardly sufficient. The union should be supplied with detailed projections and recommendations, perhaps made by a management consultant, preferably one who is independent of the interested parties. The debtor should present full and detailed disclosure of its difficulties and its proposed short-run and long-run solutions. If the debtor so requests, the court may authorize entry of a protective order during this stage in order to prevent the disclosure of information furnished to the union where the disclosure could compromise the debtor's competitive position. Bernstein, supra, at pp. 125-126. In summary, the debtor must provide to the union enough information to justify *468 each of its proposed modifications. The debtor was incorrect when it stated that it "need not explain" to the union the consequences of possible liquidation; that explanation is exactly what the debtor was required to make. And the test, in justifying each of the proposed modifications, is necessity, not convenience or desirability. Bernstein, supra, at p. 122. The debtor, in making such a proposal, is asking the union to sacrifice extremely important rights. Simple justice requires that the debtor only do so in a carefully considered and soundly-based manner. Gibson, supra, 58 Am.Bankr.L.J. at p. 336. The proposal clearly does not assure that all creditors and affected parties are treated fairly and equitably. Mr. McNamee, K & B's president, testified that he and his partner reduced their wages in 1981 and "tightened up on everything." They purchased equipment, for example, by paying by cash rather than by credit. The result of this management decision, however, was that, upon filing in bankruptcy the company had no secured debts, and the only major debt owed was that obligation of employee benefits under the labor contract. Therefore the proposal of K & B Mounting affects only one party in interest, the employees. The debtor has not shown that its proposal requires all parties directly affected management, nonunion employees, suppliers as well as unionized workersto sacrifice to a similar degree. Since no meetings took place between the debtor and the union, the debtor has not met the requirement of meeting at reasonable times to confer in good faith over the modifications. However, the court is not unaware of the union's improper stance in these negotiations; the union's refusal to recognize or to meet with the attorney for the debtor reflected its lack of good faith in these proceedings. Nevertheless, the court must say that the union had good cause to refuse to accept the proposal. The debtor has not met its burden in providing full information to the union or in providing a proposal which treats all parties fairly and equitably.[10] Because the court cannot find in favor of the debtor on the first-stage issues under section 1113(c)(1) and (2), it need not reach the second stage "balancing of the equities." Accordingly, the motion of debtor K & B Mounting for rejection of collective bargaining agreement is hereby denied. SO ORDERED. NOTES [1] The Bildisco decision established an equitable standard by which to measure rejection of an executory contract and permitted a debtor to ignore a labor contract immediately upon filing under chapter 11. The latter half of the decision, unilateral rejection of a labor contract, was unacceptable to organized labor. Therefore the labor lobby worked effectively through Congress to amend the Supreme Court decision. Full analyses of the process which led to the creation of the new Code section 1113 are found in Rosenberg, R., "Bankruptcy and the Collective Bargaining AgreementA Brief Lesson in the Use of the Constitutional System of Checks and Balances," 58 Am.Bankr.L.J. 293 (Fall 1984); Gibson, R.H., "The New Law on Rejection of Collective Bargaining Agreements in Chapter 11: An Analysis of 11 U.S.C. ¶ 1113," 58 Am.Bankr.L.J. 325 (Fall 1984); and Bernstein, S.B., Bankruptcy Practice After the Amendments Act of 1984, (PEC 1984). [2] 11 U.S.C. § 1113 became effective upon the date of enactment of the Bankruptcy Amendments and Federal Judgeship Act and applies only to cases filed after the date of enactment, July 10, 1984. § 553 of H.R. 5174; BAA § 541(c). [3] The new section 1113, found in Sub-Title J of Title III of the Bankruptcy Amendments Act, has been described as "an elaborate and thorough-going revision of the rejection process for union contracts," one which "created an expedited form of collective bargaining with a number of safeguards designed to insure that employers can not use chapter 11 solely to rid themselves of their union, but only propose modifications of the agreement that are truly necessary for the firm's survival." Gibson, "The New Law on Rejection of Collective Bargaining Agreements," supra at footnote 1, 58 Am.Bankr. L.J. 325 at 327. Although one court has criticized it as "not a masterpiece of draftsmanship" (In re American Provision Co., 44 B.R. 907, 909 (Bkrtcy.D.Minn.1984)), a bankruptcy commentator has complimented the new section by stating that "overall, the conferees deserve their self-congratulatory speeches reprinted in the Congressional Record of June 29, 1984." Bernstein, Bankruptcy Practice After the Amendments Act of 1984, supra at footnote 1, at p. 121. [4] Several court decisions have been published concerning section 1113(e), which allows interim changes in a collective bargaining agreement. In re Salt Freightways, 46 B.R. 347, 12 B.C.D. 872 (Bkrtcy.D.Wyo.1985); In re Wright Air Lines, Inc., 44 B.R. 744 (Bkrtcy.N.D.Ohio, 1984). [5] See footnote 1. [6] Pursuant to § 1113(d)(1), the court may extend the time for commencement of the hearing for a period not exceeding seven days, if required. [7] Bernstein's six questions to be answered in the first stage are virtually the same as the first eight requirements listed by Judge Kressel of the Minnesota Bankruptcy Court in In re American Provision Co., supra at footnote 3. [8] In re Overseas National Airways, Inc., 238 F.Supp. 359 (D.C.N.Y.1965); Shopmen's Local Union No. 455 v. Kevin Steel, 519 F.2d 698 (2d Cir.1975); In re Bildisco, 682 F.2d 72 (3d Cir. 1982); In re Brada Miller Freight Systems, Inc., 702 F.2d 890 (11th Cir.1983). [9] For the Minnesota Bankruptcy Court's explanation of the union's burden of production of evidence as to elements seven and eight, see page 10 of this opinion. [10] Congressional leaders intended that the revised rejection procedure of § 1113 should stimulate collective bargaining and limit the number of cases when a judge will have to authorize the rejection of a labor contract. 130 Cong.Rec. S8898 (daily ed. June 29, 1984) (comment of Senator Packwood). In accord with that intention, this court would have preferred the union to stimulate negotiations by requesting further information from the debtor or by explaining its rejection of the debtor's proposal. However, it is not so naive as to have expected it.

{ "pile_set_name": "FreeLaw" }

786 N.W.2d 579 (2010) 486 Mich. 596 PEOPLE of the State of Michigan, Plaintiff-Appellee, v. Jason Michael GURSKY, Defendant-Appellant. No. 137251. Calendar No. 3. Supreme Court of Michigan. Argued March 9, 2010. Decided July 22, 2010. *582 Michael A. Cox, Attorney General, B. Eric Restuccia, Solicitor General, Eric J. Smith, Prosecuting Attorney, Robert Berlin, Chief Appellate Lawyer, and Joshua D. Abbott, Assistant Prosecuting Attorney, for the people. State Appellate Defender (by Peter Jon Van Hoek) for defendant. Jeffrey L. Sauter and William M. Worden for amici curiae the prosecuting Attorneys Association of Michigan. Opinion YOUNG, J. Defendant was charged with and convicted of four counts of first-degree criminal sexual conduct for sexually abusing his girlfriend's child. At trial, the child's hearsay statements to a third party were admitted over defendant's objection. Those statements, which were made when the child first revealed the allegations of abuse, contained all the details of the alleged assaults and were used at trial to corroborate the child's testimony. Defendant appealed, arguing that the statements should not have been admitted because they were not spontaneously given as required by Michigan Rule of Evidence 803A. We agree that the child's statements were not "spontaneous" and therefore hold that the statements should not have been admitted under the limited "tender years" hearsay exception created by MRE 803A. We nevertheless affirm defendant's convictions because the improper admission of the hearsay statements was harmless error. The error is not so prejudicial as to require reversal because the hearsay statements were not used substantively at trial to prove guilt (but rather only to show consistency in the child's testimony), the statements were cumulative to the victim's testimony at trial, and there was other corroborating evidence of defendant's guilt. Accordingly, we affirm the judgment of the Court of Appeals, but do so on alternative grounds. I. FACTS AND PROCEDURAL HISTORY Defendant Jason Gursky was tried on and convicted of four counts of criminal sexual conduct in the first degree (CSC-I) for sexual penetration of a person under the age of 13.[1] The victim in this case, GA, was the daughter of Gursky's girlfriend, Lori.[2] *583 The charges against Gursky arose out of two alleged incidents of sexual contact with GA: one in September 2005, when GA was six, and the second around April 30, 2006, when GA was seven. On May 4, 2006, during a visit to the home of Stacy Morgan, a close friend of Lori, GA first alleged that Gursky had improperly touched her. The focus of this appeal is the proper characterization of GA's statements when she first discussed the sexual abuse. Those statements are thus provided here in detail, as relayed by Morgan during her testimony at Gursky's trial. Lori arrived at Morgan's home about 8:00 p.m. after picking her children up from their father's home. Morgan, acting on a suspicion that "something had been going on" with Gursky,[3] asked GA "if anyone had been touching her." GA did not verbally respond, but "got a horrified look on her face," and her eyes welled up. Morgan summoned GA to come closer and talk with Morgan and Lori, which she did and orally responded "What do you mean?" Morgan answered: "Has anyone ever touched your private parts?" GA's eyes welled up again, she started to suck her thumb, and she responded that somebody had. Morgan followed up: "Where have you been touched? Who touched you?" and then listed "people's names, every man's name that could come to mind, the last of which was Jason [Gursky]."[4] At the mention of defendant's name, GA began "bawling, [and] gasping for breath," pointed to her vaginal area, and indicated that defendant had touched her "down there." Morgan continued questioning GA: "How did he touch you? What did he touch you with?" GA responded: "With his finger." Morgan asked: "Did he touch you any other way? Did he touch you with his penis?" And GA responded that he had not. Morgan asked: "Did he ever touch you any other way?" and GA responded that "he kissed me with his tongue." Morgan followed up: "On your mouth?" GA responded: "No, down here" and again pointed to her vaginal area. Morgan noted that GA was "kind of hesitant" so she hugged GA and said to her, "Miss Stacy is your safe person. You know, tell me and I'll make sure it doesn't happen again." She gave GA time to calm down, during which time Lori left the room to call Gursky. Morgan then asked how many times the alleged abuse had happened. GA "kind of looked in the sky" and responded "I think it was four times because the first time was when we lived at Miss Tracy's basement." Later Lori confronted Gursky, who denied touching GA; when Lori brought GA into the room with Gursky, GA again began to cry but did not make any further accusations against Gursky. A few days later, GA wondered aloud to her mother, "what if it was a bad dream?"[5] *584 The following day Lori went to the police and prepared a written statement describing GA's allegations. A detective subsequently asked Gursky to come to the police station, where he questioned Gursky for approximately two hours. Gursky answered all the detective's questions, denied the accusations, and never requested a lawyer. During these interviews, the detective noted that Gursky's fingernails were "jagged." That same day GA was examined by a nurse, which is common when a sexual assault is believed to have happened within the prior 96 hours. GA complained to the nurse of experiencing pain in her vaginal area since "Jason put his finger in my pee-pee." GA told the nurse that defendant had kissed and touched her "where her pee-pee comes out from." During the examination, the nurse noted that GA had an abrasion on her labia minora, which appeared to have occurred within the last 24 to 48 hours, but could have occurred earlier. The nurse later testified that the abrasion was "consistent" with a fingernail scratch, or could have resulted from innocent behavior. Other than the scratch, the nurse found no other trauma to GA. Defendant was charged with four counts of CSC-I. Pursuant to MRE 803A, the prosecution provided notice that it would call Stacy Morgan to testify regarding what GA told her when GA first relayed the details of sexual abuse. MRE 803A provides a hearsay exception to allow the admission of statements by victims of child abuse under the age of 10 that would otherwise be excluded.[6] Before trial, defendant objected to the admission of GA's statements to Morgan on the grounds that they did not fall within the parameters of MRE 803A's hearsay exceptionspecifically, that the statements were not "spontaneous" as required by MRE 803A(2). Defendant argued that "it is clear from the statement of this Stacy Morgan ... that while she's there[,] names are suggested to this child, including [Mr. Gursky's] name ... she is continuously questioned as to what occurred here.... It is not spontaneous by any means." The trial court did not directly rule on this issue or address defendant's arguments regarding the lack of spontaneity. Instead, the court stated that "the reasonableness of the delay [between *585 the alleged incidents and GA's disclosures is] ... really the only issue I can consider." The court then held that the delay was reasonable, and Morgan's testimony thus admissible under MRE 803A. The trial commenced, and GA testified that she had awakened on two separate occasions when defendant had touched her "private" with "his finger" and "tongue."[7] She also testified that she first told this to Morgan and her mother, but could not recall being asked any questions by Morgan. Morgan testified about what GA had originally told her when GA had first disclosed the alleged abuse, the details of which are set forth above. Lori testified about the circumstances regarding GA's first statement of sexual abuse. She further testified about how she had found defendant in GA's bedroom at 3:30 a.m. on the night of the second incident with the bedcovers pulled down and his hands on GA's legs. The nurse also testified about her medical evaluation of GA, including the scrape on GA's labia. In closing argument, the prosecutor argued that if the jury believed GA's testimony, they must convict; she then acknowledged that this testimony was buttressed by Morgan's testimony which "corroborates everything GA said on the stand."[8] Defendant was convicted of all four counts and sentenced to four concurrent terms of 15 to 30 years in prison. On appeal, the Court of Appeals affirmed the admission of Morgan's testimony regarding GA's statements.[9] The panel concluded that although the trial court had abused its discretion by failing to address defendant's objection that GA's out-of-court statements were not spontaneously made, reversal was not required because the error was harmless: either way, the testimony was admissible. The Court of Appeals cited People v. Dunham for the proposition that "answers to open-ended, innocuous questions are spontaneous."[10] The Court reviewed the record and then reasoned as follows: *586 The victim responded emotionally to the first mention of the subject matter, crying and sucking her thumb. She willingly gave details that exceeded the scope of Morgan's inquiry. She pointed to her vaginal area and reported that the touching had occurred "down there," volunteered that the touching was with a finger and a tongue, denied that defendant touched her with his penis, and volunteered that the conduct had occurred over a greater span of time than suspected by Morgan. Taken as a whole, the victim's statements were primarily spontaneous, despite being prompted by Morgan's questions. Thus, the testimony would have been admissible had the trial court considered this objection and, therefore, the court's erroneous legal conclusion had no effect on the outcome of the trial.[11] On the basis of this reasoning and finding the statements to be "primarily spontaneous,"[12] the Court affirmed defendant's conviction. Defendant sought leave to appeal in this Court. We granted his application for leave to appeal and directed the parties to address specifically (1) whether the statements made by the complainant to Stacy Morgan on or about May 4, 2006, were "shown to have been spontaneous and without indication of manufacture" within the meaning of MRE 803A(2), and (2) whether it was more probable than not that any error in this regard was outcome determinative.[13] II. STANDARD OF REVIEW The decision whether to admit evidence is within the trial court's discretion, which will be reversed only where there is an abuse of discretion.[14] However, decisions regarding the admission of evidence frequently involve preliminary questions of law, such as whether a rule of evidence or statute precludes admitting of the evidence. This Court reviews questions of law de novo.[15] Accordingly, "when such preliminary questions of law are at issue, it must be borne in mind that it is an abuse of discretion to admit evidence that is inadmissible as a matter of law."[16] III. ANALYSIS A. THE "SPONTANEITY" REQUIREMENT OF MRE 803A 1. PRINCIPLES OF LAW Hearsay is "a statement, other than the one made by the declarant while testifying at the trial or hearing, offered in evidence to prove the truth of the matter asserted."[17] Hearsay is generally prohibited and may only be admitted at trial if provided for in an exception to the hearsay rule.[18] MRE 803A provides just such an exception for a child's statement regarding sexual assault in certain circumstances. The rule provides: *587 A statement describing an incident that included a sexual act performed with or on the declarant by the defendant or an accomplice is admissible to the extent that it corroborates testimony given by the declarant during the same proceeding, provided: (1) the declarant was under the age of ten when the statement was made; (2) the statement is shown to have been spontaneous and without indication of manufacture; (3) either the declarant made the statement immediately after the incident or any delay is excusable as having been caused by fear or other equally effective circumstance; and (4) the statement is introduced through the testimony of someone other than the declarant. If the declarant made more than one corroborative statement about the incident, only the first is admissible under this rule. A statement may not be admitted under this rule unless the proponent of the statement makes known to the adverse party the intent to offer the statement, and the particulars of the statement, sufficiently in advance of the trial or hearing to provide the adverse party with a fair opportunity to prepare to meet the statement.[19] MRE 803A, which codified the common-law "tender years exception," is also an exception to the prohibition against the use of hearsay testimony to bolster the credibility of a witness.[20] Relevant to this appeal, MRE 803A plainly requires the declarant's original statement to have been "spontaneous." The Michigan Rules of Evidence do not define "spontaneous." As when construing statutes, in the absence of a specific definition of a common term used in an evidentiary rule, it is appropriate to look to the dictionary definition to discern the term's ordinary and generally accepted meaning.[21] "Spontaneous" is defined as: "(1) coming or resulting from natural impulse or tendency; without effort or premeditation; natural and unconstrained; unplanned; (2) of a person: giving to acting on sudden impulse."[22] *588 The standards for spontaneity have been well litigated. The leading case on this issue in Michigan is People v. Dunham, a decision of the Court of Appeals holding that statements made in response to customary, open-ended questions may be considered spontaneous.[23] In Dunham, a child was asked questions by an adult mediator during the child's parents' divorce. The questions were generally innocuous and customarily asked of all children participating in divorce mediation, yet the child in Dunham responded with allegations of sexual abuse. Virtually every Court of Appeals decision (including the panel in this case) has applied Dunham when examining the issue of spontaneity, although the holding has been broadened to stand for the general proposition that statements made in response to questioning may be considered spontaneous.[24] Until this case, this Court has not itself discussed or defined the parameters under which a statement can be spontaneous for the purposes of MRE 803A.[25] Other states' courts and the federal courts have addressed the issue of spontaneity as well; their decisions may be classified into separate groups for our purposes here. The most recognizable spontaneous statements are those that arise out of pure impulsethat is, they are made by the declarant without prompt, plan, or questioning. This type of "impulsive" statement is prototypically spontaneous because it appears to "come out of nowhere" or "out of the blue." For example, in People v. Bowers,[26] the Colorado Supreme Court held that a child's statements were spontaneous where she made unexpected allegations of sexual abuse with no questioning or prompting from the adult. There, a babysitter was changing the child's brother's diaper when the child pointed to her brother's penis and said that her father "`had one just like that but it was bigger and he hurts me with it'" and the child also said to a foster care program coordinator that "`I don't like *589 boneys ... I don't like Daddy to put his boney on me.'"[27] The Court held that the statements were made "spontaneously without prompting or suggesting."[28] Statements that are made as a result of prompt, plan, or questioning by a third party, yet are in some manner atypical, unexpected, or do not logically follow from the prompt are also widely considered spontaneous. This type of "non sequitur" statement is generally considered spontaneous because it shows that the declarant was acting from natural impulses or tendencies by responding atypically to what may otherwise have been innocent prompts. For example, in State v. Aaron L.,[29] the Connecticut Supreme Court held that the victim's statement showed spontaneity and consistency, and was therefore sufficiently reliable to be admissible under Connecticut's residual exception to the hearsay rule. There, the child's statement, "`I'm not going to tell you that I touch daddy's pee-pee,'" did not "logically relate to the event that preceded ither mother admonishing the victim that it was not nice to grope her breast."[30] A third category that poses closer questions involves cases where statements are given as a result of open-ended and nonleading questions that include answers or information outside the scope of the questions themselves. Often, this type of unplanned yet responsive statement may be considered "spontaneous" because the information that results is based on knowledge independent of that provided in the question. For example, in State v. Shafer, the Washington Supreme Court held that where the child "without prompting" told her mother about encounters with the defendant and the child's mother then inquired further, while the child's "statements in response to her mother's questioning were not entirely spontaneous, they were not the result of leading questions or a structured interrogation" and were thus admissible.[31] Similarly, the decision in McCafferty v. Leapley[32] demonstrates how a spontaneous statement may arise out of simple questioning or innocent *590 prompting. There, the child's statements "about how her `daddy' sucked on her neck were given spontaneously in response to a nonleading question about how she got the mark on her neck. Her statements about this were consistent with what she told others and with what she demonstrated on [the adult's] own neck and with [the adult's] playroom dolls.... [It was also the child] who volunteered in play statements such as `this is how she could sit on her daddy's weenie.'"[33] The aforementioned Michigan Court of Appeals decision in Dunham holding that statements resulting from open-ended, nonleading questions may be spontaneousis another prime example of this type of statement. Statements falling within this last category, however, are also the type that are most likely to be nonspontaneous, and thus deserve extra scrutiny by trial courts before they may be admitted. When examining statements that have some of the same characteristics as GA's statements here, many courts have found a lack of spontaneity. The analysis they employed is informative for our purposes here. For example, the New Jersey Supreme Court's decision in State v. D.G. provides a useful comparison.[34] There, the court concluded that there was not a "`probability that the statement [was] trustworthy'" as required by New Jersey's applicable rule, because the "situation under which [the child] disclosed the sexual abuse was very stressful" and the child did not "spontaneously divulge information concerning the assault" to the adult, but rather the adult "interrogated her after finding her performing questionable acts while at play."[35] Interrogation, aggressive or leading questioning, and similar factual scenarios may all work to eliminate the spontaneity of a declarant's statement, which would thus render it inadmissible in the MRE 803A context. 2. APPLICATION Having examined these principles of hearsay and the requirement of "spontaneity" generally, we must determine the parameters of this requirement in Michigan for the purposes of MRE 803A. We hold that MRE 803A generally requires the declarant-victim to initiate the subject of sexual abuse. The question of spontaneity, at its essence, asks whether the statement is the creation of the child or another. There is certainly no doubt that the types of "impulsive" or "non sequitur" statements described above should be considered spontaneous for the purposes of MRE 803A because they result from the declarant's "natural impulse or tendency" or are "unplanned" and made "without effort or premeditation," as a *591 common definition of spontaneity provides. Such statements are quintessentially the "creation" of the child-declarant, and are thus certainly admissible under MRE 803A, assuming they meet the rule's other requirements. This case, on the other hand, requires that we address the closer question: whether prompts from adults render a child's responsive statement inadmissible. This type of statement most often arises in the context of questioning by an adult. We hold that the mere fact that questioning occurred is not incompatible with a ruling that the child produced a spontaneous statement. However, for such statements to be admissible, the child must broach the subject of sexual abuse, and any questioning or prompts from adults must be nonleading or open-ended in order for the statement to be considered the creation of the child. To be clear, we do not hold that any questioning by an adult automatically renders a statement "nonspontaneous" and thus inadmissible under MRE 803A. Open-ended, nonleading questions that do not specifically suggest sexual abuse do not pose a problem with eliciting potentially false claims of sexual abuse.[36] But where the initial questioning focuses on possible sexual abuse, the resultant answers are not spontaneous because they do not arise without external cause. When questioning is involved, trial courts must look specifically at the questions posed in order to determine whether the questioning shaped, prompted, suggested, or otherwise implied the answers. This approach requires that trial courts review the totality of the circumstances surrounding the statement in order to determine the issue of spontaneity. Even though courts should look at the surrounding circumstances and larger context in order to understand whether the statement was spontaneously made, we note that this review is not solely determinative of the question of admissibility. As MRE 803A requires, the statement must be "shown to have been spontaneous and without indication of manufacture."[37] The language of MRE 803A(2) clearly demonstrates that spontaneity is an independent requirement of admissibility rather than one factor that weighs in favor of reliability or admissibility.[38] Thus, even if, considering *592 the totality of the circumstances, the trial court determines that a statement is spontaneous for the purposes of MRE 803A(2), it must nevertheless also conduct the separate analyses necessary to determine whether the statement meets the other independent requirements of MRE 803A. Turning to the facts of this case, we do not conclude that GA's statements were spontaneously given. Morgan directed GA to sit on Lori's lap, whereupon Morgan, Lori, or both questioned GA about sexual abuse. Morgan testified that she specifically broached the subject of sexual abuse on her initiative, questioning and otherwise probing GA for details. According to her trial testimony, Morgan asked GA numerous questions, including whether "anyone had been touching her," "Has anyone ever touched your private places?" "Where have you been touched? Who touched you?" and, after identifying defendant, "How did he touch you? What did he touch you with?" There is simply no indication in this case that GA would have made the statements she made or even broached the subject of sexual abuse if not otherwise prompted and, indeed, directly questioned by Morgan. Moreover, the testimony indicates that GA hesitated for "quite a while" before making the first statement; this tends to suggest that GA did not come forth with her statements on her own initiative, and thus that the statements were not necessarily products of her creation. More troubling, Morgan specifically suggested defendant's name to GA in a list of possible perpetrators. These facts demonstrate that GA's statements were not spontaneously given, nor did they arise out of an otherwise innocent conversation or set of nonleading and open-ended questions. Although there were concededly spontaneous elements in GA's statements, this is insufficient to establish the general kind of spontaneity the rule requires. The Court of Appeals below concluded that "on balance" the statements were "primarily spontaneous" by focusing not on who broached the subject of sexual abuse, but instead on the nature of some of the questions that were open-ended, the degree of voluntariness GA displayed in answering questions and providing details not necessarily evident by the nature of the questions, and the physical reactions that GA exhibited as a result of the questioning. In this sense, the statements had spontaneous elements inasmuch as the answers were "given without premeditation," some answers seemed "unplanned," and some of her responses were "natural" and impulsiveand this is true even if GA's statements were given in response to direct questions. Nevertheless, when considering the questions in their entirety, we cannot conclude that GA's responses were, on the whole, spontaneous. As noted, because spontaneity is an independent requirement under MRE 803A(2)LQ rather than one factor that weighs in favor of reliability and therefore admissibility, an overall sense of reliability or trustworthiness cannot render nonspontaneous statements admissible under MRE 803A. In deciding that GA's statements are inadmissible, we must be clear that we do not expect a parent or other concerned *593 adult not trained in the delicate nature of questioning a child regarding sexual abuse to recognize the danger of influencing a child's responses with the type of questioning used here. Nor do we expect that most parents or adults would treat this situation casually in order to allow the child to come forward with a "spontaneous" statement. Indeed, quite the contrary is likely to be true: it is perfectly natural for a parent or other concerned adult to engage in direct questioning or seek as much information as possible if his suspicions are aroused regarding possible sexual abuse of a child. We merely hold that statements resulting from such questioning cannot meet the narrow grounds for admissibility under MRE 803A. The prohibition on hearsay is the longstanding general rule, and thus exceptions to this prohibition must be appropriately enforced.[39] In sum, we hold that a statement prompted by an adult's question specifically concerning sexual abuse is not spontaneous. This is true even if other indicia of reliability exist, such as an emotional response or details provided by the child that exceed the scope of the adult's inquiry. The Court of Appeals thereby erred by focusing on these other indicia of reliability rather than who broached the subject of sexual abuse, the specific questions asked by the adult during the conversation, and how some of the questioning suggested or implied answers. Viewing GA's statements in light of the totality of the circumstances in this case, these critical factors render her statements nonspontaneous. In future cases, though, we emphasize that a statement made in response to an adult's question or comment that does not concern abuse, or where the child brings up the subject of abuse, may be spontaneous, and for the purposes of MRE 803A may be equally as admissible as if the child had made a statement arising "out of nowhere." B. HARMLESS ERROR ANALYSIS Having determined that the trial court in this case abused its discretion by impermissibly allowing Stacy Morgan to testify regarding GA's out-of-court statements concerning alleged sexual abuse, we must next determine whether this error was sufficiently prejudicial to warrant reversal of defendant's convictions. We hold that it was not. Defendant's claim of error in this case involves preserved, non-constitutional error. The standard we must apply here is governed by statute. MCL 769.26 provides: No judgment or verdict shall be set aside or reversed or a new trial be granted by any court of this state in any criminal case, on the ground of misdirection of the jury, or the improper admission or rejection of evidence, or for error as to any matter of pleading or procedure, unless in the opinion of the court, after an examination of the entire cause, it shall affirmatively appear that the error complained of has resulted in a miscarriage of justice.[40] In making this determination for preserved, non-constitutional error, this Court asks whether, absent the error, it is "more probable than not" that a different outcome would have resulted.[41] The burden *594 is on the defendant to show that the error resulted in a miscarriage of justice.[42] Where the error did not result in a miscarriage of justice and a defendant cannot meet this burden, we have deemed the error "harmless" and thus not meriting reversal of the conviction.[43] Michigan law provides that where a hearsay statement is not offered and argued as substantive proof of guilt, but rather offered merely to corroborate the child's testimony, it is more likely that the error will be harmless.[44] Moreover, the admission of a hearsay statement that is cumulative to in-court testimony by the declarant can be harmless error, particularly when corroborated by other evidence.[45] This Court has cautioned, though, that "the fact that the statement [is] cumulative, standing alone, does not automatically result in a finding of harmless error.... [Instead, the] inquiry into prejudice focuses on the nature of the error and assesses its effect in light of the weight and strength of the untainted evidence."[46] In a trial where the evidence essentially presents a one-on-one credibility contest between the victim and the defendant, hearsay evidence may tip the scales against the defendant, which means that the error is more harmful.[47] This may be even more likely when the hearsay statement was made by a young child, as opposed to an older child or adult.[48] However, if the declarant himself testified at trial, "any likelihood of prejudice was greatly diminished" because "the primary *595 rationale for the exclusion of hearsay is the inability to test the reliability of out-of-court statements[.]"[49] Where the declarant himself testifies and is subject to cross-examination, the hearsay testimony is of less importance and less prejudicial. On the basis of this harmless error framework, we are not convinced that defendant has met the burden of showing that, but for the fact that Morgan testified regarding GA's original statements of abuse, it is more probable than not that a different outcome would have occurred. First, the prosecutor relied on Morgan's testimony only as corroboration for GA's direct testimony, and did not admit the testimony for its substantive value. The prosecutor's opening sentence when discussing Morgan's testimony during closing arguments explicitly indicated the limited purpose for which this testimony was offered: "Stacy Morgan's testimony corroborates everything that [GA] said on the stand last Friday." The prosecutor then proceeded to describe precisely how Morgan's testimony confirmed that GA's statements at trial and when talking to Morgan were the same. In essence, Morgan's statement was used to show that GA had not changed her story in the intervening time. Although Morgan's testimony was undoubtedly important, the record is clear that it simply was never used substantively by the prosecutor.[50] This is consistent with an MRE 803A statement generally, which is only "admissible to the extent that it corroborates testimony given by the declarant during the same proceeding...."[51] Second, Morgan's testimony was cumulative to GA's testimony at trial. *596 GA testified at trial and was subject to cross-examination. GA's testimony at trial was sufficient standing alone to support defendant's conviction of all four CSC charges.[52] Although whether a hearsay statement is cumulative is not dispositive to this analysis under Michigan law, it is an indicator that the error was not highly prejudicial, particularly in the presence of other corroborating evidence. Here, the improperly admitted portions of Morgan's testimony did not introduce any new information to the jury. Instead, Morgan's testimony was merely cumulative to GA's in-court testimony. Defendant contends that this case largely rested on GA's credibility and believability, which Morgan undoubtedly bolstered. However, there was additional corroborating evidence introduced which tends to belie this claim. Perhaps the most damaging of this evidence is Lori's testimony that she walked in to GA's room at 3:30 a.m. and found defendant kneeling at GA's bed, with the bedcovers pushed down, touching GA in the leg area. This testimony corroborates GA's testimony regarding the timing of the alleged crime, namely that defendant had touched and "kissed" her vaginal area that night, and corroborates precisely GA's testimony that her mother entered the room during the sexual assault and then left the room again. The nurse also testified that GA stated during the medical examination that she experienced pain in her vaginal area because "Jason put his finger in my pee-pee" and that defendant had kissed and touched her "where her pee-pee comes out from." This testimony was properly admitted under MRE 803(4), which allows the admission of statements made for purposes of medical treatment.[53] The nurse's testimony also introduced the fact that GA had recently suffered a scratch on her labia minora.[54] Thus, the other properly admitted evidence reveals that this case *597 was not purely a one-on-one credibility contest between the defendant and the victim. Third, to the degree that Morgan's testimony prejudiced defendant when she described how GA reacted during the conversation, the victim's emotional reactions are not hearsay and are perfectly admissible at trial.[55] Morgan testified about the horrified look on GA's face, how her eyes welled up, how she began sucking her thumb, and her crying, bawling, and gasping for breath. Testimony to this effect would be damaging inasmuch as these were GA's inadvertent, non-coerced physical reactions that tended to show the reliability of her statements. More important, though, the testimony about these reactions is admissible as non-hearsay because they are nonassertive conduct.[56] Morgan could properly testify as to GA's nonassertive conduct that she personally observed and about which she has first-hand knowledge. On the basis of this analysis, we hold that although Morgan's testimony was erroneously admitted, the error does not require reversal. Morgan's testimony was cumulative to and corroborated GA's testimony, which was further buttressed by other evidence. On this record, defendant cannot meet his burden of showing that a different outcome would have been the more probable result without Morgan's testimony.[57] IV. CONCLUSION We hold that the child's statements in this case were not "spontaneous" and therefore should not have been admitted under the limited hearsay exception created by MRE 803A. Statements specifically prompted by an adult's question concerning sexual abuse are not spontaneous, even if other indicia of trustworthiness or reliability exist. However, where the child brings up the subject of abuse, the resulting statement may be considered spontaneous, even if later questioning occurs by an adult. For such statements to be admissible, the child must broach the subject of sexual abuse, any questioning or prompts from adults must be nonleading and open-ended, and the statement must be the creation of the child. Although the trial court abused its discretion by admitting hearsay testimony in this case, we nonetheless affirm defendant's convictions because the improper admission was harmless error. Defendant has not been able to show that the error is *598 so prejudicial as to require reversal. Here, the hearsay statements were not used substantively at trial to prove guilt (but rather only to show consistency in the child's testimony), the statement was cumulative to other trial evidence, and there was other corroborating evidence of defendant's guilt. The decision of the Court of Appeals is thus vacated, and defendant's conviction is affirmed on other grounds. WEAVER, CORRIGAN, MARKMAN, and HATHAWAY, JJ., concurred with YOUNG, J. MICHAEL F. CAVANAGH, J., (concurring in part and dissenting in part). I agree with the majority that the testimony at issue in this case did not involve statements that satisfy the "spontaneous" requirement of MRE 803A, and, as a result, the trial court abused its discretion when it allowed the testimony. I disagree, however, that this error was harmless. I think that a full review of the record reveals that this case rested largely on the complainant's credibility, and, as the prosecution stressed in its closing argument, Stacy Morgan's corroborating testimony bolstering GA's credibility was an essential piece of evidence that was critical to the outcome of this case. Therefore, I think that defendant has satisfied his burden under People v. Lukity, 460 Mich. 484, 596 N.W.2d 607 (1999), to show that it is "more probable than not" that a different outcome would have resulted absent Morgan's testimony. Thus, I respectfully dissent from part III(B) of the majority opinion.[1] The majority's harmless-error analysis goes astray in several places. First, the majority glosses over the key details regarding the important facts in this case. Second, the majority gives insufficient weight to this Court's caselaw regarding the importance of improperly admitted hearsay. Finally, I disagree with the majority's attempt to minimize the importance of the hearsay testimony to the prosecution's case. To begin with, the majority ignores several key details regarding the facts that it relies on to argue that there was evidence, other than Morgan's testimony, that corroborated GA's testimony. First, the majority states that "the most damaging of this [corroborative] evidence" was Lori's testimony "that she walked in to GA's room at 3:30 a.m. and found defendant kneeling at GA's bed, with the bedcovers pushed down, touching GA in the leg area." Ante at 596 (emphasis added). The majority mischaracterizes Lori's testimony and overlooks a potentially innocent explanation for the evidence that it finds so damning. A full review of the record indicates that Lori testified that defendant stayed up late playing video games with her son on the night that she saw defendant in GA's room. She also testified that she had told defendant previously that she preferred that GA sleep in her pajamas, but, on that night, she had put GA to bed in her street clothes because GA had fallen asleep in the living room. When Lori confronted defendant about what he was doing in GA's room, he explained that he had changed GA into her pajamas. Further, while the majority states that Lori saw defendant "touching GA in the leg area," the record indicates that what Lori actually testified is that she saw defendant's hand "between [GA's] knee and *599 feet," which has much less sinister implications. In light of these details, the corroborative nature of this particular evidence is substantially weakened, along with the majority's harmless-error conclusion. Second, the majority also ignores several important details surrounding the nurse's and investigating detective's testimony. As the majority notes, the nurse testified that GA had a scratch on her labia minora, and the investigating detective testified that defendant's fingernails were jagged or sharp when he interviewed defendant. Although the majority acknowledges that the nurse testified that the scratch likely occurred in the 24 to 48 hours preceding her examination of GA, it fails to mention that the exam occurred five days after defendant allegedly sexually abused GA. Nor does the majority consider that the nurse testified that the scratch could have resulted from totally innocent behavior, such as a child playing. Furthermore, the nurse's testimony regarding GA's description of what had happened to her corroborates at most one instance of sexual abuse. It does not corroborate the testimony related to the other accusation of sexual abuse against defendant. Again, when this particular evidence is considered in context, its corroborative nature is substantially weakened, and the majority's harmless-error conclusion is further eroded. The majority also gives insufficient weight to this Court's caselaw when it concludes that the prejudicial nature of the error was limited because GA testified at trial and was subject to cross-examination, making Morgan's testimony merely corroborative and cumulative. In making these generalizations, the majority pays lip service to this Court's warnings that "the fact that the statement was cumulative, standing alone, does not automatically result in a finding of harmless error," People v. Smith, 456 Mich. 543, 554, 581 N.W.2d 654 (1998), and that hearsay evidence may tip the scales against a defendant when a case presents a credibility contest, especially when the declarant is a young child. People v. Straight, 430 Mich. 418, 427-428, 424 N.W.2d 257 (1988); Smith, 456 Mich. at 555 n. 5, 581 N.W.2d 654. Unfortunately, however, the majority largely fails to heed those warnings in reaching its conclusion. To start with, the utility of cross-examining a seven-year-old girl is debatable. In order to avoid the appearance of bullying a child before the jury, "no defense lawyer will subject a small child to an unnecessarily traumatic courtroom experience," even at the expense of leaving a possible error in the testimony undiscovered. Christiansen, The testimony of child witnesses: Fact, fantasy, and the influence of pretrial interviews, 62 Wash L. R. 705, 719 (1987). Further, a child "will adopt false memory as truth and be unable to distinguish the source of what she recalls. The sources of her knowledge are obscured and the possibility of falsehood hidden behind her sincere belief in the truth of her memory." Id. This concern is reflected in MRE 803A's limitations on the admissibility of hearsay statements made by children, which require that a child's statements be made as soon as practicable after the incident and that the statements be spontaneous and without indication of manufacture. Therefore, given that Morgan's suggestive questioning occurred before GA testified at trial, cross-examination may have been useless in this case. As a result, the jury may have been "presented with an unshakably false basis for assessing the weight of her testimony," and defendant's felony convictions may have been based on inaccurate information that was impossible to test. Id. at 719-720. Also, the majority's reliance on MCL 750.520h to argue that the prosecution in *600 this case did not need to corroborate GA's testimony is misplaced. The credibility of GA's testimony was a critical issue because there was little physical evidence in this case. Indeed, as the majority notes, GA's testimony was the only basis for defendant's conviction for one of the alleged incidences of abuse. Presumably, the only support for the jury's finding was its belief that GA was credible, which was unfairly bolstered by the inadmissible hearsay. Therefore, as the majority acknowledges, the prosecution did not need to corroborate GA's testimony only if we are willing to "assum[e] ... that the jury found her credible." Ante at 596 n. 52 (emphasis added). The fact that GA's credibility was the key issue is precisely why the error was not harmless: Morgan's erroneously admitted hearsay testimony strongly bolstered GA's credibility. Thus, as the majority admits, we are left to assume that even without Morgan's testimony the jury would have found GA credible. This case simply presents too many unknowns to base multiple serious criminal convictions on a bare assumption. Furthermore, there are several problems with the majority's reference to GA's credibility. First, it inaccurately states that GA's statements were "consistent over time." This ignores that several days after Morgan's conversation with her, GA made a seemingly inconsistent statement when she asked Lori, "Mommy, what if it was a bad dream?" Second, the majority's statement that it is not commenting on GA's credibility is incorrect and irrelevant. The majority does comment on the credibility of GA's testimony when it notes that GA's statement "remained consistent over time." Ante at 596 n. 52. Because the majority must rely on GA's admittedly inadmissible statement to Morgan to label her statements "consistent," the majority only compounds the harm and proves that Morgan's testimony was critical to the prosecution's case. Third, the majority's commentary on the credibility of GA's statements is irrelevant. The question is not whether this Court finds GA credible but whether the inadmissible hearsay unfairly influenced the jury's ability to determine GA's credibility. Because it is more probable than not that the hearsay influenced the jury and affected the trial's outcome, the error was not harmless. Contrary to the majority's claim, I do not discredit GA's testimony "in toto." Rather, I merely note that children, by no fault of their own, are highly susceptible to influence. On the basis of this widely accepted observation, which the majority accepts, I conclude that the jury's ability to determine whether it found GA's testimony credible was unfairly influenced by Morgan's inadmissible testimony to the point that the error was not harmless. Finally, the majority's attempt to minimize the importance of Morgan's hearsay testimony to the prosecution's case is also misleading. Ante at 595 n. 50. Simply because the prosecution listed Morgan's testimony as the "fifth reason" supporting conviction in her closing argument is not evidence that the testimony was not important. The order in which the prosecution presented the supporting evidence in her closing argument is not an indication of the weight that the prosecution or, more importantly, the jury gave the evidence. And, even if the order of presentation did somehow relate to the testimony's importance, it should be noted that in the first paragraphs of its closing argument, the prosecution stressed that GA's believability was key to the case. Furthermore, the first sentence of the prosecution's discussion of Morgan's testimony during closing argument stressed that Morgan's testimony "corroborated everything that [GA] *601 said on the stand. . . ." Similarly, it is irrelevant that "the prosecutor's discussion of Morgan's testimony accounts for less than 2½ transcript pages," given that this is no indication of the weight that the jury gave Morgan's testimony. Indeed, in People v. Snyder, 462 Mich. 38, 609 N.W.2d 831 (2000), we remanded for a new trial under the Lukity standard because of an erroneous evidentiary ruling by the trial court that affected the complainant's credibility. We reasoned that, much like this case, "the prosecution's case rested almost entirely on the testimony of the complainant," and the "prosecutor took advantage of the circuit court's erroneous ruling during her closing argument." Id. at 44, 45, 609 N.W.2d 831. In summary, defendant's convictions largely rested on GA's credibility, and, as the prosecution stressed, Morgan's corroborating testimony bolstering her credibility was an essential piece of evidence in this case.[2] Furthermore, much of the admissible "corroborating" evidence cited by the majority is less convincing when viewed in context, and the majority's conclusion that this case was not merely a credibility contest is called into question. Finally, as the majority acknowledges, this Court has held that hearsay evidence is more harmful in credibility contests, particularly when the declarant is a young child. Accordingly, I do not agree with the majority that the trial court's abuse of discretion was harmless error, and I would remand for a new trial. MARILYN J. KELLY, C.J., concurred with MICHAEL F. CAVANAGH, J. NOTES [1] MCL 750.520b(1)(a) ("A person is guilty of criminal sexual conduct in the first degree if he or she engages in sexual penetration with another person and if ... [t]hat other person is under 13 years of age."). [2] I refer to the complainant by her initials and her mother simply as "Lori" in order to protect their identities. [3] Earlier in the day Morgan and Lori had a private conversation wherein Lori mentioned "a situation that had happened prior" involving defendant and GA. Apparently this is what stirred Morgan to ask GA if anyone had been touching her. [4] Morgan was also asked if there were different reactions by GA when the names of the men were mentioned; she answered: "Each one, she just told me no, no, no, and as soon as Jason's name was mentioned, she welled up and said he did it." [5] Lori's testimony concerning the circumstances surrounding GA's statement was largely consistent with that of Stacy Morgan. Lori testified that she believed something was wrong before she and GA arrived at Morgan's house because GA was acting "a little different." Once Lori and her children arrived at Morgan's house, the children were running around, but "Stacy wanted me to have [GA] sit on my lap and ask her some questions, and I did, I asked [GA] some questions, and that's when I learned of." Counsel did not allow her to finish, but asked what GA's reaction was after the first question. Lori testified that GA started to cry, noting that GA hesitated for "quite a while" before she began to talk, and that she had a four to five minute conversation with GA. She stated that Morgan was present but she did not say whether Morgan asked any of the questions. When asked whom she first told about the abuse, GA testified, "[m]y mom." When the prosecutor asked whether anyone else was there, GA said "Her friend," "Miss Stacy." When asked "Do you remember how it came about that you told them?" GA responded that she did not. When asked whether she told "both of them or just one of them," GA testified, "Both." [6] Michigan Rule of Evidence 803A, which is a hearsay exception for a child's statement about sexual assault, provides in relevant part: A statement describing an incident that included a sexual act performed with or on the declarant by the defendant or an accomplice is admissible to the extent that it corroborates testimony given by the declarant during the same proceeding, provided: (1) the declarant was under the age of ten when the statement was made; (2) the statement is shown to have been spontaneous and without indication of manufacture; (3) either the declarant made the statement immediately after the incident or any delay is excusable as having been caused by fear or other equally effective circumstance; and (4) the statement is introduced through the testimony of someone other than the declarant. [MRE 803A (emphasis added).] [7] The facts of the actual sexual assaults, as described at trial, are as follows: The first and second contacts occurred on a night around August or September of 2005. GA was wearing pajamas and underwear in her bed. During the night, Gursky appeared in her bedroom, reached underneath her clothing, and touched her vaginal area with his finger and tongue. The third and fourth incidents occurred on one night at the end of April 2006. That night, GA had fallen asleep on the couch, so Lori put her to bed in her street clothes in the bedroom that GA shared with her brother, and Lori then went to bed herself. Lori woke up around 3:30 a.m. and noticed that her door had been closed; she walked out of her room and noticed that no one was in the living room where the TV was on, but she also saw that the door to the children's bedroom was slightly open. She opened the door and noticed Gursky kneeling by the middle of GA's bed, where the covers had been pushed to the end of the bed. GA was lying on her back and Gursky had his hand between her knee and feet. Lori asked Gursky what he was doing, and he replied that he was tucking in the children. Lori stood there a while longer, then left; a few minutes later she returned to the children's bedroom and noticed that GA had been changed into her nightgown. She then confronted Gursky: "Jason, what were you doing in there?" He repeated his prior answer: that he had changed GA into her nightgown. Lori stated that it left her feeling uneasy, so Gursky apologized and said it wouldn't happen again. [8] The trial court also denied a directed verdict at the close of the prosecution's case, noting that GA "has been absolutely consistent with her version of events from the first time she disclosed it through ... her testimony in court." [9] People v. Gursky, unpublished opinion per curiam of the Court of Appeals, issued July 17, 2008 (Docket No. 274945), 2008 WL 2780282. [10] 220 Mich.App. 268, 271-272, 559 N.W.2d 360 (1996). [11] Gursky, unpub. op. at 3 (emphasis added). [12] Id. [13] People v. Gursky, 483 Mich. 999, 764 N.W.2d 570 (2009). [14] People v. Starr, 457 Mich. 490, 494, 577 N.W.2d 673 (1998). [15] People v. Sierb, 456 Mich. 519, 522, 581 N.W.2d 219 (1998). [16] People v. Lukity, 460 Mich. 484, 488, 596 N.W.2d 607 (1999). [17] MRE 801(c). [18] MRE 802 ("Hearsay is not admissible except as provided by these rules."). [19] MRE 803A (emphasis added). [20] This Court first recognized the common-law tender years rule in People v. Gage, 62 Mich. 271, 28 N.W. 835 (1886), as a permissible rule to allow hearsay in order to corroborate the testimony of a child complainant. "The rule in this State is that where the victim is of tender years the testimony of the details of her complaint may be introduced in corroboration of her evidence, if her statement is shown to have been spontaneous and without indication of manufacture; and delay in making the complaint is excusable so far as it is caused by fear or other equally effective circumstance." People v. Baker, 251 Mich. 322, 326, 232 N.W. 381 (1930) (holding also that only a child's first statement made is admissible under the exception). However, this Court held in People v. Kreiner, 415 Mich. 372, 377-378, 329 N.W.2d 716 (1982), that the common-law tender years exception to hearsay did not survive the adoption of the Michigan Rules of Evidence in 1978. In its stead, MRE 803A was adopted on December 17, 1990, and became effective on March 1, 1991. [21] See Waknin v. Chamberlain, 467 Mich. 329, 332, 653 N.W.2d 176 (2002) (providing that this Court construes a rule of evidence in the same manner as a court rule or statute); In re Certified Question from the United States Court of Appeals for the Sixth Circuit, 468 Mich. 109, 113, 659 N.W.2d 597 (2003), citing People v. Morey, 461 Mich. 325, 330, 603 N.W.2d 250 (1999) (providing that this Court may refer to dictionary definitions in the absence of an explicit definition in the text being interpreted). [22] Webster's New Universal Unabridged Dictionary (1996). [23] 220 Mich.App. 268, 559 N.W.2d 360 (1997). [24] See, e.g., Gursky, unpub. op. at 3 ("In People v. Dunham, 220 Mich.App. 268, 271-272, 559 N.W.2d 360 [1996], this Court declared that answers to open-ended, innocuous questions are spontaneous."). [25] In 2008, this Court peremptorily reversed a decision of the Court of Appeals "for the reasons stated in the Court of Appeals dissenting opinion...." People v. George, 481 Mich. 867, 748 N.W.2d 568 (2008), reversing and remanding People v. George, unpublished opinion per curiam of the Court of Appeals, issued November 20, 2007 (Docket No. 271892), 2007 WL 4125372. In George, the Court of Appeals affirmed the defendant's conviction in a split decision, with Judge GLEICHER dissenting from the portion of the majority opinion holding that the hearsay evidence provided by the victim's mother and sister was properly admitted under MRE 803A. The dissent argued that the trial court ignored evidence that the victim's hearsay statement was not the first one made to another person (as MRE 803A requires), that the statement was not spontaneous, and that the defendant was prejudiced by this error. Regarding spontaneity, Judge GLEICHER wrote: Additionally, the evidence did not support a finding that the victim spontaneously made her statement to [the victim's sister,] Marquayla. Both Marquayla and the mother testified that the victim's report to Marquayla was not spontaneous, but was made in response to questioning. Marquayla's testimony reflects that the questioning included threats about "lying" and "getting into trouble." The victim did not supply any other information regarding the circumstances of the statement she claimed to have made to Marquayla. The absence of a showing of spontaneity reinforces the need, in this case, for a pretrial determination as to the admissibility of the hearsay evidence pursuant to MRE 104. [George, unpub. op. at 4 (GLEICHER, J., dissenting).] [26] 801 P.2d 511 (Colo., 1990). [27] Id. at 514-515. [28] Id. at 521. See also State v. Robinson, 153 Ariz. 191, 201, 735 P.2d 801 (1987) (the absence of leading questions was an important factor supporting the admission of a child's statement after the child made statements implicating the defendant while at breakfast with her mother without being asked any questions; the statement was thus spontaneous and fully explained with "little prompting"); In re Ne-kia S., 566 A.2d 392, 395 (R.I., 1989) (child responded to an adult's presence in his house by retrieving a stick and asking the adult to take it so the child's mother would no longer hit the child with it; the child later told the adult that his mother hit him on a daily basis and the adult testified that this was the "first thing Ne-kia told him. There was no reflection or deliberation involved."). [29] 272 Conn. 798, 865 A.2d 1135 (2005). [30] Id. at 816, 865 A.2d 1135. See also Swan v. Peterson, 6 F.3d 1373, 1377, 1381 (C.A.9, 1993) (where a child's day-care provider told the child to put her dress down because "no one should look at or touch her `private parts,'" the child replied "`Un-huh, Mommy and Daddy do'" and proceeded to make a detailed allegation of abuse, the court held that there was sufficient spontaneity because "[a]lthough [the child's] statement did not come out of the blue, it was not made in response to any question posed by [the caregiver]"). [31] 156 Wash.2d 381, 390, 128 P.3d 87 (2006). See also State v. Young, 62 Wash.App. 895, 901, 802 P.2d 829 (1991) ("Washington law... recognizes that a child's answers are spontaneous so long as the questions are not leading or suggestive.... [And caselaw had] broadened the definition of `spontaneous' to include `the entire context in which the child [made] the statement.'"). [32] 944 F.2d 445 (C.A.8, 1991). [33] Id. at 451. [34] 157 N.J. 112, 723 A.2d 588 (1999). [35] Id. at 122, 126-127, 723 A.2d 588 (holding that the child's statement regarding sexual abuse was not sufficiently trustworthy when made in direct response to the question "`[d]id anybody ever do anything like this to you to make you do this?'" after the child was found sexually touching her sister). See also Felix v. State, 109 Nev. 151, 167-168, 184, 849 P.2d 220 (1993) (adult could not remember whether child's statement "Martha hurt me here" while pointing to her vaginawas spontaneously made, and a second statement which came after "coercive questioning" could not be deemed reliable because answers provided by children after being questioned in a group were not spontaneous given that "there is no way to determine the extent to which the prior coercive questioning actually affected the statement."); United States v. Sumner, 204 F.3d 1182, 1186 (C.A.8, 2000) (the child's statements were not spontaneous where the child responded to questions by merely answering "yes/no" or pointing). [36] This approach is consistent with the Court of Appeals' original decision in Dunham, although not necessarily so with later panels of the Court of Appeals. For example, the Court of Appeals panel in the instant case applied Dunham in a broader context and unmoored from the factual situation of the original decision. In other instances, the Court of Appeals has applied this principle in a manner consistent with our decision today. By way of example, we note approvingly the analysis in People v. Leatherman, unpublished opinion per curiam of the Court of Appeals, issued June 30, 2005 (Docket No. 252679) at 8-9, 2005 WL 1540479. There, the Court of Appeals properly assessed how this rule applies in close cases: Dona[, the victim's mother,] admitted asking the victim a few questions after the victim initially told her that "Uncle Brad touched me down there," gestured toward her private area, and said that defendant did other stuff, too. Dona then asked what other stuff defendant did and when the victim stated that defendant had a "vibrating handlebar machine," Dona asked what he did with it. Dona also asked the victim if defendant said anything to her. The questions were not so specific and leading [as] to taint the spontaneity of the victim's statements. Dona's questions were fairly general given the context of the victim's statements. [37] MRE 803A(2) (emphasis added). [38] This is contrary to similar rules in other states where spontaneity is but one factor taken into account in determining whether a statement is sufficiently reliable and thus admissible. See, e.g., Ohio Evid. R. 807(A)(1) (providing that an out-of-court statement made by a child alleging sexual or physical violence against the child will not be excluded as hearsay if the "court finds that the totality of the circumstances surrounding the making of the statement provides particularized guarantees of trustworthiness" that render the statement reliable, "including but not limited to spontaneity...."). However, unlike our sister-state's rule, MRE 803A contains no "factor among many" language that permits the admission of a child's statement simply upon a showing of reliability even if it was not spontaneously made. [39] This Court will assess in its administrative rules process whether the language of the current rule should be amended. [40] MCL 769.26 (emphasis added); see also Lukity, 460 Mich. at 494-495, 596 N.W.2d 607. [41] See Lukity, 460 Mich. at 495, 596 N.W.2d 607 ("[T]he effect of the error is evaluated by assessing it in the context of the untainted evidence to determine whether it is more probable than not that a different outcome would have resulted without the error."). [42] Id. at 493-494, 596 N.W.2d 607. [43] See, e.g., id. at 491-493, 596 N.W.2d 607; People v. Mateo, 453 Mich. 203, 212-215, 551 N.W.2d 891 (1996). [44] People v. Straight, 430 Mich. 418, 426-428, 424 N.W.2d 257 (1988). [45] See, e.g., Solomon v. Shuell, 435 Mich. 104, 146-149, 457 N.W.2d 669 (1990) (BOYLE, J., concurring) (citing federal and published Court of Appeals decisions standing for the proposition that "improperly admitted hearsay evidence constitutes harmless error when it is merely cumulative of other properly admitted evidence"); People v. Hill, 257 Mich.App. 126, 140, 667 N.W.2d 78 (2003) ("An erroneous admission of hearsay evidence can be rendered harmless error where corroborated by other competent testimony.... [Here, the admission of improper hearsay] was merely cumulative and did not place any relevant and damaging information before the jury that the jury did not know already. Therefore, there was not a reasonable probability that, but for counsel's error, the result of the proceeding would have been different."). [46] People v. Smith, 456 Mich. 543, 555, 581 N.W.2d 654 (1998) (quotation marks and citations omitted). The Supreme Court of the United States has elaborated on factors relevant to making this determination: [W]hether ... the error was harmless beyond a reasonable doubt ... in a particular case depends upon a host of factors, all readily accessible to reviewing courts. These factors include the importance of the witness' testimony in the prosecution's case, whether the testimony was cumulative, the presence or absence of evidence corroborating or contradicting the testimony of the witness on material points, ... and, of course, the overall strength of the prosecution's case. [Delaware v. Van Arsdall, 475 U.S. 673, 684, 106 S.Ct. 1431, 89 L.Ed.2d 674 (1986).] [47] Straight, 430 Mich. at 427-428, 424 N.W.2d 257. [48] See Smith, 456 Mich. at 555 n. 5, 581 N.W.2d 654 (distinguishing Straight from the facts of Smith because "it involved the testimony of a five-year-old complainant, while the present case involves the testimony of a sixteen-year-old complainant whom the defense had full opportunity to cross-examine"). [49] Solomon, 435 Mich. at 148, 457 N.W.2d 669 (BOYLE, J., concurring), citing Swartz v. Dow Chem., 414 Mich. 433, 442, 326 N.W.2d 804 (1982). [50] By way of example, the facts of this case stand in stark contrast to those of People v. Straight. In Straight, this Court stated as follows: The hearsay testimony of the parents was not offered merely to corroborate the child's testimony, but rather was offered and argued for its substantive worth as the prosecution's closing argument clearly reveals: "And ladies and gentlemen, I would suggest to you that that was what was happening on that night in question that the statements made by [the child] at the hospital can be considered by you and even if she hasn't said on the stand what happened as she did yesterday, she just clammed up and said, `I don't remember,' or, `I don't want to say anything,' you can still find that the defendant is guilty merely from the testimony that the mother gave as to the information given to her and to the father as to what she said in the hospital." These comments establish that the parents' testimony was presented to the jury without limitation as substantive proof of defendant's guilt. [Straight, 430 Mich. at 426-427, 424 N.W.2d 257 (emphasis added).] Moreover, reviewing the entire record, we do not agree with defendant's characterization of Morgan's testimony as outcome-determinative in the trial. In support, defendant argues that the prosecutor devoted pages of the record to discussing Morgan's testimony. While true that the prosecutor discussed Morgan's testimony in her closing statement, it was the prosecutor's "fifth reason" for conviction out of seven reasons total. Moreover, the prosecutor's discussion of Morgan's testimony accounts for less than 2½ transcript pages, which likely amounted to no more than a few minutes time during the prosecutor's closing statement. Despite defendant's characterization to the contrary, we do not believe that this represents the type of overwhelming reliance that would lead to the conclusion that Morgan's testimony was highly prejudicial. [51] MRE 803A. This has always been the standard in Michigan, even under the prior common-law "tender years" version of the rule. See Baker, 251 Mich. at 326, 232 N.W. 381 ("[W]here the victim is of tender years the testimony of the details of her complaint may be introduced in corroboration of her evidence... ."). [52] MCL 750.520h provides that "[t]he testimony of a victim need not be corroborated in prosecutions under sections [MCL 750.]520b to [MCL 750.]520g." Defendant was charged of four counts of first-degree criminal sexual conduct, MCL 750.520b(1)(a), and thus GA's testimony did not need to be corroborated in order for the jury to convict defendant, assuming of course that the jury found her credible. And it appears that the jury did find GA credible in this case. For example, GA's testimony was the only direct evidence supporting the allegation that defendant had sexually assaulted her on the first occasion, yet the jury returned verdicts of guilty on those charges. Contrary to the dissent's implication, our assertion that the jury must find the victim credible if the victim's testimony is the only evidence of a crime in this type of case is merely a statement of obvious fact, not commentary on GA's credibility in this case. Moreover, we reject the dissent's citation of a single law review article in an attempt to discredit GA's testimony in toto. Post at 599-600. While there are admittedly unique difficulties in questioning children, we certainly find no support in the dissent's sweeping proclamation that cross-examination of GA was possibly "useless" in this case. As discussed earlier, even though GA's statements were not "spontaneous," there are many other indicia of reliability with regard to her statement, which remained consistent over time. [53] MRE 803(4) provides for admission of [s]tatements made for purposes of medical treatment or medical diagnosis in connection with 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 necessary to such diagnosis and treatment. [54] Although the nurse testified that the scratch had likely occurred within the last 24 to 48 hours, she also testified that it could have occurred earlier, encompassing a period that corresponds to GA's account of when defendant assaulted her. The police officer who interviewed defendant testified that he noted that defendant's fingernails were "jagged or sharp, uneven." [55] See MRE 801(c), which defines "hearsay" as a "statement"; a "statement" is then defined in MRE 801(a) as "(1) an oral or written assertion or (2) nonverbal conduct of a person, if it is intended by the person as an assertion." (Emphasis added). Thus, physical conduct or reactions are not hearsay as long as the conduct or reactions are not intended as assertions. [56] This conduct can be contrasted with actual assertive conduct by GA, which would not be admissible. For example, when Morgan asked GA if Gursky had "kissed" her with his tongue on her mouth, GA replied "No, down here" and pointed to her vaginal area. GA's act of pointing would be assertive conduct designated as hearsay by MRE 801(a) and (c), and would not admissible in this case given the foregoing analysis. [57] For these reasons, we similarly reject the dissent's contention that the error here was so harmful as to require a new trial. While the dissent criticizes a few of this opinion's characterizations or the weight this opinion gives to certain evidence, it fails to demonstrate how defendant has met his burden. Both defendant and the dissent call into question the credibility of certain evidence when viewed singularly, but when taken as a whole, the properly admitted evidence is sufficient to sustain defendant's conviction to the extent that we cannot say that it is more probable than not that a different outcome would have resulted. [1] Although I remain committed to my Lukity dissent, 460 Mich. at 504-510, 596 N.W.2d 607 (CAVANAGH, J., dissenting), because I think that defendant is entitled to a new trial even under the higher burden created by the majority in Lukity, I will apply that standard here. [2] Indeed, the trial court based its decision to deny defendant's motion for a directed verdict on its belief that "[t]he complainant . . . has been absolutely consistent with her version of events from the first time she disclosed it [to Morgan] through . . . her testimony in court."

{ "pile_set_name": "FreeLaw" }

Fourth Court of Appeals San Antonio, Texas JUDGMENT No. 04-13-00069-CV TARRANT COUNTY DEMOCRATIC PARTY; Steve Maxwell, In His Official Capacity as Chair of the Tarrant County Democratic Party; Texas Democratic Party; and Gilberto Hinojosa, In His Official Capacity as Chair of the Texas Democratic Party; Appellants v. John STEEN, 1 in his official capacity as Secretary of State of Texas, Appellee From the 345th Judicial District Court, Travis County, Texas Trial Court No. D-1-GN-09-00172 The Honorable Amy Clark-Meachum, Judge Presiding BEFORE CHIEF JUSTICE STONE, JUSTICE ALVAREZ, AND JUSTICE CHAPA In accordance with this court’s opinion of this date, we REVERSE the portion of the trial court’s judgment that denies Appellants Tarrant County Democratic Party and Texas Democratic Party their attorney’s fees incurred in the Brimer suit. We RENDER JUDGMENT awarding attorney’s fees of $15,953.91 to Tarrant County Democratic Party and $10,632.57 to Texas Democratic Party as reimbursement for their Brimer suit attorney’s fees, and award each postjudgment interest accruing from the date of the trial court’s final judgment at the statutory rate until paid in full. See TEX. FIN. CODE ANN. §§ 304.003, .005 (West 2006); Phillips v. Bramlett, 407 S.W.3d 229, 239 (Tex. 2013). We AFFIRM the portion of the trial court’s judgment that denies Appellants’ claims for attorney’s fees in the instant suit. We tax costs of this appeal against Appellee John Steen, or his successor, in his official capacity as Secretary of State of Texas. 1 Nandita Berry was sworn in as Texas Secretary of State on January 7, 2014. 04-13-00069-CV SIGNED February 19, 2014. _____________________________ Patricia O. Alvarez, Justice -2-

{ "pile_set_name": "FreeLaw" }

397 A.2d 171 (1979) STATE of Maine v. Thomas MORTON. Supreme Judicial Court of Maine. January 29, 1979. *173 Michael D. Seitzinger (orally), Asst. Atty. Gen., Charles K. Leadbetter, John Atwood, Vernon Arey, Asst. Attys. Gen., Augusta, for plaintiff. Sanborn, Moreshead, Schade & Dawson by Gordon H. Smith (orally), Augusta, for defendant. Before McKUSICK, C. J., and WERNICK, ARCHIBALD, DELAHANTY and GODFREY, JJ. McKUSICK, Chief Justice. Following a jury trial in Somerset County, to which venue was transferred by consent of the parties pursuant to Rule 21(b), *174 M.R.Crim.P., defendant Thomas Morton was convicted of two counts of felonious homicide, 17 M.R.S.A. § 2651 (repealed P.L. 1975, c. 499, § 15), for the murders of Florence and Joaquin Bettencourt.[1] On appeal, defendant raises numerous claims of error. We deny the appeal. Around 8:30 p. m. on December 9, 1973, a power failure in Liberty, Maine, left both the home of Florence and Joaquin Betten-court and Mr. Bettencourt's nearby used clothing store without electric light. Mr. Bettencourt closed his store around 8:45 p. m., a bit earlier than usual, and returned home. Sometime between 8:30 and 9:00 p. m. one of the Bettencourts' neighbors heard gunshots. Four days later a Waldo County Deputy Sheriff discovered the bodies of the Bettencourts on the premises of their residence. Mr. Bettencourt had been shot in the chest with shotgun pellets and in the forehead by a .22 caliber bullet. Mrs. Bettencourt suffered gunshot wounds from two different weapons, one of which appeared to be some kind of an automatic pistol. The Bettencourt home had been ransacked and the telephone wires cut. No money was found on the persons of either of the Bettencourts. Spattered candle wax drippings were found throughout the house. Five days after the discovery of the murders police seized a tan Oldsmobile driven by defendant. A search of the car revealed wax drippings similar to those found in the Bettencourt home. Within one week of the vehicle search, defendant left the State of Maine for Florida. I. Sufficiency of the Evidence Defendant contends that the evidence adduced by the State fails to support the jury's verdict. We disagree. The jury had before it testimony of Morton's extra judicial admission of participation in the murders, and the rest of the evidence, though circumstantial, was convincing and substantial. Of critical importance was the testimony of prosecution witness Harold Smith. He testified that in mid-November of 1973, about three weeks prior to the Bettencourt murders, defendant, along with three other accomplices including Smith himself, met to discuss and plan a robbery. One of the accomplices said he knew of an old man, Joaquin Bettencourt, who ran a used clothing store and usually carried large sums of money on his person. Noting that the store owner often carried a gun, the accomplice commented that it might prove necessary to kill him if he offered any resistance. No objection was voiced to the plan, and the four conspirators agreed to rob Bettencourt as he returned home from his store that evening. They drove to the Bettencourt residence and arrived at 9:00 p. m. It was agreed that Smith would cut the telephone wires running to the Bettencourt home. Before he could finish that task, however Smith was observed, and the conspirators abandoned the robbery attempt. Smith testified that while the conspirators fled from the scene in a tan Oldsmobile driven by defendant, Morton commented that it would be "at least a month before the heat died down."[2] The jury was apprised of numerous similarities between the November attempted robbery testified to by Smith and the December murders. First, both incidents occurred on a weekend, in the vicinity of 9:00 p. m., the store's customary closing time. Significantly, prosecution witness Regina Jackson testified that on December 9, 1973, the night of the murders, she overheard one of Morton's companions say to him: "We've got to get going because we've got to be there by nine." Second, similar weapons were used on both occasions. Smith testified *175 that Morton carried a twelve gauge shotgun during the attempted robbery of mid-November and that one of his accomplices was armed with a .22 caliber revolver and another with an automatic pistol. Ammunition recovered by a pathologist who conducted the autopsies of the Bettencourts included shotgun pellets, a .22 caliber bullet, and ammunition that could have been fired by an automatic pistol. Third, an attempt was made to cut the phone wires during the November incident; the wires were found cut when the December murders were discovered. Given the obvious similarity between the modus operandi of the two crimes and defendant's November statement that it would be "at least a month before the heat died down," the jurors were entitled to infer that Morton, having participated in one unsuccessful robbery attempt, returned to the Bettencourt home for a second attempt during which the murders occurred. The presence in defendant's car[3] of wax drippings chemically consistent with the drippings found in the Bettencourt home after the murders added circumstantial evidence of defendant's guilt. Finally, and most importantly, Morton's erstwhile girlfriend, Judith Harvey, testified that Morton told her he had been involved in the Bettencourt murders and said that he had "plugged" Mrs. Bettencourt "full of holes" because he was afraid that if he allowed her to live she might have been able to identify him. The trial testimony of co-conspirator Smith and girlfriend Harvey, the incriminating wax drippings, and defendant's departure from the State of Maine shortly after his car was seized and searched afforded the jury ample grounds for finding defendant guilty of the Bettencourt murders beyond any reasonable doubt. II. Search of the Tan Oldsmobile Defendant does not dispute the fact that at about 4:00 p. m. on December 18, 1973, the Maine State Police received information giving them probable cause to believe that a tan Oldsmobile, registered to one Marlene Roderick of Waterville, Maine, had been used in the commission of the Bettencourt murders. Waterville police placed the vehicle, then located in the Roderick driveway, under police surveillance. Simultaneously, the State Police commenced preparation of an affidavit for a search warrant. Before a warrant could be issued and executed, however, Waterville police noted that the car was being moved. The vehicle was stopped by Waterville police officers on a public highway around 10:00 p. m. The driver turned out to be the defendant, Thomas Morton. The vehicle was then towed by Arbo's Wrecker Service to Arbo's Garage on Grove Street in Waterville. Officers from the Maine State Police laboratory traveling from Augusta arrived in Waterville at Arbo's Garage sometime between 11:30 and 11:45 p. m. They conducted a search of the car and discovered traces of wax drippings, later determined to be similar to drippings found in the Bettencourt home. Morton contends that the police conducted an unconstitutional warrantless search and that consequently all evidence stemming from the search of the vehicle ought to have been suppressed. After a pretrial hearing, the presiding justice denied defendant's motion to suppress, noting, inter alia, that the exigent circumstances doctrine of Chambers v. Maroney, 399 U.S. 42, 90 S.Ct. 1975, 26 L.Ed.2d 419 (1970), validated the warrantless search. We find the presiding justice's ruling correct. When there is probable cause to search an automobile stopped on a public highway, immediate warrantless searches are constitutionally permissible because of the movable nature of the vehicle. Carroll v. United States, 267 U.S. 132, 45 S.Ct. 280, 69 L.Ed. 543 (1925). If the attendant circumstances *176 make an immediate search on the highway unsafe or impractical, the car may be moved to a more convenient location. If a search is promptly conducted after its arrival there, the probable cause factor extant on the public highway remains in force, and the warrantless search is constitutionally permissible. Chambers v. Maroney, supra, 399 U.S. at 52, 90 S.Ct. 1975; Texas v. White, 423 U.S. 67, 68, 96 S.Ct. 304, 46 L.Ed.2d 209 (1975); State v. Cress, Me., 344 A.2d 57, 63-64 (1975). Here, the need to employ trained officers who knew how to preserve delicate evidentiary material, such as wax drippings and blood stains, made an immediate search on the public highway impractical. The short delay between the car's arrival at Arbo's Garage and the commencement of the search was attributable to the fact that those trained officers had to travel from Augusta to Waterville. The vehicle search commenced as soon as they arrived and was expeditiously carried out without unnecessary delay. We conclude there was no error in the denial of defendant's pretrial motion to suppress the evidence obtained in the search of the car. III. Discovery Issues A. Financial Assistance Pursuant to former Rule 16(a) of the Maine Rules of Criminal Procedure,[4] defendant filed a pretrial discovery request seeking, inter alia, all documents relating to moneys paid by the State to any of the prosecution witnesses as compensation for their expenses incurred while attending other criminal trials. At a pretrial discovery hearing, the prosecuting attorney testified that the State had spent money during the course of the earlier trial of Morton's accomplice, Charles Heald, to reimburse witnesses for bus tickets, motel costs, and, in one instance, a car rental. The presiding justice observed that evidence regarding those payments would be of little use to defendant. They would not significantly impeach the credibility of the State's witnesses because these witnesses did not profit by testifying for the prosecution; they were merely reimbursed for the expenses they incurred in the course of appearing as State witnesses. Accordingly, the presiding justice denied Morton's discovery request. On appeal, Morton has been unable to demonstrate any prejudice stemming from this ruling. Nothing in the record indicates that the information sought by defendant was not readily available in the public records of disbursements made to the witnesses in the prior prosecutions. Rule 16 discovery is not designed to be a labor-saving device for defense counsel. Where the prosecution has material information which the defendant cannot easily obtain elsewhere, Rule 16 discovery is designed to equalize their positions. Here, since the public records were apparently accessible to both sides, Rule 16 cannot be employed by defense counsel for the purpose of making the prosecuting attorney do his work for him. See State v. Boyajian, Me., 344 A.2d 410, 413 (1975). Furthermore, defendant was in no way prevented from discussing the subject of financial reimbursement with prosecution witnesses in advance of trial, or from cross-examining them on this subject at the trial itself. On this record, we find *177 no abuse of discretion on the part of the presiding justice. B. Psychiatric Records Defendant also made a pretrial discovery request for all psychological and psychiatric records pertaining to prosecution witness Judith Harvey in the possession of the Women's Correctional Center or the Bangor Mental Health Institute. Former Rule 16(a) could be used only to obtain materials "within the possession, custody, or control of the state." See note 4 above. Though the Women's Correctional Center and the Bangor Mental Health Institute are state agencies, former Rule 16(a) was not intended to require the prosecuting attorney to produce materials "not within his possession or the possession of his office, but filed elsewhere in some unrelated department of state government." State v. Heald, Me., 393 A.2d 537, 541 (1978). The word "state" in former Rule 16(a) imports nothing more than the office of the prosecuting attorney.[5] Since the requested psychiatric records were not in the possession of the prosecuting attorney, the presiding justice correctly denied defendant's pretrial discovery request for these materials. IV. Expert Opinion Testimony The prosecution presented the expert testimony of F.B.I. agent Ralph Strickland, who testified concerning the chemical composition of the wax drippings found in defendant's tan Oldsmobile and in the Bettencourt home. Strickland told the jury that infrared spectrophotometric analysis showed that both sets of drippings were composed of paraffin and stearic acid.[6] Although he declined to state "positively" that the drippings in the Oldsmobile came from the same candle which produced the drippings found in the Bettencourt home, Strickland stated that the two sets of drippings were consistent in chemical nature and might have been produced by the same candle. Also testifying for the State, Dr. Irving Goodof, a pathologist who examined the bodies of the Bettencourts, gave his opinion that they died sometime between December 9 and December 11, 1973. Aside from this estimate, Dr. Goodoff declined to pinpoint the time of death with any degree of "reasonable medical certainty." On appeal, Morton contends that the trial court erred in admitting the testimony of Strickland and Goodof over his objection because neither witness was willing to testify with "certainty" as to his opinion on relevant facts. We have recently rejected the contention that an expert must testify with "certainty," preferring instead the rule that "the degree of [an expert's] certainty . . . merely goes to the weight of his testimony, not [to] its admissibility." State v. Mitchell, Me., 390 A.2d 495, 501 (1978). Accordingly, Morton takes nothing by his contention that the trial court erred in admitting the testimony of these two expert witnesses. V. Refusal to Grant Mistrial Defendant argues that prosecutorial misconduct in the course of cross-examination of defense witness Evelyn Francis required the declaration of a mistrial, which the trial justice declined to grant. We do not agree. *178 Francis, the sister of Morton's accomplice Charles Heald, was asked by the prosecuting attorney if her brother was currently incarcerated in the Maine State Prison. Defense counsel did not object to this inquiry, and Francis answered in the affirmative. The prosecutor then started to inquire into the reason for Heald's incarceration, but before he could finish his question, defense counsel objected and the objection was sustained.[7] Arguing that the prosecutor had alerted the jury to the fact that Heald had already been convicted of participating in the murder of the Bettencourts, defense counsel moved for a mistrial. The prosecutor responded that he had merely intended to ask Francis about her brother's convictions for other offenses, unrelated to the Bettencourt murders, in an effort to show that Francis had testified for her brother on a number of past occasions. There is no evidence that the prosecutor intended to refer to Heald's conviction for his part in the Bettencourt murders. Because the prosecutor was interrupted before he could finish his question,[8] the jury heard nothing more than the fact that Heald had been convicted of some crimea fact they already knew from the preceding question and answer establishing Heald's current residence in the Maine State Prison. The trial justice noted that there had been no remark connecting Heald's incarceration to the Bettencourt murders. The motion for mistrial was correctly denied. VI. Exclusion of Evidence of Alleged Threat Against Bettencourts by One Kelley Defense counsel called one Gary Kelley and asked him if he recalled having a conversation with Jeffrey Pyska in early December of 1973 at the Holiday Inn in Augusta. Kelley said he did not remember speaking to Pyska and specifically denied ever telling Pyska or anybody else that he had some intentions regarding the Bettencourts. Defense counsel then called Pyska as a witness. The prosecution objected, on grounds of relevance, to the anticipated testimony of Pyska, and the objection was sustained. Defense counsel then made an offer of proof, stating that Pyska would testify that in early December of 1973 (about a week before the Bettencourt murders) at the Holiday Inn in Augusta Kelley, while displaying a revolver, told Pyska "that he wanted to rob the Bettencourts, or have someone else rob them, and he would pay $2,000." The presiding justice thereupon informed counsel that he would exclude the proffered testimony as irrelevant but would give further consideration to his ruling if the defense could adduce additional evidence linking Kelley to the Bettencourt murders. Defense counsel, however excused Pyska without asking him any questions and at no time presented any further evidence or offer of proof even mentioning Kelley or showing any involvement by him in the murders for which Morton was being tried. The presiding justice committed no error in his handling of Pyska's proposed testimony. The determination of close questions of relevancy arising in the heat of trial is left to the discretion of the trial justice, and on appeal his ruling will be overturned only for an abuse of that discretion. State v. Gagnon, Me., 383 A.2d 25, 31 *179 (1978); State v. Lewisohn, Me., 379 A.2d 1192, 1202 (1977). In view of the remoteness of Kelley's alleged remarks from the issue of Morton's participation in murdering the Bettencourts, we would be reluctant to find an abuse of discretion in the circumstances of this case. In any event, however, we interpret the presiding justice's action to be an application of Rule 403, M.R.Evid.[9] In balancing the minimal probative value of the proffered testimony against the danger of confusion of the issues and misleading the jury, as well as considerations of undue delay and waste of time, the presiding justice was justified, and indeed in our considered judgment required, to rule as he did. Even if the proffered testimony was technically "relevant evidence" within the definition of Rule 401, M.R.Evid., ("evidence having any tendency to make the existence of any fact that is of consequence to the determination of the action more probable or less probable than it would be without the evidence"), it did little to prove or disprove anything involved in Morton's trial. Kelley's statement indicating, when taken at full face value, his interest in robbing the Bettencourts or having them robbed, is far removed from contradicting the evidence of Morton's participation in murdering the Bettencourts. At most, the thrust of the proffered testimony is that Kelley might also have been involved in some way in the Bettencourt robbery, in the course of which the victims were killed. The physical evidence points without contradiction to the fact that several persons participated in the murders. Remote evidence that another individualKelleymight also have been within that guilty group, directly or as a procurer, does nothing to disprove the involvement of defendant Morton. That evidence in no way disproves any of the numerous individual pieces of evidence tying Morton to the crime, such as Morton's admission to Judith Harvey, the presence of candle wax in his car, his participation in the prior aborted robbery attempt, and his attempt to prevent the search of his car. Pyska's testimony had little or no probative value in the trial of Morton for participating in the group responsible for the Bettencourt murders. On the other side of the Rule 403 balance, injection of the question whether Kelley was also involved would tend to turn the Morton trial into a trial of Kelley. It would confuse the single issue in the Morton trial: Was Morton one of the several murderers of the Bettencourts? The jury could be misled into thinking that any evidence of Kelley's possible involvement admitted in Morton's trial necessarily raised a doubt as to Morton's participation. If Pyska's testimony were admitted, the State could hardly be denied the opportunity of presenting in turn evidence that Kelley was not involved, and the Morton trial would then go far afield from the issue of Morton's guilt or innocence, causing undue delay and waste of time. Pyska's testimony was properly excluded in absence of any further details increasing its probative value so as to offset the negative consequences of its admission. *180 Whether the presiding justice's exclusion of the Pyska story represented a determination of lack of relevance or a balancing of considerations under Rule 403, he committed no error of which this appellate court will take cognizance. VII. Exclusion of Evidence Regarding Blood Stains Found in Defendant's Car At trial, Marlene Roderick, the registered owner of the tan Oldsmobile driven by defendant, testified that two days before the search of the car Morton had returned the car to her with the assurance that he had vacuumed the car thoroughly and had "made sure it was very clean." Anticipating correctly that the prosecution would argue to the jury that Morton had cleaned the car in an attempt to destroy all evidence which might link him to the Bettencourt murders,[10] defendant tried unsuccessfully to introduce evidence showing that an F.B.I. laboratory analysis of blood-stained items found in the car revealed the presence of deer blood. Drawing upon the fact that Marlene Roderick testified, both on direct and on cross-examination, that her husband had been engaged in illegal night hunting, defense counsel argued that the F.B.I. blood analysis would forcefully support the contention that Morton cleaned out the car in an attempt to destroy evidence which might incriminate his friend, Mr. Roderick. The trial justice refused, however, to allow defense counsel to question State Police Officer Ronald Eccles on the subject of the F.B.I. blood analysis. The justice concluded that "the fact that someone used this car and may have engaged in other crimes is not particularly relevant to this matter." Later in the course of the trial, defense counsel again raised the issue of the admissibility of the F.B.I. blood analysis, stating the rationale for the relevancy of the evidence with greater clarity than before.[11] Defendant made a complete offer of proof. The prosecuting attorney, while reasserting his objection to the evidence on relevancy grounds, stated he was willing to stipulate that if the evidence was allowed it would show the presence of both ruminant animal blood and other unidentifiable blood in defendant's car. Defense counsel contended it would show more specifically that the ruminant blood was actually deer blood. The prosecuting attorney then agreed to stipulate that the evidence, if admitted, would show the presence of both deer blood and blood of an unknown origin. The defense was denied the opportunity to get this stipulated evidence before the jury. On this record we are compelled to find that the presiding justice's exclusion of defendant's offered evidence was erroneous. The prosecutor initially presented evidence showing that defendant thoroughly cleaned out the car before returning it to Mrs. Roderick. This testimony was clearly relevant. It supported the inference that defendant had attempted to conceal evidence linking him to the Bettencourt murders. Defendant merely sought to rebut this inference. If the prosecution's explanation of defendant's conduct was relevant as tending to support the inference of defendant's guilt, then the defense's alternative explanation of the same conduct in an effort to demonstrate defendant's innocence must be equally relevant. See State v. Clark, Me., 394 A.2d 779, 782 (1978). The trial court erred in denying defendant the opportunity of showing that some of the blood stains in his car were of deer blood. *181 That error, however, does not justify reversal of the jury's finding beyond a reasonable doubt that Morton participated in murdering the Bettencourts. First, defense counsel was not prevented from arguing to the jury his explanation of defendant's car-cleaning conduct.[12] Furthermore, if the blood analysis results had been admitted, the jury would have been apprised that Morton's car contained not only deer blood but also other blood of an unknown origin, which the jury might have inferred to be the blood of one or both of the murder victims. Thus, admission of the blood analysis would have both helped and hurt defendant's case. Even if the blood analysis had been admitted in evidence, the rest of the evidence amply supported the jury's finding of defendant's guilt beyond a reasonable doubt. At most, the asserted exculpatory explanation for Morton's thorough cleaning of the car before turning it over to Mrs. Roderick goes to only one, relatively minor thread in the solid fabric of the State's case. The fact that defendant's car may have been used for night hunting by Mr. Roderick would not in any way detract from the evidence that showed that defendant admitted his participation in the Bettencourt murders to Judith Harvey. The presence of candle wax in defendant's car similar in chemical composition to the wax found in the Bettencourt home raised a strong inference of guilt that the blood analysis would not have explained away. In addition, the jury heard Smith's testimony that defendant had participated in the aborted robbery attempt of November 1973, which bore many similarities to the operative facts of the December murders. Finally, defendant's November statement that it would be "at least a month before the heat died down," his attempts to prevent his car from being searched, and his departure from the State of Maine to Florida shortly after the car was seized, all point inescapably to the conclusion that Morton was involved in the crimes for which he was tried. Given the strong evidence of guilt adduced by the State, we conclude that any error in excluding the blood analysis evidence did not constitute prejudicial error. VIII. Defendant's Other Claims of Error Defendant has raised some ten other issues concerning the admission and exclusion of evidence, double jeopardy, and discovery requests. We have read with care the voluminous transcript of the trial, giving particular attention to every one of defendant's claims of error. We find merit in none of them. Accordingly, the entry must be: Appeal denied. Judgment affirmed. POMEROY and NICHOLS, JJ., did not sit. NOTES [1] We have had occasion to review the convictions of accomplices of Morton for these same murders. See State v. Heald, Me., 395 A.2d 457 (1978); State v. Heald, Me., 393 A.2d 537 (1978); State v. Littlefield, Me., 374 A.2d 590 (1977). See also n.2 below. [2] For his participation in this criminal venture, Morton was convicted of conspiracy to commit robbery. On appeal, we affirmed his conviction. State v. Heald [and Morton], Me., 367 A.2d 1372 (1977). [3] The tan Oldsmobile that is here designated as "defendant's car" was registered in the name of Mrs. Marlene Roderick, but was used by defendant 90-99% of the time. When the police asked Mrs. Roderick's permission to search the car, defendant in a "loud whisper" told her he did not want the police to search the car. [4] At the time of defendant's trial, Rule 16(a), M.R.Crim.P., provided: "Discovery and Inspection. Upon timely motion of a defendant and upon a showing that the items sought may be material to the preparation of his defense and that the request is reasonable, the court shall order the prosecuting attorney to permit the defendant to inspect and copy or photograph designated books, papers, documents, or tangible objects which are within the possession, custody, or control of the state, including written or recorded statements or confessions made by the defendant or a co-defendant, written or recorded statements of witnesses, transcripts of the testimony of witnesses before the grand jury, and the results or reports of physical examinations and scientific tests, experiments, and comparisons. The order shall specify the time, place, and manner of making the inspection and of taking the copies or photographs and may prescribe such terms and conditions as are just." This rule was deleted and replaced on January 3, 1978, by a new Rule 16. [5] Subsection (b) of new Rule 16, M.R.Crim.P., effective January 3, 1978, clarifies the scope of the prosecuting attorney's duties, by providing in part: "The attorney for the State's obligation extends to matters within the possession or control of any member of his staff and of any official or employee of this State or any political subdivision thereof who regularly reports or with reference to the particular case has reported to his office." [6] Although defendant did not raise the issue at trial, he now argues for the first time on appeal that the subject of Strickland's testimony was not a proper one for expert testimony. In making this determination, the trial judge must "consider whether the matter is beyond common knowledge so that the untrained layman will not be able to determine it intelligently and whether a person with specialized knowledge can give a helpful opinion." Field & Murray, Maine Evidence § 702.1 (1976). We have no doubt that the topic of infrared spectrohphotometric analysis is an arcane subject beyond the ken of the average lay juror and that Strickland's expert testimony on this matter was therefore entirely appropriate. [7] Defense counsel's motion for mistrial was based on the following line of questioning: "Q. Mrs. Francis, would you mind telling us your maiden name? "A. My maiden name? "Q. Yes. "A. Is Evelyn Heald. "Q. And your brother is Charles Heald, is he not? "A. Yes, Charles Heald is my brother. "Q. And Charles Heald is presently in the Maine State Prison, is he not? "A. Yes, he is. "Q. Because he was convicted _ _ _ "[Defense Counsel]: Your Honor, objection. "[The Court]: I'll sustain the objection. [8] We do not mean to criticize defense counsel for interrupting. On the contrary, an alert defense attorney is to be commended for objecting quickly before prejudicial remarks have made their way into the record. [9] Rule 403, M.R.Evid., reads in full as follows: "Although relevant, evidence may be excluded if its probative value is substantially outweighed by the danger of unfair prejudice, confusion of the issues, or misleading the jury, or by considerations of undue delay, waste of time, or needless presentation of cumulative evidence." Questions of the admissibility of threats uttered by a person other than the defendant against the victim of the crime were at one time resolved by application of the judicially created "direct connection" test. That test required that the defendant show that the threat was uttered by someone who "committed some act directly connecting him with the crime" and "tend[ing] clearly to point out someone besides the accused as the guilty person." State v. Umfrees, 433 S.W.2d 284, 287-88 (Mo.1968). See Alexander v. United States, 138 U.S. 353, 11 S.Ct. 350, 34 L.Ed. 954 (1891); People v. Mendez, 193 Cal. 39, 223 P. 65 (1924). Although Dean Wigmore recognized that the "direct connection" test enjoyed widespread acceptance, he criticized it sharply. 1 J. Wigmore, Evidence § 139 (3d ed. 1940). We have no reason for taking sides in that controversy, preferring instead to analyze the admissibility of the evidence of Kelley's threats in terms of the general balancing principle of Rule 403, M.R.Evid. [10] In his closing argument, the prosecuting attorney commented: "Now when he [defendant] brought it [the car] back, he told Marlene that he had cleaned it out thoroughly, but he had not cleaned it thoroughly enough to pick up the red, red-pink, coral, whatever color you choose to attach to it, wax that was attached to the handles of the car." [11] Defense counsel stated: "You [the prosecution] have elicited testimony that he [defendant] cleaned the car. We are making the point that that has created a suspicion that he cleaned it out because it was used for some illicit purposes. For your purposes, you know, it's one thing, for our purposes it's consistent that he had cleaned out the car because it had been used for night hunting." [12] In his closing argument defense counsel said: "Now when Thomas Morton suggested to Marlene Roderick that she ought not let them search the car, it is just as reasonable to suggest, isn't it, that he was concerned about any night hunting implications as anything else at that timethe 30-06 ammunition, the red substance throughout the car, and you have heard the officers' testimony about that. Yet the State gives great emphasis to that, and they say this guy was cleaning out his car in December 1973, therefore, this has great significance. I ask you whether it is also reasonable from the evidence that the State has presented, can you say beyond a reasonable doubt that that is not the alternative way of looking at it, that there was evidence of night hunting, and that Thomas Morton being friends of the family, the Roderick family, was suggesting to Marlene Roderick that she did not have to help the State convict her husband at that time of night hunting."

{ "pile_set_name": "FreeLaw" }

. ' fl03ii'I RATIFICATION OF OIL AND GAS LEASE . STAlEOFTEXAS § FILED IN § 13th KNO\-Y ALL MEN OY THESE COURT OF APPEALS PRESENTS; COUNTY OF DeWITT § CORPUS CHRISTI/EDINBURG, TEXAS 12/29/2014 8:00:00 AM WHER£.a.s, on lho llnd ofOctoba, 2007, LOR EMF. H. KOOPMANN, an annarrl~ wo1n1111 , u lM5cf. d\dc•ccuk ind ddlvtr w H1' WKE ENTER PR {SES, u Le11eo, a ccrn io Oil. Gll fJld Minera l Le11JC l l evidenced by DORIAN Memorandum orE. OJI RAMIREZ and G;u Le&K, nid M<momidum l>cing duly rccon»j In Volume HJ, 11 Pllf" lf76 Of the omclll PuhJJc Rocord1 of OeWill Clerk C<lunty. Texas. l\nd c.ovcdng: no ncrcs of lond, more or less, being 1 pon of Section No . IJ, ln di~11ol• R•i lrood Company Survey, A·277., DtWin Cau.niy, Tcu>, being drscribcd.., ~ nnd IM.£I~ i11 th0t c<:nnin Oeed da1ed D«;c;rnbcr2'7 , 1996, from Loil Striebcr, lndivl<lu• lly an4 tl lnde p<11dcn1E~· ecun I• of die Esme orlcrry Strichcr, Doe<iutd, •s Gr•nto r, lo Gilbcr1 A. Koopmnnn and wife, Lor on< H, KOOJ>lnonn, o..1 <.iranltt , and bcinu recorded in Vo lurnt 14, ~c 42~ of the Official Public Record' ofDcWin Couniy, TeKns. here inaner c.lled ·~h• Lease". Reference 10 said Lu.so ond lo the record 1hcrcofbcing modo for oil purpo..,3; and, WHEREAS, nid Leise ond all rightJ ond J)fivileses th=undcr nrc now ownod and hold by BURLINGTON RESOURCES OJL & GAS COMPANY LP, whose l111dms Is P.O. BOK 1961, llou.uon, Tcxiu 7125 i -1967, hcre.inaf\er c&l\ed "Le>1ce"; ~1d, WHEREAS, it Is tl1e d.. ire of LOIS WOLPMAN STRIEl!ER, a Widow, the undenlgned, to 111.lopt, nitlfy .and confinn 1aid L<ASt ; For adequote coos idcrttion, in ha·nd paid, the r11Ceip1 and surndcncy ufwhith il ocknowlod&cd Jl\d con foued, I, of Loli WQlpm•o Stri~btr, t wldo,., !ho undtrsign•d do hen:by rarify, 1dop1 and confirm the Subj«I 1..t65e in ell of ii:! tenm and provu ioru. and do her<by le:u<:, gnnt, dcmis<, ar.d let 1he llJ\d! c.ovorrd by the Subject Le~le unto B URL.lrlG!ON R£SOURCIS OIL&. CAS CO:-.lPANY LP, 1ubje<:1 toand in nccordance wi th thetcnru 111d provhioni of the .Subj ect Lu>us i(I h&d been ar.d original ps rty to uld Leu,... And, I LOIS WOl,PMAl'I STRIEBtR, 1 widow, tho undcrsillr><d, do he<cby •&r<" that the laid " L<a; c" il • vnlid u1d submtini Oil "'1d G.., L.e1Jc . ~£/J . ::ru.l~ In w ilnC!<.$ whereof, 1his insrrumcm \;\'l3 CXtcuted lhisst:=_diy or JtllR. 2008 . ~ /d~ oL I i:t--' J , LOISWOL~ STATEOl'TEXAS COUNTY OF !&.W IT i :ir& .:r"'tj Thi• irutrument wu ocknowle<lgoJ i>oforc me on this tho ~AY o ( ;;,,.,t, :!OQ8, by or lAi> Wo lpma o S1rl•btr. NCJTARY PU\ll C o;"TA·n ; "' " TJ;> Y .4<:' L 30'(">'=13lo ·Ol'10 Lt i't:$ l1b ·~ ~ 803:31 ll"llUl.I Confidential KOOCOP00000944 447 NOTICE OF CONFIDENTIALITY RIGHTS: lF YOU ARE A NATURAL PERSON, YOU MA\' REMOVE OR STRJKE ANY OR ALL OF THE FOLLOWING INFORMATION FROM ANY TNSTRUMENT THAT TRANSHRS AN lNTLREST IN REAL PROPERTY BEFORE IT IS FILED FOR RECORD IN THE PUBLIC RECORDS: YOUR SOCIAL SECURITY NUMBER OR YOUR DRlVER'S LICENSE NUM13ER. AMENDMENT TO OlL, GAS AND MlNERAL LEASE (PAID UP LEASE) THIS AM'END!vlENT TO OIL, GAS, AND MINERAL LEASE is executed to be effective ns of this 22nd d.ay of October 2007 by and between LORENE Il KOOPMANN, ~n unm arried woman , ncting herein by and tluvugh Rnlph Koopman and Karen M. Koenig, my attorneys- in -fact, who se address is: 40 5 FM I08, York town, Tcl\a.~ '/8164, RALPH KOOPMANN , a muTled 1tun doling iu hi~ !<>le Mid scparnte property, who>e address is 774 Sumchos Road, Yorklowri. Texas 78 164 , and KARE:N M. KUEl'l1G , a married woman dealing i11 her !Ole and !cpiar.atc property, whose address is 34&9 ST. Hwy 72W, Cuero, Texas 77954 (col lecti vely, "Lessor"), .uid l)URLINGTON RESOQRCES OIL & GAS COMPANY LP, who~e !ddm.s is 600 North Dairy Ashford, Houston, Texas 77079-2197 ("Burlington"). Lessor and Burli ngton !!IC sometimes referred lo hcr.:in coll~tively us !he "Parties," R£CfrALS WH EREAS, that cenaln Oil. Gas, and Mine.rill Lease, d.ated 22nd da y of Octobe r 2007 wa.s mnde a.nd entered into between LOR.EN E H. KOOPMA1,1N ai1d llAWKE ENTERPRISES, as "Le~see," (tile " Lease"), a Memorar.dum of which Lc.lse is ~corded in Vol·Jmc 24J , Pa ge 876 of the Official Rcco rdl of DeWitt Co unty, Te xas, co vering the foll ow!n g descri bed lands (•.he "leased p ~:m is e~ "} : IJO atru or l_a odl mor, or IUJ, lJ~ine;. ptr 1 or Se-tthrn No. 13~ lndl mnul• }tgl\to:u.J Co~1p1 ny Survey, A-272, PeW lll Coun<y, Ttu1, and b<:lng lh• n1nt land ddc.ribtd ••TRACT NO. ONE •nld•olly and u lndrpc11denl Euc utr ll of I~• E>tAlr of J<rry Strlehar, dtrnstd, 01 Grulor, to Gilbert A. l<oopm•nn ••d wlft, (...(lnnot H . koopm1nn, aJ Cnfif.iee, 1-na bc::fnt: n-conle;cl In Volume 14 1 P-'ii'.I 4l~, Omch-I Public R<cordlJ O<.Wln COMnty , Tuu: and WHEREAS, the Lease was assigned from HAWKE ENTERPRISES, llS Assignor, lO Burlington, 11.1 Assignee, as evidenced in thut ce11ai11 AssigJ11ncnt da1cd January 9, 2008 and rtcorded in Volume 2.50, P~ge 822 of the OfficiHJ Public Records of DeWill County, Texas; and WHEREAS, there was w conveyance of an undivided 1wo/1hirds (21)) m incr~I imerest in the ks~ premises described above, from LORENF. H. KOO.PMANN to RALPH KOOPMANN and KAREN M. KOENIG Ill evidenced in 1h0t cenain Giff Minera l Deed dated June 10, 20 10, and recorded al Volume ) 13, Page 758, Of!lciaJ Public Record s or DeWitt County, Texa.s; and WHERE AS, •> a res~lt of th e partial CCJnvoyunc:c, the niincr'i!l inte rest in the lc ~ d premil<:s described above is now owned by LORENE H. KOOPMANN, RALPH KOOPMANN A.ND KAREN M. KOENJG, onc-1hitd ( l/J) eai;.h; ar.d WHEIU'!J\ S, Lessor (as to all of t~ir interes ts). and Burling ton des ire to nm end the L c a~ e in certain respecls; NOW, 1'H£RlFOTU:. for Im Do\l ar3 ($1 0.00) and ol./1c1 good und va.IWJ.ble considernt ion . the rcceip[ and suffic1cncy of whic h are hereby 3cltJ1owled gcd, [he Parties do her~ b y amend Lhe Lease, as follows : - 1- Confidential KOOCOP00001050 449 THE A!'<IBNDMEl'IT I. hragn ph 3 of th e le;ue shall~ dtle!ed In ill ent'lrcty .a.nd replaced with the fo llo wing: J. I Tnc royal ti es to be paid by Lc ssoc arc: (a) on oil ; 22.5% of that produced nnd saved frorn 5o id land , the same to be delivered, fr ee of e.1 1 col!S and expenses to the Lcs.~or into !Ii<: pipeline, or other teceplac lc 10 which the Lessee may connect its we ll s or the marke t va.Jue thereof, cu the option of the Les.sor, such value to be determ ined by ( I) tht hi ghest poslCfl price, plus premium, if any, offered or po id for oil, cn nden~111 e, di~lil lnt e, or othtr liqu id hydro;:nrbons , respec1ively of a like type ond gn:iviry for the field where produced and when nm, or (2) ril e gross proceeds of the sa le 1hereJ.)f, whichever is grc111cr. (b) on gas , including casingncad gas or other gaseous subs!Mlce, produced from said land 21 ..5% of the greater of (l) the rnarket value at tht wellhead of such gas, paid to l..e>sOr free of all co~s wid expenses, or (2) !he gro31 pNceeds re~ lized frum the sale of suc h gas, free of all toSl!l and expenses, to the fi rst non ·ttffiliatcd third party purchaser un dc-r a bona fide amu length sale or contrnc1. "Gross proceeds" (for royalry payment purposes) sha.11 mean the total monies lllld other cons ide ration accruing lo or paid lo ihc Lessee or ru.eived by l..e3sce fo1 dispo5i li on or sale of all unp ro<:essed gas proceeds, res idue gas , ga:s plan t prodocts or other products. Gross procuds shall hiclork, but ~ h a.ll not b~ li mited to advance paytnehts, take-or-pay payments (whether paid pursuun t to co ntrac~ in settlement or received by judp,01cnt) reimbLITT<:nmit for produc ti M or sc11cror1a uixes and 0.IlY and aJl o\ber rcimbUrsemcnts or payment$. (c) on all other minerals mined and marketed, ·22 .5% cithct in lcind or va lue at the well or mine , al Lcsse<:'s election, cxccpi that on sulphur mined and 1norkctcd, the roye.Jry 5hall 't>e 56.00 ixr long 1011. .3.2 If any disposilion, confT~c t or sale of oi l or gas shall include any reduclioo or ch11.rge for the expen.ses or costs of production, trca\tnent, txnnsport:aiion, manufoc ruring, process or marketing of the oil or gas. lhen suc h deduction, expense or t ost shall be added to the marker vnJut or g.ro!>I proceeds so that L"'1sor's roya.lty sha ll never be chargeab le directly or ind1ret\ly "'ith any costs 01 expenses other than i!S pro ratn share of severance or pHx!Uct ion UlXt'!S. J.3 After the end of the pri mary term, wlJk Lhcre is fl gus well on thh lease or on acrcnge poo led therewith but gus is ·not being so ld or used, Les3ee may poy as royaliy co the l essor at the add.rc5s sel out above on or before nindy (90) days after U1e date on which ( l) said well is shut in, or (2) tho Jund covered hereby or any portion thereof is included in a pooled unit on which a well is located, or (3) thb lcirn: ccllScs to be otherwise muintuined !l!l provided heroin, whichever is the later date, ~nd thereafter at annual in1etV•lh , the sum of $75.00 pe r mineral acre, and if such payment is mndc or tend ered , thi~ )e113e >h<>.ll not terminate and it wiil be considered that giu i$ being produced from lhi s !eroc in paying quantities, bui if such ·payment is nol made or tendered , thi s lease shall tc1Tninate. II. Tb.e ncood ~rn t e ac • a[ P•r~gr1ph No. 4 or the LuH, whlrh ls H i oul lmmtdi~t•ly below, 5n•ll be. deleted in iU <.ntirc ty: "Such pooling shal l be :nio a unit or units not ex~ e ed i ng forty ( 1lO) ncre> pl1,13 an acreage tolerance of ten per1:e nt ( 10%) thereof fo t oil, and unit3 not exceed ing six hundred fon y (640) ac res ei!C h plu s an acreage 1olernnce of ten percent ( l 0%) thereof for gas, provid~d lhat, shou ld govemmcntul nuthoricy havi ng jurfadictlon prescribe or permi t the creation of any driU ing, Jp11cing or prcra1ion uni ts larger than those s~ified above, such units moy be created or cnllliged to conform in !iu to i11e drilling or spacing unitl !o pre!cri.bed or ptrmi11ed or 10 the prorntion unit's as may be authori zed for obt!ln\ng t.he maximlun allowable production from one weiL •· Confidential KOOCOP00001051 450 JIJ. P1rairaph No. 5 of tbe uut shall be deleted In lti entin:ty and replaced with the follolVing: (a) DRILLING OPERA TlOl'-IS: If within 30 days prior to the expiraiion of the primary 1cnn or at the expiration of the primary tem1, Lessee is then eogaged in drilling operations on said land or upon lands pooled therewith, this ku.se shall remain in force only so long os such. opcnltions or drilliog operations for any additional wcll(s) arc prosecuted on the lease or lands pooled therewith with no cessation of more than 120 consecutive days between !he tennination of drilling operalior.s of one well and the commencement of drilling operations on a subsequcnr well, and If such operations result in the production of oil, gas or other mineral, so long the("C.afttr as oil, gas, or othrr mineral is produced from said land, or from land pooled thc:mvith. (b) CESSA ilON Of' PRODUCTlONIREWORKINO OPERA TlONS: If, after the expiration of the primary tenn of this lease and after oil, gas, or other mineral is produced from said land, or from land pooled therewith, the production thereof should cease from any cause und lbe lease i.s not otherwise maintained, thi9 lease shall not icrrninatc if Lessee commences drilling operations within 60 days thcrea.f\er and continuously conducts drilling opernrions without ce~t.ion thereof for more U1an sixty (60) days between the termination of drilling operations of a well and the commencement of drilling operations on a subsequent well and if they result in production of oil and/or gas or oilier rnincral, so long thereafter ll.S oil, gas or such other minerals are produced from said land. If witliin such $ixty (60) day period afl.u such cessation of production, Lessee commences reworking operations tu opposed to drilling operations, this lease shall not tcrmina1e so long os Lessee conlinuously conducts 3uch reworking opcretjons on such well witl<0ul cessation thereof for mer: than sixty (60) d~ys and if 3uch reworking o~rations on such well resull!I in re-c!lllbli$hmcnl of production of oil, gas or otl1cT min<:ra.J, so long thercafler n~ oil, gas or other mineral is produced from s~id land or lands pooled therewith. (c) Any pooled unit designated by Lessee in accordance with the terms hereof, may be dissolved by Lessee by instrument filed for record in the appropriate records of the county in which the leased premises are situated at any time after the completion of a dry hole or the ctlS5atioo of productioa on said w1i1. ln the event n well or wells producing oil or gas in paying quantities should be brought in on udjncent lu.nd und such well or wells is/ure draining the leased premises, or land pooled therewith, Lessee agrees to drill such offset well or wells as a rcaionably prudcrn operator would drill under the sll.ITle or similar ciroumslunces. Lessee may al 11.ny 1ime exccuie and deliver 10 Lessor or place of record a release or releases covering any portion or portions of .the above described. premises and thereby surrender this lease ns to such portion or portions and be relieved of all obligations o.s to the screage surrendered. IV. hragrupb 8 of the lease shall be deleted in its entirety and rcp!;iced with tile following: 8. The breach by Lessix of any obligation arising hereunder shall nol work u forfeiture or termination of this lease nor cause a termination or reversion of the estute created hereby nor be grounds for cancellation hereof in whole or in part. No obligation reasonably to develop the leased premises shall arise during the primary term. Should oil, gas or other mineral in paying quantities be discovered on said premises, then after the exµiraiion of the primary tem1, Lessee shall develop the acreage retained h~.reunder as a reasonobly prudent operator. If after the expiration of the primary tcnn, Lessor considers that or~rntions are not nt any time being conducted in comp.liance with thi.s lease, Lessor shnll notify Lessee in writing of uie facts relied upon o.s constit\lting a breuch hereof, and Less.ee. if in deiault, 9Mll have si:-ny days after receipt of ~uch notice in v<hich to cotruncncc the compli!nce with the obligation! imposed by virtue of this ins1rumen1. -l - Confidentia I KOOCOP00001052 451 '------------- ---- - - -- - Y. Pan1gnph 9 or rhe !ensc shall be d,fered In its entirety and rcpbc~d wirb lbt following: 9. Lessor express ly disclaims any warrnnty of lillc to the premi ses above described . fn the event ofiailure of title, Lessor shall never be required 10 rcrum any bonus or an)' other payment made to Le.s sor under th is lease. By acceptnnce of Lhis Lease, Lessee acknowledges that it has been given full opportun ity to investigate 3.!ld hns conducted sufficient invetigarion to sntisfy itseli n~ to the title lo the LMd , and Lei~e assum~ all risk of title failure s. It. i! agreed that if 1hi3 lei>Se covers a less interest in the oil. gas, sulphur, or other minemls in all or any parl of said land than the entire and undivided fee simple csuue (whether Lessor's interest is herein specified or not), or no interest lhert in, then the royalties and oth<or monies accruing from any part as 10 which U1i:; lease coven 1han such full i111crest, shall be paid only in the proportion which the in1 cresl therein, if any, covered by this lease, bellfS to the whole Md und ivided fee simple c~ tnle th erein . VJ. Puugr11ph C(d) or the Addendum of the Lea3e 1h1dl be Jel~te1l in its en lirety ~nd rtplnced with the followlnc: (d) Prior lo initial construction of c~ c h pipeline thereon, Lessee must pay the Lessor S3 .00 per fool in length for a sixty -foo l (60') wide pipt:linc right-of-way for inslalling pipelines necessary for production of any well on the l eu~e premises or on lands poo led therewith, which righ1 -of-wny shall ri:ducc 10 u 1hir1y-foot (J O' ) ngh1-of-way afu:r C-Onstruction o.nd in~tnllation of rhc pipe li ne. After iruiallation, replacement, or repair, tho 11rcn occupied by nll buticd pipelines sh~ll b<: bnckiillcd ao d tamped, M d o!herwi5e rcs1on:d to i\5 cond iti on pnor to instnl la1ion, ~plac eme n 1, or repair, utilizing the ''double ditch" rne1hod . Lessee must pay Lessor S 1,00-0.00 a.s • liquidated dam age amo\lJ1t for any oak tree damaged or destroyed by l,essec which tree has ~ 1runlc diameter ove r t~n inches ( lO"i when measured twenty ·four inc.hes (24") from ground lcvd, to be increased SI 00.00 ~r inch for e•ch inch in d iameter over I 0 inr.ohcs . Prior to commencing surface operations p<:rlaining to any well lo be drilled on the lease premises , U:s~e must deliver lo surface owner a dam•gc. paymen\ of S \ 0.000.00 Iv be applied 10 th~ damages to be incurred from &uch opcmions (~ucil damages including and associattd with the con.slruction of an access 1oad, power \inc, well p!ld, reserve pi~ fresh water pond w1d well production facilitie s a.1 pennil1cd by u1is l~ as e). Such .payment docs not preclude Lc~ sce from being liublc for the puymeni of additional damages ifsuch damages exceed Sl 0,000 .00. Vil. Pungr~ph E. or lht Addentlum lo tht Luse $h a ll br ddclttl hi lis enl lrely and replaced wil!I the following~ E. MINERAL LIMlTATfON : II is expressly lmdcrslood and provided !hat ihis lease covc·rs oil o.nd gas and liquid hydrocarbons, along wiU1 the products nnd by- products lhcreof, but this lease does 001 cover urunium, fissionable maierials or any ot.ha minerals of any type, here making palliculnr mention of water, the Lessee herein being given no right to explore for, nor devel op lllly part of tl1e h111d for production of water therefrom except wi th regard 10 producin g waler lo be used ~o lely with regard to f..e..-& e's oil and gns drilling, h)'draulic fracl\HC stimulation operations and completion operat ions upon the knsed premises a.nd MY such water well must be limiied to waicr prod uction only f10m U1ose depths below 500 feet be low the land rnrfai:e. L=e is e,;pre5..~ l y prohibited f!ilm using water from Lessor's wells, creeks and warering placu . Notwi thstMding anything tci the con trary in thi! \ease conwncd, Les~~ shal I a l 11.H timc5 protect the here in leased tru1d from drainage of ail and gM from wel l! on adjoining huid s. VIII. Pirag'raph F of the Addendum to the Lea" shall be dtlt1cd in irs ~ntirety and replar~d with lite following: ----- -------------------------~ · ..- - Confidential KOOCOP00001053 452 F. POOLING LlMlT ATIONS: (a) P201ing For Veriical Oil Well:;. Notwiu1standing anything contained herein to the contrary, pooling of this lease for vertical oil wells as classified by the Texas Railroad Commission is prohibi1ed. (bl Pooling for Gas Wells and Horizonta l Oil Wells. [n the even! Lessee exercises its option to pool as authorized herein and o.s limited hereby, the right to pool a vertical gas well or a horiwnlal &'13 well is hereby limited to 160 acm plus 10% tolerance as to all horiwns from .the surface of the ground lQ 11. depth of 7,500 f~t below the surface of the ground nnd to 320 acres plus 10% tolerance as to all horizons from 7,500 feet below the surface of the ground to a. depth of l 0,000 feet below the surface of the ground, and to 640 ucres plus l 0% tolcnmce as lo all horizons beneath I0,000 feet below the 5tnface of the ground. TI1e right of Lessee to pool for a horizontal oil well is hereby limited to 160 acres p.lu3 I0% t0Je111.nce as 10 all horiu:ms from the surfa~e of the grolllld to depth of 7 ,500 feet below the surface of the ground and to J10 acres plus I 0% tolerance if comp leted ot a depth of more lht\Il 7,500 feet below the surface of the ground provid~d that an additionnJ eighty (80) acres may be alloncd to such well for production purposes for every eight hundred twenty-seven feet (827') of horiwntal drainhole displacement (us defined by I.be Railroad Commission of Texas) over nnd above 4,000 feet of horizontal drainhole displacemen!. (c) Special Field Rules. If at the time of crention of any oil or gns unit comprising all or a p~ of the herein lca.sed premises spedal Field Rules of the Railroad Commission of Texas are 10 effect, Lessee shall have the right to pool all or a part of the herein leased pmniscs only up to the maximum acreage permit1ed to be assigned to a well in coru1ection with such oil or gas u11it under such special Field Rules, but in no event shall such unil or units contain more than the max.imwn acreage allowed by paragraph f(b). (d) Additional Horizgntal Well Provision;. In exercising the pooling rigJns granted in this lease applicable to .horii.ontal wells, Lessee shall file of record a writt~n declaration describing the borizonlJll wiit as to the spe<:ific leases and acreage to be included therein as well as the vertical lim its of the productive horiwn or zone and. stating the effective date of pooling; however, as 10 any horizontally completed well, Ltssre shall have ninety (90) days from initial completion in which to nrnend such written dc3ignat\on of unit to increase or decrease the o.creage, include or exclude specific leases or Inlets EIS · well as redefine the vertical llmits of the productive ronc, subjl:Ct to the limitation~ contain~d in this le;isc. lf such unit is filex.l nnd wnended within such period of time, Lcs.>ee ~hall file of record in the county v.11ere the lands are located a written declar~tion describing the revised unit and stating the effective date of revision. To the extent any portion of the leased premises is included in or excluded from the unit by virtue of 'uch revision, the proportion of unit production on which royalties a.re payable under !his paragraph shall be adjusted accordingly as of tlie effective date for the rnvised unit, subject to the limitations herein. The effective date of any· unit. formed for horizontal drainholc wells under this paragmpfi or any revision thereof shall be the date set forth as the effective date by lessee in the wrinen declaration that is [lied ofrecord for such unit or revisio n thereof. (e) Termin•tion of Pooling b.)'_(,C3~. Notwithstanding the decision in Wagner & Brown v. Sb ..pp.ord, 282 S.W. J 419 (Tm<. 2009), or similar authority: i. Lessee may only e.-.;crdse 1he rights to pool the interest of lessor in tM land and at the depths l~d hereby !llld only as to the lands and depths as to which this lease has not terminated as of the date such pooling document is filed in the office Of the County Clerk of the county where the land leased hereby or llllY portion i3 located. Upon partial termination of this lease, as .to any portion of the l!ll1d and/or 115 to any depihs, the rights of Lessee to pool the land andfor Confidential KOOCOP00001054 453 depths le ased hereunder may be exercised by lessee only for U1Dt portion of !he land ill1tllor those depths CJ.3 to which l.hi3 lcax has not rem1 inated. ii. If the leased p11:mim 1 or a p<irtion thOTeof, or the interest of the Lessor in part or all of the land described herein is validly pooled with other land lo form n unit prior to the partial or complerc termination of this kase, upon part ial terminntion of this lease as to 11teo and depths or complete tmnination oi this lease, Lessor may at nny tlme l11crcafter terminate the pooling and unitization of the Lessor's interest in any portion· of the interesr leased herein that hai tcnninalcd in any such uni I, by executing and filing for record in the office of the County Clerk of tho cowity in which the land leased hereby or any portion the~of is t0<:atcd, a document identifying or describing the area arnJior depths as t.o wbich such pooling is terminated. 111. Jn no event will l~.ssor be requ ired to bear costs of drilling either \>efort' or pfter this lens<: bas tcrrnimucd. IX. Pangraph H of th e. •ddeadum lo lhe Ltau )hall b< ddetffi io it~ cntlret-y Mnd replaced wiih lhe following: H. NON-POOLED PUGH CLAUSE: Lessee must within 90 days after the completion of any well on tho lc:;ml premises which is not p<JO!e!l under the provisions of Paragraph 4 or Paragraph F hereof, designate in writing and place of record with the County Cierk of the county in which L'ie property is located, a description of that purl of the leil.:led premi-1es whi~h shall De aHoned ("Allonc;J Aren") lo such well for production pucposes, the maximum size of such pan to be nlloncd being limited as follows: (n) Vertical Oil Wells: Na more than 40 acres plus 10% tolerance to be allotted in and around each wel.I classified n3 an oil well by !be Railroad Commission ofTeiGi.s if completed nt a depth of !0,000 feet or less below 1he su.rface nor more than 80 acres plus 10% tolerance if completed at a depth of more than l0,000 feet below the rurface. (b) Qas Wells and Horizontal Oil ~: No mOie than 160 acres plus J 0% tolerance 10 be allotted ln and around each ve11icnl gas well and horizontal gas well if compk1cd at a depth of 7,500 feet or less below the ~urface or the ground, nor more 1han 320 acres plus I0% tolerance if completed at a depth of more than 7,SOO feet below the surface of lhe ground, but less than J0,000 fee1 below the surface of1he grnwid, no more Lhw1 640 acres plus l0% tolerance a5 lo uU hori.:z.ons beneath I 0,000 feet below the surface of the grolL1d. No more than l 60 ncrcs :plus I0% tolerance 10 be allotted in and around each horiz.onlal oil well if completed al D depth of 7 ,500 feel or less below the sW"face of the ground, nor more lh1111 320 ncres plus 10% 10Jerance if completed al a depth of more than 7 ,500 feel below the surface of lhc ground provided that an ndditional eighl)' (80) acres m~y be allotted to such wdl for pro<luclion pwpose~ for every dghl hundred twenty scvc11 feel (827') of horizontal drainholc displacemenl (as defined by th' Railroad Commission of Texas) over nnd above 4,000 feet of horizontal drainholc displacement. Produclion or operations on said AJiotted Arca by the Lessee shal l maint~in this lease in effect only wi!h regard lo the land within such filCa. This lease shall terminate at lhe end of the primary Jenn as to such part or parts of the leased land lying oulside the Alloned Area unless !his lease is perpetvate<l as to such land outside the Allotted Area by operalion3 condu.c1cd thereon or by production of oil or gas or any such operslioos and such production in nccordar.ce with the provisions hereof. X. Paragraph J. of the addendum of the Leue !ball be delered in its entirety 2nd .replaced with 1he following: -6. Confidential KOOCOP00001055 454 ·TIP Bt.TRLLl\iGTON RESOURCES OIL & GAS COMPA..l'fY LP: By: By: ---"~"-'-~"4J,..o..:.....:=-- Name: fWtvi.K- ,/)., UH!..(.i ~-> Title: AUorney-io-Fact 1~\t L Tl-it STA.TE OF TEXAS § § COUNTY OF 1)t1Jfr.\t- § This instrument was acknowledg~d before me on this the_D_ day of =tiec , 2010, by RALPH KOOPMAWand KAREN M. KOENIG as a1tomey3-in-fuct on behalf of LORENE fl. KOOPMANN. THE STA TE OF TEXAS § § COUNTY OF])W.J; tJ-: § This insm1ment .was acknowledged before me on this thefl day of =t ~C , 20\0, by RALPH KOOPMANN. THESTATEOFTEXAS § COUNTY of'Qe.\ u~ ttH This instrument wa.s acknowledged before me on this th~ day of :s)...e.J , 2010, by KAru:N M. KOENlG. ·II· Confidential KOOCOP00001060 459 THl!:STATEOF TEXAS § § CO\JNTY OF HARRJS § This instrument was acknowledged before me on . this the_J_l_ day of D~k-: , 2010, by M1f1(J<..... f· (!19.4{1-sct , the Anomey· in- Fact for BROG GP Inc,, a Delaware corporation, the sole General Partner of Burlington Resources Oil & Gas Company LP, a D¢1aware limited partomhip, on ~half of said partnership. }J;;ag;;>~ ~ Notary Public, State ofTexas • 12. Confidential KOOCOP00001061 460 ------········--- .-· :Th · 1ti.' J. MfNIMUM ROYAL TY: lfthe royalties to be paid wider this lease during 12- rnonth periods as described below arc li:ss than the sum of$ l 00.00 per acre then leased ("minimum royo.lly"), and Lessor sends Lessee notice in writing of same, then this tease will tem1inutc u.1 Llic end of 90 days oiler Lessee receives wrinen notice from Lessor, unless the Lc-ssec pays 10 the royalty holders a sum of money equal to the difference between said minimum royally per acre and the total of all roy·alty monies on production so paid during the applicable l 2-month period. Said 12-month periods arc the initial period bcgiMing with the date of first producticrr from the lease premises and cad1 successive 12-rnonth period thereafter. The payments m out in this paragraph do not relieve Les.see of the req\liremcnt of production in paying quantities to muint.ain this lease. Notice as to this pnragi:nph will deemed t.o be given when it is deposited in the mail. certified, return rcuipt requested. XI. The following .1entence contained In Paragraph Q.(2) of tbt addendum of lbc Lean shall be detettd in it3 entirety: "Any later work done on the well wili be deemed to be reworking operation~." XII. The following delinilious shall be :i,dded lo Puagr.ipb Q or the Addendum to the l~ase: "Horizontal well" shall mean a well having a horiwntal drain hole which shall be deviated n minimum of seventy degree.'.! (70°) from the vcrtica.I and 'be.ing a minimum horizon1nl displacement in the objective formation of one hundred fifty feet (150') in Length measured between the point at which the drnin hole penerrates the top of the form~tion 10 be prodoced and the end point or rermitms of the horizontal drain hole. For 1he purposes of this provision, "terminus", "hori.rontal druinhole" ond "correlative intervals" shall be defined in accorda.nc~ with the Rules and Regulations of tl>c Railroad Commission of Texas or other govenunentaJ u\lthority having jurisdiction. "Reworking Operations", "operations for reworking", "commencement of reworking operations" and words of similar import shall have the same meaning, being the actual re -entry ioto llf1 existing wellbore with equipment capable of re- entering, reworking o.nd/or completing such well and the timely proseculion of such operations in such well bore in good faith towurd the re-cstabtishment of production of oil or gu.s from such previously producing zone or wnes." Xlll . P1r11graph T of the Addendum to the Lt.iue shall be delct~ in its cntirdy and rtplaced with the following: lNDEMNIFICATION : LESSEE AND ITS SUCCESSORS AND ASSIGNS SHALL INDEMNIFY, DEFEND AT ITS SOLE COST AND EXPENSE AND HOLD LESSOR HAAA1LESS fROM A..ll/D AGAlNST ANY AND ALL CLAIMS, LOSSES, LlABILITI.ES, COSTS, CAUSt~S OF ACTION, SETTLEMENTS, AW ARDS, PENALTIES, FEES, ASSESSMENTS, FINES, CHARGES, DEMANDS, LIENS, l'IJNITTVE DAMAGES, ATTORNEYS FEES, AND JUDGl'vtENTS OF EVERY KJND OR CHARACTER, KNOWN OR UNKNOWN, FIX.ED OR CONi' JNGENT (COLLECTIVELY, ~CLAIMS"), AfUSINC IN WHOLE OR IN PART OUT OF TtlE ACTS OR OMISSIONS OF LESSEE, LESSEE'S LICENSEES, CONCESSIONAtRF.S, SUBCOl'ITRACTORS, OR ANY OTHER PERSON on ENTITY ACTING BY, THROUGH OR UNDER LESSEE IN CONNECTION WITH ITS OPERATIONS ON AND POSSESSION OF THE LEASED PREMISES, lNCLUDlNG WITHOUT LIM1TATION ANY CLAlMS ARISING FROM TORT, PERSONAL rNJURY, DEATH, PROPERTY DAMAGE OR NUISANCE, AJUSlNG FROM ANY ACT OR OMISSION OF LESSEE, LESSEE'S LICENSEES, CONCESSIONAIRES, SUl'ICONTRACfORS, OR . 7. Confi de ntial KOOCOP00001056 455 ·1!)1 ;}' ANY OTHER PERSON OR ENTITY ACTING BY, THROUGll OR UNDER LESSEE. !'lfRTHER, THIS INDEMNITY APPLIES TO THE ABOVE CLAIMS REGARDLESS OF HOW SUCH ARE CAUSED. nns LEASE SHALL EXPlRE IN A.CCORDANC.t:: wrrn THE l'ROVISIONS SET OUT HEREIN, BUT LESSEE 'S OR ASSIGN"E E.'S OlH.. IGATlON TO INDE1\11'<1FY A.NU HOLD THE lNDE~NfFlE:O PAR1'1ES HAR.l'.-n,.ESS POR ACTIONS OCCURRING DURlNG THE TERM OF Tms CONTRACT SHALL SURYTVE: TH:E TERJ\11NATION OF THIS LEASE. fF LESSEE FAit,S OR REF USES TO fULLY PERFORM IN ACCORDANCE W!rn nus INDEMNIFICATION PROVISION , LP..SSOR AT U:SSOR'S OPTION, AND WJTllOUT R.ELJEV1NG LESSEE OF LESSEE'S ODLIGATIONS, MAV SO PERFORM, llUT Af,L COSTS AND EXPENSES INCURRED BY LESSOR fN THAT EVENT SHALL BB REIM.DURSED nv LESSEE TO LESSOR, TOGETHER WHH INTEREST ON THE SAl\-tE FROM THE DATE Ai-I)' SUCH EXPENSE WAS PAID BY LESSOR UNTIL REIMBURSED DY LESSEE. AT THE RATE OF TWELVE [12) PERCENT !'ER ANNUM. lessee and its representnlives, and lhcir ~ucce$SOrS shall not be responsible for or required to defend or indemnify Lessor or its representatives frorn lhe Lessor's tir il~ npresen\ll li vc's gross negligence or willful misconduct Lessee muse rnnincnin in effect at all times during its opcra1 ions under this lease a l.iabilily inmrnr1ce policy in an amount of 1101 less than S3,000,000.00 prottctiog Lessor ngainst lll l cl~ims uiaing by vinue of the Lessee's failure to comply with the provisions of this lease, and must furnish Leslor prior lo beginning such opcra lion;; with proof of the existence of suc;h policy. !fLeS$ee'S operalions wide r I.his lease arc conducted under the name of Conoco Phillips or one of its affil iatc3 for whic h Co noco Phillips is responsible, then Lessee may ele·: t fo self·insu.rc the aforementioned amount and will provid e Lessor with written notice of such election µrior to beginning such opcn tion s. XIV. Paragraph U of the Add codum lo the lca.Je 1"2 U be deldtd in Its eatirety •nd repla,ed wllb the followln~ ; U. DIVJS ION ORDER: Neither the Lrn,eo nor any other party disbursing oil or ge.s royally as provi<kd under this !ell!Jc or through ngrHment of the third party with the l es>ee may require L~sor to execute a division order as n rcqui5itc for the Lessor being pllid royalti~s ""ith the exception that n division order tlrnt pcovides only a stipulation of 1.>te Lessor's royalty interest may be 1e<1vircd or lhe Lessor. Neither this Lease nor ~ny mms or provisions )\ercin shn ll ~ altered, anicnded , extended or ratified by any division order or l.raMfcr cHdcr c~tcuted by Lessor, its successors, agcnls or assigns, bu1 any division orders or transfer orders shall be fo r !he sole purpose of confirming lhc extent of Lessor ' s inler~t in production of oil and gas from I.he lcuscd prernists. However, to Ule ex ront there are interests which purport to burden Lessor's roya lty which a.re in dispute or may, in the funu-e, be disputed, the excculion of divi9 ion ozdcrs i~ not a waiver of the rii.hts to so dispu1c the inlcrem, rto; does such execution in 11ny way ratify, revive , or othcrwl!c approve of any luch in1ere.1rn. if any . Pa 1'2gl"l!ph W oftbe Addendum to !he lease shall~ dtldcd in itJ entirety and repl~etd 'l'l'ith the rallav,.fog: W. SEISMIC OPERATIONS : No nulhoriry is hctein granled to Lessee 10 condui;1 se ismic open1tior.s ;1~Jc;:'s•e pays 1h::: surfoce owner prior .10 beginning of such operations . ~et' acre for the entire l~nd above described . After completion of scch operarion3, l ~s c e mu${ restore L~C land to its original condition just prior 10 such operJtions and mu sl p ~y the rurface owne r and any tenants 1he actual llnoun t of dam ages arning fro m such o~ra t i o n s . Les s~ e 's right to conducl sei smic operations upon th~ herein le ased prcm'isc s shall be non· c< ChiSiYC and Lessor hereby reserv~ the right 10 granl to third parlies, the ·righ1 to: I .i conduct sdsmic opctarior~ upon such premi!cs, ond 2.) use the dntl• re5ulling from such ~ismic operations u such ihird par1y deems nccesta.ry including but no l limited io 1he marketing/sllle of ~uch d.. 1a. Less.o r s h ~ll b~ • B- Confidential KOOCOP00001057 456 cntiLlcd to all compensation paid by such third parties for \he right to conducl ieismic opcrat io11s. Funher, tl1is tease shall be subject to t.he cig)n-1 of all :hirJ p1U1ies under a.ny se ismic permits whi'h cover all or any part of :he here in leased propcny whicb may be in effce1 at il1e time of the cxe ution of this lease. XVI. Paragnph X of the Addendum !Q the le•ic ~ba ll be de.le led 111 ib e n lir~ty . XVU . Tbe following provi.lioni il.JaU bt added tu tbr lc~ic; Le ~sec shall 11.fld agrees to never claim, 1101 seek to secure ony of the lands ' or rntnerali in the ground covered by thi s lcnsc by upplicnOon or clnim of any stetutc of li mitations or advcr.;e possession, inel11ding, but llO t limited to nny cl oim under tbe Tu~• Civ il Practice and Remedici Code St(li01u 16.025, 16.026, LG.027 or 16.028, as now enacted or as mi>y hcrcinallcr be nmcndtd. Lcs~ cc shnll and agrees never to seek to matufe limi ta1io11 s litlc to Uic oi l, gas Md rela ted mincrnl ~ In the ground covered by this lease. The purpose of th is provision is to bar any claim of limitutions ti tl e by Lessee and th us abrogate the <lpplication of ill1y theorie s under which relief was grn ntcd in r.!•turu l C1u Pipeline C o. v, Pv o[, 124 S.W. 3rl 188 (Tex. Sup. 2003), or similar authority. In ihc even t that Lessee should ever file a law~uit ngain$t Lcs~or wherein it cl11ims that it owns the oil , gos or other miner:1ls or any interest in the lands covc1cd by thi s loasc by reason of >111y statute of limitation, any interest of Lessee wider U1i$ lease shall be 8Utomntically deemed forfr itcd and tem1inatecl u~ of lhe date such l~ws uii is fi led, and Lessee will th.erea.tle r have no interest whntS-O<lvcr in this lease or any lands described herein. L.csscc may defend ltulr In court at:ih:11t claims brought a&>1.init Lt'H tc aud m~y au~rt llrulll tl on1 as a dtfwse but In no tHnt m~y Ln.1<c usut In aoy form or b i hion, advcnc poBc~uion of Lu io r 's real proptrty IRnds or minena ls In the ground . NOTrCE OF TOP LEASE O FJIER: If at any time within the primary tem1 of tr11s lease and whi le the same remains in force and dTc.:;t, Le ssor rec. eiv~ a bona li de offe r ncceplilble to Lessor to enter into un addlt.ionul icHSc (top lease) coverin& all or part of the leased premises, ~ssor (wi1houl disclosing the terms of such offer) shall notify Lessee in wriline, that Lessor ho i received such ofTcr. Les sor agrees that it shall not accept such offer (by the execution of a lop lease ) un til 15 d.-iys after Lessor gives notic'c of the offer to Lessee. Noti ce as to this pard{lfaph will deemed- to be given when it is dep0 sited in the muil, certified, return recei pt requested . PERFORJ'rlANCE: Upon the later of the expiration of lhc- primary term, or the extended tem1 by cont inuous operations, force majcurc or other suvi111{S clauses, if Lessee has inc luded a portion of the leased la nds from this lease into an All otted Arca{s) or poo led un it(s) (YDcve lopcd Lands"), but le% than nil lunds from this tense have been included in any sue.Ji Allotted A.rea(s) or pooled unil(s), ond the lease , os it perta.i ns w such lands remaining onn lhiitcd or unpoo lerl (''UnDcvclopc<l Lands'') tcnni natcs according !O the tenns of tl1e lea1c lllld/o r any ~rrteodntents thereto, L~"ee agfccs 10 pay to l.cssor n onc·tirnc non-pcrfonnence puymcnr on such UnDevcloped Lands at thnt rate of SS,000.00 per net mineral acie ("UnDevelopcd Lands pAyment"). Such VnD~v el opc d La.nds Paymen t shall be due lllld payable to Lessor, or Lesso r' s assigns. witJ1in 60 day_~ uflcr such p:irtial lease tcnn inatlon . Such p• )men t shull bear interest from the due date (60 doy~ after partial lease terminatio n) until th~ date o( pnymenl thereof M the rate of 12% per annum. No such payment s h~ll be due on any: I . Developed Lands; 2. Ponion of the land covered by thi s lc"5e within un Alloflcd Area(~) or poo led cni1(1), upon v;hich ~ wc ll(s) hos lxen drilled. plu gged l!J",d at-and oned as a dry )\()!c. Fo r the purpo~c• of de tennining the ocreagc not subj ect 10 the Undevel oped Lands Payment <U1der t b i~ . 9 .. Confidential KOOCOPOOOO 1058 457 exception, the maximum amount of leased lands (either Allo11ed or pooled unit) per dry hole well is J20 seres; 3. Ponion of the property leased herein if there is a material ti1le problem with said property; 4. Portion of the herein leased propeny, if the inability to include such portion of the leased property in a w1it is a result of a change in the rcgulutions of ihc Railroad Commisgion of Texa:i or other governmental aulhoricy which such change in reguJatioru occurs after the uatc that any part of the leased prcmi~s is lawfully pooled or a!lo11ed 10 uny well drilled on said premises. Lessor agrees to act in good faiU1 to facilitate Lessee in compliance wiih the foregoing to facilitate proper pooling of Lessor's lands and Uic drilling of wells. XVUI. MISCELLANEOUS Lessor does hereby adopt, ratify and confim1 the Lease and recognizr;s the full validity of the same, and does hereby GRANT, LEASE, and LET to Burlinglon Resources Oil & Gas Company LP, its successors nnd assigns, all of the interest of the said undersigned in the leases premises, subject to and in accordance with all of the terms and conditions set forth in the Lease, as hereby amended . This Amendment to Oil, Gas, and Mineral Lease shall be binding upon and inure to ihe benefit of the Lessor and Burlington, and their respective heil1l, personal representat ives, successors, and assigns. This instrument may be executed either as one instrument or in seve ral partially executed counterparts and the original arld all countctpa.rts shall be corutrued together and sha ll constitute one lnsrrumenl. Should less than all of the named panics execute thb instrumen t, !.his in3trurncnt shnll be bioding on lh°"c who arc signatories. IN WITNESS WHEREOF, this instr11ment is executed to be effective as of the dace ti rst above wrirten. LESSOR: LORENE H. KOOPMANN By·.RJ.\LPHOOiMANl ~~ AHomey-in- Fac t KARENJ: KOENIG . to . Confidential KOOCOP00001059 458 • 6'7901 NOTICF:. Of EXJ:RCISE OF OPTIONS TO EXTF..ND MINERAL Ll:ASES • STATl3 Of TEXAS COUNTY OF DEWITT KNOW ALL ~iEN BY THE.SE PRESENTS: Wl[EREAS, 13URLL"'lGTON R.E.'iOURCES OIL&. GAS COMPANY LP. 1 Dcluwru-c limited partners hip, whose addr~ il PO Box 219"/, Houston, Tcnv, 77252- 2 197 (herein referred to as "L<s><c) i5 tho owner oi those ccrtuin oil, gn~ and mi neral Jca;c! idcmified on E"'1ibi t "A" anached hereto and made o part hereof for ell purpose~ (herei n referr«! to as "Mineral Leases'')·, and WHEREAS, each of th~ Minera l Lt!as~s provido tl1Hl the prirnnry term rnay bo oxlonded at any time prior to the expiration of th o origlrrn l prirnnry lenn per iod by tendering to thu respective lc"50 r{s) tho option bo111Js pra.'ICrihod i11 !he lease vin check or dro(l ·tendcrcd lo tl1e depository bank named In th o lease or tnailu1 to th o i<'ssor{s) nl the 11ddreMr-3 provided In said Mineral lease (or such ot~ or address u~ lcsror nrny s111Jucq11cntly tumlsh Lessee vin wrl llcn nolico); al\d WHE.rl.EAS, the Mineral Leases furth er provide th~l shou ld tho option lo e~tend <11c pri n1.11y lenn IJe exercisi:d, i1 sha ll be considered for all purpose• !IS if the origi11al primary lcnn in !!<!Ch of such Mineral Lease) WllS for n period offive (5 ) y~!I~; 8nd WHEREAS, LcS)e<! hs.s eleooled to exercise tho. option to exten d th• prim~!)' lenn of Cl/Ch of tho Minero! Lu.sr.s idcntifiw in Exhibit "A" ultuched here.lo by tenderi ng payment by check or draft ts Sc i forth in sRid Mi ne13 J Lc.ucs. NOW, TKEREFORE, L = hereby places third putks on no1icc thl\t it has c•cn:i5Cd the option to e.-.tend t.~. primary tenn of tho Minern l ~e1 <lesCflbtd on E1Uiibit "A" attached herc10 to a toul of five (5) )'Carl in each of Juch lease~ by lendering lhe conside ration recited in th e respective Minorn l [..ease.' by check or drat\ in ~C£-O((Jil!1~" with tho ttrms, t:onditioM and provi!ions 0(1he resptctive Mincrnl £.uses . IN WITNESS WHEREOF, this Notir,e of EMn:i!e of 01>tio1u 10 Extend Mrnei;il L.casc1 ilus been oxc<:uted on tJiis ~day of hf.v .A___ , 20 l U. STAT!: OF TEXAS COUNTY OF HARRIS Thi~ in strurnenl wus acknowledgt:d before me0 11 ll1e ~~of lfJJfiA.!A<, 20 10, by M11rk B. C11.rlislc, Aumncr-in-Fact of BROG GP Inc., 1K:ti11g as sole grncn1J pi1rt11er of Durlin gton Rewurces Oil & Gas Company LP, • Oelowaro limi ted part11~r.1hip, on behalf O( SA!d limited partJ>er5hip. My co mrnissi n expires: /l-l!- ,')tJ/0 )05" L,l_f.& - 00(} ___ Confidential KOOCOP00000931 462 () 0 ::;,• ::!! Q. EXHIBfT "A" en TO ::J NOTICE OF EXERCISE OF OPTIONS TO EXTEND MINERAL LEASES tt Q) Lt=A::>c 1r<rUKMAI IUN NUMBER LESSOR EFFECTIVE DATE ORIGINAL LESSEE STATE COUNTY BOOK PAGE 303680-000 John Paul Guidrv Februat\119, 200 7 Premi~re Laoo' S<!IYi<:e$ LLC ,TEXAS DEWITT 224 296 303701~:ioo Edwin 0 Rossow el ux March 7, 2007 Hawl<e Enternmes TEXAS DEWITI 23€ 415 303750-000 William Dwor=-M< Februarv 2, 2007 Premiere land Services L.LC TEXAS DEWITT 224 i 288 • 303857-000 Andrew M Hod<!e Aoril 9. 2007 Ha>We Entc<orises TEXAS DEWITT 222 .I.al 30386()..000 T<!ddv W Aven et ux AOOl. 18. 2007 Hawke En ternrises TEXAS DEWITT 226 358 303973-000 FlO<iart Konczewski et ux .J\D<il 11. 2007 Hawl(e Entero rises TEXAS DE W1TT 226 360 303974.000 Herman Konczewski Ao.-j 1 i, 2007 Hawke Enrernrises TEXAS DEWITT 226 353 3'~4<344-001 Men Mueller et Ul< " Man::ll 14, 2007 Hawt:e Entar=iSl!!S TEXAS DEWITT 222 495 J0.4061..000 Alt.on Rav Jatu1l<a el ux Febru;;uv 2i 2007 Hawice Enten><ises TEXAS DEWlTT 222 4a5 304063-000 Saran Aroiistein et al Februarv 27 . 2007 Hawke Ente.!Drises TE-XAS DEWITT 722 4<!3 304065-000 L.acl<ev l""1<l umit~'<l f (lbruarv 23. 2007 Hawke Enterorises TEXAS DEWlTT 222 489 304081..000 -Jennie Lvnn HwdeslV AOOl 17, 2007 Hawke Enternrises TEXAS DEWITT 226 362 3().4082-000 Martin Luther Wolter et .ux ADri! 17. 200 7 Hawte Enterorlsm TEXAS DEWITT 22ti 366 304083-000 Leona Riedesel I Januarv 30 2007 HS'.'-'ke Entemrises TEXAS DEWITT 222 487 304150-000 Gld1lberT)I Partnern LTD I April 2S' 2{)07 Hawt<e Enten:>rise$ TEXAS DE WlTT .226 364 30-i 155-000 Baram<JJV\ Fam llv Trust FebroalY 14, 2007 Hawke Enterori5es TEXAS DE WlTT 222 501 3().C!~ Bamman.o FamllvTrust I Februar.1 14, 2007 Hawk e Enternri~:es TEXAS DE W ITT 222 499 3041 &')-000 l C Tnk>le et ID Fet>ruarv 21. 2007 Ha'Wl<e Ente~ TEXAS DE WlTT 270 406 31)4219-000 JOl:lanna Wild """"3, 2007 H""-'ke Enterorises TEX.AS DEWITT 226 374 • ~220-000 Jerome R Wild el ux u,,., 3, 2007 Hawke Ent:ernnscs TEXAS DE WI TT 235 d17 304.222-000 Robert H Mei:>c:OOn el vx AJ:>fi30. 2007 ' Premiere Land Services LLC TEXAS DEWITT 225 793 304224-000 Robert T Melsdlen et al Al>ril 30, 2007' . Prem iere Land Sel'l!ice:l. LLC TEXAS DE VlllTf 229 38 3[;422£.-000 V~oinia Wil'rnetn - P,l;a<; 7. 2007 Ha-•1ke Enternri«.es TE.MS DE WITT 225 - 357 =" 0 304227-000 304228-000 Robert T Meiser.en et ux Robert T Mi5i:;ct\ffi etux Ap{iJ 30, 2007 April 30, 2007 Premiere Lan.<i &!rvlce~ LLC TEXAS DE WlTT Premiere Land &Mee$ LLC TEXAS DE WITT .225 225 78.9 791 Paul V Grav et LI)( 304234-.'lOO Ma~ 8. 2007 Hawke Enternrises TEXAS DE WITT 236 423 0 304246-000 Clifford Dwayne Parke< et wt .Jutv 30, 2007 Hawke En terp~ TEXAS DEWITT 233 722 () 304252-000 AttliU< Garrnrt M iUer et ux A!:<i 2s. 2007 H:.wlrn E11t,.rprtse• TEXAS DEVl/JTT 225 4 18 304253-000 Jerald J Rouelt. et ux Premiere L911d Setvic:e!. LLC TEXAS DEWITT 225 8.9 5 0 3042~-000 Jerald J fi.o55Ctt er ux Mav8 2007 MavS, 2007 Premiere Land Services LLC TEXAS DEWITT 226 8S4 -0 ' 304255-001 .le.mid J Ros"'tt et u ._ May 8 2007 Premiere Land Se<vices LLC TEXAS DEWlIT 226 893 0 0 0 0 1ol5 0 (0 (.,.) ....., 463 () 0 :::::J ""1\ c. (t) 3(}4255.-002 Oaoline Harms Mav 8. 2007 Premiere Land Seivicas LLC TEXAS DE WlTT 229 037 ::s ,.... 304256-000 Jerald J Rcssett el UlC 3(}4260-000 Rinehold Borchardt Mav 8 2007 Mai 16. 2007 Premiera land Servic2s LLC TEXAS DEWITT HawkeEn~es TEXAS DEWITT 243 243 846 BBS ru 304262-001 Otto Lee Koeornng 304262-002 Marcie Ann Dici<erson Mav 29. 2007 Mav29. 2007 Hawi<e Enterof.ses Hawke Enti>rorises TEXAS DEWITT TEXAS DEWITT 236 236 421 419 236 374 236 3i6 304280--000 Darvin Mueller et a! Mav 11. 2007 Hawke Ente<t>Oses TEXAS DEWITT 236 378 304318-000 Cody Jafuf\<a Aoril 26, 2007 Hawke Enlerorises TEXAS DEWITT I 226 370 3043.27-000 Houts Baker March 1. 2007 Hawi<e Enterprises TEXAS DEWITT 222 5{)7 304328-000 304 3.29--000 304331-000 304415-000 304531-000 304561-000 Jerrv Wavne Schmiedlin et ux Karen Kay Lukes Alton Rav Jalul\<:a et u::c Michael P Klein et t1x Rinehdd Borcha.rdt et al Bennie Drabek et ux Fehnt:>rv 21. 2007 Marcb 15, 2007 Marel115, 2007 June 5. 2007 May 16, 2007 Jur;e 13. 2007 Hawke En11>mrfses Hawke Enterprises Hawke Enterorises Hawke Enterorlses Hawke Enterprises Hawlo;e Entefllfises TEXAS OE WITT TEXAS DEWITT TEXAS DEWITT TEXAS DEWITT TEXAS DEWITT TEXAS DEWITT 222 2Z2 222 236 243 233 505 509 503 452 841 725 • 304 58:>-000 Leon J Resoondek et ux June 15, 2007 Hawke Enterorises TEXAS DEWJTT 233 727 30<!584--000 Leon J Resoondek et ux June 15. 2007 Hawke Entero<ises TEXAS DEWITT 233 729 304585-000 F r.1t1CeS Warzecha Jo.me 20, 2007 Hawke Entemrises TEXAS DEWITT 233 724 233 720 233 721 304589-000 L C Sievers et al July 13, 2007 Hawke Enterprises TEXAS DE WITT 233 766 304099-000 EUQene lbrom July 13, 2007 1-!aw!ce Enterprises TEXAS DEWITT 233 737 304700-000 Robert lee I b<om et ux Julv 13. 2007 H3'bi<e Enterprises TEXAS DEWITT 233 741 304701-000 Hollis 0 Baker Julv 11. 2007 Hawl\e EntB!t)!ises TEXAS OE WITT 233 743 304702-000 Oavld lbrom et ux July 3, 2007 Hawke Enterprn;es lt:XAS DEWITT 233 716 A 0 304 703-010 Cat!Jerin-e Ko!odzieicvk et vir 304705--000 Robert Lee lbrom 304707-000 Daniel Ibrom et ux 30470$-000 Patricia Gail lhrom et vlr 304710-000 Shirley R Crain 30471Hl00 Melvin Sl.-aube et ux Julv 13. 2007 Ju/y 13; 2007 Julv 13. 2007 Julv 3. 2007 July 11. 2007 Julv 11. 2007 Hawke EntenxilHl-S Hawke Entel'Prises Hawke .E nterprises HawkeE~es Haw1<eEn~ Hawke Enteronses TEXAS DEWITT TEXAS DEWITT TEXAS OE WITT TEXAS DEWITT TEXAS TEXAS DEWITT DEWITT 233 233 233 233 233 233 745 735 739 714 758 750 • 0 304 723--000 Marvin C Koopmann JulY 17 2007 Haw1\e. E.nterori~ TEXAS DEWITT 233 754 () 304771-001 Frnnk Kulik et ux Julv 20 2007 Haw!ce Ent~risas TEXAS DEWITT 233 733 TEXAS DEWITT 0 304;72-000 Warren Leml<e et ux 304783-000 Robert Edward Moll etat July 20, 2007 July 23, 2007 Hawke Entt!rpriseo Hawke Enterprise:1 TEXAS DEWITT 233 243 760 833 '1J 304642-000 Alvin Stanches Jr July 27. 2007 Hawke Erttero.ri~ TEXAS DEWITT 233 756 0 0 0 0 2 of 5 0 (0 (..) (..) 464 I - - - - - - - - - - - - - - - - - - - - - - - - - -- - - - ' 0 0 :::s :::!? 0. 304865-000 lsabeJI Ann Van 8everen Julv 27. 2007 Hawke Entemrlses TEXAS DEWJTT 233 752 ([) 304868.000 James Jendr; Auaust1,2007 H~ Enterrvkes TEXAS DEWITI 236 384 :::s 233 762 e: 304870-001 David Er1er et al Auoust 1, 2007 Hawke Enternrises TEXAS DE WITT 233 764 tu 304871-00t Mich~ I R Grunder et al November 29 , 2007 Hawke Enterorise!> TEXAS DEWITI 24 3 852 304885-000 Carolyn S We>t:rve Julv 27, 2007 Hawke Entemri•es TEXAS DEWITT 233 747 3048a5-000 David A Stubblefield et ux Seo!ember 6, 2007 Hawio:e Entemrkes TEXAS DEWITI 236 437 304a87-GOO Elna Bi<'.ICl5 Auoust 10. 2007 Hawke Ente""'ces . TEXAS DEWITT 234 392 304888-000 Barbara J Siu bblefield Seoteml>er 6 2007 HawkeEnte~ TEXAS DEWITI 236 435 • 304889-001 Alton R Cieleocki el ux Auaust 2. 2007 Haw!<;e Ent_...n•- TEXAS DEWITI 236 407 304893-000 MarceHus W Weisch.,..;11 Residua1y Trust Au<>ust 2. 2007 Hawke Entero<ises TEXAS DE WITT 2:36 400 304909-000 Loretta Fav Burce· A1:nust 2. 2007 Hawke Entemrisas TEXAS DEWITT 238 396 304911--000 Scott Straube -A1Xlust 2 2007 Haw'ice Enternrises TEXAS DEWITT 233 749 304922-000 David A lbrom et ux Ju!v 31. 2007 Hawke Ent......,rises TEXAS OE V\qTT 236 405 304929-000 Morres M Van Beveren et m Julv 27. 2.0 07 Hawlr.e Entemri«es TEXAS DEWITT 2.33 718 30494-4-000 Barbara Theilin Octuter1B. 2007 Hawke E.ntertlfi&es TEX.AS DEWITI 243 858 304945-000 Charles T Hahn et ux Aunust 7 2007 Hawke Enterprises TEXAS DEWITT 236 411 304949-000 EuQene James lt>rom A•....,ust 6. 2007 H awl<e Entero<i&eS TEXAS OE WlTT 236 409 3Q.(9 50--000 Leon James Srubar Jr eta! A•.,,Ust 8, 2007 Hawke Ent~ TEXAS DEWITT 243 630 304951-00-1 Rueben W'!'JE.e Thamm el ux Auaust 16 2007 Hawl<:e Enternrises TEXAS DEWITT 236 402 304 9!»-000 Irene HaM Ai "'US{ 7 2007 Hawke En!ernrises TEXAS DEWITT 236 447 30495&-000 Kerm~ C Koehler etux September 5, 2007 Hawke Enrerorises TEX.AS DEWITT 236 386 304959--001 St.e ven D Scott tit ux Auaust 10. 2007 Hawke Enterorises TEXAS DEWITT 236 388 305000--000 T rov H Stuart el al Auaus!10 2007 Hawke Entrunrises TEXA.S DE WITT 236 398 305228-000 Jose G Perez et ux Seoternber 1. 200 7 Hawke Enterorises TEXAS DEWITT 236 445 • 305230-001 Patricia Ann Shocldev Aun\Jst S. 2007 Hawk., Enl:aro<isea TEXAS DEWITT 236 449 305232-009 Phil E Mueller et ux Auaust10 2007 Hawke Enll!!rroses TEXAS DEWlTT 236 390 30523-4-000 Hilmer E Kooomarin et al. Seotember 4, 2007 Hawlte E~ses. TEXAS DEWITT 243 827 305235-00-0 Robeit G Watson el ux September 5. 200 7 HawkeEnte~ TEXAS DEWITT 236 413 236 380 "00 305236-000 .Ravmood W Pawlik Jr Seotember 5, 2007 Hawke Enternrises TEXAS DEWITT 305245-000 Karen B Robinsoo SEIP!ember 24 2007 H ""''ke EnrerDrises TEXAS DE WITI 2.43 819 3052-48-000 Edwin A Baros SPnlember 10, 2007 Hawke Eote<D<isas TEXAS OE WITT 243 826 305258--000 Hilmer E Kooomann Seotember 4, 2007 Hawke Enterorises. TEXAS DEWITT 243 812 C') 305260-001 Elizabeth C Connois Auoust 30, 2:007 Hawke En!emrisas TEXAS OE WJTI 236 433 305260·002 Catherine Clark Ralston Aooust 30 2007 Haw!<e En!etpli&es TEXAS DE WITT 236 431 0 305261-001 Richard H Borchard Jr Auaust 28. 2007 Hawke EntemriS&s TEXAS DEWITT 236 394 '"'O 3052U2--001 Raloh Borchard el ux Auaust 28, 2007 Hawke Enternris~ TEXAS DEWITT 236 443 0 0 0 0 3 at5 0 (D (..) .i;::.. 465 --····--·-- --- -- · -·--·-- - -·-·····-·---·--···-···- ·• - - --·--··· - · --- - ···-·--·-··· (") --· 0 ::l a. ct) 30530S-OOO Isabella Nelsoo Barrett October 4 . 2007 Hawke Enterprises T EXAS DE WITT 243 818 305310-000 Ke ndr1cl<. W Baros et tu September 24 , 2007 Hawke E nterp rbes T EXAS DE WITT 243 825 :::J ~ 305311-000 Cec:J M Davi<ison el ux Seotember 13. 2007 Hawke Enterprises T EXAS DE WI TT 236 429 305312-000 Quentin L Yam:ev et ux October 5. 2007 Hawke Enterprises TEXAS DE \'VITT 243 808 ~ Mereloo Love! et ux 30 5 31 3--000 Seotember 7 2 007 Haw'~e Entertxises TEXAS DEWITT 236 382 305314-000 Martin Alllarez Castillo etux November 20. 2007 Hawke En!efi:>rises T EXAS DE\NI TT 243 867 305 3 17--001David A WriQht and wife Patricia Wright September 10. 2007 Hawke Entemrises TEXAS DEWITT 236 441 305328-000 Huebner Trust Seotembe< 24. 2007 Hawi<a Enterprises TEXAS DEWITT 243 806 305331-000 Marvin Stanchos SeJ)1ember 6. 2007 H awke Emerorises TEXAS DEWITT 243 811 236 • 305370..001 Michele Maraldo et al Seoll!mber 11. 2007 Hawke Enterprises TEXAS DEWITT 427 3053 7 4--000Fred C H®hes et ux Sentember 26, 2007 Hawke Enterprises TEXAS DEWITT 243 829 305384-000 Isabell Ann Van Beveren Seotember 26. 2007 Hawlle Enterprises TEXAS DE WITT 243 815 305387--000 Jerry McAda ms et ux October 22. 2007 Hawke Enterprises TEXAS DE'MTT 243 865 305392-000 Mariorie BrEX<len et a l October 25. 2007 Hawke Enlemfises TEXAS DEWITT 243 854-855 305393-000 Mariocie Breeden et al October 25. 2007 Hawke Entemrises TEXAS DEYVITT 243 860 305466-001 David L Urban Seotember 26 2007 Ha:wi<e Enterprises TEXAS DEWITT 243 810 305466-002 Wavne D Urban September 26 2007 Hawke Enterprises TEXAS DE WITT 243 809 3054SS.001 Donuld Jansky et ux Seotember 1. 2007 Hawl<e Enterprises TEXAS DEWITT 24 3 80-4 30547 1-001 Joel P Smith et tu October 3. 2007 Hawlle Enterpri ses T EXAS DE WITT 243 816 305480-000 Karen Koopmann K oenig Oc!ober 22. 2007 Hawl\e Enternrises TEXAS DEWITT 243 875 305482-000 Ralph KOOPm ann October 22. 2007 Hewi<e En!!!rnrises TEXAS DEWfTT 243 874 305486-000 l.ofeoe H Koopmann October22 2007 Hawlce Enterprises TEXAS DE WITT 243 876 305518--000 Sandra H ilOOc!l et al October 22 2007 Hawke Entsrprises TEXAS DEWJTT 243 872 305530-000 Elenora Klaevemarm Odober 10 2007 Hawke Enterorises TEXAS DE Vl.1TT 243 862 305533-000 Ken t Edward H iibric:h et ux Nove mber 16. 2007 Hawke Enterprises TEXAS DE WITT 243 865 305.534-0(}1 Elenora Klaevemann October , 0, 2007 Hawke Enterprises TEXAS OEWlTT 243 891 :A 0 305545-000 Lois B Chesney 305598--000 Ameila Ortiz 305603--000 Elna Bioas 305616-000 Michael A~lhon·1 Maron 30563 1--000 Cart H Schlenker Jr Estate September 2.0 2007 October 17 2007 A1...,ust 10. 2007 ()ctober 10 2007 October 26 2007 H awke Hawke Enterprises Enterprises Hawke Enrerorisas Hawke Enterprises Hawke Ent&rorisas TEXAS TEXAS TEXAS TEXAS TEXAS DEWITT DE WITT DE'MTT DEWITT DE WITT 238 2 43 234 238 243 291 832 3S4 268 879 • 305632--000 Harland Sch.lenker et al Octobe<' 26, 2007 Hawke Enlerorisees TEXAS DE WITT 243 869 0 305635--000 Hariand Schlenker et ux Ociobe.- 26, 2007 Hawk e E ntemrisas TEXAS DEWITT 243 87 1 (') 305678--000 Jeanne E Gueniero October 22, 2007 Haw'ke Enterprises TEXAS DE WITT 243 877 305774--000 G W Lamb Ill e1 Li)( November 1 2007 Hawke Enterprises TEXAS DEWITI 243 856 0 305787-001 Geo<oe Lcwma1 November 7. 2007 Hawiote Enterprises TEXAS DEWITT 243 897 '"'O 305787-002 Heav Stakes November7. 2007 Hawke Enterprises TEXAS DE WITT 243 895 0 0 0 0 4 015 0 (0 w 01 466 (") 0 ::I -·c.""""co 305767-003 EdlWl Ear1 Gaxia No;-ember i . 2007Hawke Enterprises TEXAS DE V'llTT 243 893 3059'32-00l C bff0<d Owavne ?ar!<er et ux July 30 2007 H3\ri;e Ente ronses TEXAS DEWITT 233 723 ..... ::I 3059.32-002 James K Crain et at 3059.39-000 w i Mumme ~t ux December 19, 2007 Hawke Enteronses November 1. 2007 Hawke Enteror~ TEXAS DE WITT TEXAS DE V'.1TI 267 243 252 886 ~ 306048-001 Debbie Lynn Hileman November2t 2007 Hawke Enlernrises TEXAS OEWlTI 243 885 3()6(\( 9--000 MeMn R H1lbr'id1 6< ux No\-emb-ef 15 2007 Haw!<e Enlernrises TEXAS DE WI TT 243 839 30622()-()00 Jo1\anna Wild May 3 2007 Haw1\e Enteronses TEXAS DE WITI 226 372 306925--00, Robert L Zaiontz Dee>!mber7, 2007 Hawke Enterprises TEXAS DEWITI 252 351 TOGETHER WITH All AMENDMENTS. RATiFICATIONS, CORRECTIONS ANO/OR MODIFICATIONS OF THE Oil, GAS MID MINERAL LEASES DESCRIBED HEREIN • X) ., --< ~~- ~ -3 ~.~~-: ~ ~il ~ - · ;11 n -~~0~6- -£'.it )'- o <,~i1~~> o~i ~. 8"'. ~ F er: • <OJ a --- #rr. ;:i a.. -f"I ~ ~ ~ ~'i ~;~ :<m ~ ~ -:S- ti ~7- co~ g ~ o. ~ c.o o O. a c,..... 1~ r ~~-~--- :op-~~.0 ~ ~1 ~.,, ~; g~ =" ~ir~~ 0 0 o~ g ~ "2 lf ;«f _, ~>= .,.~ I · 0 JJ~i:lO.. -, ("') ~ ... ,j <=>' I) "" l:::; 0 ' ...ii!?'~ ~ ~ r ""O 0 0 0 0 5 of 5 0 U) w en 467 • 79812 NOTICE OF CONFIDRNTIALlTY RIGHTS: IF YOU ARE A NATURAL PERSON, • YOU MAY ru:MOVE OR STIUKE ANY OF TlfE FOLl.0\'tlNG INFOAAIAT!ON FROM nns INSTRUMENT BEFORE fT IS FILED FOR RECORD IN T1IE PUBLIC RECORDS: YOUR SOClAL SECURITY NUMBER OR YOUR DRIVER'S LICENSE NUMBER RATIFICATION OF OIL, GAS AND MINERAL LEASE STATE OF TEXAS § § COUNTY OF DEWITI § THAT WHEREAS, Lorene H. Koopmanii, as Lessor, did ex~ute and deliver to Huwkc Enterprises, as U:ssee, a Pa.id-Up Oil, Gil:! und Mineral tease dated Ociober 22, 2007, a Mcrooraudum of which is recorded in. Vo1L1mo 243, Pugc 876, Official Records, De Wi n County, Tex.as, covering U1e fo llowing described tract of land: 120 sues of lnnd, more or les.$, being u pu.rt of Section no. 13, lnd iftliol~ Railroad Company Survey, A·272, DeWitt County, Texa.s, and being the :111mc lnnd described as 'Truct No. One' IJ\d Tmct No. Two' in that certnin Deed dntcxl December 27, 1996, from Lois Stricber, individu~.l ly Md as lndq><:ndent Executrix of 1ho Esta.le of Jerry Striobcr, de<:eased, a.S Gnntor, to Gilbert A. Koopmann and wife, Lorene H. Kooprnlllw, 115 Grantee, recorded in Volume I 4, Page 425, Offici•l Records, DeWitt County, Tc XA.!1 . (bcrcinll Ae: ~fcrred Co., the "Lc.uc") Referem:e to the Lease and the record of the Memorandum th~rcof bei.ng here made for all purposes mid WHERE.AS , the Lease was assigned to BUJlingtan Re..murces Oil & Gas Company, LP in an Assignment da1cd effective January 9, 2008, m:orded in Volume 250, Page 822, Official Records, De Wirt County, Texas; WHEREAS, the lease was ex.tended in a Notice of Exercise of Options to Ex1eoo Mineral Lea1cs dated March 3.u, 2010, which is rt'Cordcd in Volume 305, Page 12, Offic.ial Records. DeWitt County, Texas; 11J1d WHEREAS, it is tbe desire of Lois Strieber hereto to udopt, ratify and c.onfinn said Lea~. ns wnended. NOW, THEREFORE, in c-0osiderution of the prcmi.,cs am.I other valuable coo.siclcration, the receipt of which is hereby nclmowledged, l, LO IS STRIBBER, do hereby ADOPT. RATIFY and CONFIRM !.he U'11Se, as amended, in all of its terms and provisions, and do hereby LEASE, GRANT, DEMfSE.and LET unto the suid Burlington Reso1Jrccs Oil & Gas C'...omrmny, LP, its sucasso.rs ll.fld assigns subj~t to iuid in accordance with all of Uie tenns and provisions of said Lease, as u.mended, ill fully und completely ll$ iff had origiMlly tx:en named as .a Lessor in the Lease e.nd had rn:cutcd.. acknowledged and delivered the $atrlC. And l do hereby agree and decl11re Urnt the Lease, as a.mended, in all of it.!! term s nnd prnvi6ions i binding on me and is a valid and subsisting oil, gll.3 and m(neral lease. Execu ted this !) 1 l.ois Striebcr Rutificalion of Oil OllS Mineral uase Confidential KOOCOP00000946 469 NOTICE OF CONFIOENTlALITY RIGHTS: IF YOU ARE A NATURAL PERSON. YOU MAY R!!MOVE OR STRIKE ANY OR ALL OF TiiE FOLLOWING INFORMATION FROM NlY INSTRUMENT THAT TRANSFERS /IN INTEREST IN REAL PROPERTY BEFORE IT IS FILED FOR RECORD IN me PUBLIC RECORDS: YOUR SOCIA).. SECURITY NUMBER OR YOUR DRIVER'S LICENSE NUMBER. ROYAL TY DEED STATE OF" TEXAS KNOW ALL l<IEN BY THESE PRESENTS: COUNTY OF OEW1n Thal I, Lo!s S\rl~b.r. hereina.~er 'Granter'. P.O. Box 458. Yorlltowr'I; TX 78164. Oe\Nll\ Co1Jniy, Texas, for ond In consldoration or Ten and No/100 Dollar.; (S10.00) and otner good, valuable, nnd suffa;lenl consldtm llon lo me, l/le receipt and sufflclcm;y or which Is hereby acknowledged, Herein g1unts, sells, and conveys, unto Burlin~lon Resources. Oii 8. Ga3 Company LP. o Delaware ilrnt!od partnar.ihlp, who!i! acldr11tts 19 6-00 Nortll Dairy h!hford, Houston, TX no79, horelnaltn1 "Gra n11to", gixly pe1cool (60'/o) of Granlor'1 lnt111113t In U111 royal\Jila dorivod by Gmntor from tho production <X · all, oas. casing head ga•. go..oollno, difi1Jnnto ond condensato produced from !he toflov.i rig descrlbl!d land' or lands pooled therev.1tll: ~: All lhoil cortaln IOt. tr.ict. wnd/or parcal of land, lying and being situated In OeW1t1 County. Texa&, Wesl of the Guadalupe River, be!ng a part of Sedlon No. 13. Indianola Railrond Company Survey conveyed by V. W~don lo Henry Grube, by dC!<:'d d1ltd Novomber 20, 1690, ~ In VOiurna 3:1, PagM 38-40. Coed Rocords of ()<)Witt County. Taxas; and c.:rnveyed to Un~ MutJler, ne~ Grub•, by Henry Gruba tiy deed doled March Z4 , 1905, and by August Gru~. and W ullam Grube. by deed dali!d Soptembor 25, 1005, an<I by Adolph Grube 11nd Christian Grub&, by deed dale<! November 22, 1905, oll of said deeds being of rocord lo "1e Oee<l Recor~ of OcWiU County, Tu.<as; G<ild tract of land being described by meles and bounds .as follows, lo- w~ BEGINNING nl l1'e most noMem romer of U1u W.F. l\Jnorbach 100 acres tr<1et of land on iha noc1heas1llna of Soction No. 19. and thn !Oulhwe.st ilne of SecUon 13; THENCE. North 25 degn>e.$ E&>l 050 vora.:> to" • l t1ke, THENCE South GS del)rees East 5S4 va'"3& toe atal<e; THE NCE Sou!h 25 d11greas West 958 var.is to a sl<Jlto on the southwest llne of Se<:Uon 1J, and th~. r\OrtNlasl II~ ol Section 19, tho m°" t cutam ccf!l<'r of W .F. Afflerbo.:h'e !and, l"HENCE NORTH 65 DEGREES Wast 594 YOrti to tho place of b-eglnning, containing 100 aero~ of Jund, mora 0< fess. and bolng the name p(Operty describe<:i In deed from Henry G. Atn~rtlBch et al to Martha E. Hoepkan, Clatt'ld March 17. 11156, record&d In Volum<' 137, Page 612, Deed Records or DowiU County, Twcas and being the same property described In deed froni Ma.rtJ1 E. Hoopkon et vlr to Jerry Sltinber et ux, C!alod Octobor 15, 1969, r1corded In Volume 179, Pago 220. Doad Re<;Orda of D.iWltt County, TX. Trac t Two· /'JI ll\u( ~rtaln lot, lract arnllor per~I of land, tying and being situated In DeWitt County, TSJ!'.a.5, a p.art or ttle Sectlon 13, lndlanOla. RR. Co. Sur1ay, and a part al lt1'I 100.8 acr~ tract ot !and con~ye.;i to G. w. AHletbach by John F. Kub;il.a et ux. Therua Kubala, by d&ed tlal&d Au9<rnl 4, 191g, recorded In Volume 63, Pago -4, Dot..'<! Rucoros of DoV'iltt County, Ta><as and deticr1bed iu follows. to-Wit llEGINNING at a Sl.Jkll, tho e~sl corner of llou 100.S acto tract. being lhe nortl1 comer 'CA 0:i. G w. Afl\e1ba:dl ;oo a1:1e tract THENCE Norl1' 65 degraea west 118.3 vara~ to~ smka, me north corner of \his vact and the Eosl comer of th\! Emil Borchard~ 80.e acres lraci; THENCE Soup1 2,5 dogree;; West 953.3 vardg to a stal<a ror corner; TMENCE South 65 degte<ls East 116.J varn~ to u ~ka. tha west corner of tile 100 ~cro Inlet bolon9lng lo G.W. All\elbadl; 1HENCE North '2.5 oegrees East 953.3 varaa to lho placu ol BEGINNING, COl\talninQ 20 llCNI$ of land. mo<e or tut. being lho $1lmo rr.c1 descnbed In deild from Henry o . Amcrbaell et ~I dated IY.atdl 17, 19515, recon1ed In Volume 137, Paga 611, Deed Confidential • • ·· .. Roccros of DeWitt County, Texas, a~cl be!i1g the same property dos.crit;G<l I/\ daoo from Meta A ond He1mar1 A. Rle.dasel to Jl)(T)' and Lois Striobor, d~tco ~ober 20, 1009, recorded in Volume 179. Pa~:313. De&<! Records of DeWlitCounty, Taxu . ThiS CQnvoyanc.1 iS made an.:1 acooipttd e;.;pc~y ~ubject to tho temis ol any valid and wbsisting oU , gll.'I and mlne111t !ill!!le cir~ oove1lnq tht laoctt made pr\ot to the dew of tti!I Royalty Deed, bUI covers tho lnter~t In royaltie:s desaite<l above o1 al gucil oil. gea, caalnghead I.Jal, gagoline. di6tillate and 0011donsatn due and to be paid unoor !he terms of any guch loa~o or lttases as 11 royalty illleresL Notwith$tandlng lho f0<eiolng, It Is expressly undel"ltexx! ~I ti\e provlli\Qr.i; of lllls paragraph a/lall no\ have the e ffect ol ravMng, raUfylng 01 edrnltt!llg eny 5vch lea!e or leases lhal (ru)y have hero!OIOOJ tormlnated In W!'.ole or In part, nor of ostoPPll19 the Grantee horotn from asslltting lha Invalidity or termlnatioo of MY such poor oU, gas 3/ld rnlnorar leae.e or loo6Cs. Orantor agrees to execute and dellver ta Grantee 011 :wch oth~r additional assignments, notices, divloion omcrs, transfer oroor.i , and al!ler documents and to do all &uci1 other and furthor ac\$ and thing~ ss may bQ noce$Sary lo more fully and cllectively assign and convey to Gran!ee U1e rights, titles. lnturou ts, and estates In the royally conveyed hereby or lnlendod so to bo To have and to hold, the above d~scrlbod pr~mi>le~ . logqth~r with 1111 and nlllf)ular Uio rjghl6 and appurton3nc93 thereto In anywise belonging, unto lhe Granlt!o, ibl heirs and aosigns. forov • r. This Royalty Do~d Is rnudo without warranty of tltio, C.lqlro:;~ or lmpllod. Grontoo rePfOSCnt.G, confirm5, and worrnnt5 to Orantor I/1st the ooqu~rnon and nccor;.l.'»nce or !his Royalty Deed by Gr~nlce Is based upon Gr;lnloa's lndepandeot investJgallori and d.aterminntion or the economkl potenUal, qu~11Uty, arid velue, tt oily, of pny Q\I end gas that may be a part of the above de9Cliboo promlws. and tnat Grantee hns 110\ and l!l ri-0l rulylnD upon any etatemen~ Jo formation. Of roprnentallon thal may havo i>.en made or glvftn by Grontoi· In lll\Y n'lanner pertainl~g to :Wch tnatte11. WITNESS m)' hand this~ d3y or Aug us~ 2011. GRJ>.NTOR l.Ols Slriewr GRANTEE BURLING N RESOURCES Oil & GAS COMPANY LP By: BR G INC., fta sole General Partner ··."- -- -- - - . - - - - - - - - - - -- - Confidentia l KOOCOP00001019 472 ························--·- ····················- ···- ··············- --- - · · - - - - - - -- - ACKNOWl.EOGMEICTS STAtE OF TEX{IS § ,A}u..t.c. t. S § COUNTY OF-Ol:;Wfff § Thill !ns\f\Jment was Lots Stlieber. acknov~t1dg~d b~f011> me ol\ the L(.,+/.i day of a (j /.s :; t-I< I 2011 , by ~£ rfo~~r [Geal) Typed or Prlntild Nam11 of Notary Notary's Comml&slon explres: _ _ __ STATE OF TEXAS § couNrvoF Barri.$ i This instrum11nt was acknowlwged before me on tho lSi1l day of A~u;;;{ 2011, by DaYid w. Twomey, Attorney.Jn-Fact or BROG GP, !no.. as Sola general partner of 8\J(ngton Resources Oil I!. Gas COmpeny LP, a Delaware limited partne~hip, on behalf of lti6 partnership. [$eat] Notig l'tl~ Stats of Teim.s , 1 o e moruc01 Typed or Printed Name or Nota~ J. Notary's Cornrn~lon aXj)i~:) ;;)0 /} . ' Confidential KOOCOP00001020 473 ·-- . ···-- -·- -- ----' .,,, tonocoPhil lips id:/\/. i'POPER f Y AUt1 il INTEROFFICE CORRESPONDENCE 805 32 I JM! 2J 1. TO: Cindy D. Blevins 810G POB Bartlesv ill e t.' -· ) SUB JECT: Check one New Contract Setu_e_ - Maintenance Data F i l i~.a_ x FROM: Sheryl Kohl DATE: L.;>- l Lo. 11 AGREEMENT NO.: 2Jf54~ ·cn::J TYPE OF AGREEME'NT: W~aJty [)Ge_J PARTIES: ~U\f..., \-\ . ~~OX'£\ . PROSPECT NO:i08.JJJA PROSPECT NAME: Eagle Ford COUNTY: Dcl.D;t\' STATE: TX WE LL NAME(S): NIA PROPERTY NUMBER: NIA REMARKS: for THANKS . PLEASE ACKNOWLEDGE RECEIPT OF TH IS PACKAGE BY SIGNING IN THE SPACE BELOW AN D RETURNING THIS I THE SENDER. Confidential KOOCOP00001021 474 ·-. 79555 NOTICE OF CONFIDENTIALITY RIGHTS : IF YOU ARE A NATURAL PERSON. YOU MAY REMOVE OR STRI KE ANY OR ALL OF THE FOLLOWING INFORMATION FROM ANY INSTRUMENT THAT TRANSFERS AN INTERE ST IN REAL PROPERTY BEFORE IT IS FILED FOR RECORD IN THE PUOLIC RECORDS: YOUR SOCIAL SECURITY NUMSER OR YOUR ORJV.ER'S LICENSE NUMBER. ROYALTY DEED STATE OF TEXAS KNOW ALL MEN BY THESE PRESENTS : COUNTY OF OEWITI Tna\ I, Lois Strieber, hereinaf1er ··Grantor' . P.0 Box 458, Yorktown , TX 78164 , DeWitt County , Texas, rar and in consideration or Ten and No/100 Dollars ($10. 00) and atne1 good, valuable. and or sufficient consideration to me, the receipt .and sufficiency which is hereby acknowledged, Herl!ln giants, sells, and conveys, unlo Burlington Resources, Oil & Gas Company LP, a Delaware limit~ partnership, whose address is 600 North Dairy Ashford, Houston , TX 77079 . hereinafter "Grantee', sixly percent (60%) of Grantor's Interest in the royal1ies derivad by Granter lrorn the production of oil, gas, casinghead gas. gasoline, disttllate and condensate produced from the following described lands or l;;inds pooled therewith: Traci One: All thal certain lot. tract. and/or parcel of land. lying and being situated in DeWitt County. Texas. West of the Guadalupe River, being a part of Section No. 13, Indianola Railroad Company Survey conveyed by V . Weldon to Henry Grube, by deed dated November 20, 1890, recorded in Volume 33, Pages 38-40, Deed Records or DeWitt County, Texas; and conveyed to Lina Mueller, n~ Grube, by Henry Grube by deed dated March 24 , 1905. and by August Grul)e, and William Grube. by deed dated September 25, 1905, and by Adolph Grube and Chlistian Grube, by deed dated November 22. 1905, all of said deeds being bf record in the Deed Records of DeWitt County. Texas ; said tract of land being desc1lbod by metes and bounds as follows, lo- wit: BEGINNING at the most northern comer of the W F. Atftemach 100 acres tract of lano on the northeast line of Section No. 19, and the southwest Jlne of Section 13: THENCE North 25 degrees Easl 958 varas lo a stake; THE;NCE Sou th 65 degr'eos East 594 varas to a stake; THENCE Sout~ 25 degrees West 958 varas lo a slake on tt1e southwest nne or Secliori f 3. and the nor1heasl line er Section 19, the most eastern comer of W.F. Afflerbach 's land; THENCE NORTH 65 DEGREES Wes t 594 varas to the place of beginning, containing 100 acres or land, more or less, and being the same property described In deed from Henry G . Afflerbach et al tc Martha E. Hoepken, dated March 17 , 1950, recorded In Volunie 137, Page 612, D~d Records of Dewitt County, Texas and being the same property described In deed from Marth E Hoepksn el vir to Jerry S:rieber et ux, dated October 15, 1 &69, recorded in Volume 179, Page 220, DeE!(J Records of De Wit! County, TX Tract Two: All that certain lot, tract and/or pari:el of land , lying and being situaled in DeWitt County. Texas. a part of ttie Section 13, Ind ianola R.R. Co. Survey, and a part or the 100.8 acres tract of land conveyed to G. W. Aftlerbach by John F. Kubala el ux . Theres.a Kubala , by deed dated August 4, 1919, recorded In Volume 83, Page 4, Deed Recoras or DeWitt County. Texas and described es rollows, to-wit: BEGINN ING at a stake, Uie east corner of the 100.8 acre tracl being !lie nonh corner of the G.W. Afflerbach too acre tracl; THENCE North SS degrees west 118.3 varas to a stake. the north corner of this tract and the East corne r of Urn Em il Borchardt, 80.8 acres trncl THENCE South 25 de91ees West 953 3 varas to a stake for corner, THENCE Sovli1 65 degrees East 118.3 varas lo a slake, !he w~I corner of the 100 acre tract belonging to G.W. Affle1bach; THENCE North 25 degrees East 953.3 varas to the place of BEGINNING. containing 20 acres or land, more ot less . being the same tra.ct described in deed from Henry G . Attlerbach et al dated March 17. 1956. recorded in Volume 137. Page s ·11 , Deed '" Confidential KOOCOP00001022 475 ( . Records cl OeW11t County , Texas. and being I/le 'arno property described •n deed rrom Mela A and Herman A . Riedesel to Jerry and Lois Slneber. dated October 20. 1969. re<;orded in Volume 179. Page 313 . Deed Records o f OeW1H County. Ter.•• This conveyance i ~ made and ar.ceptod expressly su b1ecl to the terms of any valid and subsistin g 011. g~s and m ineral tease or l eas~s coverinlJ the ra nds mado prior to th e date or this Royalty Deed. bu t t;Ovo rs lhe interest in royalties described above of all such oil. gas , casin9head gas. gasoline. dlsll l l~tc and conoel)sale due and to be paid under vie terms or any suc t1 lease or leases as a royalty in t ere~I No tw1thst<lnd1ng the l01agoing. 11 is exp1e5sly understood !hat the previsions or thlg paragraph ~hall nol have the eHeci ol ;cviYing. ra~lyhg or adm1t11ng any sueh toa se or leases that may have here1oforo terminated in whole or tn part. nor ot os topping the Grantee herein from a:;serting the invalidity or termination of any such prior oil. gas and m ineral lease or leases. Grnntor agrees to execute and deliver to Gra ntee all sucf1 other addltlona t asslgnm11nts, nOlices. division orders. transfer orders, and otner documents and to do all ~uch olner and fur1he r acts and th ings as may oo necessary to more fully and eflc-ct•vely assign and convey to G rani ee the rigt1 ts. ~Ues, •nlerests. and es tates in thr. royatty conveyed 11oreby er ir.tended so lo be. To nave and lo hold. the ·above desrnboa premises, loge lhar wilh all and singu lar th e rig hts ano appurtenances thereto '" anr.vise belcng1ng , ur11o the Granloo, Its heirs a nd assign s, forever . Thi& Roya ll y Oeod is mode withcut warra nty o f 11110. express or implied. Grantee represen ts. "'nfirms. ~nd wa rr ants to Grantor U1a1 the acquisition and acr.eplance of f11ls Royalty Deed by Granlee ls based upon Gr:rnteo·s independent u1vest1gation and de1ern11nat1on of l11e e~onomic polencial . qlwnliiy. and va lue . II any , of ai y oil and gas thal may be a part of the above described premises, and Ina! Grantee has Mt and rs not 1elying upon an·t 5Ultemenl. information. or repre3entatron that may have been made or grveci by Granter In any manno r per1aining to such matters. WITNESS my Mnd this _jJ£!:_ day ol Augus t. 201 t . GRANTO R Lois Slrlebe r ~k~w GRANTEE BURLIN N RE SO URCES OIL & GAS COMPAt~Y LP By. BR G G INC., its sole General P artne r Oy· N~m-e-._-i..;)£!1U...~~~~='-:l:,---- Tltie: Confidentia l KOOCOP00001 023 476 \ ,'"/, I ACKNOWLEDGMENTS STATE OF l'E>l,AS § /J1.<. "'"c.'t.::; § C0 UNTY 0 F .QliWff'T'" § This instrument was acknowledged before me on lhe / k.r/,, day ors2,.,;J'' 1f . 2011 , by Lois Slrieber. · .J-- (sea l] Typed or Printed Narne or Notary Notary's Commission expires: - - - - - STATE OF IEXAS § COUNTY OF jdo..rri$ ~ This inslrumont wag acknowledged before me on lhe ~day ~uJf or , 2011. by David W . Twom ey, Altomey-in-Fa<:I of BROG GP, Inc., as sole general partner 01811ington Resources Oil & Gas Company LP, a Delaware limited partnership, on behalf or the par1nership. , NICOU MAAUCCI (sealj ® ;~ MT COMMJ8llJOtl EXPIRE.! MJOU8T27, :ZOt t N°f!Q' Pu~lic, State ofTexa.s 1CO .Q rY)a.r11 CC,1,, Typed or Printed Name of No1arg NotBry's Comm ission expires. • J l :;J'] 0 -.:iD } J 1 Confidential KOOCOP00001024 477 ConocriPhillips Diane Schaenen, CPL Starr Landman - North Eagleford Aaset Team Gulf Coast Bu1lness Unit 3Wl-5012 P.O. Box 2197 Houston, TX 77252-2197 Phone: 832.486.3922 Fa11: 832.-486.2296 December 7, 2011 Ralph Koopmann, Individually and as A-1-F for Lorene Koopmann 774 Slanchos Road Yorktown, TX 78164 Karen M. Koenig, lndlvldually and as Attorney in-Fact for Lorene Koopmann 3489 Slate Hwy 72 W. Cuero, TX 77954 Lois Strieber P.O. Box458 Yorktown, TX 78164 Re: Shut-In Royalty Payment Lackey Unit A #1 well DeWitt County, TX Ladies and GenUemen: Bur11nglon Resources Oil & Gas Company LP \Burlington") recently dnlled the captioned well in DeWitt County, TX. The well was spudded on October 30, 2011, and the drilling rig was released approximately November 28, 2011 We anticipate beginning a frac job on the well December 11, 2011, which will last four days. Subsequent to frac'ing the well, we will flare it for two days to establish commercial production. The spacing unit for said well Includes an oil, gas and mineral lease from Lorene H. Koopmann to Hawke Enterprises dated October 22, 2007. The deed from Lois Strieber to Gilbert and Lorene Koopmann requires commercial production on or before December 27, 2011 or the interest retained by Mrs. Strieber reverts to Mrs. Koopmann. However, the deed also provides for the payment of shut-In royalties. We are tendering shut-in royalties to ensure that all parties' interest, if any, in the well is maintained. Consequently, we are enclosing checks for all of you which constitute shut-in royalty payments and conform to the terms of the deed from Mrs. Strieber to Mr. and Mrs. Koopmann. We anticipate that the Lackey Unit A #1 well will be producing first quarter 2012. Diane Schaenen Encl. Confidential KOOCOP00000903 479 ConocJPhillips - Riiey Nelson ConocoPllllllp& Company Land-Gun Coast P. 0. Box 2197 Houston, TX 77252-2197 Office: (832) 486-6406 Fax: (918) 661-6172 !Wey .G.NelaOt\OCOOOQOPhi~ps.com February l, 2010 Lorenc Koopmann 405 Fm 108 Yorktown, TX 78164 Re: Notice of Assignment of Interest in . Oil, Gas and Mineral Lease Dated l 0/2212007 Recorded in De Witt County, Texas Lse # 305486-000 Dear Lessor: Reference is made to that certain Oil, Gas and Mineral Lease ("Lease") dated 10/2212007, between you and Hawke Enterprises, which Lease is now owned by Burlington Resources Oil & Gas Company LP ("Burlington"), an affiliate of ConocoPhillips Company. Per the terms of the Lease, we arc providing notice of an Assignment of Overriding Royalty Interest (''OR.RI'') in said Lease from Burlington to Texas Crude Energy, Inc., whose address is 2803 Buffalo Speedway Houston, T~xas 77098, effective December I, 2008. This ORR! is carved out of Burlington's working interest in your Le8se, and does not affect your royalty interest designated in said Lease in any way. A copy of said Assignment is included for your own personal records. If you have any further questions, please feel free to contact "me. Sincerely, ~~~ Riley Nelson Landman Encl. Confidential KOOCOP00000904 480 Gingerich, Todd R From: Alstrom, Tuff B Sent: Wednesday, October 19, 2011 9:28AM To: Gingerich, Todd R Subject: FW: Lackey Unit A #1 well A717077 DeWitt County, TX Go ahead and put !his one on your calendar as well. Tuff Alstrom (918) 661-0323 From: Schaenen, Diane Sent: Wednesday, October 19, 2011 9:21 AM To: Alstrom, Turf B Subject: RE: Lackey Unit A #1 weM A717077 DeWitt County, TX Absent production or a shut-in payment, the Royalty Deed expires 12-27-11. I thought if we paid it on or about the 1st of December, it might be a nice Christmas present for the Striebers, and might take away some of the sting from the Koopmann's, who were expecting to receive the entire 22.5% royalty. Nso, the well should be drilled (but not completed) by Dec.ember 1. If we pay the Koopmann's sooner than that, they might be inclined to fight the language in the deed requiring wells capable of "commercial production". I don't want to fight that battle any sooner than I have to! · Thanks very much for your attention to this matter! Diane From: Alstrom, Tuff 8 sent: Wednesday, October 19, 2011 9:14 AM To; Schaenen, Diane Subject; RE: Laclcey Unit A #1 well A717077 DeWltt County, lX Diane, we can take care of this with no problem. Do you know when the payment is actually due? We can make it anytime but if you are wanting to wait until December we can do that too. Tuff Alstrom (918) 661 -0323 from: Thomas, Sharla L Sent: Wednesday, October 12, 2011 11:49 AM To: Schaeoen, Diane Cc: Alstrom, Tuff B Subject: FW: Lackey Unit A #1 well A7170n DeWitt county, nc Dione- Tuff Alstrom with our RPA- Property Maintenance group pays the rentals, shut-ins etc on the Eagle Ford wells. Via this response I have copied Tuff with your request. Best Regards, cJ7&aflla. ~ Division On:ler Advisor - Eagle Faro ConocoPhillips Company-Real Property Administration . 1 Confidential KOOCOPogq~o905 PO Box 7500 Bartlesville OK 74005·7500 e Pflone: 918.661.0522 FAX 918.662.3559 [email protected] fl"Qm: Schaenen, Diane Sent: Wednesday, October 12, 2011 11:17 AM To: Thomas, Sharia L subject: Lackey Unit A # 1 well A717077 DeWitt ColM!ly, nc Sharla - We anticipate spudding this well on October 23, 2011. I'm attaching a copy of the permit plat for the wen. Tract 4 covers an oil & gas lease from Lorene H. Koopmann. Mrs. Koopmann and her now deceased husband rereived their interest in a gift royalty deed dated December 27, 1996, wherein Lois Steiber (Grqntor) reserved 50% of the royalties (NPRI). Absent commercial production, the deed expires December 27, 2011, and 100% of the royaltles will vest in Lorene H. Koopmann. Mrs. Strieber has assigned 60% of her 50% of the royalties to COP, with the understanding that we will get a well down and producing in compliance with the gift deed, such that they don't lose their royalty interest on December 27, 2011 . We won't have the well producing in paying quantities by December 27, 2011 . However, the gift deed provides for shut-in royalties. Consequently, could you please put a reminder on your calendar to pay Lorene H. Koopmann (&her family) and Lois Strieber a shut-in royalty on December 1. The lease provides for $250/net mineral acre shut-in payment, & the lease covers - 120 acres. Consequently, payment to Lorene Koopmann (&her family) would be $1500, payment to Lois Strieber would be $960, and the 60% of 50% would be net tq COP. The·other leases in the unit don't expire until next · year, and we anticipate the well being on line at that point. I'm attaching a copy of the ownership portion of the August 25, 2011 drilling tiUe opinion for this lease for your infonnation, as well as a copy of the Royalty Deed from Lois Strieber to COP. If there's anything more you need from me, please let me know. I'll put a copy of this e-mail on my calendar for December 1, and we can communicate further on that date, if necessary. Thanks so much for your assistance in this matter. Please let me know if you have any questions. Diane «File: 2011101211110988.pdf » «File: 2011101211111765.pdf » «File: 2011101211150072.pdf » 2 Confidential KOOCOP09R90906 Page 1 of2 Gingerich, Todd R From: Schaenen, Diane Sent: Monday, December 05, 2011 6:22 AM To: Gingerich, Todd R; Alstrom, Tuff B Subject: FW: [EXTERNAL]Fwd: Lorene H l<oopmann oil & gas lease 305486-000 Attachments: 333-741 OPR.pdf Todd- Lorene Koopmann granted power of attorney to Ralph Koopmann & Karen Koopmann Koenig. Wlen you cut checks on this lease, please attribute her Interest 1/2 to Ralph & 1/2 to Karen. Please make the checks out to "Ralph Koopmann, Individually and as Attorney-in-Fact for Lorene H Koopmann" and ~Karen Koopmann Koenig, Individually and as Attorney-In-Fact for Lorene H. Koopmann". Thanks much! Diane From: Margaret Forrester [maitto:[email protected]] Sent: Friday, December 02, 2011 7:16 PM To: Schaenen, Diane Subject: [EXTERNAL]Fwd: Lorene H Koopmann oil & gas lease 305486-000 Diane, Here it is. Let me know if you need help with anything else. Thanks, Margaret ---·----- Forwarded message ---------- From: <[email protected]> Date: Fri, Dec 2, 2011 at 3:47 PM Subject Fwd: Lorene H Koopmann oil & gas lease 305486-000 To: [email protected] Dear Margaret: Attached is .pdf of the Power of Attorney dated 6/10/2010, filed 12/27/2010 #73542 333/741-744 OPR AlJ the beSt, Robert -Original Message-- From: robertjholleyjr <[email protected]> To: margaretforrester <[email protected]> Sent Fri, Dec 2, 2011 2:43 pm 1215/2011 Confidential KOOCOP09R90907 Page 2 of2 Subject: Re: Lorene H Koopmann oil & gas lease 305486-000 -Headed to the Clerk's office in 5 minutes ... wiH let you know -Original Message- From: Margaret Forrester <mamaretforrester®9mail.com> To: robertjholleyjr <[email protected]> Sent Fri, Dec2, 20112:39 pm Subject: Fwd: Lorene H Koopmann oil & gas lease 305486-000 Thanks again Robert!! Call or e-mail me if you have any questions. 512.913.5156 - - Forwarded message - - From: Schaenen, Diane <[email protected]> Date: Fri, Dec 2, 2011 at 2:34 PM Subject: Lorene H Koopmann oil & gas lease 305486-000 To: Margaret Forrester <[email protected]> Margaret - As we discussed, Lorene H Koopmann, Ralph Koopmann, and Karen M. Koef)lg each have 1/3 participating royalty interest in the captioned lease. I think I've seen something somewhere \I/herein Lorene gave Ralph and Karen power of attorney over her affairs. We will be paying shut-In royalties to Ralph, Karen, & Lorene next week. Please have someone check the county records for a Power.of Attorney document regarding Lorene. I think it would have been filed ~ince the beginning of 2011 . Thanks I Diane Margaret Forrester (512) 913-5156 Margaret Forrester (512) 913-5156 1215/201 I Confidential KOOCOPogepo908 Page I of2 Gingerich, Todd R From: Schaenen, Diane Sent: Monday, December 05, 2011 8:22 AM To: Gingerich, Todd R; Alstrom, Tuff B Subject: FW: [EXTERNAL]Fwd: Lorene H Koopmann oil & gas lease 305486-000 Attachments: 333-741 OPR.pdf Todd- Lorene Koopmann granted power of attorney to Ralph Koopmann & Karen Koopmann Koenig. Wien you Cllt checks on this lease, please attribute her interest 1/2 to Ralph & 112 to Karen. Please make the checks out to "Ralph Koopmann, Individually and as Attorney-in-Fact for Lorene H Koopmann" and "Karen Koopmann Koenig, Individually and as Attorney-in-Fact for Lorene H. Koopmann". Thanks much I Diane From: Margaret Forrester [mallto:[email protected]] Sent: Friday, December 02, 2011 7:16 PM To: Sc:haenen, Diane SUbject: [EXTERNAL]Fwd: Lorene H Koopmann oil & gas lease 305486-000 Diane, Here it is. Let me know if you need help with any_thing else. Thanks, Margaret -·---··Forwarded message------- From: <[email protected]> Date: Fri, Dec 2, 201 I at 3:47 PM Subject: Fwd: Lorene H Koopmann oil & gas lease 305486-000 To: [email protected] Dear Margaret: ~. Attached is .pdf of the Power of Attorney dated 6/10/2010, filed 12/27/2010 173542 333/741-744 OPR All the best, Robert -Original Message- From: rober1jholleyjr <[email protected]> To: margaretforrester <[email protected]> Sent Fri, Dec 2, 2011 2:43 pm 12/5/2011 Confidential KOOCOP00000909 485 Page 2 of2 Subject: Re: Lorene H Koopmann oil & gas lease 305486-000 -Headed to the Clerk's office in 5 minutes ... will let you know --Original Message- From: Margaret Forrester <[email protected]> To: robertjholleyjr <[email protected]> Sent Fri, Dec 2, 2011 2:39 pm Subject: Fwd: Lorene H Koopmann oil & gas lease 305486-000 Thanks again Robertll Call or e-mail me if you have any questions. 512.913.5156 - - - Forwarded message - - - - From: Schaenen, Diane <[email protected]> Date: Fri, Dec 2, 2011 at 2:34 PM Subject: Lorene H Koopmann oil & gas lease 305486-000 To: Margaret Forrester <[email protected]> Margaret - As we discussed, Lorene H Koopmann, Ralph Koopmann, and Karen M. Koenig each have 1/3 participating royalty interest In the captioned lease. I think I've seen something somewhere wherein Lorene gave Ralph and Karen power of attorney over her affairs. We will be paying shut-in royalties to Ralph, Karen, & Lorene next week. Please have someone check the county records for a Power of Attorney document regarding Lorene. I think It would have been filed since the beginning of 2011 . Thanks! Diane Margaret Forrester (512) 913-5156 Margaret Forrester (512) 913-5156 12/5/2011 Confidential Gingerich, Todd R From: Schaenen, Diane Sent: Tuesday, November 01 , 2011 1:26 PM To: Gingerich, Todd R Subject: RE: 305486-000 Attachments: 2011110113204539.pdf Todd- The calculations for Lois Strieber are correct The interest owned by Lorene Koopmann is split 1/3 to Lorene, 1/3 to Ralph, & 1/3 to Karen (see the first 4 pages of 1st Supp. OTO dated 7/26/11 ). Thanks I Diane 2011110113204539 .pdf (1 MB) Ftom: . Gingerich, Todd R Sent: Tuesday, November 01, 2011 9:45 Not To: Schaenen, Oia ne Subject: 305"86-000 Diane, I wanted to confirm with you the Shut-in payments for Lorene Koopmann and Lois Streiber. $75 • 120 acres = $9,000.00 Lorene Koopmann received 112 Interest from Lois, so she would get a payment of $4,500.00 Lois Streiber conveyed 60% of her 50% interest to Burlington per the Royalty Deed, so her total payment would be $1,800.00 Let me know if my calculations are correct and we will get the payment set up to pay both parties. Thanks Diane. Todd Gingerich I Associate Property Maintenance Rep Real Property Administration I ConocoPhillips Company I 820 J Plaza Office Building Bartlesville, OK 74004 Phone: (918)-661 -5133 I Fax: (916)-662-3557 · [email protected] 1 Confidential KOOCOP02~P0911 Gingerich, Todd R From: Schaenen, Diane Sent: Tuesday, October 25, 2011 9:05 AM To: Gingerich, Todd R Subject: RE: lackey Unit A #1 well A717077 DeWitt County, TX You were right; the amendment stipulates $75/net ac. Thanks for the catch! Diane From: Glng,rictl, Todd R Sent: Tuesday, October 25, 2011 8:06 AM To: Schaenen, Diane Subject: ~E: Lackey U!Vt A #1 well A7170n DeWitt County, TX Diane, were you able to determine an amount for the Shut-in Royally? Thanks again. -Todd Gingerich ~n,Olane Thursday, OdDber 20, 2011 8:11 AM Gingerich, Todd R RE: LacXey Unit A #1 well A7170n DeWitt County, TX I'll check & get back to you. From: Glnge:ich, Todd R Sent: Thursday, October 20, 2011 8:01 AM To: Schaenen, Diane Cc Alstrom, Tuff 8 Subject: RE: Lackey Unit A 1 1 well A7170n DeWitt County, TX Diane, after reading through the lease and the amendment to the lease, the highest amount I see for the Shut-in royalty Is $75 per acre. Is there another amendment that states $250 an acre or was it just an error? Thanks Diane. -Todd Gingerich frGm: Alsb'om, TulT B Sent: Wednesday, Octnber 19, 2011 9:28 AM Toi Gingeridl, Todd R Subject: FW: Lac:key Unit A #1 well A7170n DeWitt County, TX Go ahead and put this one on your calendar as well. Tuff Alstrom (918) 6G1-0323 from: Sdlaeoen, Diane Sent: Wednesday, October" 19, 2011 9:21 AM To: Alstrom, Tuff B Subject: RE: Lackey Unit A 11 well A717077 DeWitt C.ounty, TX Absent production or a shut-in payment, the Royalty Deed expires 12-27 -11 . I thought if we paid it on or about the 1st of December, It might be a nice Christmas present for the Strleber.;, and might take away some of the sting from the Koopmann's, who were expecting to receive the entire 22.5% royalty. 1 Confidential Also, the well should be drilled (but not completed) by December 1. If we pay the Koopmann's sooner than that, they might be Inclined to fight the language in the deed requiring wells capable of ''ex>mmercial production". I don'twant to fight that battle any sooner than I have to! · Thanks very much for your attention to this matter! Diane Fnlm: Alstrom, T"7' B Sent: Wednesday, October 19, 2011 9:14 AM To: Sc:haenel1, Diane Subject: RE: Lad<ey Unlt A # 1 well A717077 Diane, we can take care of this with no problem. Do you know when the payment is actually due? We can make it anytime but if you are wanting to wait until December we can do that too. Tuff Alstrom (918) 661 -0323 From: Thomas, Sharla l. .Sent: Wednesday, October 12, 201111:49 AM To: Sdlaenen, Diane Cc: Alstrom, Tul'f B Subject: FW: LacXey Unlt A 11 well A717077 DeWitt County, TX Diane- Tuff Alstrom with our RPA- Proputy Mainte.nonee group pays the rentals. shut-ins etc on ttie Eagle ford wells. Via this response I have copied Tuff with your request. Best Regards, ~~ Division Order Advisor - Eagle Ford ConocoPtiilllps Company-Real Property Administration PO Box 7500 Bartlesville OK 74005-7500 Phone: 918.661.0522 FAX 918.662.3559 [email protected] From: Sc:haenen, Diane Sent: Wednesday, October 12, 201111:17 AM To: Thomas, Sharla L SUbJec:t: Lackey Unit A 111 well A717077 DeWitt County, 1X Sharfa - We anticipate spudding this well on October 23, 2011. I'm attaching a copy of the permit plat for the well. Tract 4 covers an oil & gas lease from Lorene H. Koopmann. Mrs. Koopmann and her now deceased husband received their interest in a gift royalty deed dated December 27, 1996, wherein Lois Steiber (Grantor) reserved 50% of the royalties (NPRI). Absent commercial production, the.deed expires December 27, 2011, and 100% of the royalties will vest in Lorene H. Koopmann. Mrs. Slrieber has assigned 60% of her 50% of the royalties to COP, with the understanding that we will get a well down and producing in compliance with ttie gift deed, such that they don't lose their royalty interest on December 27, 2011. We won't have the well producing fn paying quantities by December 27. 2011 . However, the gift deed provides for shut-In royalties. Consequently, could you please put a reminder on your calendar to·pay Lorene H. Koopmann (&her family) and Lois Strieber a shut-in royalty on December 1. The lease provides for $250/net mineral acre shut-in payment, & the lease covers -120 acres. Consequently, payment to' Lorene Koopmann (&her family) would be $1500, payment to Lois Strieber would be $960, and the 60% of 50% would be net to COP. The other-leases in the unit don't expire until next year, and we anticipate the well being on line al that point. 2 Confidential KOOCOPOQ990913 I'm attaching a copy of the ownership lion of the August 25, 2011 drilling title op. for this lease for your information, as well as a copy of the Royalty Deed from Lois Shieber to COP. If there's anything more you need from me, please let me know. I'll put a copy of this e-mail on my calendar for December 1, and we can communicate further on that date, if necessary. Thanks so much for your assistance in this matter. Please let me know if you have any questions. Diane «File: 2011101211110988.pdf » «File: 2011101211111765.pdf » «File: 2011101211150072.pdf » 3 Confidential KOOCOP00000914 490 .Gingerich, Todd R From: Schaenen, Diane Sent: Tuesday, November 29, 201110:58 AM To: Gingerich, Todd R Subject: RE: Shut in payment lo Lorene Koopmann et al 305486-000 Dewitt County, TX 1rs not urgent. The 7th (or thereabouts) is fine. I'm in the process of putting together the letter that I'd like you to send with the checi(s. The mineral owners are NOT going to be happy, so putting off getting yelled at for a week is fine with me! Thanks! Diane From: Glngeridl, Todd R Sent: Tuesday, November 29, 201110:56 AM To: Sdlaenen, Diane · Subject: Rf: Shut In payment to Lorene Koopmann et al 305486-000 Dewitt County, TX Diane, our next check run will be on the 6th of December and we can get the check out on the 7th, but if you are wanting to get it out this week, let me know and we can have a check cut this Thursday and get it out sooner. I wasn't sure how urgent you were on getting the check out, so let me know and I will be happy to accommodate. Thanks. -Todd Gingerich Fram: Schat!nen, Diane Sent: Tuesday, November 21, 20111:08 PH To: Glogerictl, Todd R ~ RE: Shut In payment to Loreoe Koopmam et al 30548&000 Dewitt Coonty, TX Thanks! Hava a great Thanksgiving. From: Glngerldl, Todd R sent: Tuesday, November 22, 20U 1:07 PH To: !)d:laenen,Olane Subject: RE: Shut In payment to Lorene Koopmam et al 30548&000 Dewitt C.ounty, TX Diane, go ahead and send it up Tuesday and we will be sure to include it with the checics. Thanks. -Todd Gingerich From: . Schaenen, Diane Sent: Tuesday, November 22, 2011 10:58 AH To: Gingerich, Todd R "· Subjed:: Shut In payment to Lorene KoopnlCIYI et al 305486·000 Dewitt C.ounty, TX Todd - I have a letter that I would like to include with the shut-in checks that will be going to Lorene Koopmann, Ralph Koopmann & Karen Koopmann Koenig. If I write it & scan it to you next Tuesday or Wednesday, would that be sufficient time lo include it with the checks? Thanks. Diane Confidential KOOCOPogg~o915 •. , Gingerich, Todd R From: Schaenen, Diane Sent: Monday, December 05, 2011 1:41 PM To: Gingerich, Todd R Subject: RE: Lorene H Koopmann o~ & gas lease COP lease 305486-000 shut-in royalty payments being generated week of_Dec. 5 Yes. That works for me. from: Glngerieh, Todd It Sent: Monday, December 05, 20111:24 PM To:· Schaenen, Dtane 5ubjed: RE: Lorene H Koopmann oil & gas lease COP lease 305486-000 shut-In royalty payments being generated week or Dec. 5 Diane, since some changes have already been made to these payee's, would you be alright with Tuff and I cutting the checks as listed below and we can address the envelope to Ralph's address for both of his checks? At this point it will be easier than trying to create a new payee number for Ralph and trying to move things around. Thanks. -Todd From: Sd\aeoen, Diane Sent: Monday, Dec2l'nbl!r 05, 20111:13 PM To: Gingeridl, Todd R SWjed: RE: Lorene H Koopmann oil 6. gas lease COP lease 30548&000 shut-In royalty payments being generated weelt « Dec. 5 Send it to Ralph, please. Lorene still has an active address, at least according to the phone book, but since Ralph's name appears on her check, send it to him. Thanks. Diane From: Glngerlch, Toc,id R Sent: Monday, Dea!mber OS, 201112:47 PH To: Schaenen, Diane · Subject: RE: Lorene H Koopmann Oil &gas lease COP lease 305486-000 shut-In royalty payments being ge~erated week of Dec. s Diane, the checks will be issued as follows. I wanted to make sure we get this correct. You mentioned below that Karen and Ralph get one jointiy, so are we sending the check to one of them or still sending it to Lorene? Lorene H Koopman Ralph Koopman & Karen M Koenig AIF's -$3,000.00 (Lorene's a'ddress) Karen M Koenig - $3,000.00 Ralph Koopmann - $3,000.00 Lois Streiber - $3,600.00 Let me know If this is correct. Thanks again Diane. -Todd From: Schaeneo, Diane sent: Monday, Deceni>er' 05, iOll 10:29 AH To: Gingerich, Todd R SUbJect: RE: Lorene H Koopmann oil &. gas lease COP lease 305486-000 shut·ln royalty payments belng generated wee.It ot Dec. 5 See attached. Confidential KOOCOP099~0916 ' • NOTICE OF CONFIDENTIALITY RIGHTS: IF YOU ARE A • NATURAL PERSON, YOU MAY REMOVE OR STRIKE ANY OR ALL OF THE FOLLOWING INFORMATION FROM ANY INSTRUMENT THAT TRANSFERS AN INTEREST IN REAL PROPERTY BEFORE IT IS FILED FOR RECORD IN THE PUBLIC RECORDS: YOUR SOCIAL SECURITY NUMBER OR YOUR DRIVER'S LICENSE NUMBER. AMENDMENT TO OIL, GAS AND MINERAL LEASE (PAID UP LEASE) THIS AMENDMENT TO OIL, GAS, AND MINERAL LEASE is executed to be effective as of this 22nd dey of October 2007 by and between LORENE R. KOOPMANN, an unmarried woman, acting herein by and through Ralph Koopman and Karen M. Koenig, my ettomeys-in-fect, whose address is: 405 FM 108, Yorktown, Texas 78164, RALPH KOOPMANN, a married mmn dealing in his sole and scp1ratc property, whose address is 774 Stanchos Road, Yorklown, Texas 78164, and KAREN M. KOENIG, a married woman dealinc io her sole ind arp1nte property, whose address is 3489 ST. Hwy 72W, Cuero, Texas 77954 (collectively, "Lessor"), and BURLINGTON RESOURCES OIL & GAS COMPANY LP, whose address is 600 North Dairy Ashford, Houston, Texas 77079-2197 ("Burlington"). Lessor and Burlington arc some1imes referred to herein collecrively as the "PartiC!." RECITALS WHEREAS, that certain Oil, Gas, and Mineral Lease, dated 22nd day of October 2007 was made and enlered into between LORENE H. KOOPMANN and HAWKE ENTERPRISES, as "Lessee," (the "Lease"), a Memorandum of which Lease is recorded in Volume 243, Page 876 oflhe Official Records of DeWitt County, Texas, covering the following described lends (the "leased premises"): 120 acrc1 or llad, more or less, btl111 • p•rt of Section No. IJ, lndlanoll Rallro1d Co111pan)' Saniry, A·l72, DeWllt Coant)', TaH, aad bch•c lhe .. m• IHd daerlbal u TRACT NO. ONE and TRACT NO. TWO I• lh•t ter11i1 Detd dalcd l>n:cmber 17, 1996, fnna Lob Strltber, l•divldu•lly Hd II l1dep«adcal E1teetrl1 or lhe !.slate of Jerry Stricber, deuascd, H Cunlor, to Gllber1 A. Koopmeaa and wife, LoJ"Ule H. Koopmaa11, 11 Cnntet, end bd•& recorded In Volanie 14, pa1e 425, Offiwl Public Rm>nh, DcWtu County, Tuu; end WHEREAS, the Lease was assigned from HAWKE ENTERPRISES, ag Assignor, lo Burlington, as Assignee, es evidenced in thet certain A.<isignment dated January 9, 2008 and recorded in Volume 250, Page 822 of the Official Public Records or DeWitt County, Texas; and WHEREAS, there was a conveyance of an undivided twollhirds (2/J) mineral in1erest in the leased premises described ebove, from LORENE H. KOOPMANN to RALPH KOOPMANN and KAREN M. KOENIG as evidenced in that certain Gift Mineral Deed dated June 10, 2010, and recorded at Volume 313, Page 758, Official Public Records of DeWitt County, Texas; and WHEREAS, as a result of the partial conveyance, lhe minml interest in the leasi:d premises described above is now o~d by LORENE H. KOOPMANN, RALPH KOOPMANN AND KAREN M. KOENIG, one-third (1/3) each; and WHEREAS, Lessor (as to all of their inlerests). and Burlington desire to amend 1he Lease in certain respecis; NOW, THEREFORE for Ten Dollars (SI0.00) and other good and valuable consideration, the receipt and sufficiency of which arc hereby acknowledged, the Parties do hereby amend the Lease, as follows: -1- Confidential KOOCOP00000917 493 • THE AMENDMENT • I. Paragnpb 3 of the lease shaU be deleted in ita entirety and nplac:ed wi~ tbe follow In&: J. I The royalties to be paid by Lessee are: (•) on oil, 22.5% of that produced and saved from said land, the same to be delivered, free of all costs and expenses to the Lessor into the pipeline, or other receptacle to which the Lessee may coMect ita wells or the market value thereof, at the option of the Lessor, such value to be detetT11incd by (1) the highest posted price, plus premium, if any, offered or paid for oil, condens.te, distillate, or olher liquid hydrocarbons, respectively of a like type and gravity for the field where produced and when run, or (2) the gross proceeds of the sale thereof, whichever is greater. (b) on gas, including casinghead gas or other gaseous substance, produced from said land 22.5% of the greater of (I) 1he market value al the wellhead of such ga.•, paid to Lessor free of all costs and expenses, or (2) the gross proceeds realized from the sale of such gas, free of all costs and expenses, to the first non-affiliated third party purchaser under a bona fide arms length sole or contract. "Oross proceeds" (for royalty paymenl purpo5eS) shall mean the total monies and other consideration accruing to or paid to the Lessee or received by Lessee for disposition or sale of all unprocessed gas proceeds, residue gas, gas plant products or other products. Gross proceeds shall include, but shall not be limited to advance payments, take-or-pay p11yments (whether paid pursuant to contnu:t, in settlement or received by judgment) reimbursement for production or severance taxes and any and all other n:imburscmcnl! or payments. (c) on all other minerals mined and marketed, 22.So/o either in kind or value at the well or mine, at Lessee's election, excepl that on sulphur mined and mllrlteted, the royalty shall be $6.00 per long ton. 3.2 If any disposition, contratf or sale of oil or gas shall include any reduction or charge for the expenses or costs of production, treatment. lranspor1ation, manufacturing, process or marl<eting of the oil or gas, Lhen such deduction, expense or cost shall be added to the market value or gross proceeds so that Lessor's royalty shall never be chargeable directly or indirectly with any costs or expenses other than its pro rata share of severance or production taxes. 3.3 After the end of the primary tcnn, while there is a gas well on this IC11Sc or on acreage pooled therewith but gas is not being sold or used, Lessee may pay as royalty to the Lessor at the address set out above on or before ninety (90) days after the date on which (I) said well is shut in, or (2) the land covered hereby or any portion thereof is included in a pooled unit on which a well is located, or (3) this lease ceases lo be otherwise maintll.incd as provided herein, whichever is the later date, and thereafter at annual intervals. the sum of $75.00 per minend acre, and if such payment is made or tendered, this lease shall not tenniDAte and it will be considered that gas is being produced from this lease in paying quantities, but if such payment is not made or tendered, this lease shall t.erm.inate. IL The second 1enlenc:e of Paragnpb No. 4 orlbe Lem1e, wbicb is sel out immediately below, Jball be deleted in lb entirety: "Such pooling shall be into a unit or unitJ nol exceeding f0r1y (40) acres plus an acreage tolerance often percent (10%) lhcn:of for oil, and wiilJ not exceeding six hWldred forty (640) acres each plus an acreage tolerance of ten percent (10%} thereof for gas, provided that, should governmental authority having jurisdiction prescribe or permit the creation of any drilling, spacing or proration units larger than those specified above, such units may be cruted or enlarged to confonn in size 10 the drilling or spacing units so ~ribed or pmnined or lo the prorarion units as m11y be authorized for obtaining the maximum allowable production from · one well." - 2. Confidential KOOCOP00000918 494 • • Ill. P•n1raph No. Sor the Luse 1hmll be deleted In lb entirety and replaced with the rollowing: (a) DRILLING OPERATIONS: If within 30 days prior to the expiration of the primary tcnn or at the expiration of the primary term, Lessee is then engaged in drilling operations on said land or upon lands pooled therewith, this lease shall remain in force only so long as such operations or drilling operations for any additional weU(s) arc prosecuted on the lease or lands pooled therewith with no cessation of more than 120 consecutive days between the ten'nination of drilling operations of one well and the commencement of drilling operations on a subsequent well, and ir such operations resull in the production of oil, gas or other mineral, so long thereafter as oil, gas, or other mineral is produced from said land, or from l1111d pooled therewith. (b) CESSATION OF PRODUCTION/REWORKING OPERATIONS: If, after the expiration of the primary term of this Jell.Se and after oil, gas, or other mineral is produced from said land, or from land pooled therewith, the production thi:reof should cease from any cause and tho lease is not otherwise maintained, this lease shall not t.enninalc if Lessee commences drilling operations within 60 days thereafter and continuously conducts drilling operations without cessation thereof for more than sixty (60) days between the tennination of drilling operations of a well and the commencement of drilling operations on a subsequent well and if they result in production of oil and/or gas or other mineral. so long thereafter as oil, gas or such other mini:rals arc produced from said land. If within such sixty {60) dAy period after such cessation of production, Lessee commence.!! reworking opcn1tions as opposed to drilling operations, this lease shall not tenninatt so long as Lessee continuously conducts such reworking operations on such well without cessalion thereof for more than sixty (60) days and if such reworking operations on such well results in rc-establishmcnl of production of oil, gas or other mineral, so long thereafter as oil, gas or other minml is produced from said land or lands pooled therewith. (c) Any pooled unit designated by Lessee in accordance with the terms hereof, may be dissolved by Lessee by instrument flied for record in the appropriate re<:erds of the county in which the leased premises arc situated al any time after the completion of a dry hole or the cessation of production on said unit. In the event a well or wells producing oil or gas in paying quantities should be brought in on adjacent land and such well or wells is/are draining the leased premises, or land pooled therewith, Lessee Bgrec,9 lo drill such offset well or wells as a reasonably prudent operator would drill under the same or similar circumstances. Lessee may at any time execute and deliver to Lessor or place of record 11 release or releases covering any portion or portions of the above described premises and thereby surrender this lease as 10 such portion or portions and be relieved of all obligations as to the 11cr~ge surrendered. IV. P•ngnpb 8 ortbc lcue sbU be deleted in lh entirety •nd replaced with the rotrowlng: 8. The breach by Lessee of any obligation arising hereunder shall not work a forfeiture or lcnnination of this lease nor cause a termination or reversion of the estate created hereby nor be groundl for cancellation hereof in whole or in part. No obligation reasonably to develop the leased premises shall arise during the primary tenn. Should oil, glll or other mineral in paying q1W1titics be discovered on said premises, then after the expiration of the primary lcnn, Lessee 5haJI develop the acmige rclAined hereunder as a reasonably prudent operator. If after the expiration of the primmy lctm, Lessor considers that operations are not at any lime being conducted in compliance with this lease, Lessor shall notify ~ in writing of the facts relied upon as constituting a breach hereof, 1111d Lessee. if in default., shall have siX"ty days after receipt of such notice in which to commence the compliance with the obligations imposed by virtue of this instrument • J. Confidential KOOCOP00000919 495 • • V. Puagraph 9 or the lease abaft be ddtted in Its entinty and replaced witb the following: 9. Lessor expressly disclaims any warranty of title to the premises above described. In the event of failure oftiUe, Lessor shall never be required to return any bonus or any other payment made to l..e.5!or under this lease. By acceptance of this Lease, Lessee acknowledges that it has been given full opportunity to investigate and has conducted sufficient investigation to satisfy it.self as to the title lo the Land, and Lessee assumes all risk of title failures. It is agreed that if this lease covers a less interest in the oil, gas, sulphur, or other minerals in all or any part of said land titan the entire and undivided fee simple estalc (whether Lessor's interest is herein specified or not), or no interest therein, then the royalties and other monies accruing from any part 89 to which this lease covers than such full interest, shall be paid only in the proportion which the interest therein, if any, covered by this lease, bears to the whole and undivided fee simple estate therein. V1. Paragraph C(d) ortbe Addendum of the Lease 1h•ll be deleted in ih entirety and replaced with the following: (d) Prior to initial construction of each pipeline thereon, Lessee must pay the Lessor $3.00 per foot in length for a sixty-foot (60') wide pipeline right-of-way for installing pipelines necessary for production of any well on the lease premises or on lands pooled therewith, which right-of-way shall reduce 10 a thirty-foot (30') right-of-way after construction and inm.llation of the pipeline. After installation, replacement, or repair, the area occupied by all buried pipelines shall be backfilled and tamped, and otherwise restored to its condition prior to installation, replacement, or repair, utilizing the ''double ditch" method. Lessee must pay Lessor Sl,000.00 as a liquidated damage amount for any oak tree damaged or destroyed by Lessee which tree has a r.runlc diameter over ten inches (10'') when mcaswed twenty-four inches (24") from ground level, to be increased SI00.00 per inch for each inch in diam~ over 10 inches. Prior lO conuncncing surface operations pertaining to any well to be drilled on the lease premises, Lessee must deliver to surface owner a damage payment of SI0,000.00 to be applied to the damages to be incurred from such operations (such damages Including and associated with the construction of an BCCCS! road, power line, well pad, reserve pit, fresh water pond and well production facilities as permitted by this lease). Such payment does not preclude Lessee from being liable for the payment of addition.al damages if such damages exceed SI 0,000.00. VII. Paragraph E. of the Addendum lo Che Lea1e shall be deleted In ifs enttrety aad replaced witb tbe following: E. MINERAL LIMITATION: It is expressly underslood and provided that this lease cover.; oil and gas and liquid hydrocarbons, along with the products and by- products thereof, but this ICASC docs not cover uranium, fissionable materials or any other minerals of any type, here making particular mention of water, the Lessee herein being given no right to explore for, nor develop any part of the land for production of water lhmfrom except wilh regard to producing water to be used solely with regard to Lessee's oil and gas drilling, hydraulic fracture stimulation operations and completion operations upon Lhe leased premises and any such water well must be limilcd to watu production only from those depths below 500 lttt below the land swfacc. Lessee is expressly prohibited from using water from Lessor's wells, creeks and watering places. Notwithstanding anything to the contrary in this lease contained, Lessee shall al all times protect the herein leased land from drainage of oil and gas from wells on adjoining lands. Vll1. Paragraph F of lbe Addendum to lhe Lease thaU be deleted In its enlln:ty and replaced wilb the following: ·•· Confidential KOOCOP00000920 496 • • F. POOLING LIMITATIONS: (a) Pooling For Vertical Oil Wells. Notwithstanding anything contained herein to the contrary, pooling of this lease for vertical oil wells as clauificd by the Tens Railroad Commission is prohibited. (b) Pooling for Gas Wells and Hori1.0ntal Oji Wells. In the event Lessee exercises its oprion to pool as authorized herein and as limited hereby, the right to pool a vertical gas well or a horizontal gas well is hereby limited to 160 acres plus 10% tolerance as to all horizons from the surface of the ground to a depth of 1,SOO feet below the surface of the ground and to 320 acres plus 10% tolerance as to all horizons from 7,500 feet below the surface of the ground to a depth of 10,000 feet below the surface of the ground, and to 640 acres plus 10% tolerance as to all horizons beneath I 0,000 feet below the surface of the ground. The right of Lessee to pool for a horizontal oil well is hereby limited to 160 acres plus JO% tolerance as to all horizons from the surface of the ground to depth of 7,500 feet below the surface of the ground and to 320 acres plus 10% tolerance if completed at a depth of more than 7,500 feet below the surface of the ground provided that an additional eighty (80) acres may be allotted to such well for prod11etion purposes for every eight hundred twcnty·seven feet (827') of horizontal drainhole displacement (&S defined by the Railroad Commission of Texas) over and above 4,000 feet ofhoriz.ontal drainholc displacement (c) Special Field Rules. If at the time of creation of any oil or gas unit comprising all or a part of the herein leased premises special Field Rules of the Railroad Commission of Texas arc in effect, Lessee shall have lhe right to pool all or a part of the herein leased premises only up to the maximum acreage permitted to be assigned to a well in connection with such oil or gas unit under such special Field Rules, but in no event shall such unit or units con1ain more than the maximwn acreage allowed by paragraph F(b). (d) Additional Hqrizontal Well Provisions. In exercising the pooling rights granted in this lease applicable to hori1..0ntal wells, Lessee shall file of record a written declaration describing the horizontal unit as lo the specific leases and acreage to be included therein Ill well as the vertical limits of the prod11<:tive horizon or zone and stating the effective date of pooling; however, as to any horizontally completed well, Lessee shall have ninety (90) days from initial completion in which to amend such written designation of unit to increase or decrease the acreage, include or exclude specific leases or ll'8Cts as well as redefine the vertical limits of the productive zone, subject to the limitations contained in this lea5e. If such unit is flied and amended within such period of time, Lessee shall file of record in the county where the lands arc located a written declaration describing the revised unit and stating the effective date of revision. To the extent any portion of the lensed premises is included in or excluded from lhe unit by virtue of such revision, the proportion of unit production on which royalties are payable under this paragniph shall be adjusted accordingly as of the effective date for the revised unit, subject to the limitations herein. The effective date of any unit fonned for horiz.ontal drainhole wells under this paragraph or any revision thm:of shall be the date set forth as the effective date by lessee in the written declaration that is filed of record for such unit or revision thereof. (e) Termination of Pooling by Lessor. Notwithstanding the decision in Wiper & Brown v. Sbeppard, 282 S. W. 31d 419 (Tex. 2009), or similar authority: i. Wsee may only exercise the rights to pool the interest of lessor in the la.nd and at the depths leased hereby and only as to the land3 and depths u to which this lease has not terminated as of the date such pooling document is filed in the office of the County Clerk of the county where the land leased hereby or any portion is located. Upon partial termination of this lease, u to any portion of the land and/or as to any depths, the rights of Lessee to pool the land and/or Confidential KOOCOP00000921 497 • • depths leased hereunder may be exercised by lessee only for that portion of the land llnd/or those depths as to which this lease has not terminated. ii. If the leased premises, or a portion thereof, or the intc:test of the Lessor in part or all of the land described herein is validly pooled with other land to fonn a unit prior to the partial or complete termination of this lease, upon partial tennination of this lease as to area and depths or complete termination of this lease, Lessor may at any time thereafter terminate the pooling and unitization of the Lessor's interest in any portion of the interest leased herein that has terminated in any such unit, by executing and filing for record in the office of the County Clerk of the county in which the land leas~ hereby or any portion thereof is located, a document identifyine or describing the area and/or depths as to which such pooling is terminated. iii. In no event will lessor be required to bear costs of drilling either before or after this lease has terminated. IX. Paragraph H of the addendum to the Lease shall be deleted In its entirety and replaced with the following: H. NON-POOLED PUGH CLAUSE: Lessee must within 90 days after the completion of any well on the leased premises which is not pooled under the provisions of Paragraph 4 or Paragraph F hereof, designate in writing and place of record with the County Clerk of the county in which the property is located, a description of that part of the leased premises which shall be allotted ("Allotted Area") lo such well for production purposes, the maximum size of such part to be allotted being limited as follows: (e) Vcctical Oil Wells: No more than 40 acres phu 10% tolerance to be allotted in and around each well cl11Ssified as an oil well by the Railroad Commission of Texas if completed at a depth of I0,000 feet or less below the surface nor more than 80 acres plus I()GAi tolerance if completed al a depth of more than I 0,000 feet below the surface. (b) Gas Wclls and Hori7.0ntal Oil Wells: No more than 160 acres plus I Oo/o tolerance to be allotted in and around each vertical gas well and horizontal gas well if completed at o depth of 7,500 feet or less below the surface of the ground, nor more than 320 acres plus 10% tolerance if completed at a depth of more than 7,500 feet below the surface of the ground, but less than 10,000 feet below the surface of the ground, no more than 640 acres plus 10% tolerance as to all horizons beneath 10,000 feet below the surface of the ground. No more than 160 acres plus 10% tolerance lo be allotted in and around each horizontal oil well if completed at a depth of7,SOO feet or less below the surface: of the ground, nor more than 320 acres plus 10% tolerance if completed at a depth of more than 7,500 feet below the surface of the ground provided that an additional eighty (80) acres may be allotted to such well for production purposes for every eight hundred twenty seven feet (827') of horizontal drainhole displacement (as defined by the Railroad Commission of Texas) over and above 4,000 feet of horizontal drainhole displacement. Production or operations on said Allotted Arca by the Lessee shall maintain this lease in effect only with regard to the land within such area. This lease shall terminate at the end of the primary term as to such part or parts of the leased land lying outside the Allotted Arca unless this lease: is perpetuated as lo such lll!ld outside the Allotted Ma by operations conducted thereon or by production of oil or gas or any such operations and such production in accordance with the provisions he~f. X. Paragnpb J. of the addendum of the Le11e shall be deleted in its entirety and replaced with the following: -6 - Confidential KOOCOP00000922 498 • • 1. MINIMUM ROY ALTY: If the royalties to be paid under this lease during 12- month periods as described below are less than the sum of$ I 00.00 per acre then leased ("minimum royalty';), and Lessor sends Lessee notice in writing of same, then this lease will tenninate at the end of 90 days after Lessee receives written notice from Lessor, unless the Lessee pays to the royalty holders a sum of money equal to the difference between said minimum royalty per acre and the total of all royalty monies on production so paid during the applicable 12-month period. Said 12-month periods 11re the initial period begiMing with the date of first production from the lease premises and each successive 12-month period thereafter. The payments set out in this paragraph do not relieve Lessee of the requirement of production in paying quantities to maintain this lease. Notice as to this paragraph will deemed to be given when it is deposited in the mail, certified, return receipt requested. XI. The following scmh:nce contained in Paragraph Q.(2) of the addendum or the Luse shall be deleted in its entirety: "Any later work done on the well will be deemed to be reworking operations." XII. The following definitions shall be added to Paragraph Q of the Addendum to the lease: "Horizontal well" shall mean a well having a horizontal drain hole which shall be deviated a minimum of seventy degrees (70°) from the vertical and being a minimwn horizontal displacement in the objective formation of one hundred fifty feet (150') in length measured between the point at which the drain hole penetrates the top of the fonnation to be produced and the end point or tenninus of the horimntal drain hole. For the purposes of this provi~ion, ''terminus", "horizontal drainhole" and "correlative intervals" shall be defined in accord11nce with the Rules and Regulations of the Railroad Commission of Texas or other governmental authority having jurisdiction. "Reworking Operations", "operations for reworking", "commencement of reworking operations" and words of similar import shall have the same meaning, being the actual re-i:ntry into an existing wellbore with equipment capable of re- entering, reworking and/or completing such well and the timely prosecution of such operations in such well bore in good faith toward the re·cstablishment of production of oil or gas from such previously producing zone or zones." XIII. Paragraph T or the Addendum to the LHse shall be deleted In Its entirety and replaced with the following: INDEMNIFICATION: LESSEE AND ITS SUCCESSORS AND ASSIGNS SHALL INDEMNIFY, DEFEND AT ITS SOLE COST AND EXPENSE AND HOLD LESSOR HARMLESS FROM AND AGAINST ANY AND ALL CLAIMS, WSSES, LIABILITIES, COSTS, CAUSES OF ACTION, SETILEMENTS, AWARDS, PENALTIES, FEES, ASSESSMENTS, FINES, CHARGES, DEMANDS, LIENS, PUNITIVE DAMAGES, ATTORNEYS FEES, AND JUDGMENTS OF EVERY KIND OR CHARACTER, KNOWN OR UNKNOWN, FIXED OR CONTINGENT (COLLECTIVELY, "CLAIMS"), ARISING IN WHOLE OR IN PART OUT OF THE ACTS OR OMISSIONS OF LESSEE, LESSEE'S LICENSEES, CONCESSIONAIRES, SUBCONTRACTORS, OR ANY OTHER PERSON OR ENTITY ACTING BY, THROUGH OR UNDER LF.SSEE IN CONNECTION WITH ITS OPERATIONS ON AND POSSESSION OF THE LEASED PREMISES, INCLUDING WITHOUT LIMITATION ANY CLAIMS ARISING FROM TORT, PERSONAL INJURY, DEATH, PROPERTY DAMAGE OR NUISANCE, ARISING FROM ANY ACT OR OMISSION OF LESSEE, LESSEE'S LICENSEES, CONCESSIONAIRF.S, SUBCONTRACTORS, OR . 7. Confidential KOOCOP00000923 499 • ANY OTHER PERSON OR ENTITY ACTING BY, THROUGH OR • UNDER LESSEE. FURTHER, THIS INDEMNITY APPLIES TO THE ABOVE CLAIMS REGARDLESS OF HOW SUCH ARE CAUSED. THIS LEASE SHALL EXPIRE IN ACCORDANCE WITH THE PROVISIONS SET OUT HEREIN, BUT LESSEE'S OR ASSIGNEE'S OBLIGATION TO INDEMNIFY AND HOLD THE INDEMNJFIED PARTIES HARMLESS FOR ACTIONS OCCURRING DURING THE TERM OF THIS CONTRACT SHALL SURVIVE THE TERMINATION OF THIS LEASE. IF LESSEE FAILS OR REFUSES TO FULLY PERFORM IN ACCORDANCE WITH THIS INDEMNIFICATION PROVISION, LF.SSOR AT LESSOR'S OPTION, AND WITHOUT RELIEVING LF.SSEE OF LESSEE'S OBLIGATIONS, MAY SO PERFORM, BUT ALL COSTS AND EXPENSES INCURRED BY LESSOR IN THAT EVENT SHALL BE REIMBURSED BY LESSEE TO LESSOR, TOGETHER WITH INTEREST ON THE SAME FROM THE DATE ANY SUCH EXPENSE WAS PAlD BY LESSOR UNTIL REIMBURSED BY LESSEE, AT THE RATE OF TWELVE (12) PERCENT PER ANNUM. Lessee and its representatives, and their successors shall not be responsible for or required to defend or indemnify Lessor or its representatives from the Lessor's or its representative's gross m:gligencc or willful misconduct. Lessee must maintain in effect at all times during its operations under this lease a liability insurance policy in an amount of not less than $3,000,000.00 protecting Lessor against all claims arising by virtue of the Lessee's failure to comply with the provisions of this lease, and must furnish Lessor prior to beginning such operations with proof of the existence of such policy. If Lessee's operations under this lease arc conducted under the name of Conoco Phillips or one of its affiliates for which Conoco Phillips is responsible, then Lessee may elect to self-insure the aforementioned amount and will provide Lessor with written notice of such election prior to beginning such operations. XIV. Paragraph U of the Addendum to the lease shill be deleted In its entirety and repl1eed wllh the following: U. DIVISION ORDER: Neither the Lessee nor any other party disbursing oil or gas royalty as provided under this lease or through agreement of the third party with the Lessee may require Lessor to execute a division order as a requisite for the Lessor being paid royalties with the exception that a division order that provides only a stipulation of the Lessor's royalty interest may be required of the ~k Lessor. Neither this Lease nor any terms or provisions herein shall be altered, amended, extended or ratified by any division order or transfer order executed by f 0 )t. Lessor, its successors, agents or assigns, but any division orden or transfer orders shall be for the sole purpose of confirming the extent of Lessor's interest in L- K production of oil and gas from the leased premises. However, to the extent there are interests which purport to burden Lessor's royalty which arc in dispute or KK. may, in the future, be disputed, the execution of division orders is not a waiver of the rights to so dispute the interests, nor does such execution in any way ratify, revive, or otherwise approve of any such interests, if any. fo!iL xv. Paragraph W or the Addendum to the lease shall be deleted In its entirety and replaced with the following: W. SEISMIC OPERATIONS: No authority is herein granted to Lessee to conduct seismic operations unles;_j.cssec pays the surface owner prior lo bcgiMing of such operations S39trj!e'l"acre for the entire land above described. After completion of such operations, Lessee must restore the land to its original condition just prior to such operations and must pay the surface owner and any tenants the actual amount of damages arising from such operations. Lessee's right to conduct seismic operations upon the herein !cased premises shall be non- exclusive and Lessor hereby reserves the right lo grant to third parties, the right to: I.) conduct seismic operations upon such premises, and 2.) use the data resulting from such seismic operations as such third party deems necessary including but not limited to the marketing/sale of such data. Lessor shall be • 8. Confidential KOOCOP00000924 500 • • entitled to all compensation paid by such third parti~ for the right lo conduct seismic operations. Further, this lease shall be subject to the rights of all third parties under any seismic permits which cover 1111 or any part of the herein leased property which may be in effect at the time of the execution of this lease. XVI. Paragraph X of the Addendum to the lease shall be deleted in its entirety. XVII. The following provulon5 shall be added to the IC81e: Lessee shall and agrees to never claim, nor seek to secure any of the lands or minerals in the ground covered by this IC83e by application or claim of any statute of limitations or adverse possession, including, but not limited to any claim under the Texas Civil Practice and Remedi~ Code Section• 16.0lS, 16.026, 16.027 or 16.028, as now enacted or as may hereinafter be amended. Lessee shall and agrees never lo seek to mature limitations !itle 10 !he oil, gas and related minerals in !he ground covered by this lease. The purpose of this provision is to bar any claim of limitations title by Lessee and thus abrogate the application of any theories under which relief was granted in Natural Gas Pipeline Co. v. Pool, 124 S.W. 3d 188 (Tex. Sup. 2003), or similar authority. In the event that Lessee should ever file a lawsuit against Lessor wherein it claims that it owns the oil, gas or other mincnils or any interest in the lands covered by this lease by reason of any statute of limitation, any interest of Lessee under this lease shall be automatically deemed forfeited and terminated as of the date s1H:h lawsuit is filed, and Lessee will thereafter have no interest whatsoever in this Lease or any lands described herein. Lenee Play defend ibelr lo court agaln1t cl~ims brought against Ltssce and may Hurt limitations as a defense but lo no event may Lessee assert In any form or fashion, adverse posse11ion or Lasor'1 real property landt or minerals io the ground. NOTICE OF TOP LEASE OFFER: [fat any time within the primary tenn of this lease 11nd while lhe same remains in force and effect, Lessor receives a bona fide offer acceptable to Lessor to enter into an additional lease (top lease) covering all or part of the leased premises, Lessor (without disclosing the terms of such offer) shall notify Lessee in writing that Lessor has received such offer. Lessor agrees that it shall not accept such offer (by the execution of a top le~) until IS days after Lessor gives notice of the offer to Lessee. Notice as to this paragraph will deemed 10 be given when it is deposited in the mail, certified, return receipt requested. PERFORMANCE: Upon the later of the expiration of the primary term, or the extended term by continuous operations, force majeure or other savings clauses, if Lessee has included a portion of the leased lands from this lease into an Allotted Area(s) or pooled unit(s) ("Developed Lands"), but less than all lands from this lease have been included in any such Allotted Arca(s) or pooled unit(s}, and the lease, as it pertains to such land!!! remaining unallotted or unpooled ("UnDevelopcd Lands") terminates according to the tenns of the lease and/or any amendments thereto, Lessee agrees to pay to Lessor a one-time non-perfonnance payment on such UnDcvelopcd Lands at that rate of 55,000.00 per net mineral acre ("UnDevelopcd Lands payment"). Such UnDevelopcd Lands Payment shall be due and payable lo Lessor, or Lessor's assigns, within 60 days after such partial lease termination. Such payment shall bear interest from the due date (60 days after partial lease tennination) until the date of payment thereof at the rate of 12% per annum. No such payment shall be due on any: I . Developed Lands; 2. Ponion oflhe land covered by !his lease within an Allotted Arca(s) or pooled unit(s), upon which a well(s) has been drilled, plugged and abandoned as a dry hole. For the purposes of determining the acreage not subject lo the Undeveloped Lands Payment under this - 9· Confidential KOOCOP00000925 501 • • exception, the maximum amount of leased lands (either Allotted or pooled unit) per dry hole well is 320 acres; 3. Portion of the property leased herein if there is a material title problem with said property; 4. Portion of the herein leased property, if the inability to include such portion of the leased property in a unit is a resuh of a change in the regulations of the Railroad Commission of Texas or other governmental authority which such change in regulations occurs after the date lhat any part of lhe leased premises is lawfully pooled or allotted to any well drilled on said premises. Lessor agrees to act in good faith to facilitate Lessee in compliance with the foregoing to facilitate proper pooling of Lessor's lands ond the drilling of wells. XVIII. MISCELLANEOUS Lessor does hereby adopt, ratify and confinn the Lease and recognizes the full validity of the same, and docs hereby GRANT, LEASE, and LET to Burlington Resources Oil & Gas Company LP, its successon and iusigns, all of the interest of the said undersigned in the leases premises, subject to and in accordance with all of the tenns and conditions set fonh in the Lease, as hereby amended. This Amendment lo Oil, Gas, and Mineral Lease shall be binding upon and inure to the benefit of the Lessor and Burlington, and their respective heirs, personal representatives, successors, and assigns. This instrument may be executed either as one inslnlment or in several partially executed counterparts and the original and all counterparu shall be construed together and shall constitute one instrument Should less than all of the named parties execute this instrument, this instrument shall be binding on those who are signatories. IN WITNESS WHEREOF, this instrument is executed to be effective as of the date first above written. LESSOR: • 10 . Confidential KOOCOP00000926 502 .. . • • BURLINGTON RESOURCES OIL & GAS COMPANY LP: THE STATE OF TEXAS § COUNTY OF =\)Wfdf ~ This instrument was acknowledged before me on this thc.d:2_ day of =Dtc , 2010, by RALPH KOOPMANfl'and KAREN M. KOENIG as attomeys-in-fact on behalf of LORENE H. KOOPMANN • •~~ ~~i(N * ':1.,. :o} •...:t.--7 PAlRICIAJ. BASSETT N111Jry PuWc, Slillt or Tuu &ly ComlMPoll uplrrs APRIL 5, 2013 THE STATE OF TEXAS § COUNTY OF"])U.µ: '\t: ~ This instrument was acknowledged before me on this theti day or :]) e.c , 2010, by RALPH KOOPMANN. ~~ PAmlCIAJ. BASSETT (.{'*}•\NolJly PubHe, Stile of Tem ~~J My Commission Expires .!,!,~ APRIL 5, 2013 THE STATE OF TEXAS § COUNTY oiQe.l u: ~H This instrument was acknowledged before me on this th~ day of "3)e ( , 2010, by KAREN M. KOENIG. l~rlt,\ PATRICIA J, BASSITT '*I ~·i·' Not1ry Publlc, Slale or Tcus ~}~~l My commission Elpns ··.,,:,...~ APR rt s. 2013 - JI - Confidential KOOCOP00000927 503 ' . • • THESTATEOFTEXAS § § COUNTY OF HARRIS § This instrument was acknowledged before me on, this the--21._ day of D~~ . 2010, by t't11f1l.& JI. c~~Ct' ' the Attorney-in- Fact for BROG GP Inc., 11 Delaware corporation, the sole General Partner of Burlington Resources Oil & Gas Company LP, a Delaware limited partnership, on behalf of said pannership. )iJ;otg?~ , - Notary Public, State of Texas - 12. Confidential KOOCOP00000928 504 1'-fAL PROPERrY ·Al)Hfll 14 6 0ld fES 16 11 .. . . .. • ' \ Confidential • KOOCOP00000929 505 • MEMORANDUM OF OIL AND GAS LEASE 56287 • STATE OF TEXAS § § KNOW ALL MEN BY THE.SE PR.ESENf'S: COUNTY OF DE WITT § . WHEREAS, THAT on the 22ad day of October, 2007, Lortne H. Koopman, H 111marritd womaa, whose address is, 405 FM 108, Yorktown, Tnu 71164, hcn:inaftcr called "LESSOR", did enter into and deliver unto HAWKE ENTERPRISES whose address is 330 Rayrord Ro1d, Salle 196, Spring, Te111 77386, hereinafter called "LESSEE", that certain Oil and Gas Lease, covering 110 acres or land, more or less, in DeWitt County, Texas, said lands being more fully described as follows, to wit: 120 1cres or lud, more or less, bd•& a part or Secdoa No. 13, hdl81olll Railroad Compuy S11rvey, A- 272, DaWltt County, Tu.u, and bd•& tlle nme lud descrlbej as TRACT NO. ONE ud TRACT NO. IY1:'.Q In that certain Deed, dated December 27, 1996, lrom Loll Strleber, ladMdaally 11d .. lndepeade1t Encwtrix or llle Eshte or Jerry Strirber, deceued, u Gr11otor, lo Gilbert A. Koopman a 111d wire, Lore1e H. Koopmann, u Grantee, aad belq recorded la Volaine 1-4, pp '425, Official Pubtlc Recordl, DeWitt County, Tuu. The 1bovementioned Oil and Ga.s Lease provides for a three (3) year Pfimuy term from CXtober 22, 2007 (unless extended pursuant to the tenns thcn:in) and contains an option to extend the primary tenn for an additional iwo (2) years, and is subject to all othor 1enns end provisions set forth in said Oil ind Gas Lease. A copy of said Oil and Gas Lease is in the possession or Lessor and l..euee, named herein. This Memorandum may be executed either as one Instrument or in several partially executed counterparts and the original and all counterpans shall be cons1n1ed togemer IJld shall constitute one Memonndum. Should less than all the named Lesson execute this Memorandum. this Memonndum and its respective Oil and Gas Lease shall be binding on those who are signatories. JN WITNESS WHEREOF, this instrument is effective on the dale first above written. STATE OF TEXAS § COUNTY OF vewJJ § This instrument was acknowledged before me on this "'" f- day of October, 2007, by Lorene H. Koopmann. CHRISTOPHER II. CRAIN "*1Pll>lc.Mofbs "1~1i1Jlra ...,.!0,2011 ~lier recording return to: Hawke Enterprises 330 Rayford Road, Sulfa 196 Spring, TX n386 Confidential KOOCOP00000930 506 . '. ~. 6'7901 NOTICE OF EXERCISE OF OPTIONS TO EXTEND MINERAL LEASES • STAT£ OF TEXAS COUNTY OF DEWITT KNOW ALL MEN BY THESE PRESENTS: WHEREAS, BURLINGTON RESOURCES Oll. & OAS COMPANY LP, a Delaware limited parlnmhip, whose address is PO Box 2197, Houston, Texas, 77252- 2197 (herein referred to as "Lessee) is the owner of those certain oil, gas and mineral leases identified on Exhibit "A" attached hereto and made a part hereof for all purposes (herein refened lo as "Mineral Leases"); and WHEREAS, each of the Mineral Leases provide that the primary lcnn may be extended at any time prior to the expiration of the original primary tenn period by tendering to the respective lessor(s) the option bonus prescribed in the lease via check or draft ·tendered 10 the depository bank named in the lease or mailed to the lessor(s) at the addresses provided in said Mineral Lease (or such othCf' address as lessor may subsequently furnish Lessee via written notice); and WHEREAS, the Mineral Lell$CS further provioo that should the opt.ion to extei1d tho primary lonn be exercised, it shall be considcn:d for all purposes as if the origi1111l primary t.enn in each of such Minenil Leases was for a period of five (S) years; and WHEREAS, Less,ee has elected to exercise tho option to extend the primary term of each of the Mim::ral l..c8W.'I identified in Exhibit "A" altechcd hereto by tendering payment by check or draft as set forth in said Mineral Leases. NOW, THEREFORE, Lesseo hei:eby pluces third parties on notice that it has exercised the option to extend the primary term of the Mineral Lcasei; described on Exhibit "A" attached hereto to a total of five (.S) years in each of such leases by tendering the consideration recited in the rcspedive Mineral l.eases by check or draft in accordance with the terms, conditions and provisions of tho respective Minctal Leases. IN WITNESS WHEREOF, this N~ of Exercise of Optjona to Ex.rend Mineral Leases has been executed on this~ day of "1,.,r .,l.... . 2010. STATE OF TEXAS COUNTY OF HARRIS This instrument was acknowledged before me on tho L~ y//_~. of 2010, by Mark B. Carlisle, AUDmey-in-Fact of BROG GP Inc., acting as sole general partner ofBu·rlingtOn Resources Oil & Gas Company LP, a Delaware limited partnership, on behalf of said limited partnership. My commission expires: /J-1/--JU/0 ~~ih Notary Public in and fOftl1StllteOrTexas 3051/ft- OOC> Confidential KOOCOP00000931 507 0 0 ::s -.. -·c. C1) EXHIBIT"A" ::s ~ TO · NOTICE OF EXERCISE OF OPTIONS TO EXTEND MINERAi. LEASES or Lt:A::>t: ~ - .. - llUN NUMBER LESSOR EFFECTIVE DATE ORIGINAL LESSEE STATE COUNTY BOOK PAGE 303680--000 John Paul Guidrl February 19 2Q07 Premiere Land Servloes LLC TEXAS DE\MTT 224 296 303701-000 EdWln O Rossow el ux March7 2007 Hawke Ent..,,,...... TEXAS DEWITT 236 415 303750-000 William Dwor""2Vk FebruillV 2 2007 Premiere Land Services LLC TEXAS DEWITT 224 288 • 303857.-000 Andrew M Hn<1ne April9 2007 HBWl\e Enhln>riaes TEXAS DEWITT 222 481 303860-000 Teddv W Aven et ux 11.nr:il 18 2007 HawkeEnte~ TEXAS DEWlTT 226 358 303973-000 Florllln Koncz.ewakl et ux Anril 11 2007 Hawl(e Enteron..111 TEXAS DEWITT 226 360 303974-000 304044-001 Hemlan Konezewsk.I Meo Mueller et ux . ADrf! 11 2007 March 14, 2007 H awlle Ente11>11Ht1 Hawke Enteron1es TEXAS DEWITT TEXAS DEWITT 226 222 353 495 304061-000 Alton Rav Jalullca et ux Febn.iarv 21 2007 Hawke- TEXAS DEWITT 222 485 304063-000 S.rah Aronstein et al Februarv 27, 2007 Hawke EnteroriHS TEXAS DEWITT 222 483 304065-000 Lld(ey Land Limited Fetiruarv 23 2007 Hawke Enlel'Pr1HS TEXAS DEWITT . 222 489 304081-000 Jennie Lmn H11n:MK!v ADrll 17 2007 Hawke Eneeronsn TEXAS DEWITT 226 362 304082-000 Martin Luther Wolter et ux ADtll 17 2007 Hawke EnterPn- TEXAS DEWITT 226 366 304083-000 Leona Rleduel JanuatY 30 2007 Hawke EntBrP1111U TEXAS DEWITT 222 487 304150-000 Granbenv Partners LTD ADlfl 26 2007 Hawke EnlarDrl&M. TEXAS DEWITT 226 364 304155-000 isaramann Famil'I Trust Februarv 14 2007 Hawke Er11en1n.... TEXAS DEWITT 222 501 304151).00() e.ramann Family Trust Februatv 14 2007 HilWka Enl8r'Pr1sn TEXAS DEWITT 222 499 304160-000 L C Thiele et ux FebNa!Y 21 2007 Hawke Enlll!ltlma5 TEXAS DEWITT 270 406 304219-000 JohannaWdd MllY3 2007 Hawtce Enmrcnsn TEXAS DEWITT 226 374 • 30422()..()()() Jerome R Wild et UJC MilY3, 2007 Hawlce Enlllll>OHS TEXAS DEWITT 238 417 304222-000 Robert H Malschen et ux Aotll 30 2007 Premiere Land Services LLC TEXAS DEWITT 225 793 3().4224-000 Robert T Meisdlen et al . "111'130 2007· . Premiere Land Services U.C TEXAS DEWITT 229 38 304~00 Virginia Wlllm.th • MilY7 2007 Hawt<.e En1111110Sn TEXAS DEWITT 228 357 ~ 304227..000 Robert T Me~ et ux ADrll 30 2007 Premiere Land S.rvlca LLC TEXAS DEWITT 225 789 0 3()4228-000 304234-000 Robert T Me-.chen etuJC Paul V UlllV el ux Allri30 2007 Mav8 2007 Premiere Land Services LlC TEXAS DEWITT Hawke En-.-. TEXAS OE WITT 225 236 791 423 0 3042"6-000 Clllrol'd Dwavne Pancer et ux JulY 30. 2007 Hawke Enieronus TEXAS DEWITT 233 n2 0 .,, 304252.000 A111'lur Gan.ti Miller el ux #,Dlt 25 2007 Hawke En111rnr1se1 TEXAS DEWITT 226 418 0 3G4253-000 304254-000 Jerald J Ro1Mtt et ux Jerald J Rosaett et ux M"'18 2007 Mav8, 2007 Premiere LIW!d Servlc:al LlC TEXAS DEWITT Premiere L311d Services UC TEXAS DEWITT 226 226 895 894 304255..001 Jerald J Rossett et ux Mav8 2007 Premiere Land Services LLC TEXAS DEWITT 226 893 0 0 0 0 1or5 0 co w N 508 0 0 :J ::::!? c. ...m-· Cl> 304255-002 Daoline Hanns t.A:nr 6 2007 Premiere land Ser.r.ices LLC TEXAS DEWrIT 229 037 :J 304256-000 Jerald J Ros11ett et ux Maya 2001 Premiere land Serv'.ices LLC TEXAS DEW1TT 243 846 304260-000 Rlnehold Borchardt MllY 16, 2007 Hawke Entemrises TEXAS DEWITT 243 889 - 304262-001 304262--002 Otto Lee Koennin!l M81'!lie Ann Dickerson Mav29 2007 May 2.9, 2007 Hawke Enterprises Hawl\e Enrsn>rtses TEXAS DEWITT TEXAS DEWITT 236 2.36 236 421 419 374 236 376 30428()-0()() Darvin Mueller et al Mav 11 2007 Hawke Enterprises TEXAS DEWITT 236 378 304318--000 Cody Jaluftca ADril26 2007 Hawke EnU!mrises TEXAS DEWITT 226 370 304327-000 Hollis Baker March 1 2007 Hawke Entemrtaes TEXAS DEWITT 222. 507 304328-000 304329-000 304331..000 304415-000 304531-000 304581-000 Je1TV Wavne Schmledlin et ux Karan Kav Lukes Alton Rav Jalufka et ux Michael P Klein et ux Rlnehold Borchardt et al Bennie Drabek flt ux February 21 2007 March 15, 2007 March 15 2007 Junes. 2001 Mav 16 2007 June 13, 2007 Hawl(e Entemr1541s Hawke Enterprises Hawke Enterprises Hawke Entemrises Hawke Entemrises Hawke Enterprises TEXAS DEWITT TEXAS DEWITT TEXAS DEWITT TEXAS DEWITT TEXAS DEWITT TEXAS DEWITT 2.22 222 2.22 236 243 233 505 509 503 452 841 725 • 304583-000 Leon J Resoondek et ux June 15 2007 Hawke Ent""'rises TEXAS DEWITT 233 n1 304584-000 Leon J Respondek et ux June 15 2007 Hawke Enternrises TEXAS DEWITT 233 ng 30458&-000 Frances Warzecha June 20 2007 Hawke Enterprises TEXAS DEWITT 233 724 233 720 233 721 304589·000 L C Sievers et al Julv 13 2007 Hawke Enlerortses TEXAS DEWITT 233 756 304699-000 EUQenelbrom JulV 13 2007 Hawke Enlerprises TEXAS DEWITT 233 737 304700-000 Robert Lee lbrom et ux July 13, 2007 Hawke Enterprises TEXAS DEWITT 2.33 741 304701..000 Holli& 0 Baker Julv 11 2007 Hawke Enterprises TEXAS DEWITT 233 743 304702..000 David lbrom et ux Julv 3 2007 Hawke Enterorlses TEXAS DEWITT 233 716 ~ 0 304703.000 304705-009 304707-CIOO 304709.000 304710·000 304711-000 Catherine Kolodzieicvk et vlr Robert Lee lbrorn Daniel lbrom et ux Patricia Gall lbrom et vlr Shirtev R Crain Melvin straube et ux July 13. 2007 Ju v 13,-2007 Ju v 13 2007 .h!IV3 2007 Julv 11. 2007 Julv 11 2007 Hawke Enterpnses Hawke Enteri>nses Hawke Enteronses Hawke Enterorbea Hawke Entarcrlses Hawke Enterortses TEXAS TEXAS TEXAS TEXAS TEXAS TEXAS DEWITT DEWITT DEWITT DEWITT DEWITT DEWITT 233 233 233 233 233 233 745 735 739 714 758 750 • 0 304 723.000 Marvin C Kooomann July 17. 2007 Hawke Enlel'Dl1S&S TEXAS DEWITT 233 754 0 304771-01>-1 Frank Kulik et ux Julv 20 2007 Hawke Entemrises TEXAS DEWITT 233 733 Warren Lemke et ux HawkeEn1......ru.e._,. 0 304n2-000 304783-000 Robert EclWard Motl etal Julv 20, 2007 Julv 23· 2007 Hawke Entel'Drises TEXAS TEXAS DEWITT DEWITT 233 243 760 833 '1J 304842-000 Alvin Stanchos Jr J ulv 27. 2007 Hawke Enterorlses TEXAS DEWITT 233 756 0 0 0 0 2 of5 0 co w w 509 0 0 -·= """' c. C1) 304865-000llsabeUAnn Van Beveren July 27, 2007 IHawl<e fntel'l)rlges TEXAS JOE WITT 233 752 = :::!: 3048684'01James Jendrv Au!!Us! 1. 2007 I Hawke Enterprises TEXAS IDE WITT TEXAS JOE WITT 236 233 233 384 762 784 - 304870-001 IDavid Erler el al Aunust 1. 2007 IHawkeEntermses A> 304871-001 IMlchael R Grunder et al November 29. 2007 IHawke Ent~ TEXAS roe WITT 243 852 . 304885-000 ]Carolyn s Welbye July 27, 2007 (Hawke Enteroriaes TEXASIDE WITI 233 747 3048!M>-0001Davkl A Stubblefield et ux Seotember 6. 2007 IHawke Enterprises TEXASIDE WITT 236 437 304887-00CllElna Blaoa August 10, 2007 (Hawke Enterpnses TEXAS JOE WITT 234 392 304888-0oG IBarbara J Stubblefield Septembers. 2007 !Hawke Enteronses TEXAS IDE WITI 236 435 • 304889-001 IAlton R Clelenckl et ux Auousl 2. 2007 IHawke Enlen>rlses TEXAS IDE WITT 236 407 304893-000 I Marcelus W WelllChwill Reslduerv Trust Aunust 2. 2007 IHawke Ent8f'Drtles TEXAS IOE WITT 236 400 304909-000lloretta Fay Burge Auaust 2. 2007 IHawke Enterprises TEXAS lDE WITT 236 396 304911-000IScolt Straube August 2, 2007 IHawke Enlerprlaes TEXAS ICE WITI 233 749 July 31. 2~ 304922:0001Dallid A lbrom el ux 304929-000JMorres M Van Beveren et ux 304944-000 Barbara Thedin Juty 27, 2007 October 18. 2007 I (Hawke Ent8rD<IH9 Hawke Enterp!!ses Hawke Enbmlrises TEXASIDEWITT TEXASIDEWITT TEXAS DE WITT 236 233 m 405 718 8s8 304945-000ICharle:s T Hahn et ux Auaust 7. 2007 IHawke Enterprises TEXASIDEWITT 236 411 304949-000IEuaena James lbrom Auou&t 6. 2007 IHawke EntefJ>riaes TEXASIDE WITT 238 409 304950-oOOlleon James Srubar Jr etal Auoust 8. 2001 IHawke Ent.et'Dllsee TEXASIDEWITT 243 830 304951-00-1 IRueben Wayne Thamm et ux August 18, 2007 IHINll<e Eritemrtses TEXAS ICE WITT 236 402 304956-000 Irene Hahn Aunust 7. 2007 Hawka TEXAS DE WITT 236 447 I 3049S8-000 Kermit C Koehler etux 304959-001 Steven D Soot! et ux Auaust 10. 2007 j September 5, 2007 Hawke En!!!rpris< Hawke EnlarDrises TEXASIDE WITT TEXAS OE WITT 236 236 386 388 ~OSOOO-OoOITrov H S!IJart el al August 10, 2007 IHawke Enterortses TEXAS (OE wrtT 236 398 3052213--000IJoae G Perez et ux Seotember 1, 2007 !Hawke El'Ufprtses TEXAS IDE WITT 236 445 • 305230-001 IPaicla Ann Shocldev Auaust 8, 2007 IHllWke ENerpl'ises TEXAS ICE WITI 238 449 305232--000IPhll E Mueller et ux Auaust 10. 2007 I Hawke EnterDrises TEXAS !DE WITT 236 390 305~001Hllmer E KooDmann et al Seotember4, 2007 !HIWke Enterpriles TEXASIDE WITT 243 827 305235-000IRobert G Watson et ux September 5. 2007 IHawke En!erorlses TEXAS IDE WITI 236 413 "0 3052Je..()Q0jR!ymond W Pawiik Jr September 5, 2007 !Hawke Ent!!prises TEXAS IOE WITT 238 380 0 305245--000 Karan B Rot>mon Seotl!lnber 24, 2007 Hawke ~ -~- -- TEXAS OE WITT m 819 305248-0001 Edwin A. Baros Seotember 10, 2007 IH;rwXe Entltrl>risea TEXAS IDE WITT 243 828 305258-000IH Wmer E Kooomann Seotember4, 2007 IHilWlte Entel"Dlfses TEXAS IDE WITT 243 812 0 3052B0--0011Elizabelh C CoMors 305260--0021Celherine Clark Ralston Auoust 30. 2007 IHawke Entert>riae11 Au!lust 30. 2007 IHawke Enterprises TEXASIDEWITT TEXASIDE WITI 236 238 433 431 0 305281-001 IRichard H Barchard Jr Augusl28. 2007 !Hawke Enterprises TEXAS ICE WITT 236 394 "'tJ 305262-001 IRalph Borchard et we Auciust 28. 2007 IHawke Enterprises TEXAS IDE WITT 236 443 0 0 0 0 3 of5 0 (0 w .s:. 510 0 0 :::s ~ ..-· Q. (D :::s m 305309--000 laabella Nelson Barrett 30531~0 l<endricil w Bartl$ et ux 305311..000 Cec:ll M Davidson el ux 305312-000 Quentin L Yancev et ux 305313..()()() Merelon love! et ux October 4 2007 SeDlllmber 24 2007 SeDtember 13 2007 OdDber 5 2007 seottimber 7 2007 Hawke Enterprises Hawke EnllllrDrises Hawke Enll!ronses HawkeE Hllwke t:mAmrlses TEXAS DEWITT TEXAS DEWITT TEXAS DEWITT TEXAS DEWITT TEXAS DEWllT 243 243 236 243 236 818 825 429 808 382 305314-000 Martin Alvarez Castillo etux November 20 2007 Hawke EncerJJrises TEXAS DEWITT 243 867 305317.001 OaYtd A Wrirlnt and wife Pabicia Wrial\t SeDtembef 10. 2007 Havwtte tnl8lllrises TEXAS DEWITT 238 441 30532.8-000 Huebner Trust Seotember 24 2007 Hawke Enlel'Drises TEXAS DEWITT 243 806 305331..()()() Marvin Stanchos S.DtAmber 6 2007 Hawtte EnterDri&eS TEXAS DEWITT 243 811 • 30537~1 Mlehele Maraldo et al S.PUtmber 11 2007 HIWke Enlel'Drille5 TEXAS DEWITT 238 427 305374-000 Fred C Huahes el ux SeDtember 26 2007 Hawke Enlerortses TEXAS DEWITT 243 829 305384-000 Isabell Ann Van Bevel'eJ1 s..ntember 26 2007 Hawke Enlel'Drises TEXAS DEWITT 243 816 305387..000 Jerrv McAdams 111 ux October 22, 2007 Hawke EnlerDrises TEXAS DEWITT 243 865 305392-000 Mal10!1e Breeden el al October 25. 2007 Hawt<e Enleroriaes TEXAS DEWITT 243 854-855 305393-000 Manorie Breeden et al Oclober25 2007 Hawke EnterDriaes TEXAS DEWITT 243 860 305466-001 David l Urban Se"""mber 26 2007 HawkeEnte~ TEXAS DEWITT 243 810 305466-002 Wavne D Urban Seotl!mber 26 2007 Hawke Enterorises TEXAS DEWITT 243 809 305469--001 Donald JanskY et ux Ser>tember 1 2007 Hawke Entel'Drises TEXAS DEW11T 243 804 305471.001 Joel P Smith et ux Oc1ober 3 2007 Hmwke Ent9CPrises TEXAS DEWITT 243 816 305480-000 Karen Kooi>mann Koenia October 22. 2007 Hawke Enlemnsm TEXAS DEWITT 243 875 305482.000 Ralph Koopmann OdDber 22 2007 Hawtce Enlllnlrises TEXAS DEWITT 243 874 30~86-000 Lcnne H Koomnann Octaber 22 2007 HIW!te Eni.rorisee TEXAS DEWITT 243 876 305518-000 Sandra Hilbrich el el OdDber 22. 2007 Hawke Enl8f'D098S TEXAS DEWITT 243 872 305536-000 Elenora KlaevemaM October 10 2007 Hawke Enterprises TEXAS DEWITT 243 862 305533-000 Kent EdWard Hllbrlch et UlC November 16. 2007 Hawke Ent.en>Os811 TEXAS DEWITT 243 865 • 305534--0().1 Elenore Klaevemenn October 10 2007 HIWke EnterD11ses TEXAS DEWITT 243 891 305545-000 Lois B Chesney saot11mber 20 2007 H11wke Enllll'Dl\!les TEXAS DEWITT 238 291 305598--000 Amelia Ortiz ·Odober17 2007 Hirwlce Enlf!mrts es , , TEXAS DEWITT 243 832 305603-000 Elna BIQQI AUaUSl 10, 2007 Hawke En.....,rlses TEXAS DEWITT 234 394 ~ 305616-000 Michael Anlt1ony Maren October10 2007 Hawlle Enll!fllnlle3 TEXAS DEWITT 238 268 305831..000 C&r1 H Schlenk« Jr Estate October 28, 2007 Hawke EnlllrJJrises TEXAS DEWITT 243 879 305632.000 Karlend Schlenker et al Oclober 26 2007 Hawke Enlllmrisees TEXAS DEWITT 243 869 0 305635--000 Harland Schlenlter et ux Odober26 2007 Hawl<e Enl8nlttses TEXAS DEWITT 243 871 0 305678-000 Jeanne E Guerriero October 22. 2007 Haw!c11 Ent..,.,,,w.s TEXAS DEWITT 243 en 305n4-000 GWlambllletux November 1 2007 HawtteEn~ TEXAS DEWITT ' 243 856 0 305787.001 George Lowman Nowtmber 7, 2007 Hswl<e Enrtwnrises TEXAS DEWITT 243 897 "'tJ 305787-002 Hedv Stakes November 7 2007 Hawlle En•....,rises TEXAS DEWITT 243 895 0 0 0 0 4 ofS 0 co w en 511 0 0 :::::I ::!? c. 305787..003 Edwin Ear1 Galda November 1 2007 Hawke Enlaronses TEXAS DEWITT 243 893 C'D 305932-0<l.1 Clifford Dwavne Parker et ux Jutv30 2007 Hawk• EnlerprlHa TEXAS DEWITT 233 723 ..... :::::I -· Al 305932-002 305939-000 3060.(8-0CM Jamet1 K Crain et al WT Mumme et we Debbie Lvnn H~eman DecefTlber19,2007 November 1, 2007 Novan\ber21.2007 Hawke Hawke Erarorises EntarDrisu Hawke BM1111isn TEXAS DEWITT TEXAS DEWITT TEXAS DEWITT 267 . 243 243 252 886 885 306049-000 Melvin R Hilbrich et ux N0119mber 15 2007 Hawk.a Enleronle! TEXAS DEWITT 243 839 306220-000 Johanna Wild Mav3.2007 Hawke Enlerorisn TEXAS DEWTIT 226 3n 306925-001 Robert L Zaiolltz December7, 2007 H~lll Enlal'l>ri.ses TEXAS DEWITT 252 351 • TOGETHER WITH ALL AMENDMENTS, RATIFICATIONS, CORRECTIONS ANO/OR MODIFICATIONS OF THE OIL, GAS AND MINERAL LEASES DESCRIBED HEREIN ~ e!! ~ t.a\!11 3 ~~6,, ~--11 f.fl"c n Q -~1~~Q • ~ ~ ititllf ! ~ ~~ ...... ~-.l! 8.,.. -C Oj!:§- i;- · fll ·O a '< c.o •1 !i;1~ J:Dco c 9. ..., 0 -i; o;;i :::>~t.j~ ... ~ . ........ "00 ft I~~ is r';/ I' I :::t :J:) ~ IE,:o ~ iJ~~c. Q 0 0 "'tJ 0 Ii a ~ F 0 0 0 5 of 5 0 <O w en 512 • • Notice of Confldentfallty Rights: H you are 1 aahlnl penon, you may remove or 1trike any of the followiDa informatloa from this imfnlmmt before it is faled for record la tbe Public Recorcb: Your Social Security Nu..mber or your Driver's Lk.nue Number. OIL, GAS AND MINERAL LEASE (PAID UP LEASE) THIS AGREEMENT made this 22nd «Dy of October, 2007, between LORENR H. KOOPMANN, 111 unmmicd woman, Lmsor (whcthct one or more). wlKKe address is: 405 FM I01, Yorktown, Tew 78164, llld HAWKE ENTERPRISES, whose addrns is: 330 Rayford Rold, Suho 196, Spring. Tcus 77316, Lwcc, WITNESSE11f: I. ~in consideration ofTen llldNollOO Dollars ($10.00) In hand paid, of the royahiea herein provided 111d oflhe agreemenrs of Lessee herein oonlained, hen:by grants, leues and lcu exclusively unto Leueo for the purpose of inverliptlna. exploring, l'fOJPOCllng, drilling a.nd mining for and produeing oil, gu and all other minmls, ainducting cxplontlon, geologic: and geophysical surveys by selsmogrsph, core, lest, gravhy, and magnetic methods, l1ylng pipe lines, building roads, tanks, power stations, telephone lines and other stnJetures thereo , · i1Ye111 thlfflta, 10 produce, save, take care of, treat, traNport, and own said produc:tJ, and housing its cmployeu, the following dcsaibed land in DeWitt County, Texu, 10-wll: 120 1<m of laad, 111ore or less, bel11& a part or Seclloo No. 13, l1dlHol1 RaUroad Company S11"1'ty, A-27l, DeWitt County, Tues, and ~lag the a1u land described u TRACT NO, ONE 11d !RAC! NO, TWO In that certain Deed, daled Dectmbcr 27, 1996, rro• Loli Strlcbcr, lndtvldually 1ad u J.depadnl EncatrlJ: or IJtc &tale or Jerry Strlcber, decHHd, u Crantor, lo Giibert A. Koopman ud wtrc, Loren H. Koop•HI, as Gnintte, and bdai: recorded la Volu•e 14, ptp <415, OIJklal hbllt Records, DeWitt CoHly, Tnu. 'Alil ' - alla _ . , anlll h11lu•• all lllul e-..i w 1laltiM ~ 1 . - -.!•111 • RNls- .. 11M a.II ,....lllilri,. •.-MN all1v1, ""4Mlh• IM -111laMill1-.i) w ~ ar i11..ij-•~11 ....p 1111 i111lllMI wilhkl 1h1 h1111.,... efllle 1111111 ..... 1141..ly •-"~Ml ..... l . Without refemicc to the c:omme:ncemcnt, proKCution or c:essalion at any lime of drilling or other developmenl operations, Ind/or 10 the dlscorny, d.CV'l:lopment or ccs:salion at any time of production or oil, ps or Olhcr minenls, and without fiu1he:r payments !ban lho royalties h=ln prvvided, and notwithsl&nding anything cbe ha'cln contained to tbc C<leltnry, this k&sc shall be for. term or ~years livm this dale (1:11lcd "prirary lam") and as long thcral!Cf u oil, gas or other minenl iJ producccl from .aid land OI' land wilfl which sald land is pooled hereunder or~ long u this lease Is continued in efToc:t u Olhuwise provided hCRin. 3. The royalties to be paid by l..esJee are: (•)on oil, .!.l1m of the prodllellon ~and saved from said land, the samt 10 be dclim-ed, free of all eosu and expenses IO the Lessor Into the pipeline, OI' olhcr re~tacle lo which the Leuec may connec:t its well1 or the mutct value !hereof, at the option of the Lcuor, such value 10 be dcl.crminod by (I) the highest posted price, plus pRmium, if111y, olTmd or paid for oil, condensate, distillate, or other liquid hydrocarbons, resp«tlvely of a llke rypc and gravity ror the field where producod and when nin, or (2) the gro.. proceeds ofdle ale !hereof, whichever is greattr. (b) on pt, lncludine casinpad eas or other gaseous substance, produced 6'om •id land, fillb of the pu~ of(I) the market value al tho wellhc:IMI ofsuc.h p.11 paid to lessor free of all wru and expensea, or (l) lhe IJ'OH PfOCceds rcallz.cd ftom the Hie of sueb gas, free or 111 coatJ and expenses, to the first non-affiliated third patty purchaser under a bona fide II/Tiii length Ille or contract. "Orou proceeds" (for royalty payment purposes) $hall mean the toCll monies and other consideration acc:ruing lo or paid tho Les.sec or received by Lessee for dl1poilllon or sale of all unproceued gas proceeds, residua gas, gas pl.lo! products or Oilier productJ. Gross proceeds shall include, bul is not limited 10 advmu payments, take-or-pay paymcnll (whelher p1id pursuant co conlnct, In 5Cttlement or received by judgmenl) reimbunement for production or sevcnnco Wies and any and all oilier re!mbursemcnll or paymr.nll (e) If 1ny disposi1lon, aintnia or sale of oil or gas shall include any reductlon or dwtc for tho cirpenses or cosrs of production, 1rca1ment, ll"lllUpCKUtlon, manufacturing. proce.ss or mllli<e1ing of l/w: oil or gas, then meh dcduc1ion, expense or cost shall be edded 10 lhe market value or !VOSS proceeds so Iha! lessor's royally shall~ be chaJiuble dlrcctly OI' indlrec:11y with any costs or upenm otm lhan ils pro 111la share of sevenmce Ill'" produi;lion w:c.s. (d) While !here is a gas well on this lease or on acreage pooled ~th bul g11 is not bcina sold or UJCd, ~may P9Y u royalty co the credit oflhe owner or owners ofroy.all)' hereunder in- CitiT&!ll B111k 11 ypdaown. TCIU, (...tilc.h blnlt and its lllCCCSSOr1 an: die l'l))'lhy owner or owmcr'• •gent, and shall ~inue as deposilOI}' for all 'lldl 1ums whldl Lcssu may pay bc:reundcr, rcprdlcss of chanseJ In ownenhlp of royalties) on or before ninety (90) dsys after the d1t1 on whlc.h (I) said wdl Is shut In, or (2) the land coven:d hereby or Ill)' ponlon !hereof Is inc hided in 1 pooled unit on whh;h a wolf ls loc.alat, Of (3) lhll leme _ , to be otherwise malntllnc.d as piovided herein, whichem' Is the Illa' dale, and !hereafter 11111nllll inlcmls, die sum s:u.!N pa millml acre, Slid if such payment 11 made or tr:ndcml, this lease shall nae tamlnale and it will be considered that gas is being produced li'om thiJ lcue in pl}'lng qwnlitles; and ( c) on alt other minmls mined and mlltceted, ono.-1en1h eilher in kind or onlue 11 tho wdl or mine, al Lessee's election, Clt(epl !hit on 1ulphlll' mined and marltded, Ille ro)'lll)' shlll be Sl.00 pcT long Ion. Lessee sh.Ill hve fiee use of oil, gat, ooal ind war.er li'om said land, CJC«pt Wllti:r from Lessor's wells, creeks and w11uln1 pl~ for 11! opc~ionl heTcundcr, 111\d I.be roy.alty on oil, ps and c:o1l 1h1ll be compuled •Iler deducting any so used. Confidential KOOCOP00000937 513 .,. • • 4. r..es-, 11 its option, Is lle1dly &iYen the ri&hl and power ro pool or ccmblne the ac:reage covered by !hi.I lease or any portion thereof IS ro oil lllld au. or cllhcr of them, with 111y other land covered by this kale, mid/or with Ill)' other land, lease or leases In !he immediate vicinity thereof to the extent hereinafter s1fpul11cd, wh!:ll in 1.cs-·• judgment it Is necessary or ~vlsablc IU do so in ordu properly 10 explore, or !O dcw:lop and opeflle uid loased premises in compli1ncc with the rule1 or regul•tion1 of !he R1llroad CommluiOll of Texas, or other lawM authority, or when !O do $0 would, in the jlllfgment of Leuec, promote the con~on or oil and gas in and 111\der and tbU may be produced from said pn:mlJC1. Suc.h poolinc shall be Imo a unit Of imits no< oceeding forty (-40) ~plus an acreage rolcfance or ren ptlUlll (10%) thereof for oil, 1111d unill not exceeding slit hundrid fony (6-40) 1CttS udi plus an acreage 1oleooce of ~n pm:ent (I 0%) thereof for gu, provided thll., should govemmenial authority having jurisdklion prescribe or pennit the creation of any drilling. spacing or proration unill larger than thowo speclncd above, such units may be created or enl11ged 10 confonn iii sW: to the drillln1 or spacing units Ml preJcribed or permirtcd or 10 Ille prora1ion units as may bt authorized for obUining the muim11m allowable production frcm one well. LcSSH may pool the aueage or inltmts 1bove described, or any portion thet'cot; as above provided, as 10 oil or gu in any one or mon: mncs, &/\d uniu $0 formed need not conform in 1lzc or aru wilb the unit or units inro which the lease a pooltd or combined as 10 any OIMr zone, 111>d oil unilS ~ nor conform as to ami with 8*' uni1L The poolin3 in one or mere insllnceS shall nol cxh1w1 the rights of the l..cssce hereundtt to pool this leuc t1t portions theieor into other units. ussee r.hall file for recool in the appropriate reconlJ of the counly in which rho leased pn:mise1 ~ sltu:alcd an instrument dcKrlbin& Ind deslifttllng the pooled ac:reage IS a pooled unit; 111\d upon 1uch rccordatlon tho unil shall bo otrective u ro 111 parties htrelo, their heirs, successors, 1111d mlpu. imspcttlve of whether or not the unit ls likcwbe effective IS to 111 other owners of surf&ce, mlnenl, IO)'lfly, or other rights in land included in auch unit. Laseo msy at its election CllCKiso its pooling ope ion before or afttt 'omm~ng opera1lom (or or completing an off or gas well on the lcued pre.miJCS, and rhc pooled unit may include, but it is not required to include. S.nd or lcase.s upon which • well capable of producing oil or ga in p1yin3 quantitics hu lhcmofore been completed or upon which opcnlfons for the drilllng or a well fot oil or gas have theretofore been commenced. In the event of opmilions for drlllln& on or prodU<ltion of oil or cu from any part ofa pooled unit which Includes all ora portion of the land covered by this lease, regardless of whclher such operations fOI' drilling were commenced or s11eh producrion was Jeeured before or after the execution of this instrument or the insaument dal"1'1in& !he pooled unit.. SUl:h opct11tions shall be COllSldtted as openrlons for drilling on or production of oil CK ps trom land coven::d by this lease whether or not the ~II or wells be localed on the pmniscs c.ovcn:d by this lease and in such o:,1ven1 openllons for drilling shall be deemed lo have been commenced on S4id find within the meaning or pangnsph S of this lease; and tho e.ntil'I llCTCllge constituting such unit or units, as to off and gas, or either of them, es hcRin provided, 1hall be tRaled for 111 purposes. oxccpt the payment of royalties on production ll'om the poolc.d unit, IS If the $am<1 were in<:1ude1:1 in this 1usc. For the piapose of COlllJMlling the royalties to which owncl'I of royalties and payments out of production and each of them shaU be entitled on production of oil and gas, or either of them, ftom the pooled unit.. there shall be allOClll:d !O the land covered by this lease and included In said 11nit (or touch separuc ltKI within the unit if this leue coven lCJllRle incu within the unit) a pro rara ponlon of the oil and &IJ, or either of them, prochloed li'om the pooled unit after deductin& lh•I used for opcntlon.J on the pooled unll Such 11foe11lon shall be on an acrc&Je basis·thal ls lo say, Uiete shill be anocated to the 11Cn:a&e ~ by this lease and includcil In the pooled unit (or to each sqiara1c ltKI within the unit if lhfJ lease coven sep;ntc tnclS within the unit) that pro !'Ill pcwtion of the oil and gu, or cithel or them., produced fi'orn the pooled unit which the number of surface a=s covered by this lease {or in ndl sudl separl1C In~) and included In the pooled unit bears to the total number of surftcc 1e1a included in the pooled unit. Royalciu hereunder shall be computed oo Ibo portion of such procluc:tian, whc1hct ir be oil and gas, or either or them, so 1t1oca1ed to the land coveted by this lcHe aml Included in Ille unit jllJ1 u though such production waT ftom such land. The production from an oil well will be oon1idercd 1.1 producrion from the lease or oil pooled unit from whldl ii ls producing and not M production trom a 111 pooled unit; and production from 1 ps well will be considmd as prodlldion ftom the lea!e or ps pooled 1111it from which if is producing and not !Jom an oil pooled uniL The fonnatlon of any unit hereunder shall not have the effect of changing the owne:ship of any delay rental or shut-in pniduction royalty wllicb 1111)' become flC)'llble andeJ' this lase. If this !cue now or hercaltet cover11cpamc Inlets, no pooling or unitimtion of royalty inrercm u between any sYCh ~Inds is Int.ended or lh11f be implied or mull mntly from the inclusion of sw:h separllc tracts within this lease but us1ee shall nevtl1heless have the righr ro pool as ~ided above with c.onseqllelll 1flocalion of produelion as abov.: provided. As used in this puapaph 4, the words "Jcp11ato Incl" mean any tract wilh royalry ownership differing, now or hel'Clfter, either as 10 paniet or amounts, from lhlt as to &ny other pan of the lealed premises. 5. If 11 tht lllqlintion or the primary tcnn, oll, gu, or other mineral is not bel111 produced on uid land, or frorn land pooled LhcRwith, but Le.ute fJ then engaged in drilling or rcworldng opcratlonl lhen:an, or &hall have comple.led 1 dry hole thereon within 60 days prior to lf)e elld of the primlll)' ~nn, the fell.Se ah1ll remain in forte so long as opcratlom on said well or for drilllng or ll!WOrking of any addition.ii well 111: prosecuted with no cessation of more th111 60 cons~utive d1y1, Ind if they mult in the production of oi~ gas or other mineral, so long lhm:111\er ilS oil, gas. or other mineral ii produced fiom nld land, or li1Jm land pooled !herewith. If, after the ~xpifation of tho prim8y rmn of this lease and after oi~ gas, or other mineral is produced ftom Aid 11.11d, or from land pooled dlemvil.h, the prodUC(ion lhereofshould cuse from any ause. this lca5C s.hlll n:mal• In foru oaly if Leu« commences openrions for drilling or reworld11g within 60 days after !he: ceu.alion of s11eh produC1ion but .th.all rrmain in force and effect so long u suc:h operations ~ prosctuled with no cen11ion or more than 60 consecutive days, and if they rcs11h in the production of oi~ aa.s, or other mineral, so lotig thtrc;after as oil, ps, or other mineral Is produced from said land, or from land pooled therewith. Any pooled unit designated by IAsoe In accordance with the renru hereor, may be dissolved by Lessee by insln.lmcnt filed for record in the appropriate records of the county In which the lel$ed premisea In: situllcd 11 any time after the c.omplefion of a dry hole or !he cessation of prod1Jttion on said unit In the event a ~II or wi:llt prodlKing oil or ps In paying quantities should be brought in on ldjec.ent land and d111ining the k&wj premises, or I.and pooled I.herewith, Lessee aU"J to drill S>Kh olTsel well or wells as 1 reasonably prudcm opera.tor would drill under the aame or similar clrwms1anecs. Lessee may 1t iln)' tlrne e~rc and deliver lo Lessor place of record a release or releucs covcrina any portion or ponions of the 1bovo described pn:miw and thereby swrender lhls lease as to suc.h portion or portions and be relieved ohll obllpdons as !O the acm1ge su~ . 6. LcuR shall have lhc right at any lime dllrin& or within sli months after tho expir'llion of thk lease lo remove Ill (!fOpmy and fixrure:s pl.lad by Lc.uec on said IAnd, including the right lo draw 11\d Rmove 1U casing. Thereafter same become Iha property of Lessor. When required by Leuor, LcJffi: will b..-y all pipe fines below ordlnuy plow depth. and no openrlons shall be conducted within SOO feet of any midence or barn now on uld land without Lcuor's consent 7. The rights of either party hcrwndCS" m.ay be auigned in whole or in part, and Ilic provisions hereof shall exicnd to their heirs, succcuorJ and auipis, but no change or division In owncnhip of the land or !Vflllties, however aw>nrplishcd, Jhall operate to enlarac die obligttlons or diminish the n&Jits of Lesm:; and no chan&e or divuion in such ownmhlp shall bo binding on Uisee until thirty (30) dll)'S after ussce shall have been furnished by regislered U.S. mail al Lusee'1 principal place of bwlness with 1 certified 2 Confidential KOOCOP00000938 514 • • c:opy of recorded lns1rument or imuvrnenu evldencln& 11mc. In the noen1 of usipunmt hereof io whole« ill pat liabilily for bn:8Ch or any oblipllon hereunder lhall rtJt exclusivtly upon the owner of thl.s lease or of 1 portion lhmof who commits IUCh bRlch. 8. The bruch by Lesaco of any obligation ulslna hereunder &hall not worlc a for1'eit11re or tennhution of thl.s ltue nor cause a t.crminalion or revcnion of the CSblo anted hcn:by nor be vuuncb for tal!CCllatlon hcn:of in wholo or In part. No obligation reasooably to d.ovclop the lellSCd pmnl.su sh.Ill arise during llM primary rorm. Should oil, gas or Olhot mllltnl in 119ying qullllllleJ be discovered on said pmnises, thai after die expirtbon of the primuy tam, Lessee shall de\'elop the aaap reWncd heminder as • reasonably pnident opcntor, but in dlsdtargin1 this obligation ii 1hall ln no evmt be required to drill more thin one well per forty (40) 11ercs or lhc na retained hereunder and capable of procb:lng oil in payin& quaruitiu and one well per 640 ~ plu1 111 1Cte1ge toluance no1 to c~ 10% of 640 acres of !he an:a retained berellndc.- and captble or producln1 aas or ocllet mine.1111 In paying quantities. If al\er the 01>iration or the primwy 1cnn. lePof conaiden tlwl opcntlons an not at any time being ccnductcd ill complitnce with this lc&se, lcssof ahlll notify Lesacc in WTirin1 oflhe facll relied upon u constituting a breach beRof, 111d t..t.s.see, if In dcC.ult, shall haYoe sixty days after receipt of S4lcll notice In whkh lo tonlmencc CM c.ompllance whh Ibo obligalionl lmpoted by virtue ofthl.s lnstrumcnL 9. Lusor hmby wamnt1 llld 1~ to defend the title to all of Leuor'1 Interest in said Jud and qree1 Iha Lessee aa its option may dilch1rge any tax. monwc or other lien upon said land either In whole 0t in part. mi in event Lessee docs ao, It $hall be subrop<ed ID such lien wilh the right to enfurce same and apply royaWes ewuln1 hetounder towatd '91i$fying same. Without lmptimlent ofl.cu ee's right under the WV!'lnty in even! offailun: oft/de, ii is api:ed that if Lessor own' In interest in the oll, gas or odlcr minerals on, In or llJ'lder said l111d leu thin the entire fee simple CJlllte, whether or not this lease plllpOftl to eovu the whole or a f,..cllorlll ina:rest, rhea the royaltiH to be paid Lessor shall be ,.,duccd In the proportion that his lnlCl'CSI bears to the whole and undivided fee and In aoc:or~ce whh the nilure of the utate of which Lessor is seized. Should any one or mcwc of die parties named above u Lessors fall to execule thlJ lease, ii shall nevertheless be binding upon the pezty or panics execurln1 the same. JO, Should l.cs1CC be prevented from complying with any eiqi=s or implied covenant ofthil lwc, from cond\Jtting driiCing or rcW«lcing operations dtm>on ot on IJnd pooled therewith or !tom poducing oil or cu thcreltom or ll'om land pooltd the~ by l'UIOll of scarcity of or inability lo obtain or to uso equlpmcnl or 11111erial, or by operation of force m1jcure, any Fedml or state law or any orda', rule or ~culation of govmuncntll authority, then whlk IO prenntcd, L=ec'a obllpllon to eotnply wllti 111Ch comiant ahall bo 1uspcnded, and Lasec &hall not be liable in damages for fall~ ID comply therewith; and thlJ tcue shall be cf;1Cnded ..tlile IDd ao long u Lascc is p!CVClllcd by my rucb cau.se from conductina drillln1 or ~Wol1dng operationa 011 or from produdng otl or ps from the leued pmnlsa or land pooled therewith, and the time whik Lessee is so ~!rd shill not be counted apinsc Lenee. anything in thi1 lcuc to tho contrary no1wid!Slanding. SEE ADDENDUM, PARAORAPHS A THROUGH AA, A1TACHED HERETO AND MADE A PART HER.EOP POR ALL PURPOSES. IN WITNESS WHEREOF, this inltrument Is uccuted on the dtJe f1111 abow written. LO(~,..i ){r4..,_...-= TlfE STATE OF TEXAS : COUNTY OF DEWITT : This instrument was acknowledged before me on the 26111 day of October, 2007, by LORENE H. KOOPMANN . CIWS'Tlll'HEll M. CllAIN llDy Nill:, lillll d .... lly~- .lmlwy SO, ZOii ~"'-~ ~Lif.STATE OF TEXAS 3 Confidential KOOCOP00000939 515 . . • ADDENDUM • THE PROVISIONS Of 1lflS ADDENDUM SHALL CONTROL AND GOVEJU.I OVEJI. ANYTHING HEREIN ABOVE PROVIDED WHICH MAY BE IN CONFLICT HEREWllll. A. PUGH CLAUSE: Notwithstanding aoythin& to the~ hmln ec>nlalncd, drillln& opcndOIU on or production li'om a pooled °' °' unk unils et111bli1hed wldci' the pnivision of Puqnpb 4 Pwqrapb X hmof, Cllltnclna luld c:o~ bmby and other b.nd, lball malnlaln this lease in folce only as to land lndudcd in Juch imit Of unll>. The !cue may be 11ainllined In force *5 to die remainder of the 1..d in any manner herein provided for. B. INGRESS&. EGRESS: In the event Ill)' of tho KRqc wV!:fed by lhla !cue Is released by opmtion ofd!e terms of Paragraphs A or H hereof, l...cuce shall have the rigbr of ingress and epess for production pWpOSCI lla'OSS Ifie released ~ lo the aaup retained hereunder if 1uch right i.s necesury for Lessee to have acca.s to the malned acreage. C. LAND USE: (RE.FllRENCE HEREIN TO LESSOR ALSO REFERS TO SURFACE OWNER) (•) Should I.us« or 1enant1 on the leased pmnisa suffer Ion of, or cllrna&i: IO, Q'OpJ, ~. run, livesaoclc. WllU wells, fmc:es, roaclt, other pc!Wnal property, buildings or other improvemencs, u 1 result of opetallons or Lessee unde.- thi' lease, Lessee apees to pay Lenor or such fdWlts the actull amounr of their said Ion or dmn.lge. It Is npmsly undenlood aJld provided !hit the da11U1&CS provided to be paid under the terms of this leaso shall be payable within 60 days after wriuen oollco by Lessor 10 Lessee of the accrual of such damases 111d If such damage• are not paid within 60 d•)'I l'rom the rKelpt of any such norice then such d111111gcs shall bear inlercst at the nrta of I 0% per armum from the elite of 11Ccr1J1l of such damage., (b) Within a reasonab~ dme after Lessee's need thefefOI' shall have ceased. Lessee shall fill all pits and other cxcavlllioM mlldc by Lenee upon die lwed premiset, leYel oft' 1111 mounds llilde by UsJee upon the lease prembu, and itmovo all debriJ and rubbish plllced by Lessee upon the leased pmnl1e1 and rato19 Iha Ntf'- to ill ori&inal in-drilling conditlan aa -1)' u posaible. Lestee shill erect and m1int11ln ll'Ound 111 open pill a fence e1p1ble of turning liYllllOCk. To protect Lcuor'1 li\'CStocli, Lessee and those ccnductlna surface and/or seismic operations on the lease snmllel mu.II nae allow truh. dcbri1, cw ~l\isc 11-orn audl operation to exist on the poand, inc:luding, but noc lim~ to, fllgging mnerial, wire, plaWcs, chemical ruiduc, Of' ocher foRlgn object> or mlleriab lbll would endanger or injlll'll livcS!oelt. Upon cessallon of use thaeof by IMsco, it will notify Lestor of 111ch ~lion and at the option of tho Lcuor will leaYC on lllepmnlses u ~ oflhe propaty ofl.cuol'all cattle guanli, waler wclla, bridges and roeds placed lhcreon by Luscc, iU successors or assigns. lhequested by Lessor-, lessee must plw: 111 romd and pld em-ct in piles on the !use ll loc:adons desl&nated by lessor. A c:anle gu.-d with lock-W shall be plal:ied ll the QllmlCC ontu die lease snmlles tbrolJ&b which the LcNco will ban accesJ to the premises wfdl ~ tu Ill)' Mii beln& drilled on die lease premltet or land pOOlcd lttcmvith. Said lock·bar lhaU be ktpt closed and locked at all limos Cllcepl during times of em-anc.. by lcs:lee, Its agents and panics operating Wider die Lessee. Lessee agrees to maintain all roads and pat!u upon which ii b"lvcfs In a condition which iJ as good u or bctlEr !ban !he conditioo of such ra.d or palhway prior lo I~'• entry upon the 1bcm--described net. The loadon of 111y ro.! installed by ~ murt be along • Rl\ltc nquelted by Lessor, however, ~ must DOC male• 1111 unn:aso111ble noquest. Any rwds lrmaDed by Lessee md the drill site must be made up of al least six inches (6, of computed pvcl which lfl'l'CI shall be ~ of stones llO( in excess of two inches (2") in diamdcr. AdeQulle and ample chlnasc lhall be provided on !he roach Ind drill site ID avoid llandin& water. Lcuee must In.WI a slxteai f'ool (16') ptvanlzzd tube p111 In each of Lcuor'• fenca fhrou&h which It must p&D durin& ks opentions. ( c) None of Lcuor's fresh water m.y be used for ~onday recovay IMlbods of oil m au pniduction. Lessee is aprcaly given no ri&fll to disposa of "'Y waste oil or salt Wiiia' on or ow:r lhe leased pmnlses or 181\d poolod dlerewith. All oil-based drilling mud, cllltln&I, and deleterious substances from the ~JI or brou&flt onto the premises by Lea. are to be hauled off the leased ~lses by Lcuoe. t..w.ec agrees that any oll hued mud. drilli111 compound containing 1 bydtocution blse or any material which is hanntul to the 1011 used in Lessee'• opentions on Hid land will be pllCed In 1 poc1able steel storage contalnw dumg drillin& opentlona on said land, and Leuce shall ranovo 111 such mlld1, c;ompoundJ, m11eri1ls and 11onaa conllinm from tho land aJld dispose or It off the leased smmiseJ. Any water based drilling mud not c:oot.lining any of llid delctcrioas 111b5t1nccs shill be &preed. disced, and leveled by tho Lessee near the IOClllon wh«CI the mud was u5ed u di~ by Lessor. The: topsoil of the drill site mwt be removed before Installing the drill site. Allor completion of its use by Lessee, all topsoil th11 bu bcm mno~ mwt be retvmed to the original location and spread over the ara, disced in. and appropriate f!TllSIU pl111ted 1nd ns-sprigged according lo the Lessor's ~irements. The: well equipment and localion !hall be kepi IS clean IS possible 11111 timu, and roads used by Lmee should be kept in good~ of ~pair. Lessor rcterVes the right to Inspect and checlc for accuracy 111 meten tlvough which le3.sor'1 royalty m1y bo marketed. (d) It b here agreed thl1 Lessee win pay the LesSOI' for eath turftca acre used by the i . - ill lt1 operations, wh~ it be for the drill 1tt., pits, production &cllities or roadJ, Sl,S00.00 PCf 1ao as •peed Mllfau dllll\lge, Ill addition to JllYln& those amounts set fonh with regard to otlc tn:c1 and plpcllnes Id Oii! ~low. Lcssca mUJl pey the l..asof SI .00 por foQt in lensd! fur• atxty.fooc (60') wld• pipeline ri&flt-ot-way for lmtallloa pipelines occemry for pn>ducllon of any well on !he least premlseJ, whicb right-of·w.y 511111 nduca lo a thirty.fooc (JO') ri&frt-of·way after ~on and insllllalion oflha pip~llne. U:ueo mini pay Lcnor $7SO.OO as• liquidated darnlge 1111ount for 111y oak tree dama&ed or deslroycd by Lessee which tre0 hu • tNnk dlameler oYer twelve inches (Ir) when measured twenty-fllur Inches (24") from ground Incl, to be locn:ascd SI00.00 per Inch l't!r etCh Inch O¥t:r 12 In~. Pri« to commencins surfKe opera11ons penainlna to 111y wen co be drilled on the premlaes, Lessee shall pay Surlla Owner all swfice cillnaga anticlpall:d II-om such surfau oper'llionL Thaeafter, if ac1111I surfaoee danu&a u aicd Ille ~t paid by Lwu to the rurface o - , then Lessee shall P'>' all addidonal surfllCll damages Immediately. (c) NoiwlthsUndlng me general 1mns of gnnt wntained In thiJ lease, lho Lestee Is noc given the right co c:rcct or m.ain1ain refining flcilit.les, or 111y olhe:r Ulnttion or treating fsilhlcs on die lease premli.es unless dircctJy rellted to Ille prodllClion, tre:l!ment, llDd recovay or oil, ps. sulphur, and Olhcr leased minenils from thl• luae or &om 11114 pooled therewith, ud such ~lllties, if ID)', lhll1 be only those ~asonably nuemzy fur pn>duction, treatment 111d recovery of such leased subslanca &om dill lease and bnd pooled lh«ewith. (f) Upon faminalion of th it lease, Lessee •l!J'C$. binds and obllpies ltstJlf ID plus In acconlance wicb !he Rule:i ~ Regulllions of lhe Railnllld Commluion ofTcus 1111y well clrilled by Ll:lsee. In lhe OYl:llt LellOO shall 1'111 IO ph1&IUCll well in~ with die forqolng provisions, then l...cSSOC' sllall haYe the right to do so 11 Lessee's expense and lhall be entitkd to ~co>'tf ftoom Lessee Ill 4 Confidential KOOCOP00000940 516 • eirpcn$CJ incuned In the pluglng of any such well, together with a reasonablo attomey's ~County, Tcxu. • rte and venue fOf lutb ltlloo shaU be In 0. SHllT'·IN LIMIT: It is expressly apud and p!'O'fided Cl\ll thb leale cannoc be held, malnlalned, llOI' atmded under and by vlnuc or tho •hut-in '" well pnivUlon of this lease for a longer tmn be)'ood lhe prilllll)' tam 111111 rwo (2) consecutive yan lmmedl3Uly thefaftor, or fOf ahol1ct laml 11 various lnlervals not ID exceed in the ...,..m two (2) , - , in all E. MINERAL LlMITATION: It is aprcslly undenlood ad provided that this lase coven oil and ps 111'1 liquid hydnx:lrt.om, along widl tho produas 111d by·produc:U thereof, but Ibis leuc does DOC cover unnlvm, fia lanable m1tai11J Of 1111y odltf minerals or any lypO, hen: rrAkin& panicu!. mention ofw.tcr, lho Lcucc herein bein1 giv.:n no right to explore for, nor dtVl!lop 111)' part of the land (Of production of w.tcr !h=from except wi1h ~ to produdnz: Wldtr lo be u.scd told)' whh reprd IO lcsRe's oil and ps drilling opcnlions. Notwithstanding anything to Ille contrary in this lease conbllned, l.eSJcc dlall 11 all rimes protect the herein leased land from drainage of oil and gas from wells on adjoining llllds. F. POOLING LIMITATIONS: . (•) Jn the event Lessee exercises its option to pool u authorizied by !he 1crms and provision• or Parlgrlph 4 herein, the right to pool for 11&1 including condensate and distillati., is hereby limited ID 160 ~plus t0% tofCTllllQC IS ID all horizons from the sutf'Ke oftho VCKJ11d lo I depth of S,000 feet below the Rlrl'1cc of the crocmd and to 320 l l:ICI plUJ 10% tolcm!ce U IO all horilom &om 5,000 feel below tho surftce of the ground lo a depth of9,000 feet below the sric. oflhe &fOllnd, it bein1unders&ood11ta1 Lessee shall have Iha right to pool or unitl1.0 the L\ndl coven:d hucby for gas including condensate or dllllllate u to all dr:plhs below 9,000 re~ below the 111rfl1e:~ orthc ground l111CCordancc with the tenns lllld provisions set forth In 11kl Plngraph 4 above. lfl..euco excrciJcs Its right lo pool 1 au well localed on tho Lessor's land, it mu.sl place Into the pool ll leut $0% of Lessor'• land origln1lly !cued Ind dumbed herein, unlcr.s Iha ,.Id laocl originllly luscd herein docs not exceed 150 ICm In auch case 111 of tho llllld must be included in said gas pool. {b) Lessee acquires no rights or power ID pool any of 1he lbove descn"bed land for oil, ii being undmlood and lg1=i that pooling provisions as provided for ltutln ~limited to gas and/or gu disrllla.lc only. O. RELEASES: Lessee must furnish to Lessor within 60 dl)'l after lhe tcnnination ofthiJ lease with reg,ard lo 111y pan of the hmin lascd pmnl.ses from 111y cau.. 1 duly executed md •cknowlodpd illllnlment releuing OI' evN!enclne the tcrmlllllion of the lease as to th11 pll't of th.e land upon which the lwe has tuminaled. U:ssee qrcc1 IO p1y !Assor SIO.OO per day u liquidated damqa in DeWitt County, Tous, for 1..w.ee's hihn to furnish said release within I.be time provided. If the l..esRC docs so Iii~ such damages per day ARE ID bqln ICCl\llng on I.be 61 • d.y 1ftcr sui:b tamlnadOll. Said amoat ii ~ to be 1 n:Dllllble mnounl IO omet llClllal dmnqcs wbicb Ire dilricull to detcnnlne. Said liquated dJmi&t amount i1Umilt>d10 I muimum amount ofSl,000.00. H. NON.f'OOLED PUGH CLAUSE: ~must within 90 dlyl afttr lite compldlon or 1111y IWll on the IC&Wd premhes which Is noc pooled under lhc provisions of Par1~ 4 or Pwagnpi X hereof desipiat.t In wridn& Md pl.Ke or recx>rd widl thl County Clcrlt of~ County, Texas, • description of that pmt of the le.od pranjsa whi"1 shill be 1llolled IO sucll well for~ JU1I09CS. no "'°" lhllll 40 llO'eS plua 10% tolennce IO be allolled in fDd ~each well ct.uiricd a 111 oil well by the kallrold Comm!Jsion of Texas if complaled 111 depth of 9,000 feet or less below the surface nor more than 10 ea-a plllS I0% IDlerance IO such oil well if compk*d 111 a depCb or more th1119,000 feat below lhc surface, and no more INn 160 aaa plm 10% iolenncc to be allolUid in and mound each wdl cWsificd u 1 pa ~II by die Railn111d Commluioo or TGXu if completed at a dq>lh or S,000 flld or le11 below the aurlice of the gtOllnd, nor men than 320 llQ'CS plua I0% tolcran~ If complded at 1 depth of more thazi 5,000 feet below the sumu oflhe pound b\11Imthan9,000 feet below the surficc not more than 640 acres pllll 10% tolerance to Sllch 115 well ircompleted Id a dep«h of9,000 f...c or mon below tho surface. Produc:tion or opmtlons on said allotred area by the Leuec shall mainllln lhls lease in effect only with regard ID the land within the descn"bed uea. This leue sh11l 1c::nnlnate 111 the end or lhc primary Cam u to such put or paits or the leased land lying outside the allotted area unless this lea.so is ptlpellllted as lo such la!ld outside the allontd area by operatlonl conducted thcmm or by prodlldion of oil or gas or any ruc;h opcndo111 and ruch production In a«ordlncc with the provisions hcrcor. I. PAYMENT LOCATION: All roynltles, surf'l.CO damages, and other paymcnlJ duo under lhis lease sh•ll bo payable In~ County, Tcxa, unlcn OlhC1Wlse herein provided. J. Ml'NIMUM ROY ALTV: lflho royalties to be paid unda thll lnse durln1 12·monlh periods u tbT!bed below ue le5I dim the sum or S25.00 per ICl'tl !hen leased ("mlrlimum n>y1lty"), Ind Leuor scnds Lenee norlcc in wrltina or same, thell this leaie will tmnilllll: II the aid of 90 dayJ 1fter LeA~ ~l~es wrlt11ll notice ltom LellOI', Wilm the Leuee pays to the royalty holders 1 sum of money cq111I to the dilfcn:nce between said minimum ruy1l1y per acre Ind Ifie total of all royally monies on production so p1ld durlni: Ibo appl'"blo 12-momh period, Said 12·monlb pcriodl IR the initial period bqinnll!c widl the diUl off~ production from Ille lease prcmlJci Ind each JUCCCSSin 12-month pcilod liima.fta'. Tho pl}'1Mllts '4:t out In this pengnph do not n:licve Lessee of the requlmnent of produc:tlon in paying quaMitia IO maintain t!Jis lease. Notice u lo this panpwph will dmncd to be glwn when ii Is deposited in the mail, cutificd, mum reci:ipl rcqutsled. K. INFORMATION PARAGRAPH: Lcuor or bl1 agent shall have 11CC1CU to 111y well bein& drilled on tho pn:mise3 but must not lnrerfuc w1lb Lessee'• opentloru. At Lessor'• rrqum, l..eJJCC mast furnish Lesaor or hlJ agent with copies or Jogs. elettriQI w.:11 formation •W'VCYI llld analyu1 or formllloa samplct used by Lessee with reprd to arry well on tho pra11lsa wi.lhin JO days after well aimplc:tion or niqucsi, whlthovcr it liter. ~mun fWnish lessor on n:quni cop1c1 of ale contract conccmlng oi~ ps, ud other minent11Tom Ill)' wtll on the land. All of the~ lfO 10 be furnished Lessor Ill hll address Id out above. ~~to koep all lnfonnallon cotiridmtlai for a period of twenty four(24) months from receipt. unltn said luformltlon is necessary fOf 1 lawsui1. L ROY ALTV PRODUCTION: Paymemts of royalty under lhc tmns of this lcuc ahlll oevu bcu or be c:hlqed wilh, eithc:r directly or lndin:clly, 111y pat of Iha mm or expenses of production, pthcrin&. ddtydntlon. ~Ion. lnn$pOltllllon. ,,..,.,~ proccuhl&. trntiiig, pan-production expenses, marbling Of olltcrwbe making the oll or ps ready for Ille or we, nor any COlll or conllruclion, opcntiotl or dcpRclalion af any plane or Olbtf r1cilitiet for proceatna or tm11.ln1 laid oil or gu. AnythiAg 1o the contrary herein no«wlthstandina. it ls expressly provided thll the tcnna of this ~ lltall bo controlling over tho provilloos of Puqnpll J(a), (b) llDd {d) oflhl1 lease to~ wntnry Ind thb panigmph ahlll not be tr'C&ll:d a su.rplusage ~1111 the llokling in the s Confidential KOOCOP00000941 517 C&1CS • • styled "Hqjtaq Rmurw.Jn-.. v. N1tjQNbW. 939 S.W. ld 111 (Ta. 1996) and "Judice y. Mewbo!lne Oil Co. 939 S.W. 2d 135-36 (Tex. 1996). M. DEEP RJOHTS: At lhe end of lhe primary term htreof or the expiratlon of any exri:rulon or miewal of tho primary tcnn, whichc~ oecurs later, this lease lhall 1L1U1matieally eXJ>ire u to all deplhi !yin& dee~ th~ 100 feet bel<WI tho decpC$t oil or pa slrlla found co be t1p1blo ofpiod111:ing in p1ylng or conunm;ial quantirles durln1tho1erm oflhlt lease. Provided IK'lwever, lft.euce is then eoppl In drillin& or rr:wortin& opcn1lo111 on the ftled pn::mlses or lllldt pooled dwwwillt, this lwe shall rwmaln In l\all lbn::a u to 1\1 dcpdu so long u 1uch drillin1 or mirorking opcmlona are ~ed with no c:essation of mOR thin sixty (60) ~ivedays. N. ROYALTY PAYMENT DUE DATE: All roydy pi)'lllClllS on acnial procluQion an: duo and payabhi within 60 d.ys after the end of the month in which the produdi<MI occwrcd. In the event Lasce becoolta dellnquent in wch payment, lhe ~ mllSt notify tho Leisee of tho default and if Lui.ee does not pay the delinquent amount within IS days atb:r Lcuor has tent aucfl notice of tho delinquency lo Lessee by cet1lfied mall al itll addmt set out above, i . - m111t pay Interest on the delinquent roy1lty emount ind on all other royalties aubsequently becoming delinquent until 111 delinquent peymenb hlvo been paid, tho interest rate 10 be 12% per year and computed os to -h of IM dclinq11e11t amounts be&innlng wllh the date each becomes due. Lessee's obligations to pay royalties under this lease shall be S«Uted by a fU'SI lien under the provision:s of Section 9.l 19 of the TclCl.I Business Ind Commerc:e Code exttnding 10 all of Lessor's royal!)' share of all all and p.s production ind the proueds of such diare or the piodualon from die prcmisn. l.csloa's :ialc of the royally oil and ps shall not e111inguish thb lien, which lien is thereby impressed on the monies rcuivcd for the rQyalty oil and p;s. In the event ofl.e.ssee's b&nlcnrptcy, Le5SOr shall posseu 1 lien on all proceeds fi'om ttic s.ale oflhc royalty oil and gal. 0. REPORTS: In the event of production nf oil, gas, and olher liquid hydrowbons &om the leased premlsea or land pooled lk!ewi!h, lhc Les.see muit del.im' lo the l.eJsor henlin afta' Lesso1"1 wrilla\ request eopin of all manlhly nll and ps production rqMlfU required IO be tiled wldl lhe Teua Railroad Commission conc:cmlna the well or wells on thc ~ PfCllllses Oii iand pooled lhertwl!h, such delivay to be 11 the ~time u the fllln& time therefor n:qu!rtd by aid C.Ommb:slon. P. NOTIFICATION: The Lessee mwt nolify wsor not lw lhan 4& hour1prior10 any enlrulce on the lcalCd prcmiut, of tho date ii will enur the land, including in •udt notice lite purpose of the Gnlry and, lhpplicable, lite specific location ofany well to be drilled on the leased premises. This will not apply, however, 10 "°'"'''well inspec:!ioa operwtlons (gmieers, e1c.) Q. DEF1Nl110NS USED IN IBIS LEASE: (I) Tho ltm\I udrillina opentionl" or "opcmi0111 for drilling" shall mean lhM lite drilling rig Is In position with the bit on the ground and rolatin&. (2) A well is "completed" undc:r lhe provisions of1hi1 lwc (I) live d1ya after the well reaches total deplh and oo attempt is 1!11de to comp'lete the well u a producer or oil and/or gu by runnln11 of production cuing. or (2) thiny daya after the date production wing is eell\el\WI In !lie well (u mlected by the cemcntlna affidavit required to be flied with lhe Railroad C.Ommlssion of Tau) In the evcat 1111 ancmpl b 1111de to c.omplcle the well as a producer or oil wrd/ar ps. Any Iller wort dql')I! qn th '"'II will be dccllled 10 bt rc- wom111 opermlol\s. (3) A well is deemed "aM!doned" at the earlier of(a) when pcmunently plu&&ed, or (b) "1len tcmporwily plugged by 1Mtall11lon ora dly-holc tree or by weldln111 steel pllll: 11 the IOp of the o:ulng. R. Taken Olll(Negligent Losa) S. POLLUTION AND CONTAMINATION; (I) It Is qreed and undcm-1 bctwtc11 the Lcswr &/Id the Le1sce thll the Lessee will In its opcnlions on the lc.a.sed pmnlses comply wllh all Fedcnl. mid Stile laws, rules and rcg11Jation1 with n:gard to the avoidance of pollution and CDPlaminalion, inc.luding, but not limitt:d to, the Comprehensive Envirnnmcn.. I Response, Compensation and Liability Ad of 1980 ("CERCLA"). the Rcso~ Conserwtion and Recovny Ai:! (''RCRA"), The Texes Health and Sefety Code, Rules and Regulations of any Stale or Fedenl 11Cfrnlnlstrn1ive •CUICY and all amendments l!ien:to u and whC!I they becomo effective. (2) l.essee osnimes all responsibility to pn>led. defend, indemnify, and a ve l..essoJ harmless from and aplnsl all claims, dtmlnds, and CMIStl of action of ewry kind 1111.d clwa:!cr arlstn& dinldly ot indit'CICilly &om any Ind all poflutlon Of contaminEIOll wbidl may occur dtrllg tho condJK:l of opcnlion hmlmder whetba' aboft the !Md IUlfKo w bolow, illc:ludln&. btrt llOl llmlred ID, those which l"tl$Ult &om 1plll1 of matm.als llllJ/or garbage, or which may rault &om lire, blowout, cral«ing, M:Cpllp, Oii flow of oil, PJ, 'Wiier or ollltl' .subs1ance, u wdl as from the use or disposition of oils, nutds, conumina.ted cuttings. lolt eimilllion .ad fish n:covesy mllaials and fluid. (3) Lessee mt.Ut control and remove all polluting or conWllinating lllbslance. it brinp or ClllSCS IO be brought on tho land. If a third perty performing worlr. for the Leuee commits an 1et ar nonisslon which Rmlts in such pollUllon or COlll8Tllination or falhn IP wmpfy with the •forcmcnliol!Od laws govcmin& same, I.he Lesaco shall be n:sponsible lheref!K 10 the Lei$« widc:r this parqrapll. (4) This ban ongoing obligation on the pin nfthe l..cuee which survives lho 1crmination oflhc leuo wilcss tllC Lcswee fumlshes to lho Lessor 11 Lest1eo'• cicpenile an E!lvlronmenfll Audit 11 die urmlnation of the lease sllowlng lhll thens It no polfudon or contaminallon &om Leuee's operations wider tJtls laase then In ulstma: on the i-d land or land pooled tberiwith. Slid audit shall be conducted by 11 person ayud upon by Lwor and Lusee who ls qualified IO conduct such •udit. {S) Lessee mwt immediately norlfy ~ upon laming Oii swpccting th•I any environmental eonwninarion or pollu'llon ha! oe<:uired on the lease ~ises. (6) Lessa! must m.a.intafn in effect 11 1ll lime5 durin& its operallons under 1111• lease a lltbllil)' Insurance policy in amount Of not Jess lhlii1 S 1,000,000.00 protecting l.e$sor •&•irut all claim• arilln11 by virtue of the l.euee's failure ID comply with the pniviJioru of this Pangnph S, and must fumlsh Ltsso.. prior ID !Je&lMlng such operallOlll with proof of the eidstcnce or l1JC.h policy. 6 I Confidential KOOCOP00000942 518 • • T. JNOBMNIF1CATION: Lessee 11Jtt$ lO indemnify, hold hmmlm ind defend l.nsor II Leiscc's COit against Ill claims for dlmlru to pcno!I or property arising out of or conl'ICQed with L.estec's open.lions on or oc.;upancy or the leased pmnises. Lessee wlll comply with 111 enviTonmen11t pi-ote<;tiDll mt pollution IJws. U. DIVISION ORDER: Neilher the Lessee nor any olhet pany dlsbuning oil or ps roy1lty u provided und~r this ka.se or through •1"Cmcn1 or lhe third pt.rty wilh the Le.ssec may miulre Laaor to cxoculc 1 divi1lo11 onlcr u 1 requisite for the Lessor being p&id roy.lclcs wilh the excepcion 1h11 a division order !hat prov~ only 1 stipulallon ofdlo Leuor's royally lnlcmt ITllY be required of the Lcnor. V. RATIFICATION: Prior lO e:itercisin& ilJ ri&lrt to pool or wiitiic any p&lt or the lease premises, Lcucc must oblain ratifitllion of chis luse by all holden of outstanding royalty, if 1ny, lhcnby pl'OCCIClin& Wsor li'om cl&inu of such roymlty holders. lcsJeC mUSI bell' Ill)' excess roymlty occasioned by Lessee's Iii.ii~ to obtain such mifkalion. W. l·D SEISMIC OPERATIONS; No aulhorily is herein panted to Lcsscc to conduct seismic opcntlon111Slng l·D method IDl!CSS Lenee pa)'1 lht sur~e owner prior lo beginning of such opcrallons S2.S.OO per !!CR for lhe CTttlrc t1nd above ducribcd. After completion of such opentlons, Less.cc mu.st restore lhe land to Its origlnal condition just prior to such opentlons and must pay the surrtcc owner ind 1ny 1cn111ts the actual 1mount of dunag-es irising &om such opcntfons. X. HORIWNTAL DRILLING: In the event 1 well Is drilled in which the horlr.onttl compol!C'llt or the gross complellon intcrval exceeds one hundn:d (100) foci in length ("horizontal completion well"), pooling shall boon a swf1e11 acr~ge basis (defined below) to incl~ Ille lenath of 1he horizontal dr1inhole beginning d 1 poinl where the horiZA>nlll drmlnhole penelnltcs IM com Ialive inlttVll and extending to tho 1.erminu1of5udi horizontal drainhole. For the purpose orlhl1 provision, ~1ermlnu1", "hDl'lzontal drainhole" and "com:latlve Interval" shall be defined in accordance wilh 1he Rules and Recul1dons of lhe Railrold Commission of TexllS or other aovtmmcntal authori1y having jurlsditlion. The dilgonal of ulcl units ah all comply wllh the Rules and Regul11loR1 of said Alllhority, Including bul not lirnil!ld to, Statewide Rule 86. usurface acrell&' basil" mwu the production on which the Lessor's ro~lty Is caltul1tcd ahall be lhat pD11fon of rot.I unit JlfOduet)on which the surlKe am:qc co~ by tfil1 lwo and Included 111 the unit bean 10 lhe total surlace IQ'Cago in th• uniL The siie or the unil for a horizontal completion well wilt\ 1 drill s.itt IOUled on die above dcac:r!bcd propcll)' or In which the above described property is pooled where !he drlll 1ite IJ locallld olfthe leased pn:mkn shall not cx.cced the unit slic pcrmlncd by lhe R.allltlad Co111m1Jsion of Tex.. In CKCl'CWn& the poolin& riahU pWllcd in lhis ~ I.a.see shall file or reeonl I wriltal deelWltion describing the unll U to lho speclfto lase.I llld ICl"eJl8 to be ~hided !herein U \Wit u the vertical llmlll of lhc prod&Klivc horizon or ZO(ll) Ind statina Iha •lfoahoe elm of poollnJ; hawewr, u IO llDY horimnwly complcud well, Lessee sball hive ninety (90) days fiolll inllill ccmpletian la which to llll1Clld Jucb written ck:ripmtion of llnit to lncn:ase or detrcase the acraae, inclllde or exclude specific lea5CJ OI' IJ'ICU u well u ~dcliM the vi:rtlcal limits of the productive lDlC ill order IO form to Ille -11 spacing or density pn:acnl>ed by die Rallrold Commwion or Tau. If sud! un.ir Is filed Ind •mended wldtln sueh period Of time, Lessee ~I fife Of record in the counl)' where the Janda lie louted I wriam declararion describlnc the revised unil INI stating the cfrccli...: date or rcvlsi011. To lhe CX'IClll any portion of the le.ucd prcmbea is Included in or excluded &om the uni! by virtue of such revirion, tilt: proportion of unit produ~lllft 011 which royaltfn n payal>le under th~ (>1Rg11ph wll be adjllSCtd "cordingly as of the offCCllvc date for the revised 1R1it. The effective d&lc of my tat it formed for horimnlll dralnholc wells undc:t this pananph or any m'Uion thereof shall be the date set fonh IS the cff'ecdve date by lcsseci in thcl wriacn dccl-lon thu is flied ofn:conl for sudl unit or n:vlsion thcm>f. Y. ASSIGNMENT; Lessee must advise Lessor of the names and addresses of each assignee or transferee of all or any part of the lease prcmjse, or rights beret.Ulder within thirty (30) days after the execution of such assignment Z. EXTENSION: The lmsor herein grants to lhe Lessee the option to oxrend the primll)' ttrm of this lease lbr 111 lddldonal IWO (2) yun bcgirilllna October 22 20 I0. provided howcvcc for said ~lrl\Jion to take etrccr, lite Lcsscc m~ dell WI' to die Lessor on or prior 10 Cktobq 22, 2010, 1 cash amoon1 or124.QOO.OO. If Slid IJ'llOWll la not dcllveted tu !he Lcnor within !he lime provided. !his option shall autnmllic1lly tom1ina10. Should tho eldenslon oplion be exet11lscd as herein provided, It shall be considered for all pullJoses u though lhis Lease originally provided for a prlmll')' tenn of five (5) ycan. AA. HEADINGS: The per1graph and section beadings appnrlng in this lgJeemcnt are for convenience of referc:nc.e only and are not lnlellded, to any ~tent or pllfpOse, to llmit or define tho text of any pl118"ph. SIGNED FOR IDENTIFICATION: 7 I Confidential KOOCOP00000943 519 • •• RATIFICATION OF OIL AND GAS LEASE fW3f>'I • STATE OF TEXAS § § KNOW ALL MEN BY THESE PRESENTS: COUNTY OF DeWITI § WHEREAS, on Ille llad of October, 2007, LORENE H. KOOPMANN, 111111niurricd-11, as 1 - , dideXC(;Ule and deli var to HAWKE. ENTERPRISES, as Lessee, a celtlin Oil. Gas and Mlncnl Lease a evidenced by Memorandum of Oil and Gu Lease, said Memorandum bei!lg duly recorded In VollMl!c 24J, 11 P1&e 176 of Ille Omclal Public Recotds of De Wilt County, Texu, 1111d covnin&: 120 acres of land, more or less, being a part or Section No. 13, lndillj()la RAilra.d Company Survey, A-272, De Win County, Texas, beini: dtlietibed as TRACT NO. ONE and IM.CI NO. TWO ln that certlin Occd dated Ococember27, I 996, liom Lois Strieber, Individually and as Independent ExcMrix of the Est.ie af Jury StrleOO', Deceased, as Gran1or, to Oilben A. Koopmann and wife, Lorene H. Koopmann, as Grantee, and being ttc-Ordcd In Volume 14, pqc 425 of the Official Public Records of De Witt County, Texas. hereinafter called "the wsc". Refc:rcnce to said (,case and to lhe record thcreofbclna made foc 111 pUTJ>Oses; and, WHEREAS, said Lease and all rights and prlvllc&et thmumlcr 111e now owned and held by BURLINGTON RESOURCES OIL & CAS COMPANY LP, whosuddrus is P.O. Box 1967, Houston, Tew 772S 1-1967, hereinafter called "LCPCc'; and, WHEREAS, ii Is lhe desire of LOIS WOLPMAN STRIEBER. 1 widow, the undC11igned, 10 adopt, ratify and ~nlinn uid Leas.c; For adequate considention, In hand paid, rhe receipt and sulfK:icncy of which Is acknowledged and confessed, I, of Lois Wotp111ao Striditr, a widow, the undersigntd do hereby ratify, 8dop1 and c:cnlitm lhc Subjecr Lease In 111 of its terms and provisions and do hctcby lease, grant, demise, llld let the lands wvcred by lhe Subject l.euo UlllO BVRUNCTON RESOURO:S OIL& CAS COMPANY LP, subjec1 to and inacc.orcW1ce with lbe!mnl ind IJC')vi1ion.s oftbe Subjocl ~asirt had been and original party ro Rid Lease. And, I LOIS WO LP MAN STRJEIER, 1 widow, I.he undrrsigned, do heRby agree lhll die said "Lc:uc" is a valid and suMisling Oil lllld Gas L.ease. ..f'iA .:r~I~ In witneu whettof, this Instrument was executed thiJ!l::::..day of,_., 2008. Lalor: STATE OF TEXAS § § COUNTY OF PeWIT § ~rJ .:Tc.11 This instrument wu acknowlc4gcd before me on this the;::i9ay of Jmi, 2008, by of Loll Wolpm.. Slrltber. 60351 Afla' rtt.Ofdi.na plwr: rcrum to: f'.iled for Record % 3lORayford Hawtc Enrcipriset Ti.II, lh&\£\..\h day \ • "LI'. , ~..Qa RDad fl96 .r · 'YJ odcdc · M Sp<lna, Texu 71316 El.VA PE IEA&W. COUNTY Cl.Bl( OF {j) qiWI Cov!ty. Tp.mo I - ~ Deputy Confidential KOOCOP00000944 520 :) .... .. .. - - . !i"J'c---- !If Al. PROP£1l i Y AUMlll :;..:--:··~ .': :':4 · ·,_ : :. ·,., . ...'-"·' . . .... .:. ·.i.·~ "·,1:·1 w.~~r11:1.:mrr l~·;~i:~ •· .'t_r • : 1 c.•.J :-. - -:· 1. :, ,•·--'.. ,....·.... ·:·, 5 3 j 4 97 NOV 21 ~ . . ·- - . ' . ~::·~:'.~.~·~~~. ,..f[~~;..~;.: ;.}·-· • ~ . .. Id ;· ...Yo .; ....; :,·: ., ·. v. ..:-:•'- i" . .. . -· --- - - . . ,.,·....... . _ • 1•J ' .. "' · • t "' •' ..."': •. ;.., ·,: .. 1,, , ·.~ n·.:;. ....1.:.,.~•:,,.L. .. . . --~~ u: ). •lt i.~- •:., LJ J • 1\( ~ '· . ,. U · ' ' ' ~ -' ,,. ', . ) • .· !' .. ;, ., j..~; . ,.. I i l .. I ... I . . . . •• .,. ,• ~ ,• t ' ·, .. I 1 •• ·~· ~_j.:: ...~·.'-:- ' •__.___ _._ Confidential KOOCOP00000945 521 • . '-.· ' 79812 NOTICE OF CONFIDENTIALITY RIGHTS: IF YOU ARE A NATURAL PER.SON, • YOU MAY REMOVE OR STRIKE ANY OF 1'HE FOLLOWING INFORMATION FROM THIS INSTRUMENT BEFORE IT IS FD.ED FOR RECORD IN THE PUBUC RECORDS: YOUR SOCIAL SECURITY NUMBER OR YOUR DRIVER'S UCENSE NVMllER RATIFICATION OF OIL, GAS AND MINERAL LEASE STATE OF TEXAS § § COUNTY OF DEWIIT § THAT WHEREAS, wrcne H. Koopmann, as Lessor, did exetute lllld deliver to Hawke Enterprises, as Lessee, 11 Paid-Up Oil, Oas and Mineral Lease dated October 22, 2007, a Memorandwn of which is recorded in Volume 243, P•gc 876, Official Records, Dc\Vilt County, Texas, covering (he following descnDed tract ofland: 120 1cra of land, more or less, being a part of ScclJon no. 13, Indianola Railroad Company Survey, A-2n, DeWitt County, Teiw, 1nd being the same land cbc:ribcd as 'Tract No. One' and Tract No. Two' in thaccictaio Deed dated Decembu27, 1996, from Loia Stricbu, individually and as ln~t Executrix of Ute Es1alc of Jerry Strieber, deceased, as Grantor, to Gilbert A. KoopmlllD wd wife. Lorene fl Koopmmn. as Grantee, rD;Orckd in Volume 14, P~ 425, Official Reconls. DeWitt County, Texat. (hc:mnaft.cr refetftd to as tbc "Loa.sc") Reference to the Lease and the record of the MCIJIOra.ndum tbeJcof being hc:e made for all purposes and · WHEREAS, the Le.ase was usigned to Buffinaton Resources Oil & Gas Company, LP in an Assignment dated effective JanlW)' 9, 2008, recorded in Volume 250, Page 822, Official Records, DeWitt County, Texas; WHEREAS, the lease wa.s ext.ended in a Notice of Excn:ise of Options tD Extend Mineral Leases dated March 3rd, 2010, which is recorded in Volwnc 305, Page 12, Official Records, DeWitt CoWJty, Texas; aod WHEREAS, it is the desiie of Lois Strieber hereto to adopt, ratify and confirm said Lease, as amended. NOW, THEREFORE. in consideration of the premises and other valuable consideration, the receipt of which is hereby aclcnowlcdgcd, I, LOIS STRJEBER, do hereby ADOPT, RA TWY and CONFIRM the Lease, u amended. in all of its terms and provisions, and do hereby LEASE, GRANT, DEMISE and LET unto the said Burlington Resources Oil &: Gas Company, LP, its succ.essors and assigns subject to and in accordance with all of the terms and provisions of Slid Lease, as amended, as fully and completely as if I had originally been named as a Lessor in the Leese and had executed, aclcnowlcdged and delivered the same. And l do hereby agm: and declare that the Lease. as amended, in aJI of its tt:rms and provisions is binding on me and is a valid and subsisting oil, g119 and mineral lca!e. Executed this tJ 1 day of 'J""~"12011. Lois Strieber · Ratification of Oil Gas Mineral Lease Confidential KOOCOP00000946 522 .,· . .. • ... • ACJ<NOWLEDGEMENT Stau:ofT~ § County of DeWitt § This instrument was acknowledged before me on lhi'1._-fiiay of0C....0 , 2011, by Loi5 Strieber. S e~SU~orf&m 79812 Ratification ofOil Gas Miaeral LCMC Confidential KOOCOP00000947 523 . •. ; ..·' rlt Al. PROP£R 1'( Al.!t'i!H • .- . -· • '. I 78 8 6 S6 OU 20 11 t '• ' I"! • J • ~ ' ' ·· ··;. • • IJ ! " I•. • o ·' o 'f".: . .. ·1 • ' • • : ~ f1 • I Confidential KOOCOP00000948 524 • • .- . ~·~· ..·_,:.· · · · .· 1424 330 ~ f:IOed. SW 198 . • . Spring, TX'7738e :. . . (281) 2Sl2-1383 ·· 10/30/2007 i ~ ~'fu:~ °[,~E L0tene H. Koopmann I $ ''24.ooo.oo ~ Twenty-Four Thousand-Only""''" ,. DOU.AAS ~ ~ . ~ Lorene H. Koopmann '405FM1011 t; Yonctown, TX 78tS. ~ :s (Bonus Consldenltlon) :; MEMO 120 aae.. DeWitt County, TX/Burl~on/Cuero Wect ' .. ... . . . _. ______ ____ Confidential KOOCOP00000949 525 • 11'2/2007 c. ~ ~~~~E--:Lc;.;Of..;;..ene.;.;;..;.;H.:....;.K.;.: oo.:, :Pc.. m;.; ; an..;. ;n_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _-.JI $ ..6.000.00 ~ Six Thousand Only' .."" OOL.l.ARS la ~ Lorene H. Koopmann 405 FM 108' Yorktown, TX 781&4 (Bonus, Conskl9!3llon-81i.n0e Due) 120 acres, DeWitt County, TX/Surlinglpn/Cuero Wast POD~~~~~ ~~i~~22~55~ O~Q2~87•~i~ ., 0 Confidential KOOCOP00000950 526 ~~=·:::·:;!z~·'''11.u1.1ma;e14;11151s1:pr:1~::::·i:=.•narnamrmm ·~ 1 ' 20501 Katy Freew11y, 1214 Dallas, lX 75201 Kary, ix n .. so 1-800-788-1000 . (832} 83().2404 DATE 1212912010 88-9317/11111 PAV TO THE ORDER OF __K_ar_e_n_M_._K_o_e_n_;ig~------------------ $I **50,400.00 __-~T.~'lli_o_u._~~'AJVD:-:-~-Fi~O~U_R_-ll_UN._~_'Jl£._'D_A.N._'D_._o_a_v_1_o_o_·_·_··_·_·_·_·_·_·_·_·_·_·_·_··_·_·_·_·_·_·_·_·_·_·_··_·_·_·_·_·_·_·_·_·_ _~DOLLARS __F._1_FTY- Karen M. Koenig MEMO Amendment Fee 120 acres 11• b 5 5·2 1: L Ii Ii q q 3 ? ? ti 1: 1.80 L 5 50 ?O? "305 l( 8<o-ooo ~Cft.iJ·l·0'!1.N1tl¢t"RiiJ.ll·l;IH:f.B:iihMl!li·*.l7Fi'll.lll3;M4;!iilm!Mrni:!fJii;l.i4MiCBlll4flii.\;1114Mti\7.\iM\?~ . Dolphin Resources LLC JPMorgan Chae Bank. N.A. 6553 20501 Katy F~ ~14 , Katy, nc n•sa (832} 6.30-2404 Dalas, lX 75201 1.:S00-783-7000 ,; . . DATE 12/29/2010 11&-QJn I 1 119 PAY TO THE ORDER OF Karen M. Koenig $ l..__._.*3__;,.,o_o_o_.o_o___. __r._'ll_RE __E_-_r._u_o_u._'SAND _ _ _AND __o_a_v._1_00_••_*_*_*_*_*_*_*_*_*_*_*_*_**_*_*_*_*_*_*_•_*_*_**_*_*_*_*_*_*_*_*_*_*_*_*_*_**_*_*_*_*_*_*_*_*_*_*_*_*_ _ _ DOLLARS Karen M. Koenig MEMO Miscclianoous Fee 12011cn:s 1.801550?0? -~ . ,. / Confidential KOOCOP0~990951 a f Dolphin Resources LLC 20501 Katy Fle9Way, #214 JPMorgan Chae Bank, N.A. Dallas, TX 75201 6551 Katy, TX 77450 1-800-788-7000 (832) 830-2404 DATE 12129/2010 88-937711119 PAY TO THE ORDER OF Ralph Koopmann **50,400.00 FIFI'Y-THOUSAND FOUR-HUNDRED AND 001100************************************** DOLLARS ------...-.,.----------------~-----------------------------~ Ralph Koopmann MEMO Amendmen1 fee 120 acres CC~b iao is so ?O 1 vcn.cl>eCk Fonn :ux>O Pros119<1 (01i08) DETACH BEFORE DEPOSITING .,_,..,llOilook.aJITI p Dolphin Resources LLC JPMorgan Chase Bank, N.A. l 20501 Katy Freeway, 1214 Dallas, TX 75201 6550 Katy, TX 77450 1-600-788-7000 (832) 830-2404 DATE 1212912010 PAV TO THE ORDER OF Ralph Koopmann $ l.__*_*3_,oo_o_.o_o___, __T._'ll_RE_'E-_T._'Hi_O_USAND ____A_ND__o_o1._1_0_0_·_·_·_·_·_·_·_·_·_·_·_·_·_·_·_·_·_·_·_·_·_·_·_··_·_·_·_·_·_·_·_·_·_·_·_·_·_·_·_·_·_·_·_·_·_·_·_·_·_·_·_·_*___ DOLLARS Ralph Koopmann MEMO Amendment OGML 29.83 acres cc~i· ~80~550?0? Confidential KOOCOPoq9goss2 p2 a Dolphin Resources LLC JPMorgan Chae Bank, N.A. 1 20501 Katy Freeway, '214 DllH, TX 75201 6548 Katy, TX 77450 1-800-78&-7000 (832) 630-2404 DATE 12129no10 PAY TO THE ORDER OF Lorene H Koopmann $ l..___ **_so_,_4_oo_.o_o__, __o_u._~_ND __F._l_l'_l'_r-_TH __Fi_'O_U._'R_-H_UND __u_D_A_N_'D_OtV __1_fJO_*_*_*_••_·_·_·_·_·_·_·_·_·_·_·_·_··_·_·_·_·_·_·_·_·_·_·_•_·_·_·_··_·_·_·___ DOLLARS Lorene H Koopmann MEMO Amendment OOML 120 acn:s 1.80~550?0? VorsnCheck Porm 3~00 P""1ige (01 "'81 DETACH BEFORE DEPOSITING p llJJ·l·IdllQi:llif.\Di·''·';''·''''''3d;l·liid·*·U'·'?·''4;1·14;iltll:tw:r1;1ta4!iglJij·ilCliill,JJi·i:ili;f@iilYl·ii#.ilj;ll,f.j;f: Dolphin Resources LLC JPJllofpn ChlM Bank, N.A. 20501 Kiiiy Freeway, #214 Darin, TX 75201 6549 Katy, TX 77450 1-81»-78&-7000 (832) 630-2404 DATE 1212912010 PAY TO THE ORDER OF Lorene H Koopmann $l.__••_3_,ooo_.oo _ __. THREE-THOUSAND AND 00/100**•••••••••••••••••••••••••••••••••••••••••••••••••••• ~~~~:---~--:-'.'.'":":'"~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~DOLLARS Lorene H Koopmann MEMO Miscellaneous Fee 120 acres lBO~SSO?O? Confidentia I KOOCOP00000953 529 0 0 :J :!I a. Ct» ,.. :J ii' e 1786 ~ Hawke Entarp PAOSP!AITY 8AHJC 330 Rayfonl Road, . REEJC BANKING CENTER, 2828 FM 1950 E. :OUSTON, TX T7013 (211) 443-7800 Spring, TX n3811 1&226511131 (281) 2W.M363 7/18/2008 PAY TO THE ORDER OF ._..,.~ ......... ..,.. ,an ....nn'lliill...U• . $ ..100.00 One Hundred Onl·-- j;;--~--,,--~~~~D91-LARS ~ 1€" Lois WOlpman Slriaber 1743 St Highway 119N Yorktown, TX 78164 (Bonus Consideration) RaVL.orene Koopman/Burlington/Cuero/West e 11•00 • ?B Eau• 1: ~ • :I l. 2 2i; S 51: " 0 0 0 0 "'C 0 c c c c U> C1I .s:. 530 : • Complate Items 1, 2, and 3. Also complete ~ ~em 4 If Restricted Del1Y91y Is ~red, : • Print your name and addnlss on the r8V81'88 ; oo that we can retum the card to you. . 9. F.lecelved by ( Prlnl1td ! • Attach this card to the back of the mallplace, : or on the front tr space permits. D. 19 cllitie!y-*hm ~ flom limn 1? 0 'm "YES. . . deto'try ~below: 0 No ! r- · - - - -- ·-·- - - - . - ·· - · ·· ; I LORENE H KOOPMANN J : ~ Lease #: 305466-000 1 1405FM108 : : YORKTOWN TX 78164 I I i I ~ - -- - - - . ________ ,/ 3. ~"fype 6i"Certtflod Mall 0 fteglst8"ld 0 ~Mall ~a1Um ~fOrMen::tlaodlse • ; 0 lnSVl9d Mall 0 C.O.P. : 2. M!d11 Number (Thtnstr hotn ~ ~ PS Foon 3811, February 2004 DomRstlc RelU'1I Allcelpt . . 1~1540· ~- - -~ -~- - - -, - .. ·.· ::.: "'\-. • Sender: Please print your name, address, and ZIP+4 In this box • ... . ... -· . .. . . . . ..... . ConocoPhilllps Company Nicole Marucci - 3W6009 PO Box 2197 Houston, l"X 77252 11 ••• 11 ••• 1•• 1.1.1.1. ti 1.1 •• 1.1 ... 111.1..1... 11.1, ,1 ... 1, ,1.11 Confidential KOOCOPo~g~o955 e. U.S. Posta) Service , o--. ..... ri·, + )> CERTIFIED MAIL .. RECEIPT r IT" rDomes11;: M.111 Only No tn5ur,1nt"t' Cri.N,1<:it' Pr,,.·irJ.odi ....0 -u :;o I r11 . IT' . l..D 0 ""D (\J I I I l..JJ ' <O OFFICIAL USE t ·:::I" t.- r·"": ;:c -1 "-119 I l:J" -< - I~ ~:: c.i91dFM' > c 1-;r · l'l:l!llnonll .r;;- 3: 10 ~~ 10 Htll'I ~ C> . ,c I a (~~ '. ~ ro1a1 Pa•( LORENE H KOOPMANN nJ no=""o=-- Lease #: 3054a6-000 IT' o ~-APi'.i 405 FM 108 o orPt:>eo.~ YORKTOWN TX 78164 ...... iSIY.Siitii."! Confidential KOOCOP00000956 532 .ConpccrPhillips December 4, 2009 CERTIFIED MAIL Lorene H Koopmann 405 FM 108 Yorktown, TX 78164 Re: Tobin Lease No. 305486/000 Oil, Gas and Mineral Lease dated October 22, 2007, between Lorene H. Koopmann, as Lessor and.Hawke Enterprises, as Lessee, recorded in Volume 243, Page·876, official Records of DeWitt County, Texas. Dear Ms. Koopmann: This letter is.in regard to extending the primary term of the Oil, Gas and Mineral Lease reference above. Burlington Resources Oil & Gas Company LP, an affiliate of ConocoPhillips (COPC), acquired this lease from Hawke Enterprises, and is hereby exercising the 2 year extension of the primary"term option ai provided in the Leas~. In accordance therewith, enclosed please find a COPC Check in the amount of $24,000.00 which represents the consideration necessary to extend the primary term. If you have any questions concerning this matter, please feel free to contact me at 918- . 661~0323. . . . . Sincerely yours, CONOCOPHILLIPS COMPANY Tuff B. Alstrom . enclosure 1-66$ Confidential KOOCOPoiqqo957 CONOCOPHILLIPS OOMP~ RENTAL RECEIPT Lease Date !Original Lessor l#MthjMth Begin !Lease Number 10 - 22-2007 !Lorene H KooprnaruJ,- · 100 l12-0l-20lll305486/000 AGENCY LEASE NUMBER: IN PAYMENT OF:Shut - in Royalty Business Unit :GULF COAST REMARKS: shut-i~ payment for the Lackey Unit A Well. RECORDED: Book 243 Page 876 Reception M56287 TRACT: l COUNTRY: US STATE: TX COUNTY : DE WITT NET ACRES Prospect: EAGLE FORD (COTE D'OR) CUERO WEST (BR) 120.000 ASaet A.rea:CENTRAL TX GC . LBGAL (Part of) :I RR co Sl3 ABST/ID# 272 Grantee QQ ALL FOR THE CREDIT OF: PAYMENT KAREN M KOENIG (BA# 0286977001) $3,000.00 3489 STATE RWY 72 W CUERO TX 77954 ACCT: (DPS# 0286977001) TOTAL. BANK SERVICE CHARGE $.00 TOTAL AMOUNT PAID $3,000.00 106964 --- - --~ - ---- - -- ------ - -------- - ---- - ----- - - - --- - --- - - - ---- -- - - -------- - ----- - - - - - --- CONOCOPHILLIPS COMPANY P.O. BOX 7500 106964 BARTLESVILLE, OK. 74005-7500 Prop. No. 305486/000 Serial No. Period covered 00 months BEGINNING 12-01-2011 Check Pate 12-08-2011 ** ******3,000*DOLLARS AND* OO*CENTS ****** *** *$3,000 . 00 KAREN M KOENIG V 0 I D 3489 STATE HWY 72 W V0 I D CUERO TX 77954 V 0 I D V 0 I D IJ../<f/11 Af~dVl /ff/~l TBA DEC os zon 01/1J. - ~ ~....J- ~ ~,.otJto e.St.~ 'Y1'/111z Confidential Diane ~ntn. ·CPL .·StiltU.8hilrj1an ; ~or1h .~mefi:ini. ~t Tnm . Gutt~ !91,1111'.i•.• Uni~ . . 3WL-6012 P.O: '80x'2187 ·· HOUiton, TX n262-2197 · Phone: .~--~ Fu: .832.<488..2298 ~al~h ~oopmann, l~dlviduaily and·as A·l-F for Lo~ne Kbc;>pmann 774 ~~~ngfjo~ Rqa~. . · ~prkti;iWTI, ·t x 18164 ' .. ~Rl'J ~· koeo~: !ndividv~lly a~d as ~mey In-Fact for Lorene· K~pmann 31~ stat, HWY 12 w. ·:· . . c~. ·rx n$54 ...... ~~~= Yot1d~. TX 78164 ~e: ·sllut~ln RayattyPaymem ~Y. ~na.A•~ ~II · .. JMtt County, TX Ladle• •iid Gem'8men: ~~(npto,n . Res.QI-!~~ Oil & ~a;1 CC).n.l~~y LP re.ur11ngton1 recently driiled the ca~ wep ~ f?e~ CO.Linty, 'nt 'Tbe we~ Will •Pl!dd~ on Oqto~r ®·· 2011, &l'.ld the ~Ulng ~ waa re~~ apj>n»dmately -~~rri~ 28~ ~~. 1 .W• a~ta _i.g1m1il"G a frac Job on the wajt 0eoel'!lber 11, 2011, ~ wDI last four tlBp. .Sul>i$'9quam·.. "to f~'lng. ht~. . ·we .wtll. flare It for two daya to eetablleh commercial production. The ~P~~!'\9 1,.1r.lt (Qr .~~ ~- 1Q9fL.'des an oil, Q&& and rrilnerai lease from Lorene H. Koopmann to ~awke · Enterpriaee dated October ~2:, ~007, t• · The .deed -<rom S~.r ~o GJiJ:>e.ct '!lod ~ore!1e Koop!l1&'1fl requires. eom.rner.cl.al · p~u~on ·an or before . ~ce}Jl~~ -~1 1 _~_11 .~f. :qu,. ·"'1!!1,.. ~1;1ed by MrS. stnebet reverts to Mrs, t<oopmlii1n, H~ver1 ~e de~ also pn>Vf~· f.or'~ P.•~' Of •~-11'.1 royalHes, Wa •ca ~n~rfng ihut-fn rc>Y(lltleS •o ensure l;hat ~II partleS' lnterea~ If any, In 1he .well IS·rtlilntalhec;t. coriaeq~l#y. w, ~~· •n~~lr ~·for'-" ()f you wh~ conStitute ahutkln royi;aity paym~·ts !Mld Conform to the term~ or ttte deed ~ ~- ~ to Mr. and Mrs. Koopmam. W.e amfclp:a\e that the i..adtey Unit A #1 well Will be producing first quar.fer _2012r ~ _ ly, _ . . .· _ . ., , •. ' Diane Schaenen Encl. Confidential KOOCOP0~9eo959 ~:...~ CONOCOPHILLIPS COMPANY' RENTAL RECEIPT ~;~~~-;;_~~-j~;i~i~i-~~~~~;------------------,;~~~j;~~-~;~1~-1~;~~~-~~~----1 ------------------------------------------------ -------- - - - ~-- --~--------~----, 10-22-2007 !Lorene H Koopmann IOO j12-01-2011j305~86/000 . . --·----------------------------------- ------------ - -·-- -~--- --- --- ----- ------- AGENCY LEASE NUMBER: IN PAYMENT ,OF:Shut-in Royalty Business Unit :GULF COAST REMARKS: Shut-in payment for the Lackey Unit A Well. RECORDED: Book 243 Page 976 Reception # 56287 TRACT: 1 COUNI'RY: US STATE: TX COUNTY: DE WITI NET ACRES Prospect: EAGLE FORD (COTE D'OR) CUERO WEST (BR) 120.000 Asset Area:CENTRAL TX GC , LEGAL (Part of) :1 RR CO Sl3 ABST/ID# 272 Grantee QQ ALL FOR THE CREDIT OF: PAYMENT LOIS STRIEBER (BA# 0347466001) $3,600.00 PO BOX 458 YORKTOWN TX 79164 ACC'I'.: (DPS# 0347466001) '. TOTAL BANK SERVICE CHARGE $.OD TOTAL AMOUNT PAID $3,600.00 106965 CONOCOPHILLIPS COMPANY P.O. BOX 7500 106965 BARTLESVILLE, ·oK. 74005-7500 Prop. No. 305496/000 Serial No. Period covered DO months BEGINNING 12-01-2011 Check Date 12-08-2011 ••••••••3,600•DOLLARS AND• OO*CENTS ·········•$3,600.00 LOIS STRIEBER V 0 ID PO BOX 458 V 0 I D YORKTOWN TX 78164 . V 0 ID CLEARED DEC I 4 2011 -tBA ~EC 0 8 2011 Confidential II.,·· l. ./ ,,.. conc>c6Phi11 Diane Sctmenen, CPL &aft Lindman - North EaiJlaford Aaatt Team Gulf'Coat Buafnesa Unlf 3WL-6012 P.O. Box 2197 Houston, TX 77252-2197 Phone~ 832.4'88.3922' Fax: 832.486.2296 December 7. 2011 Ralph Koopmann, lndMduany and as A+F far Lorene Koopmann n 4 stanchos Road Yor1down, TX 78164 Karen M. Koenrg, lndividuany and as Attorney In-Fact for Lorene Koopmann 3489 State H\Vy 72 W. Cuero, lX ne54 Lola Strieber P.O. Box458 YDltda.m, TX 78164 Re: Shut-In Rcyalty Payment l..dey Unft A #1 \WR DeWitt County, TX Lacfl8S and Gentlemen: . Burtfngton Resources 011 & Gas Company LP (9Burllngforn recently drtned the captioned weU rn DeWitt County, TX. The wel was spudded on October 30, 2011, and .the dl'llling rtg was. released appn:>Ximately November 28, 2011 We anticipate beginning a t'rac Job on the well December 11, 2011, Which wlll rast four days. Subsequent to tracing the well, we wfll flare It for two days to ea1abllsh coromerdal production. The spacing unit for said weU Includes an on, gas and mineral lease ·from Lorene H. Koopmann to· Hawke Enterprises dated October 2Z 2007. The deed from Lois Strfeber to Giibert and Lor:ene Koopmann requires commercial producfJon. m or before. December 27. 2011 or the interest retained by Mrs. Strieber reverts to Mrs. Ko0pmann. HOwever, tli& deed also provides for the payment of shut-In royalties. We are tenderihg shut-In royalties to ensure that all parties' interest. If any, In the well IS matntaihed. · Consequently, we are enclosing checks for aR of you which constitute ehut-ln royalty payments and eo11form ~ the terms of the deed from Mrs. Strieberto Mr. and Mrs. Koopmann. We anUClpate that th& Lac:la9y LJnit A#1 wen wtll be producing ftrlt quarter 2012. · · Diane Schaenen Encl. Confidential KOOCOP0~~90961 •4 CONOCOPHILLIP~ COMPANY RENTAL RECEIPT ------·----------------------------------------------~------------------------ Lease Date IOriginal Lessor · l#MthlMth Begin !Lease Number 10-22-2007 !Lorene H Koopmann 100 112-01-20111305486/000 AGENCY LEASE NUMBER: IN PAYMENT OF:Shut - in Royalty , Business Unit :GULF COAST REMJ\RKS: Shut-in payment for the Lackey Unit A Well. RECORDED: Book 243 P~ge 876 Reception # 56287 TRACT: 1 COUNTRY: US STATE: TX COUNTY : DE WITI' NET ACRES Prospect: EAGLS FORD (COTE D'OR) CUERO WEST (BR) 120.000 Asset Area:CENTRAL TX GC - LEGAL (Part of) :I RR CO Sl3 ABST/IDff 272 Grantee QQ ALL FOR THE CREDIT OP: PAYMENT LORENE H KOOPMANN (BAff 0286975001) $3,000.00 RALPH KOOPMANN r. KAREN M KOENIG AIFS 405 FM 1.08 YORKTOWN TX 78164 ACCT: (DPS# 0286975001) TOTAL BANK SERVICS: CHARGE $.00 TOTAL AMOUNT PAID $3,000.00 106963 CONOCOPHILLIPS COMPANY P.O. BOX 7500 106963 BARTLESVILLE, OK. 7400S-7500 Prop . No. 305486/000 Serial No. Period covered 00 months BEGINNING 12-01-2011 Check Date 12 - 08 -2 011 ••••• •••3,000*DOLLARS AND• OO*CENTS ········•• $3,000.00 V0 I D & KOENIG AIFS V 0 I D \ V 0 I D ~~IJ TX 78164 V 0 I D f' VOID ~ ~~'>~ lo/P}tA ~~/~~ TBA uEC O8 2Dff ?t.,.vl / «-~~~ \1-1w'l"1 . '0/1t1. - prek ~ ~~~ Confidential KOOCOP0~9po962 ~ .. "."':' ~ ··1~[~~.:-:.~:~:-::·: r .·: . , 'I .~ ' .. ... . . . ",.~ .. >~· . : . ·. ·..:~.~ . ~,,:ps ., I ~ .. '• ~ ... ~i"nber 7; 2011 ~aiph KooPtnann, lndlVlduaily ahd as A-1-i= tor Lorene Koopmann Tf4. ~.t~nct10' RQ&d . . Vt1rfd0Wri1 'TX 7(:11:64 ·Karen M. Koenig, in.dlvtdualiy a~ as Attorney in~FaCt for L,~rene ·t<oopmaM 3-4~9 s'~~· l:'twY72 w. C~9·, TX n954 t*Strieber. P.o.Boi<~ Y~TX 781&4 ~~~ $1\~-tn R~ P.aym&nt Lackey Uni A "1 well .t>eWitt CoUnty, TX L~ ahd Gefit18fl'.lefl: B""1Yl9l9f1 R~t.ree• Oil .& ~as Cc:!m.pany LP ("Burington") recently drliled the captioned well ~ ~Vf~ . ~.l.CntY,~ TX. "the weH was ipLldded ()11 c;>cto~ 30, 2011, '"d the . ~r111.lng tlg .was releaaeq appr'oidmately ~m~ 2e, ·20~ 1 .We _ atjtldpate beginning a ~Job on the walJ Decembef 11, 2011, which wJJI • foll' ctays. ~ut;seqiJem to frac?'~ ~ well, ·~ will fl~re It for two daya to eatabR1h commeraal producUOn. The ~.~ng \,lnit fQf e~lct ~11 . 1.IJ(;ll,J:des an oil, gas and rritneral lease f~ Lorene H. Koopmann ~- HaWke Em~ etated Odot>er22. 2001. - Th• de~ fr'Ot'ri LOrs ~bet \o :Gl!~!1 ~od k~ ·Koopmann ~ires comrnerdal prQd~. on 0r before ~Wl~(~f'., 2QU Or·ttit, lnfe~ f&~lnad ~ Mr&. Sb1eb8r ~rta i!> ~' f(oopmann. H~r. the <feed also prov1~ ror#ta ~ymer)t or •h~-ln r.:oyaJHes. We ilf8 ten~ng ehirt..{n royaltie5 to ensl.jre tti11t ail parties' Interest, If any, In the well ls matfm!~. C.Of\Sfqu_enify, w, m ~n~~.loq ch~qca fo'r ~of you which constitute 1hut-4h .royaltY piayn,tent. an,d ~ ·ta the tetn'la of the d8ed ~ ~- ·~to Mr. and iwa. Koopmann. We anUcf~ that the l.aCkey Urilt A #1 wen will be produqng first qu&ttM 201·2. · · ~mly,· : ·:< ~ - ,. ~ At~ . Diane Schaenen Encl. Confidential KOOCOP0~990963 I . ! I ! ·' I I .I ·1 .· ... .. ···"" - ····---·-- ·- -- ·~::-- ··· ---~: . ·····- · ·- · --· . . ·. Confidential KOOCOP00000964 540 .. ..' CONOCOPHIL.L IPS COMPANY RENTAL RECEIPT ' I Lease Date joriginal Lessor l#Mth\Mth Begin \Lease Ni.unber 10-22-2007 !Lorene H Koopmann 100 112-01-20111305486/000 --------------- ~ --------------- - -------- -- ------------------ -- ---------------- AGENCY LEASE: NUMBJm : IN PAYMENT OF:Shut - in Royalty Business unit :GULF COAST REMARKS: Shut-in payment for the Lackey Unit A Well. RECORDED: Book 243 Page 876 Reception # 56287 TRACT: l COUNTRY: US STATE: TX COUNTY: DB WITI' NET ACRES Prospect: EAGLE FORD (COTS D'OR) CUERO WEST (BR) 120.000 Asset Area: CENTRAL TX GC . LEGAL (part of) :I RR co Sl3 ABST/~D# 272 Grantee QQ ALL FOR THE CREDIT OF: l?A'iMENT RALPH KOOPMANN (BA# 0286976001) $3,000.00 774 STANCHOS RD YORKTOWN TX 78164 ACCT: (DPS# 0286976001) TOTAL BANK SERVICE CHARGE $.oo· TOTAL AMOUNT PAID $3,000.00 106962 CONOCOPHILLIPS COMPANY P.O. BOX 7500 106962 BARTLESVILLE, OK. 74005-7500 Prop. No. 305486/000 Serial No. Period covered oo months BEGINNING 12-01-2011 Check Date 12-08-2011 · · · · · · · • ••$3,000.00 RALPH KOOPMANN V 0 ID 774 STANCHOS RO V 0 I D YORKTOWN TX 70164 V 0 ID V 0 ID Confidential KOOCOP00000965 541 .. ... . I conocdPhilli ~ . ,,.- p. s . .u , I , Diane 8chaltlfn,.CPL. 81itff ~ ~ .~~ l;egleiont Aaet TUJti ~ulf j:oU~ ~i:1M9 Uni~ 3Wl.-6012 P.O. BoX:2197 Houafon,'1?( "262-2197 Phone: 832.it88.3922 Fmc:· 832."88.2296 Ralph Koopmann, lhdMdUaily and as A-1-F for Lorene Koopmann "174 $l•n¢hQ8 RQ-~. . Y.orklOWti, TX 1£;164 K&reh M. Koenfg, individual~ a·~ a~ Attorney In-Fact for 'Loren~. l<o0pmann 3489 State ·1-iwy 72 W. . . . . . · c~ro. ~ n954 · Lois S1rfeber P:t'.J. Box 458 YQfktQVt'ri, TX 78164 Re: $hut·fn RoyaJtY Payment .~ckey l)~ A #1 well .~Witt O<>untv; T'>( Ladle& lind Gen~esnen: Bu~rigton R'8~t,irces Oii ~ Gas Company LP r&unlngton 9 ) recently driled the c8ptloned we!i 1'1 ~~ County, TX. The iN811. wn spudded on october ~. 2011, and the dr118ng ng was 'raleaaed ·approximateiy November 28, 201' Wa anll•te ~Inning a trac Jdb oi'i th& W9il December 11, 2011. which wjU ~ four days. SubsequenH9 frac1ng th~ ~u. ·we will n~ It for two ~aya .to establ111h commercial productiOn. The spacing unit f~r said well Includes -an oil, gas and rrilnerai ~·,se fr6m Lorene H. Koopmann to Hawke Enterprise& dated October 22, 2007. · The deed frOm Lola Strtabe'r ~o G~\1E!.rt -~~ .~e ·t_<~.opman·n require~. ~mmertial productiol1 ·on or before December.27, 2011 or ttie l"te"'9l retained by Mns. Striebet i'everlS t9 M~. l<90p,mano. However, the c;I~ also provides fo1"the payment of shut-In fOY~· · · · We ate. tendering ~hut-In roy~lties to ens1,.1re th• .-p ~rtle8' Intern~ If any. tn the well ls ni,1~1ried. Consequently, ~ ~ encl®,I~ ~~ tor ._n of you Whlqti constitute shut-in .royaity payments an~ conform to the terms of the deed ffotn ~'l· ~~ to Mr, and Mrs. Kdoprriam. We antlcfpate thaf tM L.ack8y Unit A #1 well wOI be producing first quarter 2012. Olarye Schaenen . -Encl. Confidential KOOCOP00000966 542 EIJ /17/201 2 l•1: 24 JOHN FR ConocoPhHllps Company o.·1t~: 318/1~ Real Property Admlni1tratio11 Requestor, woolrncr Division Order Department To: Conoc..oPhitlips Comparny PO Box 7600 Ba rtles vill e, OK 74005-7800 0Wl tf! f KAREN loll ICOEh'lG Namf;l Owner No,: 02869770!X2 and Add nm>; cui::no. rx 11~' CWO.."OP/\illp• Compai1y '' '•Ii~ natllled, tn wrllirg, of any c.hange In 0\4'Tl(l~til p , decl;nai ln1e r~,1. or P'!ym&f'll udd111u. AJ 1ud1 cn..ngeii tl't!l be ~r~ I d11y of liMi month toltowlno rer.eipl of ~!)Ch notk>:, erfedM'.! Kll.l CQnuc.af' hi~p• Com~~ ny I~ ulhoril: ~~ 10 wlll 1~okl l>iYflW.nl ge11ding 1e• olu1lon or J ti1"' dl~pU!e or ad\Mr~ rlnm 111:1crt t1 r-.;9un:1i"O o.., 1nlo111M In prodlJc.tJon cl~rmotJ Mt•ln Ul'\d!lrslg11od. n., 11\df'n1l(jned •g l'!CH It> in1<lmnlfy nnd roin1bur"1! C<'Mcof'hllJO.i C<lin~ufly for aU dei'rui rll;1nQ by !hd lrorn, md ~rnm;n\~ "ti U' u~ ln. ~ n tll.81111110 wl\kJ1!M Undimi-,)ned 11110( onliUod . Cono~oP111ilp s C41l!PMY rn~y accru6 wa cee~ ,111111 !"'1 llltn1 omou111 aquult. $100. ur pay ,.,Mually, Yihlelttl":r occvro fi1 •I, <H' ... raquinad by .a pp~ ca Qlo ttJ:nta •b h1 t.. Tr.ii DMJolo n iJrd.>I 00.-1' 1101 unend. ;111y k!R~ e O«)W<lliiig ogr£<ome11l llntwoo11 lhe und,.riilgt1cd and !he lcu-ce qr OIJ ~'111l o r 01 riy ot!lftr oonira cu 10< 1h<e purcf\J.se or oil 'Jr \lllll· N1 &ddl!J0(1 lo lM lerrrt4 ~r<Q <;ot><:H01Jn~ al lhi?i Dl~n Orda r. lhll unde ~IQ 11"d MM payor may have CA"Jlf M~1 Mrrlulo;y rlght11Jr1dertN fjlWIJ ol lhe abt;, In 111hl c11 lh!> pr oporty ;,, loelt4~<i. Speclul Clauu: Tri. ln1tr1UI r..'1Jfllld bv the underolg llerl ln c:U:i"tl • II on (do~f'\M ~ i:rude on alld coodt.r<nto) i-1ld prac-tl• ~rill!ld ll'001 ~Hie !Ji' •11 oil lid g;is (d1Jfir •<J QO l'lltl.nil 1;,t 2nd c.ul~1>11d QU) produced, Ir~ •I ~~bOhi.nOU pmd.ie>1d VJlitl lX'.ll Oii Qfl\J \IU), •tliibu(!!lhill lo Ill• ~ ... 1dMcJ1btd h;lr~l11 . Fram 1M etlucll,,;e a~le 11r<:1 w11i furtlli!rwrtuan nol~, ~ ~ull.lllcl lo !hi! pl!>V"SIOMJ h!lmi<i. ConoaiPt1illpa COnil!Brr( or ConocnPnilWps C-Olllpar.y'' d~i!ln• tec1 .a.o•nl, 11 ~u thort1ftd io r.ko or puo;floc SAJch pl"Qdvcl.lor, Gnd µ10Cl\4'da from th& ~~la of oil ~n~ 11••, In • =1\11111"" w1U1 111e dllliolion or inrt reiu dtiac.Ylb~.O h ~rnlri. m:s DIVISION ORDER R6rU:crs OWNERSHIP IN THG. LACKEY UNIT A,, vi/ELL. Owner Signatu re {s ); (Owiler Si<Jn•ture) Owner(s) Tax Id Numtxida l: ~54-04-1211 Ownor Daytime T&lophone M: Owner Fu Tel ~phOM #: ed<iral law requires you lo furnf:;h you ~ Social Sr:cur1ty or Taxpayer ldentificl!ltlon Number. F111iure (o comply wil l r ~l.J! I in a w'l tt1holclln In ccco r n·- 'Mt!~ Fed ro l L4W eind will n 1 IU d b b on ~ P •Iii 11 Cqm '1n c. NioHTl~JOALE ti :~ · 1,:om oo 100486-l 308 03/17/2012 14:24 JOHN FR PAGE 04 Reque~to;: woolmcr Exhibit A • 0/0 <1nd OWnerahlp Deacriptlon Run Date: 318112 Ownor No.: 0200&177002 KAREN M KOENIG OJO Hu111btr tnd Nan,,.: A717076 GQO-O t (GAS) Flil Humbor. 10G466 Oparator: BURLINGTON RESOURC!ill O&G C{) lf' Eo..:llw O•tt.: 2/ ii20i2 hliif•,..1 Ty1\+/0Klm1I: Al 0.00009675 P~ Code: PAY &l Cou nty ..... T"'1' lb>f QUCIM/l.Ql O;IJ~ . OO~""°'lf.lil')iUil , wtO IJ ~ . FUr.::f'Uf'~1 ,W.lni<JOI~ ~•lndilJ!c>'I n - c.. "!'··~ SllV<rt · ~. """<noct 112 ""d . . ~-,~-co""'""" a.-- 1~ . AJ:i•'1ld 'J fl , n 0..\MM C;cil..'l(i. 1h'U, !M!.11'\U tlKJfft ""'>' Ouoi:JOd" !!'..... _ d Ci&• u..."" .... _,.,.,., _u .«<•; UM A"""" - O<iaeOI' I. 20 '1 1, ,,.....0-0t\l •I FM t4l.nQ9f "41D-4 .;¥( 1#1.a Ofli'CMI PuWo fttCi«"rh ()t Oc~J C:oii.rlfl, Tcn.o;t1' 1 tn!l t1,a111g o:imntiMda t~ fl'~'0"1Jht ~ : Tl'l tl. 1 l . l_..,...._..,.or l1uA. 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Afl'>.;~ •i1cJ ~ra . ~" ,.yn~~ to O.\VlU CCM'lty, T ox••· lt•d 1a: 1.•~feltt. n'~Q<~b&litQVUl t)lln&l C I COl."~I l\i;,.4,l M ~ ~ li'-......._lt'Tl ~ r•"' o<,... ~iQ ~ tc.1 1 ~ n<.i v.o rw ~...,,n, t:f ~ l\ca:) jM ....,.J rroa ....tN 11 ,.,,. ~-ct.,,. l~'Q(l 1'UOl.nll!M ~A Gi t ~mOti.rty, l.P-l.Jd.< t yUNI ..\-., IL'J \ •O"'MD'll ll'9 flV'I at lhn J. k. Rtekrw Stl'Yty_~ ~o; tti.a E'. W. ~" rt-" S\.IW,, .Abe11e~ J-42: V~ .~~•ne w 't l•llf'aed Coo:IPW"I Sl..rtD't. s~ 1~. Al)t.VW.\ in: limd lt!IO J k. 03/ 1 7/ 2612 H : 24 l .JQH~1 FR PAGE 11 1tquaiiior wool me: Exhibit A • 0/0 and Ownera hlp Oaecriptian Run Dote: 3/lli12 l',\c:Ni.11 1 i u f\"J y, AcJJ,.;C. 6i:) , ff\ 06iMlr Cd~. "rlX"A , .,,. bff"Q nu>.- t~y do""1o.<l 11 11\11 ._,.,. Wti!Olll)' 0..ll ~\!"\ \Ht t'alilr'l U1111 f--d ~bwr I', tilQJ, ro r.crd&<Jii!.VO ~:JIJ1, P~~(J(fN •11-rl ll•q;tlddoJ !lilt.Vitt C.Wrty, h~t. tram (!Ml\ ',(uu. Ul•)(l>;1 • to. lnUJ1 RY.I..... T,..Jll'I 1Al4G,.. , ll!'ari. 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JOPWV • ..,,,,..., lo.I .. ,,,. !t.c.i .-.d \ht ~n1.otC;o.;;,ty R°*' :JQ:l ~ ty"<i ·...-on~ uol.ldJiii • O('llt e,urtt.-i .... m "•to1.1CA·• 0..t A Cu C4tof"""Y· U' .. l.Jitdct)' Ufll l ~ UIO ,.,.Ml WA-1 ~ ... rA ... IOOl~M~ A...uod s".-..y .......... ~H. w.. ~a\VnCountv, Tsua.. ainJ ~t;a mt ~• la.ntt \114(11~ '"II 0-ld d.t'td }ia'MJ'l'b. t 10. W"5 . 1~tibd Jill VU..,.-11 12 N~ d 3-11 o( N QfJdlll Publ11:1 Rwo:>ird"t ;J DllMI\ C\i&J~ . Tt 'lH , if'UJ" C4ftn H_ U~. l ~d"'I E'tWJ1CI trf t.".O e:•\i M QI JCil :.~YI M~' I.? ~~ . l.J 'lttllf'4._. . ~A . lr".Jt\t'- ~ f!I al uid t....a. ~ ~\n OEWTT CC:ilir<r'r' . Tf) ).J). 316 3 12. ConocoPhillips Company Da!e · 5/16/13 Real Property Administration Requestor: Clleal am Division Order Departmen t To : ConocoPhillips Com pany PO Box -1500 IReturn to ConocoPhillips ComY:anYJ Bartlesville. OK 7 ~0 05 - 7 5 00 Ownrn RALPH KOOPMANN Na111e Owner No. : 0206976002 and Addr es.s · 774 STANCHOS ROAD YORKTOWN, TX 781fi.i f11e under~igned certilie~ the ownsr~hip of !heir decin ra l inieresl irr pr oduction or proceeds as described on Exhibii A payable by Co nocoPhillips Cmnpany. CooocoPhrllrps Compr1ny sha ll be no rificd. 111 wn ling, of any change 1n ownership, decm·1 i i11 1ere.;1, or p<l)'menl add r~ss A~ sucrr changes shall be effecliva lhe r1r~t day o ( !tie rnon(h fo Uowrng receipt ol such notice. ConocoPt1illips Cornp~r1Y is <1µ1horized 10 withhold payment p?. nding resolution ol a ti1f - dispu1e 01 adverse cl ain1 asserted regarding I/le interest in production claimed herein by the 11nders1g ned, The urrd ersigned agrer,s to Indemnify and reimburse ConocoPhillip s Company lor all d a.im6 arising frCfT1 . nd amouo l!> attrib utable to , an rnleres t to v.h1c;h l!'l!? uride1signed is not entillM Conoc0P r1jlllps Gornpany ma y accnm proceeos until tho 1oia l amounl eqil als $'100, or p;:iy Annually. Whicheve1 occurs Irr.st. or as required b'/ applicable stale staiu1 fnrs Division Ord er doe ~ 1101 ~rnen~ any luase or opcrnhng agreement be tween trre unrtersigned ano inn rn ssee or operator m any orhei ox11ra ~ 1,, tor the purc.h3se of orl ut g~s . In add ii ion 10 the 1errns ancJ conditio ns of llliG Divisi on Orclf\r , lhe u n d e r~ig n e d and p, yor m ay lr ~ve cer1a !n s 1a1,;1ory rrg11 1s urider 111 0 l a w~ of tn e stale 111 wl 11d 1 lhe p1ope1iy is loca led Speoal " lause : The inlo<e$\ c.e rtifle:d by the unatirsigr1od includes all oil (defined as cnid•, oii ;ind condr;n s at~) <ind rJJ occ e<:Js derived fr om 1he sale of all oil nnd gas (cle(111ed as natural gas and casing l\ead (JDS) orodu ccd . 111cluoi119 ull subslances prCYJuced woih such orl and gils . all ributab!e to lhe inie1es1describ<.<d heroin. Frcrn lho effective dale and unlil fcrH1er wrr1 1~n norice. and subject 10 the provisions hrm1i11. Coooc0Pt111iips Curnp~ny or ConocoP11lli1ps Com p~n Y's designated agent, 1$ au111onzcrJ 10 lake or purchase such production and proceed s lrom !he sa le of oil and gDS, 1rr nr::Gotcl<i nce wiih Ilic divi~ ion nf ir 1tmest described h.irein . Add itional Special Cla1rnes: THrS OJ\/\S ION OR ER COVERS YOUR INl ERE "T IN THE LACKEY UN IT A #2 WELL Co rrecte d Address Own er Signature(s ): (Owner SigrHl luw) (P rini Owner Na•r1u) Own er( s ) Tax Id Nurnber(s): 4 Li4 -04 - 1198 Owner Daytim e Tele phone#: Owner Fax Telephone#: !Federal law req\Jife~ yo u lo (umi s l1 yo ur Soc ial S..:c urity or Taxpayer ld e ntifrcation Number . Failu re lo comply Will result in :lax w1l i1holding, 1n Clcco rdance with Federal L. aw . a nd will nol be refu ndable by Con o coF'hillip5~~-'-'- - -- - - - -- --' T S IMO~l S Return to ConocoPhlllip s Co mpany I DO 110663-L 317 2., \,-, ' '"':) :eq11cstar. chea lam Exhibit A - 010 and Ownership Description Run Dale 5116113 )W!Hl r No .; 028697600') RALPH l<OOPMANN l/O Nur rlJer :and Nama: A71 l 0/ll G0002 (GAS) U\CKEY UNIT I'. 112 'ilu Number: li066:J Oper:i tor : BURLINGT0 r4 RESO\JRCES O&G CO LP Jfo c tlv ~ O;;lc: •11112013 tntorcsl TypclPccima/: !1 1 0.00669675 Pay Godo: PAY fw u 009 00 :lC'U 1 rr.&e tx :u:. Oli1 of J H fhj llttr 91.l(v"·" A11w>:1 'i1J. 1r"" trnil"1'V.A ~ R u ~i i»":l <: ~·n~.,., .,. 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J.l .._i~11 r, •'10l 1t111•1ll4n1ab«it)Q~lr.;'11110C W1n Counh, TE...~ )wner No.: 0206976002 RALPH KOOPMANN 110 ~lumbar and Na 1tm: /\717078 N0002(NGL ) LACK Y UNI T I\ 112 ·Ho Numllci: ·11051;3 Opuralor: BUHLING fON RESOURCES O&G CO LP 'ffoctive Dal.,: .111 no1 :l il>tQro st Type/011c im al : ru 0 ,006139675 Pay Codo: PAY fwp /tna A11m.li~1 :1 County '"" 'X Ol: WITT 6(1!) ro O< f O . fT~HI Ot l~J~•• C>'. JI Of J I i_ fflCl\ l nt !\\II'""!, AM\t a<.\ fl t '.J. lf\t 1Mrl\rio111 H111l1owJ CwnpRny SlntJ11J "J:W !K.1 117 Ut'i"J tr'lll l1-,d1ii1 w-1l11 fl a,lto~J C: on iptt ny ~y 1 ~. J\ti ti ll, Cl ",!7 J !n OOW11 1 Cov111v. h).H. b Plf!Q 100ta 11"1 )' d ~ )O ll}Cd 10 llH:: l>IT''O"'.itl ioo <'II G 1i!t \Jl'l 1l l<;t H'\4! Bunli' UI "" . l. 11 c.kt.\</ U1•11 A 1jal!)<(l 111te-.:11• t 0<: 10t1u ! 10\ '. •uoo16.lltj • • Fi'c ti..Jo'lt•"'f 64W.t nl lha O /'fit•• I flV'LJht f.IK.Oiih cl O u'b H C~)'t't. 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Exhibit A - 010 and Ownership Description Run Dale 5/16/13 vc.i ~.11r~ .t ~ f'.a~e f1i O of me Uf! ., d Necva) at O•Wt1 1 c ~" .,. r .. . u, 111'i1\J1ii>• H·•) 1ti, 1<'> 0·l\\\' ri 1 (.('.1;.rJy, r c ~ .u· U r.I n 1, LP · LAVl!t) Ur\o l /~. "·""' S Yi ?I.\ clOH biil.1()0 (JU1 OI tj\ 11 ""°' :.!1 1 j; il,ttlt c a<l Cif·fi MY Str..11y Sed f'On ' /' 1.u .11&:1 V1. t.'ie: l!'<ltt1'1t.'i 11 ~ · iro.ld C~pllf "l')o ~t,...ny . .:Oc<.lt(ltl 1 -4 Nh1lr I ~-tll. /TI1 0 tr~ lf\d ;aoo1 o'I R:11~tH <J 0 C\)l'fl lHl llY !1 10~ ·, ~~d;OI\ I~, l\bWuir; I 'J. I/ in tJ:;tWl\I Ccvn1y , Tu •:i l) ,;nl bo:firy11Jl0ft1 /ull-, tHl,~lt'Od •fl IJ .:,i\ c. v 1 1.r 1 nW ~1 • u1-t.y P.Yv<» 1J1ttVi l J1•, f'I !fl. ?003 1KU1<.)itiJ ni w~11.11M 1JO , Ph-()6 9'.i.!t ot irwt t )Jfm11t Pub• <. Ru.v''' rJ (h1W1H G<!'.Jil\y. T111. 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'l/~1 No f\M(J" l!l • W11 r1;>rily l)oit:1 OIUt iJ ~clhTll:>tf 21 10'i}!~ . t~ r.1vth1d l'i Veott.inw I (. l 1no • '- '.l~ ol \I\ ~ Otfre~ il"i 11 &.~Qt J!: QI llti W!t l C.Ot lil ~h.. fGd'>. IH.)j l l LQIS Sln"Uor 321 !equeslor. chea tam E:<hiQit A· D!O and Ownership Descrip tion Run Dale· 5/16113 tr,dlvid1Mtl·f end u ! n~ (l~f•( btl~ ir i:~ al ttie E~tofo of Jt.ifl'I S\riOOa1 !U G1lb(ln A 1<e>oPmDfo oncT .,.,.,,~ . t.orur~ .,, l\CJIPfr\"l lfJJt;I .5' ;2 16 .ecieo;, ((\/;oJo "I. 19 ~.(;IH) mme ~ •eu, btlnQ ovi ::if !h ~ to~oia Raill10UQ lfln :1~n t"r1d dillciit.lld ii1 •hit U •1 1tlfl Con,.,oyar<'..:li t1I fl!Qlll -of-\ Vay 1faflt!j JDr\Jll.')' ~IJ . 1U"J:l, itw:ordod nl Vc.fttir\O 1Cr!i. P "'Q<t 2'67 llf Iha Oo~d RtH':!YO' of (Je;W,11 Cc,unl'.f. T!t~Dlt , It o,,, V W B laL\~ , ~I fl1 \0 OoJWiU Cwnlv, I ~~M ' )fl)Cl 6 0 .!;!I ·,...:tU}. lW'lfJfl C)Hl 3-0: t Ot) 111(1(1' Cit ll"oH, r.-.1r19·,ul °' !hil 1iitJO a1Hi:l;r '\il•IH>i1d Surve.y, S~<. 1 100 l'..l. Ar1Wi1Cf )Tl , i i\ 04'\'V\11 Cr.on ly, 'f& >:il t, c .:imj'.Xll ~i!] ll Pllfhon ol Coo111l y Ro.it<i J ~ 1: , l'Jfld ~ lno tho uma lut)d Or.54'..nb~d \n lt'inl ctrlol1n Rood O~fc:J d.G1efl F c:broD(y 2 7 1ft29. t ft(.l)~(j <!ti \'ciiuMl'f 9JJ, P111·ttt 5~ 7 o! in, ()e;HI lt at !J'di Qt U~Witl r:,oor'(-1, l~.10~ . hoiT! O . i.v All1t-rb.YJ\ nnr:l 711_ 1 H ocun . mo.-1,1 QI if'H, bwr.o 1r.01 prn110h nl Cou:'11'1 Ro.W J !1.A11v~ bt.il\llfl!'l'l lh o ~:.1ei 1 1' bouncJ!lfY llM of lh)} IQll~ Q•JV.:r l-tHr::f 9U.7 1 ,Xib llcl•l\ n~ lnfl .: 1.11,101 tln" 01 C1JV1\y Rc..Qci Jll " o.nt1 iy"1u wit0!111ho tl<A.fnd~tiH: 04 IM aur1ing1a1 Aoi,c:uc.v~ Oil & G~, C~l1)9:)1',y, Lf ·li'Ck\Jl UM A, l;..itd 91) ) 1 11Cz.ri 5 being O'I. ~ ..,; [f\,f}) I !. R1ct'll fr SUNoy. Ab5iri\d. ~o . lhr- f. . w M;t1ltww~ Sl.Jf" a; , /lll1 lr1ttl :M2; tho l()(hMolt!. R.:i,VQ.v1 cmipt·,ny SUl'VJ>I' :i!!<; llQll t :l, /l.b.";11 1Xl 21"l. "''~ 1'1-:: J , , Al<t11u· Sutvl)'f. Ar1,11ao Ml. in ~w,u Cmir.t;. Tn.uu . nrxi bt111\o mor e fully dll!fctlt.r<J /fi IM I (..l)f11hl"I WL1i1mn1y O>t"O with VtJf'ldt)(' ~ lJ.,nd!Hfl O o~c.-tuQa/ 16 . \9'JJ. reeoioe~1 &I Vol..-i1e J.{)7. P.s9f'l ?5 QI rl)(i 0f'od neco1d1 of Oov..1il COYnl)', Tt!.an, flom Eli1IM Hi RHt 81U .n o~ II) LWi~ A \''ltllokG T1i!C:I 71,:i l.'12 l!<:HU , n'ttil O or l(li.1, bfl•'IJ 1>'int pe.O,on of Coil"\tV lload .15M lyinlJ l'Ql>Mi1..--n m., wo ~htin t.wf\Oliry l!N (l f1! 11t lollOWtllO O:il !.Cl 1bo d H)f;,'4/ ] ltCrtt l r~ I .VHJ lllO ~ ufll ort1 n9 ¢r C ovnt1 Ro~ 39.£ itnd lyfog wilhi" \ho t'll)Jr' d il"i~i ct lfln Ou li-,Q'l01o1 f\oOtJ!O J 011 & G•_.. Co111P')1l )', LP -L11()\f1'1' Un•l I\, .f:>)tl 106 "77 ~r;:1u. bdng 001 1"'11 100 J H air..il'c;I\ A~ht~ '$i..)IV,'(. Ab1> !•Dll 613 , ~ OitW•!I Counfy. f lllC<'' . .:Hl<l bnmo 1nc>4"11!1 IUlly dO~ Olt:.d 10 ""'° \r 1teh u lhal cffl3'n W.;i:ffrtnty Dr.-od d~1o..'.! 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Mvi111ut ;11...: ... 10. 1; 111..1 H ~w(l1:41r .l!l 1"11., :ru d fM !ia fi.t1 hO i;w.,, 11tu ,n DEWln COVtHY TEXAS 325 CAUSE NO. 12-07 -22,354 RALPH WADE KOOPl'v1ANN, KAREN § LN 'ffrn DIST!UCT COURT rv1ARIE KOENIG, and LOR.ENE H. § KOOPMANN § § VERSUS § § DEWirr COLJNTY, TEXAS CO NOCOPHILLIPS, BURLlNGTON § RESOURCES OIL & GAS CO., L.P. and LOlS STRIEBER, Individually and As Executrix of the ESTATE JERRY STRJEBER 24TH JUDICIAL DISTIUCT ORDER GRANTTNG PLAINTIFFS' AMENDED MOTfON FOR PARTIAL SUMMARY JUDGMENT On this lhe d?O -tJI"'\ day of L, 2013, the Co u11 heard Plaintiffs ' Amended Motion for Partia l Summary Judgment. Afte.r carefully considering tbe pleadings, Llie motion, the response, the reply, if any, the arguments of counsel, an d other evidence on ti le, lhe Court the GRANTS, l.o al l pans, Plaintiffs' Amended ivlotion for Part ial Summary fodgrnent. It is, therefore, ORDERED, ADJUGED, and DECREED thatPlaintiffs' Amended M.otion fo r Partial Summary Judgment, in the above styled and captioned cause, is GRANTED. As such, it is fUlther ORDERED, ADJUDGED, and DECREED as fol lows: (I) As of December 27, 20 11 (Le., fifteen (.15) years from the date of the Warranty Deed executed by Lois Stricbcr on December 27, 1996, on file wilh the County Clerk of DeWitt County, Texas, and recorded on January 2, 1997, at 8:35 a.m.), [here \Vere no wells on Lackey Unit A (i.e., th e pooled unit) rhal were actually producing in paying or aommercia l quantities; 455 .~· (2) The reserved tenn royalty interest, entitled ''Reservations from and Exceptions to Conveyance and Wananty,'' as contained in the Warranty Deed executed by Lois Strieber on December 27, 1996, on file with the County Clerk of DeWitt County, Texas, and recorded on January 2, l997, at 8:35 a.m., expired on December 27, 2011 in accordance with the express terms of the Wananly Deed, and, U1erefore, is mdl and void ; (3) ConocoPhillips Company's, Burlington Resources Oil & Gas Company, LP. 'sand Lois Strieber's, Individually and as tbe Executrix of the. Estate of Jerry Strieber, rights in or to the tern1 r.oyalty interest reserved in the Warranty Deed executed by Lois Strieber on December 27, l 996, on file with the County Clerk of DeWitt County, Texas, and recorded on January 2, 1997, at 8:35 a.m., are terminated ; and (4) Plaintiffs, Ralph Wade Koopmann, Karen Made Koenig, and Lorene H. Kooprnann, are entitled to the full amount of any royalty payments due under any rninera l lease from the mi_neral estate in question, as set lorlh in the above-described Warranty Deed. It is further ORDERED, ADJUDGED, and DECREED that Plaintiffs, Ralph Wade K.ooprnarm, Karen Marie Koenig, and Loren e H. Koopmann, have Judgment against Defendants, ConcocoPhillips Company and Bmlington Resources Oil & Gas, L P. in an amount tobe detem1ined later for reasonable.and necessary attorneys' fees incurred in the prosecution of this m atter . All other relief not expressly gTanted herein [s denied. /'~ ~ Sigr1ed on thi s the Cl..LJ day of ~v~ , 2013. JOHANSON & FAIRLESS, L.L . P. LAWYERS 1-456 Fial Colony 0oule11ard Sugar Lflnd, Ttx•• 77.479 2.B 1-313-5000 TELECOPIER 281-3-40.~100 MIKE JOHANSON JAY W. CRAOOOCK RAl'IJY L. FAJRLESS • VICKI L. DALEY TOOO TAYLOR • GREG LAUGHLIN BART BASDEN • JOELLE G. NELSON KELLEY J. FRICDMAN TIMOTHY J. NISBET ~IU c~ lt1 Ptf&O~ 1n;vry llel L#W CHRIS M. VOLF T$XU 6ow Cl! L.09.,i 8Pttcitl.ii11tloM TOOO TA YLOFt DIRECT °"'L 2!1-340-6107 OlAtl..: tnx!ord!Arnilm·«im January 10, 2012 Ms. Diane Schaenen Via Certified and regular mail ConocoPhillips Staff Landman - North Eagleford Asset Team 3VVL-5012 P.O. Box 2197 Houston, TX n252-2197 Re: ShLit-ln Royalty Payment Lackey Unit A #1 well DeWitt County, TX Deer Ms. Schaenen: I a m writing you at the request ·Of the Koopmann fam ily regarding correspondence they recetved trom you on December 7, 2011 with regard to the ~shut-In Royalty Payment" of the above referenced well. I have been asked to advise you that the well In question. as of this date. still has not been put in line for production and has not produced any oil or g,as in paying quantities. Further, desprte representat ons in your correspondence to Iha contrary, ttle well was never "Oared for two days to establtsh commercial production". The Koopmanns have also asked me to research why it is that ConocoPhilNps woukl forward shut-in royalty payments (wtlich have not and will not be cashed) and why ft is that ConocoPhilllps quoted language from the Purchase Deed from 1996 in this letter you sent on De<:embef 7, 2011. My research has revealed that you and your company have attempted to obtain a percentage of the 50% royalty Interest which was conveyed to the Koopmanns on December 27, 2011 without revealing same to the Koapmanns. That als-0 means that you are familiar with the language contained in the real estate purci'lase document and are aware that the well In question and ConocoPhillips have fellen short of their attempt to secure a portion of these royalty payments. Specifically, under the terms of the purchase agreement entered into by the Ms. Diane Schaenen January 10, 2012 Page 2 Koopmann family and their representatives on December 27, 1996, 50% of the royalty interests were conveyed to the Koopmanns on the date of purchase. Further, under the purchase agreement, the remaining of the 50% royalty interests on the property in question as referenced above, were to convey to the Koopmanns after the explratk>n of 15 years. The 15 years have now, of course, expired as of December 27, 2011 and as of tnat date there was no well on the property in question capable of, nor producing on and gas in pay·ng quantities. The deed In question of course does allow for shut-In royalty payments however. under specific terms and conditions. To quote the deed specifically, it states: "It is exprassly understood, however, that if any oil, gas, and mineral or mining lease oovering said land or lands pulled therewith is maintained In force and effect by psymtml of shut~ In royalties or any other similar payments made to thEJ Jessers or royalty holder in lieu of ect.ual production while lharo is located on ti1e lease or land pulled therewith a well or mine capable of producing oil or gas or other mln•rals In psylng or commercial quantit/e.s but shuf.ln for l•ck of market or •ny other reuon, thoo for purposes of determining /he lerm of this rese!V9d royalty inlarost ii will be considerod lhst production fn paying commercial qusntitles Is being obtainoo from the land here and conveyed.• I am very confident that you are well aware that the well referenced above does not meet the terms of this shuHn provision. The well has naver produced In paying quantities and even as of today is not capable of producing in paying quantities. Further, despite what your letter suggested and as mentioned previously, this well has never been flared, and In fact the well head has never been connected to a flare or the production facility that is in place today. As this letter is being written to you. there is a crew on the site today whose job ts to drill out the plugs Installed during the tracking procedure. This well, quite simply is not a well "capable of producing oH, gas, or other minerals In paying or cornmerclal quantities and Shut-In for lack of market•. Further, this well is not a well that is ·shut-In". It is a well that Is under constructlon and that ts not yet complete. Accordingly. the well in question is not shut-In and cannot be shut-in, Is not a well capable of producing in paying quantities even as of today and certainty was n<:it as of December 27, 2011, and has never boon flared . As a result. royalty Interest under the tefTT\s and condttions of the deed itself has conveyed lo the Koopmanns and any owners.hip of royatty interest owned by the grantor or ConocoPhillips own has terminated under the term.a and conditions of the deed. Accord· gry, under U1e strict terms of the deed (a copy of which is attached hereto) the Koopmann family, their representatives, and heirs are now the owner of 100% of the royalty interest of the 120 acre tract In question. When and if the well In question ts put on 592 Ms. Diane Schaenen January 10, 20·12 Page 3 line for production, all royalty payments to the mineral intere$t owner consisten1 wtth the otl and gas lease·are ow-ed solely to the Koopmann family, conslstentwtth the mineral interest division afforded each or H1em as on file in the DeWitt County re~I proP'erty records. Please have a. dilfision order is~ued immediately consistent with the terms of the deed, including the conveyance of the remaining 50% royalty internst to the Koopmann famlty. This division shall reflect the feet that the Kooprnanns have 100% ownership of the royalty interest of this 120 acre tract tn question and more par00ularty the well referenced In the reference block above. Please forward a oopy of that division order to each member of the Koopmann family entitled to same, conslstent wtth the mineral Interest divtslon afforded each of them ae on file In the OeWrtt County~ea · I roperty reoord. s. Please also forward a copy of that division order to my attention the address above a1 your earliest convenience. · If you have any other questions or co e s on is Issue please contact me directly at the above referenced number and address. Cordi ty, & FAIRLESS. L.L.P. TT/hs 593 JOHANSON & FAIRLESS, L.L.P. LAVVYERS 1·l56 First Coiony Boulevard Sug ar Land , Texas 774 79 2!.l 1-3 13-5000 TELE COP IER 28 1 ·3~0·5100 MIKE JOHANSON VICK I L. DALEY HANDY L. FAIR LESS · KEVlt• C. KYSER TODD TAYLOR' PAUL GREG LAUGHLIN BART aA.SDEN ' TIMOTHY J. NISBET KELLEY .J FRIEDMAN CHRISM. VOLF 'Ooan:! Certifoed In Per~ona l 1njt11)' Tnal Law T OX.1S H<Jard of Lll{lal Spoc1.all2ation MIKE JOHANSON DiRECT DIAL Wi-340·5109 E-Mail [email protected] June 24, 201 3 4. 193 Elizabeth Tiblets Via Ema il, CMRR LOCKE LORD, L LP 2200 Ross Avenue , Suite 2200 Dal las, TX 75201-6776 Re: Cause No. 12-07-22354: Ralph Wade Koopmann, Karen Marie Koenig, and Lorene H. Koopmann vs. ConocoPJ1illips, Burlington Resources Oil & Ga s Co., L.P. and L.ois Strieber, Individually and as Executrix of the Esta te of Jerry Slrieber, In the 24 1ti Judicial District Court of DeWitt Cou nty, Texas DEMAND TO RETURN ROYALTYPAYMENTS OWED, NOTICE Of DELINQUENCY. AND DEMAND FOR ACCOUNTING Dear Eliz:abe rh: Please cons ider this a formal notice lha! royalty payments owed lo Ra lph Koopmann, Karen Marie Koen ig , and Lorene H. Koopman n are delinquent., and are wrongfull y in the possession and cont rol of Burli ngton Resources Oil & Gas Company , l.P .. and/or ConocoPhil lips Company As such royalty payments are delinquent and being wrongfu lly withheld by your clients , this correspondence shall serve as a demand for the immedia te return of such royal ty payments. Further. tl1is corresponde nce sha ll serve as a continuing demand that future royalties , as they corne due to Ralpt·1 Koopmann, l<aren Marie Koenig, and Lorene H. Koopmann. be rellnquish ed and timely 1 pa id pursuant to the terms of the Lease . Please provide tt1is demand and notice to your clients . Foremost, th rough the discovery conducted in this litigation, 1t is clear that Ralph Koopmann, Ka ren Mane Koen ig , and Lorene H. Koopmann are entitled to be paid the full amount of royalties arising under the 1erms of the Lease (and your clients knew s-eme long before suit was filed) . Nevertheless, your clients have failed to pay such royal ty interests to date , instead withho lding ntty percent (50°/o) of the royal!.les owed . Further, it appears that your clients will continue to fai l to pay future royal ties as they come due . despite the fact they clearly owe the full royalties to my clients . There is no viable reason for your clients to retain these royalty payments (in the past or future), and it is clear they are the wrongfully appropriated property of Ra lph Koopmann. l<aren rvlarie Koenig, and Lorene H . Koopmann. Whil e we have previously demanded the return of the royally payments owed to Ralph Koo pmann. Karen Marie Koenig, and Lorene H. l\ooprnann, we now provide this formal demand, so as there will be no question your clients wi ll be subject to interest on the unpaid royalties as provided under the terms of the Lease sl1ould they fail (and continue to fail) to pay . Specifically. the Lea se stales as foll ows : N . ROYALT r' PAYMENT DUE DATE : All royalty payment s on actual production are due and payable with 60 days after the end of the month in which the production occurred. In the event Lessee becomes dellnquenl in such payment. the Lessor must notify th e Lessee ot the def a ult and if Lessee does not pay the delinquent amount with 15 days after Lessor has sent such notice of the delinquency to Lessee by certified mail at its address set out above, Lessee must pay interest on ttie delinquent royalty amount and on all oth er royalties subsequently becoming delinquent until all de li nquent pa yrnents have be en paid, the interest rate to be 1 2'% per year and computed as to each of lhe delinquen\ amounts beginning with th e date each becomes due .. . As you are aware, fifty percent (50<'1~1) of the royalty payrnenls due to my clie nts are bein g wrongiu ll y witr1held by your cli ents at lh1s time, and they are therefore delinquent in making these paym ents. Please remit the tota l delinquent amount of royalties owed to Ralph l(oopmann. l<:a ren Marie Koenig, and Lorene H. l<~oopmann within fifteen (15) days of th e receipt of thi s certified letter . It my clients 11ave not received lhe full amount of delinquent royalty payments within lhe time period set forth above by the Lease, we ' for th e purposes of' this notice and den1and, "leas e· shall mea n tti a ·011, Gas and Mineral lea se (Paid Up Lease )" t.tia t wa s entered ln \c baiv1een Hawke Enterprises and Loren e H. Ko opmann on or ;about October 26, 2007, which was subsequenlly assigned to 8uf1inglon Resources Oil & Ga s C ompany, L.P., and/or retitled by the "Amendment to Oil. Gas and Mineral Lease (Paid Up Lease)' entered Into between Bur1ington Rssources Oil & Gas Company , L.P., and Ralph Koopmann, Karen Marte K oe nig, and Lorene H . Koopmann on or about December 27, 2010. 2 595 demand interest be paid on such amount at \tie rate of twelve percent ( 12°/o) per year, beginning with the dale any such royalty payment originally became du e. A s the Lease provid es fifteen (15) days lo rem it the owed royalty payments before interest attaches, we expect that a check made payable to our law firm and Ralph Koopmann, Karen Mane l<oenig, and Lorene H. Koop mann will be delivered lo our fi rm. address above, no later 0-1an July 10. 2013. Pl ease contact us for any additional drafting instruction s or information you may require. Stiould the unpaid royalty payments not be rece ived by the above deadllne. we will consider the failure to pay such owed royalties an affirmation of your clients' co ntinuing refusal to return property owned by Ra lpll Koopmann, Karen Marie Koe nig. and Lorene H. Koopmann , but wrongfully held In their posse ss ion and control. W e will seek the full amount of interest owed under the Lease, and any add itional remedies available. Dem and for Accounting Plaintiffs request a specific accounting, through the present date, of all payments an d/or amount r1eld in "suspense", represen ting fifty precent (50% ) of the royalty interest that is the subjecl of lhe above re ferenced lawsuit. It is undea r whether these monies are simply being "withheld" and/or whethe r monies are being paid into a specific, interest bearing account. We need clarification regard ing this issue along with an accounting for all payments withheld or suspended through the present date. Finally . thi correspondence does no t address the additional clea r damages that Ralph Koopmann, Karen Marie Koenig, and Loren e H . Koopmann are en titled to, including tort damages. attorneys· fees. or exemplary damages We will continue to pursue lhese damages through the pending litiga tion. Sl1ould you have any questions, please don't hesitate to contact me_ Very truly yours , MJ/kck Mike Johanson cc: Errol John Dietze Michael Powell Clint Schumacher f<evin Cullen Todd Taylor Chris Volf Ron Walker 596

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129 N.W.2d 519 (1964) 177 Neb. 542 Eliza WOODS, Appellee, v. George WOODS, Appellant. No. 35564. Supreme Court of Nebraska. July 10, 1964. *520 Stern, Harris & Feldman, Omaha, for appellant. Jerome Grossman, Omaha, for appellee. Heard before WHITE, C. J., and CARTER, MESSMORE, YEAGER, SPENCER, BOSLAUGH, and BROWER, JJ. WHITE, Chief Justice. Defendant, George Woods, in November and December 1957, received a total sum of approximately $2,408.10 in money from Eliza Woods, his mother. This is an action by the mother, Eliza Woods, to recover that sum. Defendant admits receiving the money, from cashing an endorsed check and the sale of some livestock. As a defense, he seeks to establish that he had a contract with plaintiff under which he was to receive the money in return for an agreement to support and care for the plaintiff. He pleaded this defense by an unverified *521 answer. The plaintiff filed a reply and the parties proceeded to trial. The court, on its own motion, struck the answer on the grounds that it was unverified. The plaintiff by filing a reply, thus pleading over, waived any objection as to verification thereto. Northup v. Bathrick, 80 Neb. 36, 113 N.W. 808; Blodgett v. Swanson Bros., 105 Neb. 191, 179 N.W. 1011. This was error and the answer should not have been stricken. Plaintiff's husband had been ill for about a year and died on October 22, 1957, at Little Rock, Arkansas, near Forrest City where plaintiff and her deceased husband farmed and rented out two small acreages. Several of the children who lived in Omaha, Nebraska, had gone to Arkansas to help during their father's illness. George, the defendant, had gone from Omaha to Arkansas in May 1957, and stayed there until his return to Omaha late in December 1957. Augusta Bowers, a daughter, lived in Arkansas. The defendant offered to prove, by Augusta's testimony, over objection, that on October 28, 1957, the day after the father's funeral, his mother, Augusta, and defendant were driving in his car to Forrest City, Arkansas; that Augusta told her mother there had been a meeting of the family the previous evening; that they agreed it would be best for the mother to go to Omaha and live with George; that if it was all right with the plaintiff George should use whatever funds were then available or became available for the care and support of plaintiff; that while in the car George agreed to assume this responsibility; and that the plaintiff agreed to this arrangement in the presence of George and Augusta as they were in the car driving to Forrest City. The evidence shows that the plaintiff went to Omaha and began living with the defendant in February 1958, and lived with him for about a month. Sometime during this period of time she began demanding the return of her money. The court, on its own motion, rejected the offer of proof as to the contract and refused permission for either Augusta or George to testify as to the conversation and agreement during the automobile trip. The court, therefore, directed a verdict for the plaintiff and entered judgment accordingly. This was prejudicial error. A binding mutual understanding or meeting of the minds sufficient to establish a contract requires no precise formality, or express utterance from the parties themselves as to all of the details of the proposed agreement. It may be established by the parties assenting to the proposal drawn, or uttered by a third party to which they assent or to which they agree, and it may be implied from conduct and circumstances and may be shown by circumstantial evidence and the admissions of the parties sought to be charged. Evidence of facts and circumstances, together with the words of the parties used at the time, from which reasonable persons in conducting the ordinary affairs of business, but with special reference to the particular matter on hand, would be justified in inferring such a contract or promise, is sufficient. Citizens State Bank v. State Bank, 111 Neb. 571, 197 N.W. 607; In re Estate of McKeon, 227 Iowa 1050, 289 N.W. 915; Kladivo v. Melberg, 210 Iowa 306, 227 N.W. 833; Restatement, Contracts, s. 22, comment (a), p. 27. Plaintiff argues that there is a presumption of a gift when a child renders service to parents, that the offer of proof didn't refer to any specific contract for the use of the mother's money, and that the offer of proof does not cover all of the necessary elements or details of such a contract for services. Part of these arguments are based on an acceptance of plaintiff's testimony and version of the facts. Defendant, however, was entitled to have the testimony presented supporting his theory of defense. The offer of proof was sufficient. It need not state with precision every detail of the proposed testimony of the witnesses establishing the agreement or contract. It is sufficient if it directs the court's attention to material testimony establishing or supporting defendant's theory of *522 defense. It is not asserted that the defendant's pleading in this respect is insufficient. For the reasons given, the judgment is reversed and the cause remanded for a new trial. Reversed and remanded.

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670 F.2d 1235 216 U.S.App.D.C. 416 Mazaleskiv.Schweiker 79-2470 UNITED STATES COURT OF APPEALS District of Columbia Circuit 9/30/81 D.C.D.C., 481 F.Supp. 696 AFFIRMED

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In The Court of Appeals Ninth District of Texas at Beaumont ____________________ NO. 09-06-208 CR ____________________ STEPHEN PAUL BORDAGES, Appellant V. THE STATE OF TEXAS, Appellee On Appeal from the 359th District Court Montgomery County, Texas Trial Cause No. 04-07-05428-CR MEMORANDUM OPINION We have before the Court an appeal by Stephen Paul Bordages from a sentence pronounced January 31, 2006. The notice of appeal was filed with the trial court on May 3, 2006, more than ninety days from the date of sentencing. We notified the parties that the appeal did not appear to have been timely filed. The appellant did not supply an affidavit or otherwise establish that notice of appeal was filed within the time permitted for perfecting appeal. The court finds the notice of appeal was not timely filed. Tex. R. App. P. 26.2. No extension of time was timely requested pursuant to Tex. R. App. P. 26.3. It does not appear that appellant obtained an out-of-time appeal. The Court finds it is without jurisdiction to entertain this appeal. Accordingly, the appeal is dismissed for want of jurisdiction. APPEAL DISMISSED. ___________________________ DAVID GAULTNEY Justice Opinion Delivered July 26, 2006 Do Not Publish Before Gaultney, Kreger and Horton, JJ.

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Fourth Court of Appeals San Antonio, Texas JUDGMENT No. 04-18-00910-CR Jermaine Thomas WITTY, Appellant v. The STATE of Texas, Appellee From the 226th Judicial District Court, Bexar County, Texas Trial Court No. 2017CR13722 Honorable Mark R. Luitjen, Judge Presiding BEFORE CHIEF JUSTICE MARION, JUSTICE MARTINEZ, AND JUSTICE ALVAREZ In accordance with this court’s opinion of this date, this appeal is DISMISSED. SIGNED January 16, 2019. _________________________________ Sandee Bryan Marion, Chief Justice

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375 F.3d 1021 Timothy GAMBLE, Petitioner-Appellant,v.Sam CALBONE, Warden, Respondent-Appellee.Kenneth Popejoy, Petitioner-Appellant,v.Ron Ward, Warden; The Attorney General of the State of Oklahoma, Respondents-Appellees. No. 03-6057. No. 03-6150. United States Court of Appeals, Tenth Circuit. July 13, 2004. COPYRIGHT MATERIAL OMITTED Submitted on the briefs: Timothy Gamble, Pro Se. W.A. Drew Edmondson, Attorney General of Oklahoma, Jennifer J. Dickson, Assistant Attorney General, Keeley L. Harris, Assistant Attorney General, Oklahoma City, OK, for Respondents-Appellees. Kenneth Popejoy, Pro Se. Before EBEL, HENRY, and MURPHY, Circuit Judges. MURPHY, Circuit Judge. 1 Timothy Gamble and Kenneth Popejoy, Oklahoma state inmates appearing pro se, appeal from the district court's denial of their habeas petitions brought pursuant to 28 U.S.C. § 2241. The petitions alleged violation of the inmates' Due Process rights because respondent revoked their earned credits in prison disciplinary proceedings for criminal acts they did not commit. In each case, we granted a certificate of appealability (COA) on the issue whether some evidence supports their disciplinary convictions for violation of Okla. Stat. tit. 21, § 1541.1. In Mr. Popejoy's case, we also granted COA on the issue whether copy fees charged by a district court to obtain a criminal record and transcript to be used in preparing and filing an application for post-conviction relief are "fees or costs" within the meaning of Okla. Stat. tit. 57, § 549(A)(5) that may be paid from an inmate's mandatory savings. Because the facts and law in each case are virtually identical, we have combined the cases for judicial economy. And because we determine that no evidence supports the disciplinary convictions, we reverse and remand for issuance of the writ in both cases.1 I. Relevant facts and proceedings 2 The following facts, many of which were found by the district court, are undisputed in the record. Both inmates are incarcerated at the Great Plains Correctional Facility, a private prison.2 Section 549(A)(5),3 in pertinent part, requires that at least twenty percent of an inmate's wages derived from prison employment 3 shall be placed in an account, payable to the prisoner upon his or her discharge or upon assignment to a prerelease program. Funds from this account may be used by the inmate for fees or costs in filing a civil or criminal action as defined in Section 151 et seq. of Title 28 of the Oklahoma Statutes. 4 This account is referred to as the "mandatory savings account." The correlative Oklahoma Department of Correction's (DOC) policy states: 5 Except for fees incurred by an inmate filing any state or federal action, statutory savings cannot be drawn upon until the inmate discharges, paroles, or upon assignment to a community based supervision program. (57 O.S. Section 549). The allowable fees are defined in O.S. 28, Section 151 et seq .... Attorney fees are not an allowable fee. Disbursements for filing fees must be made payable to the applicable county or federal court clerk. Any court order to release funds from statutory savings for any purpose other than filing fees will be referred immediately to the legal division. 6 DOC policy OP-120230 (1999-2001). In 1999, Travis Smith, who at that time was the business manager at Great Plains (and who later became a deputy warden) sent a memo to the general inmate population briefly stating his interpretation of section 549(A)(5) and OP-120230. In a footnote, the memo quoted the portion of OP-120230 set forth above, but Mr. Smith informed the inmates that, "OP 120230 ... states that only court-ordered filing fees may be paid from mandatory savings." R. No. 03-6057, Doc. 2, Ex. K. The memo instructed inmates who desired a qualifying disbursement to complete a request to staff at the DOC, and to include a copy of the court order with an envelope addressed to the court "you will be paying." Id. 7 On October 17, 2001, Mr. Gamble sent a written "Request to Staff" to the DOC asking staff to withdraw $500.00 from his mandatory savings account. The check was to be made payable, and sent directly, to the Canadian County Clerk. He included a letter to the clerk authorizing payment of the costs to obtain certified copies of the transcript and record in his criminal case so that he could prepare and file an application for state post-conviction relief. 8 On October 10, 2001, Mr. Popejoy sent a similar request, asking that $170.00 be sent to the Oklahoma County Court Clerk to obtain court documents and transcripts relating to his criminal conviction. He demonstrated that he had previously filed a motion with the district court in Oklahoma County on August 3, 2001, requesting copies of his criminal record and transcript, along with an affidavit claiming pauper status, but had received no response after almost three months. R. No. 03-6150, Doc. 2, Ex. A. 9 Both petitioners assert that prison law clerks told them that, under the statute and DOC policy, they could request money from their mandatory savings to pay for the copy costs. The DOC did not issue a check in response to either request. Instead, on October 24, Great Plains prison officials commenced disciplinary proceedings against them, charging both inmates with violating section 1541.1 of the Oklahoma criminal statutes, which prohibits "[o]btaining money under false pretense." R. No. 03-6057, Doc. 2, Ex. A; R. No. 03-6150, Doc. 2, Ex. E. The sole evidentiary basis for each charge was a copy of the inmate's request. Both inmates challenged the charges. 10 At a November 1 hearing, both inmates admitted requesting money from their mandatory savings to pay for certified copies of their court records but contended they did not violate the law. Quoting Mr. Smith's memo, the disciplinary hearing officer who presided over both cases maintained that prison policy "states that only court ordered filing fees may be paid from mandatory savings." R. No. 03-6057, Doc. 2, Ex. E; R. No. 03-6150, Doc. 2, Ex. L. He concluded that Mr. Gamble's behavior was "an attempt to obtain money under false pretense," R. No. 03-6057, Doc. 2, Ex. E, and that Mr. Gamble had therefore violated section 1541.1 and committed a class X offense.4 The officer imposed punishment of thirty days' disciplinary segregation and 365 days of lost earned credits. See id. 11 The officer made no comments about Mr. Popejoy's alleged misconduct other than to also find him guilty of the class X offense for violating section 1541.1. R. No. 03-6150, Doc. 2, Ex. E, L. He imposed thirty days of disciplinary segregation and a loss of 180 days' earned credits as punishment. Id. Ex. L. Mr. Popejoy complains that he was also punished with seven additional administrative disciplinary sanctions not imposed in his misconduct decision, including loss of telephone, visitation, canteen, recreation and exercise privileges; loss of wages; demotion from classification level 4, where he was earning forty-four days of credit per month toward reduction of his sentence to level 1 where he could earn no credits; and removal from his level-four honor pod to a level-one pod. 12 Both inmates administratively appealed their misconduct convictions. Both argued (1) they could not prepare and file applications for post-conviction relief without copies of their criminal record and transcript to support the petitions; (2) Travis Smith's memo misinterpreted section 549(A)(5) and OP-120230; (3) Oklahoma statutes specifically define copy costs as "fees" that may be paid from mandatory savings; (4) Oklahoma case precedent provided for payment of copies of the criminal record from their mandatory savings account; (5) they used the proper method in requesting the money from the DOC; (6) they had no intent to defraud or cheat anyone by asking for money from their own savings; and (7) no evidence supported a disciplinary conviction for violation of section 1541.1. 13 In Mr. Gamble's case, the designee for the Director deciding the appeal responded, "Oklahoma State Statute 57 O.S. Section 549 states, `Except for fees incurred by an inmate filing any state or federal action, statutory savings cannot be drawn upon until the inmate discharges, paroles, or upon assignment to a community based supervision program.'" R. No. 03-6057, Doc. 2, Ex. I. Contrary to the designee's statement, the quoted language she attributed to section 549 does not appear in the statute, and it has not been amended since 1996.5 In Mr. Popejoy's case, the designee properly attributed that language to DOC policy OP-120230. R. No. 03-6150, Doc. 2, Ex. P. But in both cases, she interpreted the words "fees incurred by an inmate filing any state ... action" to mean that only "filing fees" could be paid from a mandatory savings account. She determined that Mr. Gamble had failed to prove that he requested the money to pay for filing fees; that Mr. Popejoy had failed to prove he requested and intended to use the money to pay for court-ordered filing fees; and that there was no indication that either inmate owed money for filing fees. See id.; R. No. 03-6057, Doc. 2, Ex. I. She further concluded that section 549 "prohibited" using mandatory savings to pay for certified copies of a criminal record. R. No. 03-6057, Doc. 2, Ex. I. Without addressing their claims that there was no evidence of an intent to cheat or defraud anyone, the Director's designee concluded there was sufficient evidence to support the charges that both inmates violated § 1541.1, and denied the appeals. See id.; R. No. 03-6150, Doc. 2, Ex. P. 14 Both inmates filed habeas petitions in federal district court. In both cases, the district court denied the petitions, concluding that the disciplinary actions based on violation of § 1541.1 were supported by "some evidence." R. No. 03-6057, Doc. 16 at 1-2; R. No. 03-6150, Doc. 16 at 1 (adopting magistrate judge's report and recommendation) & Doc. 14 at 8 (magistrate judge's report concluding that "some evidence" supported conviction). II. Exhaustion of state-court remedies 15 Generally, before a habeas petition may be granted, a petitioner must demonstrate exhaustion of state court remedies unless "there is an absence of available State corrective process," 28 U.S.C. § 2254(b)(1)(B)(i), or "circumstances exist that render such process ineffective to protect the rights of the applicant." 28 U.S.C. § 2254(b)(1)(B)(ii). Both magistrate judges assigned to the cases noted that respondent admitted there appeared to be no state-court remedy recognized in Oklahoma for immediate judicial review of the sufficiency of the evidence to support a prison disciplinary conviction. R. No. 03-6057, Doc. 14 at 4-6; R. No. 03-6150, Doc. 14 at 4 & n. 4. 16 We have previously held that an inmate seeking speedier, but not immediate, release due to alleged errors in calculating earned or good-time credits does not have an adequate habeas remedy under Oklahoma law, and that requiring state exhaustion would be futile. Wallace v. Cody, 951 F.2d 1170, 1172 (10th Cir.1991); see also Johnson v. Dep't of Corr., 916 P.2d 264, 266 (Okla.Crim.App.1996) (holding that claims of due process violations were not proper subjects of state habeas relief because inmate could not show entitlement to immediate release). In 1996, the Oklahoma Court of Criminal Appeals further held that, although state mandamus relief is available to force a prison to provide an inmate with "minimum procedural due process" before revoking earned credits, mandamus is not available to review the actual decision of the disciplinary authority. Canady v. Reynolds, 880 P.2d 391, 396-97 & n. 4 (Okla.Crim.App.1994). The court has subsequently stressed that an inmate "cannot challenge the merits of, or appeal from, the prison officials' administrative decision that [the inmate] is guilty of prison infractions and that she should be punished by the revoking of earned credits" through mandamus because mandamus relief does not apply "to the full panoply of due process rights" in Oklahoma. Dunn v. Ramsey, 936 P.2d 347, 348-49 (Okla.Crim.App.1997). 17 Nor does an Oklahoma inmate have the right to a direct judicial appeal from a disciplinary board or DOC decision to revoke credits. Canady, 880 P.2d at 398-99. In short, the Canady court held that "an inmate does not have a right to an interlocutory determination of the status of his earned credits in a situation where he is not entitled to immediate release," stating that it "refuse[d] to believe the [Oklahoma] Legislature intended this Court or any district court to become involved in the earned credits business." Id. at 400. We continue to follow our ruling in Wallace that there is no state-exhaustion requirement for Oklahoma inmates challenging the merits of a disciplinary board revocation of earned credits where the inmate is seeking only speedier, and not immediate, release. III. Standard of review 18 On review of the denial of a petition for habeas corpus, we review the district court's legal conclusions de novo. See Patterson v. Knowles, 162 F.3d 574, 575 (10th Cir.1998). When determining whether a disciplinary board decision should be upheld upon a challenge to the sufficiency of the evidence, we do not examine the entire record or weigh the evidence; we simply determine "whether there is any evidence in the record that could support the conclusion reached by the disciplinary board." Superintendent v. Hill, 472 U.S. 445, 455-56, 105 S.Ct. 2768, 86 L.Ed.2d 356 (1985). The conclusion reached by the disciplinary board is that both inmates violated a state criminal law, thereby committing a class X offense that could be punished by revocation of earned credits. IV. Analysis of issues on appeal 19 There is no dispute that the inmates requested a disbursement from their savings accounts to pay court copy costs associated with the prospective filing of their state petitions for post-conviction relief. The ultimate legal question in these two cases is whether, by making this request, the inmates violated section 1541.1. We must first, however, ascertain the answers to two preliminary questions: what was the crime charged for the disciplinary conviction, and what are the elements of that crime? 20 A. Crime charged. Respondent states that Mr. Gamble "was found guilty of a misconduct for attempting to obtain money from his prison savings account for an improper purpose," which violated prison policy OP-120230. Aplee. Br. No. 03-6057, at 6. Respondent states that Mr. Popejoy's "misconduct report was written" because he "sought withdrawal of money from his account for an improper purpose." Aplee. Br. No. 03-6150, at 3. But, as previously mentioned, the record conclusively shows that the inmates were charged, convicted, and disciplined for violating a state criminal law prohibiting obtaining money under false pretense. Neither inmate was charged with violating OP-120230. 21 Further, OP-120230 does not impose any requirements on an inmate to ensure that his request is for an allowable expenditure or warn that an attempt to obtain money in savings by making a request that may be disapproved is a rule violation subject to prison discipline. Indeed, the 2001 policy provided that, after an inmate makes a request for disbursement, the "appropriate staff will approve or disapprove the disbursement request and forward to trust fund officer, or return to inmate if not approved." OP-120230(VII)(B)(1) (attached as Ex. C to respondent's brief in No. 03-6150). In addition, submitting a disapproved disbursement request is not an act that constitutes a rule violation under OP-060125; and only acts falling within this policy may provide the basis for discipline or the loss of earned credits.6 22 Just as section 549 "enumerates the powers and duties of the State Board of Corrections," Webb, 907 P.2d at 1057, OP-120230 simply sets forth the DOC's policy on use of inmate accounts in accordance with the statute. Thus, we must examine the actual basis of the inmates' disciplinary convictions, which is violation of section 1541.1, and determine whether "some evidence" supports a finding that the inmates committed that crime. 23 B. Elements of the crime charged. Section 1541.1 provides, in relevant part: 24 Every person who, with intent to cheat and defraud, shall obtain or attempt to obtain from any person, firm or corporation any money, property or valuable thing, of a value less than Five Hundred Dollars ($500.00) by means or by use of any trick or deception, or false or fraudulent representation or statement or pretense ... shall be guilty of a misdemeanor and upon conviction thereof shall be punished by a fine not to exceed One Thousand Dollars ($1,000.00) or by imprisonment in the county jail for not more than one (1) year, or by both such fine and imprisonment. 25 In order to affirm a conviction for obtaining money by false pretense, there must be evidence that the inmates attempted to obtain money by means of a trick, deception, or false representation. It is necessary that they knew it was a trick, deception, or false representation, and that they had the intent to cheat and defraud. See OUJI-CR 5-41. If, as here, the defendant is accused of making a false representation, it must be about "past or existing facts by one person to another with intent to defraud; such statement must be reasonably calculated to deceive that other." Bartlett v. State, 733 P.2d 1350, 1352 (Okla. Crim.App.1987) (quotation omitted) (interpretation of holding limited on other grounds in Broadway v. State, 818 P.2d 1253, 1255 n. 1 (Okla.Crim.App.1991)). Intent to defraud is defined as a "[s]cheme to take property so as permanently to deprive the owner." OUJI-CR 5-56; see also Warren v. State, 93 Okla.Crim. 166, 226 P.2d 320, 321 (1950) (noting that "if the owner parts with the possession and title [of property], due to the deception and artifice of the taker, then the offense constitutes obtaining property by false pretenses"). "Fraudulent intent ... [may] be inferred from a series of acts and pertinent circumstances." Ross v. State, 572 P.2d 1001, 1003 (Okla.Crim.App.1977). But absent evidence of an intent to defraud, a conviction under section 1541.1 must be reversed. Hixson v. State, 598 P.2d 268, 268-69 (Okla.Crim.App.1979) (interpretation of holding limited on other grounds in Broadway, 818 P.2d at 1255). 26 C. The district court's analysis. Respondent does not discuss the elements of section 1541.1. Instead, he argues, both here and below, that the act of making application for the disbursement, in and of itself, violates section 1541.1. 27 The district court agreed, adopting the two magistrates' reports and recommendations. In arriving at this conclusion in both cases, the magistrate judges first noted that section 549(A)(5) provides that funds from an inmate's mandatory savings account "may be used by the inmate for fees or costs in filing a civil or criminal action as defined in Section 151 et seq. of Title 28...." R. No. 03-6057, Doc. 14 at 7 (quoting section 549(A)(5)); R. No. 03-6150, Doc. 14 at 7. Then the judges noted that, under the prison policy, "[f]unds in an inmate's mandatory savings account may only be used `to pay court costs payable to a county clerk.'" R. No. 03-6057, Doc. 14 at 8 (quoting OP-120230(V)(A)(2)); R. No. 03-6150, Doc. 14 at 7. Without further analysis, the magistrate judges concluded that copying costs imposed by a court clerk for supplying a criminal record to be used to prepare a post-conviction application for relief do not qualify as costs or fees for filing a civil or criminal action under section 549(A)(5). Both magistrate judges then concluded that the inmates attempted to obtain the funds for a personal purpose that is not allowed under statute or DOC policy, and that this provided "some evidence" of an intent to use funds for an impermissible purpose through trick or deception and, therefore, provided sufficient proof of violation of section 1541.1. R. No. 03-6057, Doc. 14 at 9; R. No. 03-6150, Doc. 14 at 8. 28 The magistrate judge in Mr. Popejoy's case also found persuasive that, in Hammons v. Ward, No. 02-6326, 62 Fed. Apx. 899, 2003 WL 1849344 (10th Cir. April 10, 2003) (unpublished), a panel of this court denied a COA to review the district court's denial of a habeas petition in a case involving similar facts and charges. And on appeal, respondent also cites Farrow v. Ward, No. 02-6318 (10th Cir. June 13, 2003) (unpublished order), as persuasive authority. But "unpublished decisions are not binding authority." Duran-Hernandez v. Ashcroft, 348 F.3d 1158, 1162 (10th Cir.2003). We further note that certain facts are different in the Farrow case, and it is sufficiently distinguishable that we do not regard it as persuasive authority. See United States v. Salzano, 158 F.3d 1107, 1112 (10th Cir.1998). In denying COA, Hammons did not fully address the statutes and case law we are concerned with here, nor did it discuss the issue of intent to cheat and defraud. For these reasons, we decline to follow it. See Shayesteh v. City of South Salt Lake, 217 F.3d 1281, 1285 n. 6 (10th Cir.2000); Day v. Maynard, 200 F.3d 665, 667 n. 1 (10th Cir.1999). 29 D. Section 549(A)(5). As Mr. Gamble and Mr. Popejoy point out, section 549(A)(5) specifically provides for payment of "fees or costs," as defined by Okla. Stat. tit. 28, § 151, and not just "filing fees." Section 151(A) provides that district court clerks shall charge and collect fees, fines, costs, and assessments imposed by "this title," i.e., title 28. 30 Okla. Stat. tit. 28, § 31 provides, in relevant part: 31 the clerk of the district court ... shall charge and collect the following fees for services by them respectively rendered and none others, except as otherwise provided by law: 32 .... Making copy of an instrument of record 33 or on file, first page..................................... $1.00 subsequent pages (each).....................................$0.50 Certifying to any instrument (each) ....................................$0.50 34 Thus, the term "fees or costs," as defined in section 549(A)(5), reasonably appears to include photocopy charges imposed by a court clerk for obtaining official records and transcripts. 35 Respondent argues that, because section 549(A)(5) limits inmate use to fees or costs "in filing" their civil or criminal actions, the term "fees or costs" is limited to only "filing fees." Respondent, however, fails to address the express language specifically allowing disbursement for "costs," and interpreting "fees or costs" to mean only "filing fees" would seemingly eliminate other types of expenditures incurred under title 28 "in filing" a suit. 36 The inmates' understanding that requesting disbursement from their mandatory savings for the costs of obtaining their transcripts was a legal request is justified under Oklahoma case precedent and legislative history. In 1985, section 549 did not expressly provide for any pre-discharge use of an inmate's mandatory savings account. See Cumbey v. State, 699 P.2d 1094, 1095 (Okla.1985) (quoting former statute, then codified as Okla. Stat. tit. 57, § 549.5 as providing, "that not less than twenty percent ... of such wages shall be placed in an account payable to the prisoner upon his discharge"). The inmates in Cumbey challenged as unconstitutional the apparent prohibition on withdrawing money from their mandatory savings for personal and family purposes "and to pay court costs and filing fees." Id. at 1096. The court held that the inmates did not have a constitutional or legal right to immediate use of the money in their savings because the former statute gave them only a conditional right to receive the savings upon their discharge. See id. at 1097-98. 37 But the Cumbey court denied the inmates' applications to proceed in forma pauperis on appeal and directed the DOC to release money from their mandatory savings to pay not only for the costs of filing the appeal, but also "for costs of assembling the record on appeal," i.e., for the costs of copying the record. Id. at 1096. The court held that the inmates were not indigent by virtue of their mandatory savings accounts, and that money from those accounts could be released as costs were incurred "upon proper application and court order" notwithstanding the fact that section 549.5 provided only for payment of the funds to the inmates upon discharge. See id. The rationale for this holding was to 38 curb the indiscriminate filing of prisoner civil rights actions, by prompting inmates to confront the initial dilemma which faces most other potential civil litigants: is the merit of the claim worth the cost of pursuing it? 39 Id. 40 In response to Cumbey, in 1985 the Oklahoma legislature passed a new law providing that, "[i]n determining whether or not an inmate shall be allowed to use an affidavit in forma pauperis, a court shall consider the amount of funds an inmate has on deposit with the Department of Corrections." Okla. Stat. tit. 57, § 565. The legislature also concurrently amended section 549 to specifically provide an inmate the right to use mandatory savings during incarceration to pay "for any fees or court costs incurred by an inmate filing any civil action." Daniels v. Kaiser, 851 P.2d 529, 531 (Okla.1993) (quoting the November 1, 1985 amendment); see also Foust v. Pearman, 850 P.2d 1047, 1051 (Okla.1992) (Hodges, J., concurring in part and dissenting in part) ("Two days after the Cumbey decision, the Legislature amended title 57 to conform to that holding.") The legislature amended section 549 again in 1990 to limit "any fees or court costs" to those "as defined in Section 151 of Title 28 of the Oklahoma Statutes." Daniels, 851 P.2d at 531 n. 1 (quoting the 1990 amendment). 41 Until 1995, section 549 specifically limited the use of inmates' mandatory savings accounts to costs and fees associated with civil cases. See id. at 531. Accordingly, in a case decided in 1993, the Oklahoma Supreme Court held that, although mandatory savings funds could be used to pay for "costs and expenses" associated with prosecuting a civil matter, they could not be used to prosecute an inmate's criminal appeal. McMullin v. Dep't of Corr., 863 P.2d 1187, 1188-89 (Okla.1993) (stating that, "§ 549.A.5 authorizes prisoners to use their trust funds, prior to release, only for costs in civil matters"). The court affirmed the district court's refusal to order the DOC to release money from the inmate's savings account "to pay costs and expenses associated with the appeal of a conviction." Id. at 1189. But the court also held that the district court could not even consider the amount in the inmate's mandatory savings accounts in deciding whether the inmate was indigent and unable to pay "filing fees, other court costs, transcript costs, [and] other expenses" associated with prosecuting his criminal appeal. Id. The court held that the inmate could file a pauper's affidavit to force the state to pay for a transcript and other costs in either a criminal appeal or when seeking post-conviction relief7 in order to guarantee his access to the courts. Id. 42 In 1995 the Oklahoma legislature responded to McMullin by again amending section 549(A)(5) to include fees and costs associated with the inmate filing criminal cases. 1995 Okla. Sess. Law Serv. Ch. 266 § 4 (emerg. eff. May 25, 1995) (West). In addition, the legislature passed Okla. Stat. tit. 12, § 2003.1(C). That statute provided that all inmates desiring to proceed in forma pauperis had to submit certificates stating the amount of money on deposit to the inmate's credit "in any account in the institution," and further provided that a court may deny leave to proceed in forma pauperis if the total account values exceed $200. See 1995 Okla. Sess. Law Serv. Ch. 141 § 1 (eff.Nov.1, 1995) (West) (emphasis added); Smith v. Moore, 50 P.3d 215, 218 n. 4 (Okla.2002) (quoting language of section 2003.1 as codified in 19958). These legislative amendments expressed Oklahoma's policy of "compelling a prisoner to weigh the validity of a lawsuit against the cost of pursuing it," Smith, 50 P.3d at 218, and forcing inmates to pay for all costs incurred in preparing and filing the case from the inmate's draw or mandatory savings accounts. Cf. Williams v. Austin, 890 P.2d 416, 418-19 & n. 2 (Okla.Ct.App.1994) (implicitly holding, in Open Records Act case, that mandatory savings account funds could be used to pay for the costs of obtaining copies of an inmate's criminal record needed in anticipation of filing an application for post-conviction relief). 43 Mr. Gamble and Mr. Popejoy established that their request for a disbursement from mandatory savings for fees charged by a court to copy and send their criminal records and transcripts was reasonable under section 549(A)(5) and OP-120230, thus negating any inference that they knew they were requesting money for an illegal purpose or that they had the intent to cheat or defraud anyone by making such a request. The act of making such a request simply does not provide "some evidence" to support a conviction for violating section 1541.1. 44 E. Intent to cheat and defraud. Citing Hill, 472 U.S. at 455-56, 105 S.Ct. 2768, respondent makes the novel argument that, because our review is limited to determining only whether "some evidence" supports the disciplinary conviction, mens rea (even if an element necessary to establish a violation of § 1541.1) is irrelevant. We disagree. In Hill, the Supreme Court held that, "[r]evocation of good time credits is not comparable to a criminal conviction, and neither the amount of evidence necessary to support such a conviction, nor any other standard greater than some evidence applies in this context." 472 U.S. at 456, 105 S.Ct. 2768 (citation omitted). But the Court further held that, to satisfy due process, there must be "some evidence to support the findings made in the disciplinary hearing." Id. at 457, 105 S.Ct. 2768. The Court's holding is directed toward the qualitative and quantitative character of evidence necessary to support a disciplinary conviction; it rejects the "clear and convincing" or "beyond a reasonable doubt" standards. But the Court did not imply that there need not be "some evidence" for each element necessary to establish a violation of the particular criminal statute used as the basis of a disciplinary conviction. 45 Alternatively, respondent argues that the mens rea element is supported by some evidence because Mr. Smith's 1999 memo "informed the inmate population that `only court ordered filing fees may be paid from mandatory savings.'" Aplee. Br. No. 03-6057, at 10; Aplee. Br. No. 03-6150, at 13. Mr. Smith's interpretation of section 549(A)(5) and OP-120230, however, is not necessarily correct and is certainly not the only reasonable interpretation. The statutory language, legislative history, and case precedent discussed above justify an interpretation of section 549(A)(5) that would allow use of petitioners' mandatory savings accounts consistent with their requests to withdraw funds. As a consequence, those requests are not evidence supporting a finding that petitioners intended to "cheat and defraud." Because no other evidence was presented, there was a complete failure of proof. V. Conclusion 46 We hold that no evidence supports a finding that either Mr. Gamble or Mr. Popejoy violated section 1541.1. Accordingly, no findings or evidence support a conclusion that either inmate committed a class X misconduct that could be sanctioned or disciplined. The misconduct convictions must be reversed and expunged from the inmates' records, and all earned credits revoked as a result of the convictions, and their former statuses in earning credits, must be restored. 47 The judgment of the district court is REVERSED and this matter is REMANDED for issuance of the writ. Notes: 1 After examining the briefs and appellate record, this panel has determined unanimously that oral argument would not materially assist the determination of these appealsSee Fed. R.App. P. 34(a)(2); 10th Cir. R. 34.1(G). The cases are therefore ordered submitted without oral argument. 2 Mr. Calbone, warden of Great Plains, was named as the respondent by both Mr. Gamble and Mr. Popejoy. In Mr. Popejoy's case, because the Oklahoma DOC bears responsibility for the custody and supervision of inmates housed in private prisons, the magistrate judge substituted Ron Ward, the Director of the DOC, as the proper respondent. R. No. 03-6150, Doc. 14 at 1 n. 1. The Oklahoma Attorney General represented both respondents, and we refer only to "respondent" in this opinion 3 Section 549 "enumerates the powers and duties of the State Board of Corrections,"Webb v. Maynard, 907 P.2d 1055, 1057 (Okla. 1995), and creates statutory limits on the collection, apportionment, and disbursement of wages paid for inmate employment. See id. 4 Class X offenses form the most serious class of prison misconduct and, besides disciplinary convictions for violation of specific city, state, or federal laws, include offenses like rioting; taking over a part of the prison; resisting apprehension within the prison; selling drugs; threatening prison security; killing, raping, or intentionally harming others; setting fires; possessing weapons, firearms or drugs; and escape. OP-060125 Attach. A. Only class X offenses may result in the maximum 365-day loss of earned creditsId. at p. 8. 5 The designee apparently was quoting the language from Mr. Smith's memo, which quotes the 1999-2001 version of DOC policy OP-120230 at paragraph C.2. Aplee. Br. No. 03-6150, Ex. C. That paragraph explains the methodology for cash disbursements and is similar to the current versionSee OP-120230, found at http://www.doc.state. ok.us/Offtech/op120230.htm. 6 OP-060125 provides that, "`Acts Constituting Rule Violation' (Attachment A ...) of this procedure defines all inmate/offender disciplinary rule violations and specifies the allowable range of disciplinary sanctions authorized by the Oklahoma Department of Corrections for each violation." http:// www.doc.state.ok.us/Offtech/op060125.htm 7 "Actions brought pursuant to the Oklahoma Uniform Post Conviction Procedure Act are criminal actions."Moore v. Gibson, 27 P.3d 483, 485 (Okla.Crim.App.2001). 8 Section 2003.1(C) was amended in 2002 to delete the language specifying which accounts could be considered for pauper status, but, in the same legislation, the legislature concurrently passed another law that specifically sets forth what income and assets a court may consider in determining pauper status, including inmate trust fund accounts. 2002 Okla. Sess. Law Serv. Ch. 402, §§ 6 & 10 (eff. July 1, 2002); Okla. Stat. tit. 57, § 566.3(B)(3)(h) 48 HENRY, Circuit Judge, concurring. 49 I fully concur in the majority opinion: Great Plains Correctional Facility has failed to provide any evidence that Mr. Gamble or Mr. Popejoy acted with the requisite "intent to cheat and defraud." OKLA. STAT. tit. 21, § 1541.1. Mr. Gamble and Mr. Popejoy seem to have quite honestly, and I suggest, reasonably, believed that their disbursement requests were permissible under OKLA. STAT. tit. 57, § 549(A)(5). As the panel acknowledges, "the inmates' understanding that requesting disbursement from their mandatory savings for the costs of obtaining their transcripts was a legal request is justified under Oklahoma case precedent and legislative history." Maj. Op. at 1030; see also OKLA. STAT. tit. 28, § 31 (listing the charge for "[m]aking [a] copy of an instrument of record or on file" as an example of a "fee" to be collected by the district court); Cumbey v. State, 699 P.2d 1094, 1096 (Okla. 1985) (denying inmates' request to proceed IFP and directing "the Department of Corrections to release the sum of fifty ($50) dollars for the costs of filing this appeal; and the sum of thirty ($30) dollars ... for costs of assembling the record on appeal") (emphasis added). After all, paying court costs is a good thing, as is reinforcing the reality that one must, by and large, pay one's own way. 50 The lack of intent to cheat and defraud is further highlighted by the fact that prison officials could simply have rejected the inmates' requests for disbursements to cover copying and transcript fees. Oklahoma Department of Corrections policy states that "[t]he appropriate staff will approve or disapprove the disbursement request and forward to [the] trust fund officer, or return to [the] inmate if not approved." OP-120230(VII)(B)(1). The panel notes that "submitting a disapproved disbursement request is not an act that constitutes a rule violation under OP-060125." Maj. Op. at 1027. I question why the staff did not simply reject the inmates' disbursement requests rather than charging them with obtaining money under false pretenses. 51 Finally, I believe that the Great Plains Correctional Facility's interpretation of the statute is simply wrong. I fail to see the harm in allowing prisoners to spend their funds on court costs and fees, whether they are associated with the filing of a case or the prosecution of it. It would make little sense to allow savings account monies to be used to file a case and then forbid their use to provide courts with materials useful in resolving that case. Indeed, it is possible that interpretations this far off the mark could raise constitutional implications concerning access to the courts. But as Mr. Gamble and Mr. Popejoy did not adequately raise the constitutionality of this interpretation, and keeping in mind that "[i]t is not the habit of the court to decide questions of a constitutional nature unless absolutely necessary to a decision of the case," Burton v. United States, 196 U.S. 283, 295, 25 S.Ct. 243, 49 L.Ed. 482 (1905), I rest my decision with the majority on the clear lack of evidence of intent in these two cases.

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329 Md. 1 (1992) 616 A.2d 1275 RICKY R. WILLIAMS v. STATE OF MARYLAND. No. 7, September Term, 1992. Court of Appeals of Maryland. December 23, 1992. Thomas C. Hill (Shaw, Pittman, Potts and Trowbridge, and Lori V. Gagne, on brief), Washington, D.C., for petitioner. David P. Kennedy, Asst. Atty. Gen. (J. Joseph Curran, Jr., Atty. Gen., on brief), Baltimore, for respondent. Argued before MURPHY, C.J., and ELDRIDGE, RODOWSKY, McAULIFFE, CHASANOW, KARWACKI, and ROBERT M. BELL, JJ. MURPHY, Chief Judge. This case involves Maryland's "Drug Kingpin Act" enacted by ch. 287 of the Acts of 1989, now codified within the provisions of Maryland Code (1992 Repl.Vol.), Art. 27, § 286. Section 286(a)(1) makes it unlawful for any person "[t]o manufacture, distribute, or dispense, or to possess a controlled dangerous substance in sufficient quantity to reasonably indicate under all circumstances an intent to manufacture, distribute, or dispense, a controlled dangerous substance." Section 286(g)(2) provides that if any person violates § 286(a)(1), the violation involves inter alia "448 grams or more of cocaine," and the person is a "drug kingpin," that individual is subject to the penalties set forth in § 286(g). That section defines a "drug kingpin" as a person "who occupies a position of an organizer, supervisor, financier, or manager as a coconspirator in a conspiracy to manufacture, distribute, dispense, bring into, or transport in the State controlled dangerous substances." Section 286(g)(2) provides that "[a] drug kingpin who conspires to manufacture, distribute, dispense, bring into, or transport in the State controlled dangerous substances" in amounts proscribed by § 286(f)(1) is guilty of a felony and on conviction is subject to: "(i) Imprisonment for not less than 20 nor more than 40 years without the possibility of parole, and it is mandatory on the court to impose no less than 20 years' imprisonment, no part of which may be suspended; and (ii) A fine of not more than $1,000,000." I. In late February 1990, the Maryland State Police launched an undercover narcotics investigation in Salisbury. It targeted the activities of one Gary Williams (Gary), the suspected head of a drug distribution network in Salisbury, who was the older brother of petitioner Ricky Williams (Ricky). In the conduct of its investigation, the police operated from a fictitious pawnshop storefront known as "Big Bubba's." State Trooper Ike Jackson (Jackson) posed as a drug dealer and purchaser at Big Bubba's; the shop was equipped with video surveillance cameras. On February 28, 1990, by arrangement of a third party, Jackson met Gary at Big Bubba's. Gary identified himself as head of a local drug organization, named one Maurice ("Sincere") Bomar as his lieutenant, and indicated that he employed several others. Gary told Jackson that he could supply him with cocaine, while expressing an interest in buying guns and marijuana from Jackson. Jackson offered to purchase two ounces of cocaine from Gary, and they agreed to complete the sale by March 7. On March 2, Gary and Jackson met again at Big Bubba's. Gary produced slightly more than two ounces of cocaine "to show his good faith," for which Jackson paid $2,000. Their relationship thus established, Jackson told Gary he wanted to purchase four more ounces. On March 15, Gary phoned Jackson to offer the four ounces that Jackson desired. He told Jackson that the cocaine was of "top shelf quality," and that on March 17 he would send Sincere to Big Bubba's to consummate the sale. Gary also suggested that it was time to plan some serious purchases, and in that vein he called Jackson the next day from New York City to say that he could sell Jackson two kilos of cocaine. The following day, March 17, Sincere delivered the four ounces of cocaine to Jackson at Big Bubba's. Gary, phoning Jackson from New York to determine whether Sincere had arrived, again expressed interest in obtaining marijuana. Jackson reiterated his willingness to trade guns and marijuana for cocaine. Jackson and Gary tentatively agreed to yet another deal, their third, in which Jackson would receive one kilo of cocaine in exchange for ten pounds of marijuana, five guns, and $12,000. Meanwhile, Jackson and Sincere haggled over the purchase price of the four ounces and found it necessary to call Gary in New York. After Gary resolved the dispute, he and Jackson agreed to complete the third sale by March 24. On March 22, Gary stopped at Big Bubba's to inquire whether Jackson had liked the four ounces. Jackson answered affirmatively, and they renegotiated the third sale to Jackson to encompass two kilos of cocaine in return for fifteen pounds of marijuana, five weapons, and $23,000. On March 23, Gary explained to Jackson at Big Bubba's that he was having some difficulty obtaining the cocaine; he offered to purchase a lesser quantity of the guns and marijuana for cash. Jackson rejected this proposal, making the guns and marijuana available only as part of a sale of cocaine. On March 30, not having heard from Gary, Jackson and Edward Toatley (Toatley), a second undercover officer posing as Jackson's lieutenant, located Gary in Salisbury, at which time Gary said that while he still wanted to buy guns, he was no longer interested in purchasing marijuana. Jackson, Toatley, and Gary then undertook to renegotiate the terms of the transaction. Gary suggested to Jackson that Toatley, Sincere, and a female drug carrier of Jackson's choice travel by train to New York, where at Penn Station the female "mule" would be outfitted with one kilo of cocaine in return for $28,000. Jackson rejected this proposal. Gary then offered that, for an additional $5,000 "turnpike tax," his younger brother Ricky would bring the "sugar" to Salisbury. Jackson accepted this offer, at which point Gary called New York and left a message for Ricky to call him back at Big Bubba's. Ricky returned Gary's call within a half hour. After he and Gary spoke, Gary told Jackson that Ricky wanted $34,000 to bring the cocaine to Salisbury. Jackson agreed. For the next six or seven hours, Jackson, Toatley, Gary, and Sincere awaited Ricky's arrival. Ricky entered Big Bubba's at approximately 1:37 a.m. on March 31. He asked for an additional $500 to pay Keith Walker, an individual who had driven him from New York. Ricky dropped this demand when Gary instructed him to "chill out." Toatley then handed Ricky $34,000 in cash, which Ricky counted and hid in his car. Ricky returned with the kilo of cocaine, which he handed to Gary. At that time, he told Jackson that in the future Jackson could buy cocaine directly from him. With the assistance of a SWAT team hidden in the back of the store, Jackson and Toatley then arrested Ricky, Gary, Sincere, and Walker. On April 25, 1990 Ricky was indicted in a ten-count indictment, including two conspiracy counts and two counts of being a "drug kingpin" under the Maryland Drug Kingpin statute. On June 8, Ricky moved to dismiss the two kingpin counts on the ground that the kingpin statute was unconstitutionally vague. The motion was denied. On August 21, the State responded to Ricky's motion for a bill of particulars, naming Gary and Ricky as the only conspirators in the conspiracy and drug kingpin counts. Ricky was tried before a jury in the Circuit Court for Wicomico County on September 24 and 25, 1990. The court (Simpson, J.) granted Ricky's motion for acquittal on two of the ten counts, including the second kingpin count (the conspiracy to transport), on the ground that they were duplicative of other counts (e.g., the conspiracy to distribute). The jury convicted Ricky on the other eight charges, including the remaining kingpin and conspiracy counts.[1] Consistent with the provisions of § 286(g)(2), the court sentenced Ricky to twenty-five years' imprisonment, without the possibility of parole, and ordered him to pay a $10,000 fine. The court also sentenced Ricky to a concurrent thirty-year sentence on his convictions under the remaining counts. Ricky appealed to the Court of Special Appeals, contending only that Maryland's Drug Kingpin Act was unconstitutionally vague and, secondly, that the evidence at trial was legally insufficient to sustain his drug kingpin conviction. That court affirmed. Williams v. State, 89 Md. App. 685, 599 A.2d 848 (1991). We granted certiorari to consider the significant issues raised in the case. II. Ricky first argues that the statute is unconstitutionally vague for failure to define who qualifies as an "organizer, supervisor, financier, or manager" in a drug conspiracy. He also posits that even if the statute is adequately clear on its face, it is vague as applied to the facts of this case because it is legally impossible under the statute for both persons in a two-person conspiracy to be drug kingpins. As classically stated, the void-for-vagueness doctrine requires that a penal statute "be sufficiently explicit to inform those who are subject to it what conduct on their part will render them liable to its penalties." Connally v. General Const. Co., 269 U.S. 385, 391, 46 S.Ct. 126, 127, 70 L.Ed. 322 (1926). The vagueness doctrine, rooted in the fourteenth amendment's guarantee of procedural due process, stems from two ideas. The first is that one should not "be required at peril of life, liberty, or property to speculate as to the meaning of penal statutes. All are entitled to be informed as to what the State commands or forbids." Lanzetta v. New Jersey, 306 U.S. 451, 453, 59 S.Ct. 618, 619, 83 L.Ed. 888 (1939). We have said that this is the "fair notice principle, ... that persons of ordinary intelligence and experience be afforded a reasonable opportunity to know what is prohibited, so that they may govern their behavior accordingly." Bowers v. State, 283 Md. 115, 121, 389 A.2d 341 (1978). In determining whether a statute satisfies this principle, the touchstone is whether persons "of common intelligence must necessarily guess at [the statute's] meaning." Broadrick v. Oklahoma, 413 U.S. 601, 607, 93 S.Ct. 2908, 2913, 37 L.Ed.2d 830 (1973). The second rationale for the vagueness doctrine, which the Supreme Court deems "more important," Kolender v. Lawson, 461 U.S. 352, 358, 103 S.Ct. 1855, 1858, 75 L.Ed.2d 903 (1983), is to ensure that criminal statutes provide "legally fixed standards and adequate guidelines for police, judicial officers, triers of fact and others whose obligation it is to enforce, apply and administer the penal laws." Bowers, supra, 283 Md. at 121, 389 A.2d 341. Without such standards, penal laws would "impermissibly delegate[] basic policy matters to policemen, judges, and juries for resolution on an ad hoc and subjective basis, with the attendant dangers of arbitrary and discriminatory application." Grayned v. City of Rockford, 408 U.S. 104, 108-09, 92 S.Ct. 2294, 2299, 33 L.Ed.2d 222 (1972). In order to satisfy this second rationale, therefore, a statute must eschew arbitrary enforcement in addition to being intelligible to the reasonable person. In contending that the Maryland Drug Kingpin Act violates these principles, and is therefore unconstitutionally vague, Ricky argues that it is unclear who qualifies as an "organizer, supervisor, financier, or manager" in a drug conspiracy. He suggests that, by giving an accomplice a trivial order or by taking the slightest initiative, even the lowliest of coconspirators could be deemed a "manager," "supervisor," or "organizer" in the conspiracy and could thus qualify as a "drug kingpin." He says that the average person cannot ascertain the upper limit of one's conduct before becoming a drug kingpin, and that the statute invites law enforcement officials to wield its enhanced penalties selectively. We do not agree. Relative to the usual vagueness challenge, Ricky's assertion is clearly without merit. The Supreme Court "has long recognized that the constitutionality of a vague statutory standard is closely related to whether that standard incorporates a requirement of mens rea." Colautti v. Franklin, 439 U.S. 379, 395, 99 S.Ct. 675, 685, 58 L.Ed.2d 596 (1979). This is because "the requirement of a specific intent to do a prohibited act ... relieve[s] the statute of the objection that it punishes without warning an offense of which the accused was unaware." Screws v. United States, 325 U.S. 91, 101-02, 65 S.Ct. 1031, 1035, 89 L.Ed. 1495 (1945) (plurality opinion). While the Maryland Drug Kingpin Act does not expressly require a specific intent to "wilfully" or "purposefully" occupy a position as an "organizer, supervisor, financier, or manager" in a drug conspiracy, the statute does, of course, impliedly necessitate a deliberate foray into some threshold of criminal drug involvement before one can reach the brink of drug kingpin status. Thus, in the same manner as specific intent statutes, the drug kingpin statute can in no way be "a trap for those who act in good faith." United States v. Ragen, 314 U.S. 513, 524, 62 S.Ct. 374, 379, 86 L.Ed. 383 (1942). See also Boyce Motor Lines v. United States, 342 U.S. 337, 340, 72 S.Ct. 329, 331, 96 L.Ed. 367 (1952) (It is not "unfair to require that one who deliberately goes perilously close to an area of proscribed conduct shall take the risk that he may cross the line."). Put another way, Ricky alleges that the Maryland Drug Kingpin statute is vague as to when a low-level drug dealer becomes a high-level kingpin. But vagueness as between degrees of illegality seems less objectionable than vagueness at the margin of legality, for the former cannot snare the unsuspecting. Ricky knew his drug dealings were proscribed; the statute did not force him to speculate at his peril as to the propriety of his conduct. Ricky's defense is therefore less compelling than the historical vagueness challenges of defendants for whom the very stigma of a criminal conviction hung in the balance. As the Supreme Court has said, "A mind intent upon willful evasion is inconsistent with surprised innocence." Ragen, supra, 314 U.S. at 524, 62 S.Ct. at 379. Ricky proceeded not uninformed of the criminality of his behavior, but merely unaware of the number of counts he might face and the number of years he might spend in prison. In any event, we conclude that the Maryland Drug Kingpin statute is not vague. In Bowers, supra, 283 Md. 115, 389 A.2d 341, we upheld against a vagueness challenge a statutory definition of child abuse as "cruel or inhumane treatment." We observed that "[a] statute is not vague when the meaning of the words in controversy can be fairly ascertained by reference to judicial determinations, the common law, dictionaries, treatises or even the words themselves, if they possess a common and generally accepted meaning." See also Rose v. Locke, 423 U.S. 48, 50, 96 S.Ct. 243, 244, 46 L.Ed.2d 185 (1975) ("Even trained lawyers may find it necessary to consult legal dictionaries, treatises, and judicial opinions before they may say with any certainty what some statutes may compel or forbid."). The Maryland Drug Kingpin statute satisfies this standard at its most basic level, for the meanings of the statute's operative words can be "fairly ascertained by reference to ... the words themselves." The terms "organizer," "supervisor," "financier," and "manager" are not vague. They are not technical terms; rather, they are common words with well understood meanings. As these words are defined by Webster's Third New International Dictionary (1981), an "organizer" is "one who organizes" (to "organize" is "to unify into a coordinated functioning whole; ... to arrange by systematic planning and coordination of individual effort"). A "supervisor" is "one that supervises a person, group, department, organization, or operation" ("supervise" is "to ... oversee with the powers of direction and decision the implementation of one's own or another's intentions"). A "financier" is "a large scale investor." A "manager" is "one that manages, a person that conducts, directs, or supervises something." Because these definitions comport with everyday understandings of the words they define, the drug kingpin statute employs language accessible to persons of common intelligence; they need not guess at the statute's meaning. The statute makes clear, in ordinary language, that those who occupy positions of importance in drug conspiracies will be subject to heightened punishment. Nor does the statute foster selective prosecution, since its terms are as plain to law enforcement officials as to the general public. The statute does not become unconstitutionally vague merely because it may not be perfectly clear at the margins who qualifies as an "organizer," "supervisor," "financier," or "manager." See Eanes v. State, 318 Md. 436 at 459, 569 A.2d 604 (1990) ("A law is not vague simply because it requires conformity to an imprecise normative standard."). Rather, the drug kingpin law plainly provides fair warning of serious consequences to drug conspirators who would assume the posture of "an organizer, supervisor, financier, or manager," as those words are understood in common parlance. Ricky argues that the statute is vague when considered against the corresponding federal drug kingpin law and those of other states. The federal statute provides in part: "[A] person is engaged in a continuing criminal enterprise if (1) he violates any provision of this subchapter or subchapter II of this chapter the punishment for which is a felony, and (2) such violation is part of a continuing series of violations of this subchapter or subchapter II of this chapter (A) which are undertaken by such person in concert with five or more other persons with respect to whom such person occupies a position of organizer, a supervisory position, or any other position of management, and (B) from which such person obtains substantial income or resources." 21 U.S.C. § 848(c) (1992). Ricky points to the federal requirements that the manager, organizer, or supervisor act in concert with at least five others and derive substantial income from the enterprise as evidence of the specificity with which a statute must be drawn to pass constitutional muster. Ricky claims that the federal statute, by adding these further requirements to modify and refine the statute's operative terms, demonstrates the vagueness of Maryland's sole requirement that a person be an "organizer, supervisor, financier, or manager." This argument mistakes breadth for vagueness. By stiffening the penalties for those who act in the management ranks of drug conspiracies, without regard to the number or income of coconspirators, the Maryland statute simply constructs a wider net than that enacted by Congress. While the breadth of the Maryland formulation necessarily forfeits some of the precision of the narrower federal statute, this does not render the Maryland law vague. Otherwise, all broad laws attempting to punish a range of criminal conduct could be susceptible to vagueness challenges insofar as they could be drawn more narrowly and precisely. As the Supreme Court said in Colten v. Kentucky, 407 U.S. 104, 110, 92 S.Ct. 1953, 1957, 32 L.Ed.2d 584 (1972): "The root of the vagueness doctrine is a rough idea of fairness. It is not a principle designed to convert into a constitutional dilemma the practical difficulties in drawing criminal statutes both general enough to take into account a variety of human conduct and sufficiently specific to provide fair warning that certain kinds of conduct are prohibited." In other words, the vagueness doctrine does not require absolute precision or perfection. See United States v. Powell, 423 U.S. 87, 94, 96 S.Ct. 316, 321, 46 L.Ed.2d 228 (1975) ("The fact that Congress might, without difficulty, have chosen `[c]learer and more precise language' equally capable of achieving the end which it sought does not mean that the statute which it in fact drafted is unconstitutionally vague."). Since the Maryland Drug Kingpin Act makes its proscriptions readily discernible to both the general public and law enforcement officials, then even though it may be broad and imperfect, it is not for that reason unconstitutionally vague. Ricky next suggests that the statute is vague, as applied to the facts in this case, because as only he and Gary were named as conspirators in the conspiracy underlying his drug kingpin conviction, it is impossible for both to be an "organizer, supervisor, financier, or manager" in the conspiracy. This is so, he argues, because both parties in a two-person conspiracy cannot meaningfully "organize", "supervise," or "manage" each other.[2] The flaw in Ricky's argument is that it assumes that one must be an organizer, supervisor, or manager of elements in the conspiracy in which one is charged to satisfy the drug kingpin statute. This is not the case. Under the statute, a "`drug kingpin' means a person who occupies a position of an organizer, supervisor, financier, or manager as a coconspirator in a conspiracy to ... distribute ... or transport in the State controlled dangerous substances." There is nothing in this language requiring a defendant to organize, supervise, or manage those in the central conspiracy in order to qualify as a drug kingpin. In the instant case, even though Ricky and Gary were identified in the indictment as the sole conspirators in the central conspiracy, a jury could reasonably find, if legally sufficient evidence existed, that Ricky had organized, supervised, or managed the operation, perhaps involving others not fully apprised as to the central conspiracy and hence not central conspirators. In this manner could Ricky fall within the purview of the statute. For all of these reasons, we find no merit in Ricky's constitutional argument. See also Anderson v. State, 89 Md. App. 712, 599 A.2d 861 (1991); Allen v. State, 89 Md. App. 25, 597 A.2d 489 (1991). III. Finally, Ricky contends that even if the Maryland statute survives constitutional review, there was insufficient evidence as a matter of law to prove beyond a reasonable doubt that he served as an "organizer, supervisor, financier, or manager" in a drug conspiracy. When assessing the sufficiency of the evidence to support a jury conviction in a criminal case, "the relevant question is whether, after viewing the evidence in the light most favorable to the prosecution, any rational trier of fact could have found the essential elements of the crime beyond a reasonable doubt." Jackson v. Virginia, 443 U.S. 307, 319, 99 S.Ct. 2781, 2789, 61 L.Ed.2d 560 (1979) (emphasis in original); quoted in McMillian v. State, 325 Md. 272, 290, 600 A.2d 430 (1992); Tichnell v. State, 287 Md. 695, 717, 415 A.2d 830 (1980). This standard of review, while affording considerable deference to a jury's verdict, necessitates our focusing upon whether a rational jury could have found, based on the evidence presented, that Ricky's actions satisfied the elements which the General Assembly intended to constitute the crime of being a drug kingpin. As we have stated so often before, "in the event that ambiguity clouds the precise application of [a] statute, the cardinal rule of statutory construction is to ascertain and effectuate legislative intent." State v. Bricker, 321 Md. 86, 92, 581 A.2d 9 (1990). See also Taxiera v. Malkus, 320 Md. 471, 480, 578 A.2d 761 (1990); Harford County v. University, 318 Md. 525, 529, 569 A.2d 649 (1990); Jones v. State, 311 Md. 398, 405, 535 A.2d 471 (1988). "The language of the statute itself is the primary source of this intent; and the words used are to be given `their ordinary and popularly understood meaning, absent a manifest contrary legislative intention.'" Privette v. State, 320 Md. 738, 744, 580 A.2d 188, (1990), quoting In re Arnold M., 298 Md. 515, 520, 471 A.2d 313 (1984). See also State v. In re Patrick A., 312 Md. 482, 487, 540 A.2d 810 (1988); Tucker v. Firemen's Fund Insur. Co., 308 Md. 69, 73, 517 A.2d 730 (1986). In looking to the language of a statute, moreover, we read the words "in light of the full context in which they appear, and in light of external manifestations of intent or general purpose available through other evidence." Cunningham v. State, 318 Md. 182, 185, 567 A.2d 126 (1989). We attempt to divine legislative intent from the entire statutory scheme, as opposed to scrutinizing parts of a statute in isolation. Forbes v. Harleysville Mutual, 322 Md. 689, 697, 589 A.2d 944 (1991); Jones, supra, 311 Md. at 405, 535 A.2d 471. We may also consider "a bill's title and function paragraphs ... and other material that fairly bears on the fundamental issue of the legislative purpose or goal...." Kaczorowski v. City of Baltimore, 309 Md. 505, 515, 525 A.2d 628 (1987); see also Wynn v. State, 313 Md. 533, 539, 546 A.2d 465 (1988). The operative words of the drug kingpin statute, arguably applicable in Ricky's case, are as follows: "`drug kingpin' means a person who occupies a position of an organizer, supervisor, financier, or manager as a coconspirator in a conspiracy to ... distribute ... in the State controlled dangerous substances." The words "organizer," "supervisor," "financier," and "manager," as we have already explained, have common meanings which require no elaboration. Undeniably, however, some ambiguity creeps into the statutory terms at the margins; thus, to determine just how broadly they are to be construed, we look to the larger context of the statute and to other relevant materials to ascertain legislative intent. The operative terms "organizer, supervisor, financier, or manager" define the concept of the "drug kingpin." Indeed, the 1989 amendments to § 286 were entitled by the legislature as the "Drug Kingpin Act." Because the "Drug Kingpin" heading is the statute's focus of definition and elaboration, it is, of itself, pregnant with meaning. In bowling, the "kingpin" is the lead or front pin. The metaphor of the "drug kingpin" is therefore commonly understood to indicate one who fronts a drug trafficking network or conspiracy. The original version of the statute, as proposed, although later amended before its enactment, shared this understanding, for the "drug kingpin" label evolved from the blander statutory formulation of "a leader of a drug trafficking network." See Bill Analysis, Senate Bill 400, Senate Judicial Proceedings Committee. Another legislative source refers to "a leader or a kingpin of a drug trafficking network." Governor's Office, Briefing Document and Synopsis of the Drug Kingpin Act, Senate Bill 400/House Bill 502, 1989, 5 (emphasis added). Still another describes a "drug kingpin" as a "large-scale drug trafficker." Department of Legislative Reference, Legislative Session Review, 1989, 66-67. It is plain to us that the phrase "drug kingpin" was intended by the legislature to apply to a leader of a drug trafficking network. It thus follows that the words "organizer," "supervisor," "financier," and "manager," read in the context of the statute, were not intended to encompass a person occupying a role substantially less than that of a large-scale drug trafficker. In other words, in looking to the larger context of the statute (which prescribes lesser penalties for non-kingpins); at the bill's title; and at external evidence in order to chart the blurry perimeters of the statute's operative terms, we believe that the legislature intended the statute's heightened penalties for "drug kingpins," or leaders, to have limited application to those acting as organizers, supervisors, financiers, or managers of large-scale drug trafficking operations. We glean this construction from an attempt to harmonize the drug kingpin provisions with the statutory scheme as a whole. Forbes, supra, 322 Md. at 697, 589 A.2d 944; Scott v. State, 297 Md. 235, 245, 465 A.2d 1126 (1983) ("[A] statute should be construed so that all of its parts are given effect and harmonized if possible...."). A. In affirming Ricky's conviction of being a drug kingpin, the Court of Special Appeals noted his argument that his only involvement in the drug conspiracy was to transport the cocaine from New York to Salisbury and that this was legally insufficient evidence to permit the jury to consider the drug kingpin count that he conspired with Gary to distribute the illegal drugs. The intermediate appellate court noted Ricky's further argument that he was not involved in the conspiracy until a month after it began; that his brother Gary was the kingpin and the target of the police investigation; and that his participation was limited to the role of a courier. The Court of Special Appeals first observed that Ricky was mistaken in believing that he could not be convicted as a kingpin if his role was subordinate to that of another actor in the conspiracy. The court said that nothing in the statute "dictates that a conspiracy can have only one kingpin." 89 Md. App. at 700, 599 A.2d 848. In this regard, the court noted that the statutory language encompassed "the possibility of a joint endeavor: among the definition section's meanings is a `manager as a coconspirator.'" Id. (emphasis in original). The intermediate appellate court concluded as follows: "The evidence amply supports the idea that Ricky acted in concert with Gary as a coconspirator. Jackson and Toatley gave the purchase money directly to Ricky; Ricky counted it; Ricky told Jackson and Toatley that they could deal directly with him; Ricky took the money and hid it in the car in which he transported the drugs. Gary's assertions also support the conclusion that Ricky was his coconspirator and an important participant in the conspiracy: Ricky set the sale price; Gary told Jackson and Toatley that he (Gary) was the intermediary in arranging an exchange between them and Ricky, and that he did not control the deal. Moreover, as an expert witness in narcotics enforcement, Jackson testified that mules have no control over the drugs they carry, and are paid $500 to transport drugs from New York. Because Ricky had complete dominion and control over the $34,000 paid to him for the drugs, Jackson concluded that Ricky was not merely a mule. Jackson also testified that Gary told him that Gary wasn't profiting from this transaction: `[h]e just made the arrangements for me to purchase the kilo of cocaine from or through his brother.' "In sum, the evidence readily supports the theory that Ricky managed or supervised an illicit drug operation. This operation could have been orchestrated by Gary's organization and limited to arranging to bring the cocaine from New York to Maryland. Alternatively, it could be inferred that Ricky was Gary's New York connection, prepared to assist in the transfer Gary initially proposed to Jackson in which Toatley and Sincere would travel to New York to pick up the drugs. In either case, the jury reasonably could conclude that Ricky was responsible for an important and necessary phase of the operation: moving the cocaine from New York and delivering it to its Maryland purchaser. We therefore affirm Ricky's conviction under the drug kingpin statute." Id. at 700-01, 599 A.2d 848. B. At argument before us, the State espoused the view that the statute should apply to anyone whom the words "organizer, supervisor, financier, or manager" can possibly be construed to reach, i.e., not merely to "drug kingpins" but to any "non-menial drug conspirator." This construction, we think, is plainly at odds with the legislatively intended reach of the statute. We must read the words "organizer," "supervisor," "financier," and "manager" in light of the independent connotations of the word "kingpin." To do otherwise would be to impermissibly render surplusage the crucial words "Drug Kingpin," by which the statute is entitled, as well as the concept the disputed words purport to modify. See Scott, supra, 297 Md. at 245-46, 465 A.2d 1126. We thus must consider whether Ricky's actions, viewing the evidence in the light most favorable to the State, amount to participation as an organizer, supervisor, financier, or manager in the drug conspiracy with Gary in the sense contemplated by the legislature. Before Ricky involved himself in the conspiracy underlying his drug kingpin conviction, the State Police had been targeting Gary, Ricky's brother, for over a month. Gary had told Jackson that he was the head of the drug distribution organization and that he employed others in the organization. He had spoken or met with State Trooper Jackson no fewer than ten times before Jackson heard of Ricky. Gary and Jackson had arranged and completed two independent drug deals, without Ricky's participation, and had agreed upon terms of a third. Without first consulting Ricky, Gary volunteered Ricky's services to transport the drugs to Salisbury from New York as to which Ricky agreed by return phone call. Ricky's role then consisted, in its entirety, of the following: (1), agreeing to and transporting the drugs for Gary and Jackson's third deal to Salisbury; (2) negotiating the final purchase price of $34,000; (3) engaging a driver to transport him and the drugs to Salisbury; (4) receiving and counting Jackson's money; (5) secreting that money in his car; and (6) advising Jackson that he could be directly contacted for further sales. On the record before us, we think the trial court erred in submitting the case to the jury on the drug kingpin count. The evidence showed that Ricky was more than a "mule" or mere courier of the drugs from New York to Salisbury. While he was an important cog in effectuating the third cocaine sale which Gary had arranged with Jackson, the evidence simply does not permit a rational factfinder to conclude, beyond a reasonable doubt, that Ricky's participation amounted to that of an organizer, a supervisor, or manager within the contemplation of the statute. On the contrary, the evidence showed that Gary, who was later convicted of being a drug kingpin, orchestrated the transaction in the course of which he offered Ricky's assistance to transport the drugs even before he had consulted with Ricky. According to the direct evidence, Ricky's involvement was limited to approximately six hours in which he obtained the drugs in New York and had them driven to Salisbury where he completed the sale and accepted the money. That Ricky may have, in Gary's presence, negotiated the final purchase price and accepted the money does not, without more, elevate his status to that of an "organizer," "supervisor," or "manager" in the conspiracy. It was Gary, not Ricky, who the evidence showed arranged the third sale, as well as the earlier sales. That Gary, not Ricky, was the sole "kingpin" in the criminal episode is supported by the evidence that Gary instructed Ricky to "chill out" when Ricky tried to extract a larger final purchase price. As we see it, the jury could not, beyond a reasonable doubt, rationally infer from the direct evidence that because Ricky may have acted as Gary's source, and procured Walker to drive him to Salisbury, that he was a coconspirator in a conspiracy to distribute drugs, either as an organizer, supervisor, or manager. Nor did the evidence that Ricky told Jackson that Jackson could deal directly with him, and that Gary told Jackson that he was not profiting from the third sale, permit the jury to draw a rational inference that Ricky was a "drug kingpin" under the statute. As a convicted criminal conspirator, drug courier, drug possessor, and drug dealer, Ricky was lawfully sentenced to thirty years in prison. His conviction for being a "drug kingpin," however, was improper and must be reversed. JUDGMENT OF THE COURT OF SPECIAL APPEALS AS TO COUNT 1 OF THE INDICTMENT REVERSED; CASE REMANDED TO THAT COURT WITH INSTRUCTIONS TO REMAND THE CASE TO THE CIRCUIT COURT FOR WICOMICO COUNTY WITH DIRECTIONS TO VACATE THE PETITIONER'S CONVICTION FOR BEING A "DRUG KINGPIN" UNDER COUNT 1 OF THE INDICTMENT. COSTS IN THIS COURT AND IN THE COURT OF SPECIAL APPEALS TO BE PAID BY WICOMICO COUNTY. NOTES [1] The drug kingpin count of the indictment under which Ricky was convicted charged that from February 28 through March 31, 1990, Ricky occupied "a position of an organizer, supervisor, [and] financier" in a conspiracy with Gary Williams to distribute cocaine in the amount of 448 grams or greater. The conspiracy count of which Ricky was convicted charged that between these dates Ricky conspired with Gary Williams to distribute cocaine. The gist of a conspiracy is an agreement between two or more persons to commit a crime. The crime is complete when the unlawful agreement is reached, and no overt act in furtherance of the agreement need be shown. See Apostoledes v. State, 323 Md. 456, 461-62, 593 A.2d 1117 (1991). [2] Gary Williams was also indicted for being a drug kingpin in connection with the same transactions that resulted in Ricky's conviction for the same offense. Gary was convicted at a separate trial a week following Ricky's conviction.

{ "pile_set_name": "FreeLaw" }

80 N.J. Super. 339 (1963) 193 A.2d 697 HUDSON COUNTY NATIONAL BANK, A NATIONAL BANKING ASSOCIATION, PLAINTIFF, v. THE PROVIDENT INSTITUTION FOR SAVINGS IN JERSEY CITY, A NEW JERSEY SAVINGS BANK, THE HOWARD SAVINGS INSTITUTION AND PLAINFIELD SAVINGS BANK, DEFENDANTS AND DEFENDANTS-INTERVENORS. Superior Court of New Jersey, Chancery Division. Decided September 9, 1963. *341 Messrs. Milton, Keane & DeBona (Mr. John Milton, Jr. of counsel), attorneys for plaintiff. Mr. Israel Spicer, attorney for amicus curiae New Jersey Bankers Association. Messrs. Wilentz, Goldman & Spitzer (Mr. Frederick R. Becker of counsel), attorneys for defendant The Provident Institution for Savings in Jersey City. Messrs. Pitney, Hardin & Kipp (Messrs. Roger C. Ward and William H. Osborne, Jr. of counsel), attorneys for defendants-intervenors The Howard Savings Institution and Plainfield Savings Bank. Messrs. Darby & McDonough (Mr. Robert F. Darby of counsel), attorneys for amicus curiae Savings Bank Association. PASHMAN, J.S.C. Plaintiff The Hudson County National Bank, a national bank doing business in New Jersey, instituted this action against defendant The Provident Institution for Savings in Jersey City, a mutual savings bank, seeking to permanently enjoin and restrain Provident from offering or maintaining demand accounts subject to withdrawal by check by its depositors. In addition, plaintiff also sought an adjudication declaring the practice of maintaining demand accounts, engaged in by certain mutual savings banks, to be ultra vires *342 for all savings banks under the Banking Act of 1948, N.J.S.A. 17:9A-1 et seq. Shortly after this action was commenced, defendant Provident was joined by The Howard Savings Institution and the Plainfield Savings Bank (defendants-intervenors), both mutual savings banks. The three "defendants" contended that the practice of the state mutual savings banks in maintaining demand accounts subject to withdrawal by check was and is "necessary and convenient" to the carrying out of the business of savings banks, and that the maintenance of demand accounts was a "usual custom" of savings banks. Defendants then pointed to the following sections of the Banking Act, arguing that the conclusion was inescapable that the defendants' practice of maintaining demand accounts was legislatively condoned: "Every bank and savings bank shall, subject to the provisions of this act, have the following powers, whether or not such powers are specifically set forth in its certificate of incorporation: * * * * * * * * (12) to exercise all incidental powers, not specifically enumerated in this act, which shall be necessary or convenient to carry on the business of the bank or savings bank. * * *" (Emphasis added) N.J.S.A. 17:9A-24 (12) "In addition to the powers specified in [17:9A-24], every savings bank shall, subject to the provisions of this act, have the following powers, whether or not such powers are specifically set forth in its certificate of incorporation: (1) to receive money on deposit, to be repaid, upon such terms, not inconsistent with this act, as may be agreed upon between the depositor and the savings bank, according to the usual custom of savings banks." (Emphasis added) N.J.S.A. 17:9A-26(1). Plaintiff, together with the New Jersey Bankers Association which filed a brief as amicus curiae, contended, inter alia, that the "necessary or convenient" clause of N.J.S.A. 17:9A-24(12) refers to incidental powers which do not include the maintenance of checking accounts and, therefore, the mere necessity or convenience for demand accounts cannot provide the justification for the savings banks' maintaining them. Additionally, plaintiff maintained that the practice of *343 the defendant and other savings banks in offering demand accounts to their customers was not a "usual custom" of savings banks, and that in any case a comprehensive study of the Banking Act discloses a manifest legislative intent to prohibit savings banks from providing demand deposits subject to withdrawal by check. From an historical standpoint, defendant Provident, which received its charter in 1839 and commenced business in 1843, is the oldest mutual savings bank still in existence in this State. Only the Newark Savings Fund Association, which was incorporated in 1828 and which is no longer in business, is older than Provident in terms of initial legislative creation. Two thirds of all mutual savings banks in the county and in the State of New Jersey were chartered between 1850 and 1880. The last charter to be issued in this State was to the Germania Association of Elizabeth in 1900 which, on July 31, 1947, converted from a savings association to a savings bank, taking the name of Elizabeth Savings Bank, which it bears today. All of the parties agree that mutual savings banks, which are managed by a board of trustees and owned by their depositors, were originally designed to serve as a depository for the earnings and savings of the working people and to encourage thrift and conservation among the members of that class. As our highest court noted as recently as 1960 in the case of Application of Howard Savings Institution of Newark, 32 N.J. 29 (1960): "A mutual savings bank is a different type of financial institution from a commercial bank. Its purpose has frequently been stated as encouragement of thrift by mutuality of ownership. It has no stockholders. The profits from its operations not retained for surplus are divided among its depositors in the form of percentage dividends periodically declared, popularly referred to as `interest.'" (32 N.J., at p. 39) See also Commercial Trust Co. of N.J. v. Hudson Bd. of Taxation, 86 N.J.L. 424 (Sup. Ct. 1914), ("Savings banks are quite different from ordinary banks of discount and deposit, *344 and trust companies. They are engaged in a different business, not primarily for the making of money, but rather for the purpose of enabling people of small means to combine their small wages and by careful investments in restricted securities earn a moderate rate of interest. * * *"); and Mercantile National Bank of New York v. Mayor, etc., of the City of New York, 121 U.S. 138, 7 S.Ct. 826, 30 L.Ed. 895 (1887), ("No one can suppose for a moment that savings banks come into any possible competition with the national banks of the United States. They are, what their name indicates, banks of deposit for the accumulation of small savings belonging to the industrious and thrifty."). Despite the relatively narrow nature of early mutual savings banks, the passage of the years has tended to change and broaden the banking services offered by these banks to their depositors. Indeed, the testimony of the various banking experts during the trial of this matter very clearly established that at the time of the Banking Act revision in 1948, six of this State's 24 mutual savings banks (Bloomfield Savings, Howard Savings, Hudson Savings, Montclair Savings, Plainfield Savings and United States Savings) maintained demand deposits of different types for their depositors in the following amounts: Name Number of Branches Amount (in thousands) Bloomfield Savings 1 $2,676 Howard Savings 2 346 Hudson City Savings 2 2,127 Montclair Savings - 891 Plainfield Savings - 217 United States Savings - 112 _____________________ ____ ______ Totals 6 main offices 5 branches $6,369 By 1960 the number of mutual savings banks with demand deposit liabilities increased to ten, as reflected in the following schedule: *345 Name Number of Branches[*]Amount (in thousands) Bloomfield Savings 2 $5,381 Howard Savings 6 512 Hudson City Savings 3 6,083 Montclair Savings - 1,512 Orange Savings - 167 Plainfield Savings 1 1,149 Provident Savings 3 198 Somerville Savings - 134 Union County Savings 1 204 United States Savings 5 1,569 _____________________ _____ _______ Totals 10 main offices 21 branches $16,909 To reiterate, in 1948 there were 24 mutual savings banks in New Jersey having an aggregate of seven branch offices. Of these 31 offices, 11 offered a checking account service of some nature. Of the 24 main banking institutions, six offered checking accounts, and of those six, three had one or more branches. Thus, 25% of the 24 savings banks offered this service and, with their branches, 35% of the total mutual savings bank facilities did so. The question remains, however, does this percentage support the conclusion that the maintenance of demand accounts subject to withdrawal by check was a "usual custom" of savings banks within the purview of N.J.S.A. 17:9A-26(1), supra? The testimony of the expert witnesses for both sides did not, in my opinion, provide any conclusive basis upon which to resolve the main issue of "usual custom." As might be expected, plaintiff proposed that any activity having less than 50% bank participation could not be the basis for a usual custom. Plaintiff did feel, however, that 75% was a more realistic measuring rod for determining whether or not a banking practice was in accord with the statutory concept. Defendant, on the other hand, took a different approach, arguing that familiarity of the practice was the keynote; that *346 it was neither rare nor unique and that it was an appreciable and substantial characteristic of savings banks in this State. Defendant also maintained that the mere fact that a majority of savings banks did not provide checking accounts did not detract from its "customary" character, since this was merely a matter of personal choice and was not due to any assumed unlawfulness. Neither plaintiff nor defendant offered any evidence tending to establish that the Legislature's use of the word "custom" in N.J.S.A. 17:9A-26(1) was made with a conscious knowledge that a numerical minority of mutual savings banks in this State maintained checking account services. Furthermore, to engage in supposition as to whether the Legislature considered the practice in the light of the several well-entrenched judicial definitions of "custom" is virtually impossible, if not unpermissive. The utter absence of judicial precedent in this State, both prior and subsequent to the promulgation of the Banking Act, on the question of a custom's being given legislative recognition is a serious obstacle to any inquiry into legislative intent. The detailed discussion of Chief Justice (then Judge) Weintraub in Jantausch v. Borough of Verona, 41 N.J. Super. 89 (Law Div. 1956), affirmed 24 N.J. 326 (1957), was argued by both sides. The question there involved was whether beauty culture was a "customary" home occupation under a municipal zoning ordinance which permitted "home occupations incidental to * * * use as a residence," and is of little aid in the instant context if only for the reason that the Jantausch case must be considered in the light of its particular circumstances. Whether four out of ten beauty salons in a particular municipality, being located in a residential zone, makes such use "customary" has no bearing upon an inquiry as to whether the use of the words "usual custom" in N.J.S.A. 17:9A-26(1) encompasses the practice of savings banks in maintaining demand deposits subject to withdrawal by check. Even the apparent subordination of numerical prevalency in Jantausch, supra, 41 N.J. Super., at p. 100, does not, *347 of itself, support the proposition that the practice of 6 out of 24 (or 11 out of 31) savings bank facilities constitutes a "usual custom of savings banks." On the other hand, the court does not feel that the absence of imposing proof tending to demonstrate the legality of a custom compels a negative conclusion as to its existence. The basic attributes of a custom are usually stated to be: (1) antiquity or duration, see, e.g., Albright v. Cortright, 64 N.J.L. 330 (E. & A. 1900); (2) general or universal character, see, e.g., City Electric Street R. Co. v. First Nat. Exch. Bank, 62 Ark. 33, 34 S.W. 89, 31 L.R.A. 535 (Sup. Ct. 1896); (3) certainty, continuity and uniformity, see, e.g., Federal Reserve Bank v. Malloy, 264 U.S. 160, 44 S.Ct. 296, 31 A.L.R. 1261 (1924); (4) reasonableness, see, e.g., Cowles v. Sgobel & Day, 105 Misc. 561 (Sup. Ct. 1919), 173 N.Y.S. 752; (5) legality, see, e.g., Allen v. St. Louis Nat. Bank, 120 U.S. 20, 7 S.Ct. 460, 30 L.Ed. 573 (1887); (6) harmony with public policy as defined by common law, by statute or by constitutional provision, see, e.g., Zimmern v. Southern R. Co., 209 Ala. 284, 96 So. 226, 29 A.L.R. 1237 (Sup. Ct. 1923); and (7) general acquiescence in the practice. See, generally, Unkovich v. N.Y. Central R.R., 128 N.J. Eq. 377, 380, 382 (Ch. 1934). In the vast majority of cases which have dealt with the legality of a supposed custom, the courts have considered the question in a context involving a change in a rule of law, be it contract or otherwise, which would apply ordinarily in the absence of the proffered custom. Even the few cases which deal directly with a statutory recognition or use of the word "custom" are confined to recognized practices in a narrow and limited context. See, e.g., Lichter v. Land Title Guarantee & Trust Co., 150 N.E.2d 53 (Ohio C.P. 1955), affirmed 150 N.E.2d 70 (Ohio Ct. App. 1957); Polich v. Anderson-Robinson Coal Co., 227 Iowa 553, 288 N.W. 650 (Sup. Ct. 1939); Millage v. Canton Twp., 73 S.D. 26, 38 N.W.2d 755 (Sup. Ct. 1949). A comparison of the statutory law of our sister states, for the purpose of ascertaining the meaning of the term "usual *348 custom" as it is used in N.J.S.A. 17:9A-26(1), is not conclusive. Even if it be assumed, for purposes of analysis, that in using the phrase "according to the usual custom of savings banks" our Legislature meant savings banks throughout the United States (as plaintiff contends), scrutinization of the evidence offered by plaintiff reveals little in the way of interpretive aid. Plaintiff offered the official reports of the banking authorities of eight states which had, in 1948, mutual savings banks, and four states which prohibited their mutual savings banks from offering checking accounts. It also asked the court to take judicial notice of portions of the statutes of those 12 states, five others (including Alaska, which was not, of course, a state in 1948) and the United Kingdom. Of the eight states in which the practice might be controlled by custom, three definitely condoned the practice (Indiana, Maryland and Vermont), one probably did so (Connecticut), three definitely did not do so (Delaware, Maine and New Hampshire), and one could not be definitely determined (Massachusetts). With no more than the bare statutory sections and official reports, the sketchy testimony and the absence of judicial interpretation, I believe it to be presumptuous to conclude that our Legislature consciously considered the practice of other jurisdictions when enacting the Banking Act of 1948, at least insofar as N.J.S.A. 17:9A-26(1) is concerned. There is no evidence, in any event, that the Legislature did so. It appears inescapable that in order to ascertain what was meant by "usual custom," and particularly whether checking accounts were meant to be included therein, it is necessary to enlist the aid of certain recognized rules of statutory interpretation. Initially, it is quite clear that the legislative intent is not to be fractionalized, and a statute which purports to encompass such a large and vital area as the business of banks and banking should be read as a whole with reference to the system of which it is a part. See, e.g., Alexander v. N.J. Power & Light Co., 21 N.J. 373 (1956). As our Supreme *349 Court recently said in Febbi v. Bd. of Review, Div. of Employment Security, 35 N.J. 601 (1961): "It is a cardinal rule of statutory construction that the intention of the Legislature is to be derived from a view of the entire statute and that all sections must be read together in the light of the general intent of the act so that the auxiliary effect of each individual part of a section is made consistent with the whole. 2 Sutherland, Statutory Construction, 3d ed. 4812, §§ 4702, 4704 (1943); Trugman v. Reichenstein, 27 N.J. 280, 288 (1958); Petition of Sheffield Farms Co., 22 N.J. 548, 554 (1956). When the Legislature has clearly defined a term, the courts are bound by that definition. 2 Sutherland, Statutory Construction, §§ 3002, 4814 (3d ed. 1943); Eagle Truck Transport, Inc. v. Board of Review, etc., 29 N.J. 280, 289 (1959)." (at p. 606) See also Abrams v. Dept. of Civil Service of N.J., 70 N.J. Super. 559, 563 (App. Div. 1961); Walsh v. Dept. of Civil Service, 32 N.J. Super. 39, 48 (App. Div. 1954). The Banking Act of 1948 is explicit on the payment of interest on deposits. As the plaintiff points out, banks have been given express authority to receive non-interest-bearing demand deposits. N.J.S.A. 17:9A-25(4). Nowhere in the act is there any such express power given to savings banks. They may receive money on deposit, to be repaid upon agreed terms, according to their usual custom. N.J.S.A. 17:9A-26(1). They may classify depositors according to their dealings and regulate payment of interest according to the classification. N.J.S.A. 17:9A-186(A)(2). It is true, as plaintiff argues, that there are no statutory sections dealing with savings banks which can be equated with the language found in N.J.S.A. 17:9A-25(4). Is the absence of such express language indicative of a legislative intent to deny savings banks the power now exercised by a minority? Furthermore, can the present practice be reconciled with the provision of the act which apparently compels savings banks to pay interest upon deposits so that, as nearly as possible, all profits are received by the depositors? See N.J.S.A. 17:9A-186(A) (1). *350 If the Banking Act is to be read as a homogeneous whole, it would appear that the above provisions are inconsistent with the maintenance by savings banks of non-interest-bearing demand deposits. Absence of express statutory approval, in view of the other provisions noted by plaintiff, casts some serious doubt upon any assertion that the omission can be ascribed to mere oversight. The Banking Act of 1948 was the result of a comprehensive redrafting of the scope of commercial and savings bank activities. Detail and particularity are evident throughout. On the other hand, the omission of an express provision is a two-edged sword. The directness with which the Legislature dealt with commercial bank practice as to non-interest-bearing demand deposits does not stand as authority for the proposition that savings banks could not do so. An affirmative authorization to commercial banks is not, per se, a negative prohibition against savings banks. Nowhere is there any express prohibition against maintenance by the latter of demand deposits. Quite the contrary. Various sections encompass savings banks in treating demand deposits. See, e.g., N.J.S.A. 17:9A-18, 19, 27, 28, 216 to 219. Similarly, the Bank Collection Code, N.J.S.A. 17:9A-230 to 246, which was repealed in 1961 and reinstated in large part by N.J.S.A. 12A:4-101 et seq. refers to savings banks (banking institutions) in connection with demand deposits. There is an absence, in the Banking Act of 1948 and its amendments, of any clear-cut distinction between banks and savings banks from which it can be accurately concluded that the Legislature clearly pronounced a prohibition against demand deposits, interest- or non-interest bearing, in savings banks. Absent this language, the court, in construing the act, may properly utilize another very important interpretive aid, namely, legislative acquiescence in a long-standing administrative interpretation. See, e.g., In re Glen Rock, 25 N.J. 241, 250 (1957); 2 Sutherland, Statutory Construction (Harack, 3d ed.) § 5109, pp. 525-6. To apply this canon of construction, it is first necessary to review the history of the *351 savings bank practice in issue in the light of the treatment accorded it by the Department of Banking and Insurance, the agency whose responsibility it is to administer banking legislation and to regulate banking activities. Apparently, the first savings bank to offer a checking account service in this State was Hudson City Savings Bank, which inaugurated the practice about the beginning of this century. By 1929 five other savings banks offered the service, some restricted to savings depositors only and some restricted to the amount which could be deposited. Varying rates of interest were paid. In the latter part of 1928 the Deputy Commissioner of Banking and Insurance, Mr. Hilson, wrote to the president of the Bloomfield Savings Institution to inquire about a newspaper advertisement placed by that bank to the effect that a checking account service was being offered to its depositors. Mr. Hilson wanted to know "just where in the law it is provided that a savings bank is permitted to do a checking account business." In reply, the president of Bloomfield Savings informed the Deputy Commissioner that several other savings banks had such accounts and that Bloomfield had acted upon legal advice which referred to those sections of the then existing Savings Bank Act which permitted classification of depositors and payment of deposits in accordance with regulations duly adopted by the bank's board of managers. No response to this reply was forthcoming from the Bureau of Banking. In 1937 the then Deputy Commissioner, Mr. Compton, requested an opinion from the Attorney General's office "defining the right of savings banks to receive demand deposits subject to withdrawal by check." An Assistant Attorney General replied by letter that the statute, as he read it, did not empower savings banks to engage in the practice. Despite this opinion no action was taken by the Department to stop the practice. For the next 20 years, during which time the Banking Act of 1948 was enacted, the Department acquiesced in the practice. *352 In 1958 the Hudson City Savings Bank sought permission to acquire, as an incident to a merger, the demand deposits of the North Bergen Trust Company. At that time the plaintiff's chairman, Mr. Ferguson, inquired of the Deputy Commissioner whether this acquisition was proper since it meant the acceptance by a savings bank of demand deposits subject to withdrawal by check. The Department then instituted its own inquiry, seeking the opinion of the Attorney General's Office. That office submitted a memorandum opinion to the Deputy Commissioner which stated, in its essential part, that: (1) "it would not be unreasonable to conclude that the bank [Hudson City Savings] is empowered to accept demand deposits"; and that (2) "in view of the long standing administrative construction by the Department of Banking and Insurance the problem might be better resolved by an appropriate study directed to possible legislative changes rather than by legal ruling at this time." It was suggested that if an immediate legal ruling was desired, then the Commissioner should make a formal request for an opinion of the Attorney General. There is no evidence that any such formal opinion was requested. The importance of the foregoing chronology is self-evident. In Bd. of Ed. of Manchester Tp. v. Raubinger, 78 N.J. Super. 90, 97 (App. Div. 1963), the court noted that a "longstanding statutory interpretation by an administrative agency is entitled to great weight * * *." In Lane v. Holderman, 23 N.J. 304 (1957), the court said "that resort may be had to long usage and practical interpretation in construing statutes to ascertain their meaning, to explain a doubtful phrase or to illuminate any obscurity." (23 N.J., at p. 322.) See also State Dept. of Civil Service v. Clark, 15 N.J. 334 (1954); Swede v. City of Clifton, 39 N.J. Super. 366 (App. Div. 1956), affirmed 22 N.J. 303 (1956). In In re Glen Rock, 25 N.J. 241 (1957), the court held that an administrative agency's interpretation of its own powers and responsibilities, when long-standing, is entitled to great weight where the statutory provisions that it is called upon to administer are ambiguous, and especially where that *353 interpretation is, "inferentially at least, concurred in by the Legislature." (25 N.J., at p. 250.) See also Harper v. New Jersey Mfrs. Cas. Ins. Co., 1 N.J. 93, 98-99 (1948); Mayoros v. Board of Review, 49 N.J. Super. 74, 77 (App. Div. 1958); 2 Sutherland, Statutory Construction (3d ed. 1943), § 5109. For a period of at least 20 years prior to the 1948 Banking Act the Department of Banking and Insurance knew of the demand deposit practice of certain savings banks. In the 12 years between that act and the institution of this suit the practice was still condoned. The Legislature, both prior to 1948 and ever since that time, must be presumed to have known of the demand deposit practice since the annual reports of the Commissioner of Banking and Insurance included that information. Our Supreme Court has also noted the practice, albeit quite passively. In Application of Howard Savings Institution of Newark, supra, 32 N.J. 29, the court affirmed the Commissioner's approval of the establishment by Howard Savings of a branch office within the county where its main office was located. In scrutinizing the services to be offered the community in light of the statutory direction that establishment of a branch office be designed to serve to the advantage of the public interest, the court remarked that among the services offered by the new branch was that of personal checking accounts. (32 N.J., at p. 41.) Thus, at least inferentially, the Commissioner's approval of the establishment of the branch office and, consequently, his approval of Howard Savings' checking account service, were adopted by our Supreme Court. Continued approval by the Commissioner of the maintenance by savings banks of demand deposits subject to withdrawal by check as a proper practice bespeaks a lack of power to disapprove. When, in 1929, Howard Savings merged with the Security Savings Bank it was agreed that interest was to be allowed on "accounts subject to check." The merger was approved by the Commissioner. In 1958, as noted earlier, the Commissioner approved the establishment by Hudson *354 City Savings Bank of a branch office as an incident of its acquisition of a trust company. The new branch was to be located in the main office of the trust company and included the assumption by Hudson of the Trust company's demand deposit liabilities and maintenance of checking accounts. The acquisition, transfer and branch office establishment was approved despite certain known objections to the assumption by Hudson of the demand deposit liabilities. In July 1962, 14 years after the 1948 act and nearly two years after the institution of this suit, the Commissioner approved the establishment of a branch office by Provident with knowledge that it would offer the checking account service to its depositors. The afore-mentioned events, combined with the long-standing administrative acquiescence, is at least tacit approval by the Department of Banking and Insurance of the demand deposit activity engaged in by some of the savings banks in this State. The Legislature's failure to make an express pronouncement in opposition to the Department's consistent approval thus takes on great significance. In Walsh v. Dept. of Civil Service, supra, the court held: "The practical construction of the statute by the Commission over a period of years without interference by the Legislature is evidence of its conformity with the legislative intent and strongly inclines the courts to concurrence therein. * * * The fact that the particular interpretation was adopted as part of the routine administration of the law rather than following a formal hearing in an adversary proceeding * * * does not prevent this concurrence." 32 N.J. Super., at pp. 48, 49. There can be no doubt that the course of administrative treatment of the instant problem is heavily in favor of the validity of the practice. Both prior and subsequent to the 1948 act some savings banks provided checking account services, to the knowledge of the Commissioner and the Legislature. Neither took any contrary action. There is no doubt that the various provisions of the 1948 act which have critical relevance to the main issue in this case are not so clear, precise and unambiguous as to *355 eliminate the propriety of investigating and considering administrative construction. See, e.g., Loveladies Property, etc. v. Barnegat City, etc., Co., 60 N.J. Super. 491, 504 (App. Div. 1960), certification denied 33 N.J. 118 (1960). Whether the practice is ultra vires the powers of savings banks is a question which the statute, on its face, does not expressly answer. This being so, the practical construction accorded the practice under the 1948 act which was substantially contemporaneous with the adoption thereof should be accorded great weight. See, e.g., North Central Counties Retail Liquor, etc. v. Edison Tp., 68 N.J. Super. 351, 359 (App. Div. 1961); Essex Co., etc., Stores Ass'n v. Newark Board of Alcoholic Beverage Control, 64 N.J. Super. 314, 322 (App. Div. 1960); Presbyterian Church, etc. v. Div. of Alcoholic Beverage Control, 53 N.J. Super. 271 (App. Div. 1958), certification denied 29 N.J. 137 (1959). No formal directive has issued from the Commissioner concerning the particular practice. One of the latest official statements directly in point (and which was placed in evidence) was a letter from Acting Deputy Commissioner Prosser to Mr. Ferguson, chairman of the plaintiff, dated July 18, 1958, in which the latter was advised that the Department was going to "make a study of the situation" in regard to "the right of savings banks of New Jersey to accept demand deposits withdrawable by check." Whether that "study" was ever completed, no less initiated, does not appear. In December 1958 the question was still under advisement. Be that as it may, the Department's subsequent action in approving branch office establishments which provided checking account services and in promulgating savings bank statutory regulations which expressly recognized demand checking accounts, reveals no change in attitude. It should also be mentioned that in the latter part of 1958 a bill was introduced in the Senate to prohibit and abolish the checking account practice engaged in by mutual savings banks, but this bill was never acted upon for reasons not made known to the court. *356 From a reading of the applicable statutory provisions and in light of well recognized canons of construction heretofore adverted to, this court concludes that under the Banking Act of 1948 savings banks in the State of New Jersey may accept demand deposits subject to withdrawal by check. While only a numerical minority of such banking institutions have engaged in the practice, this fact does not automatically remove it from consideration as a usual custom of savings banks. The evidence overwhelmingly demonstrated that the Department of Banking and Insurance knew of the practice, informed the Legislature of its existence, took no action to halt it and, in fact, approved it after careful consideration. Had the Legislature intended to prohibit the practice, it could and would have done so in express language either in the Banking Act of 1948 or by amendment thereafter. The language of N.J.S.A. 17:9A-24(12) regarding the exercise by savings banks of "incidental powers," not specifically enumerated, which shall be "necessary or convenient" to the carrying on of business of a savings bank buttresses this conclusion. This section was, I believe, fully intended to be accorded a broad scope, especially in view of the more restrictive phraseology of its predecessor which referred only to "corporate powers necessary to the exercise of the powers" of a savings bank. R.S. 17:6-17(b) (repealed). Plaintiff's contention that the words "incidental powers" greatly limit the words "necessary or convenient," and that the additional powers must therefore be implemental or supplemental of specifically enumerated powers, is not, in my opinion, a correct interpretation. While I agree that the section cannot give independent vitality to a proscribed activity, however, the checking account practice is, in fact, incidental to the power of savings banks to maintain classes of depositors and to regulate interest according to each class within the rules laid down by the Commissioner. See N.J.S.A. 17:9A-186(A)(2). So, too, the fact that no interest is paid on demand deposits does not violate the terms of N.J.S.A. 17:9A-186(A). *357 Had subsection (A)(1) so clearly compelled payment of interest on all deposits, there would have been no need for the various inquiries to and from the office of the Commissioner. The fact is that the subsection, when considered in light of subsection (A)(2) regarding classification of depositors, leaves a good degree of doubt on the question. This doubt has been resolved accordingly and need not be repeated. Plaintiff has offered a technical argument based upon the effect which the maintenance by savings banks of demand deposits has or will have upon our economy. In its simplest form the argument starts with the premise that since national banks use their "free" reserves to stimulate credit financing, and savings banks cannot do so (due to the restriction on the type of investments which they may make), for every dollar deposited in a demand deposit in a savings bank, the economy is deprived of five dollars. Secondly, plaintiff contends that demand deposits are and will be diverted from commercial banks in small communities to savings banks and thus deprive local industry and business of the advantage of the commercial bank's lending power. Defendants, in response, attacked the spectre of the economic day of doom indicated by plaintiff and offered statistics of their own. It is not necessary for the court to embark upon an evaluation of the conflicting statistics and theories offered. While the court is not expert in national monetary management in particular or economics in general, the portent of economic chaos presented by plaintiff has not occurred. In any event, the proper forum before which these economic theories should be offered is the legislative branch, not the judiciary. Plaintiff has also criticized the fact that the various checking account services of the savings banks are not uniform and that some were "hermaphrodite arrangements" which were essentially time deposits subject to withdrawal by draft. While it is true that the regulations utilized by these banks vary in nature, such as to time of advance notice of withdrawal, limits on total monthly withdrawals, presentation of *358 a passbook, and restriction to established time depositors, these conditions were known to the Commissioner and were not objected to. Moreover, some have never been enforced. In short, each of the various services is, in essence, what can be accurately considered as "checking accounts," and the individual distinctions have no bearing upon the basic question of power to maintain the service which I have determined in favor of defendants. One final point should be mentioned although it was not raised by either side either in the pleadings, pretrial order, at trial or in the briefs. I refer to the question of whether, considering the role of the Commissioner of Banking and Insurance in relation to the Banking Act of 1948 in particular and the banking business in general, the institution of this suit was violative of the exhaustion of remedies doctrine and R.R. 4:88. Throughout the course of this case repeated emphasis has been placed upon the role of the Commissioner and his Department, and especially their conduct in regard to various inquiries concerning the checking account practice of the savings banks. Plaintiff maintained that no construction of the Banking Act was taken by the Department; rather, that it was and still is preparing a study. Defendants contended, and I so found, that the Department had both tacitly and expressly condoned the practice through knowledge, acquiescence and failure to object. With the close and obvious relationship between the basic question and the Department, through the Commissioner, why does not the latter have jurisdiction over the issue, with appeal by any aggrieved party to be made in accordance with R.R. 4:88-8 and -10 and subject to R.R. 4:88-14? This question, it seems to me, is relevant to this case and should have been considered. The Commissioner is vested with broad discretionary powers. For example, if he finds that a bank or savings bank is violating its certificate of incorporation or conducting its business in violation of any law of this State, or in an unsafe manner, he may order it to cease such practice, in *359 which case the violator may seek relief in the Superior Court. See N.J.S.A. 17:9A-267. The Commissioner may take possession of the property and business of any bank which violates his order, or is insolvent, or which, in his opinion, is in an unsound or unsafe condition to transact business. See N.J.S.A. 17:9A-269(A). With broad and drastic powers such as these, might not one expect the Commissioner to have jurisdiction over the question of whether the practice of savings banks in maintaining checking accounts subject to withdrawals by check is a violation of the Banking Act or an ultra vires activity? I believe that strong arguments may be made on both sides. Since the question of exhaustion of remedies was not raised by the litigants, and since I have already determined the issues on their merits, the point is, for present purposes, purely academic. It may be that R.R. 4:88 is not applicable at all. It may be that even though plaintiff has not exhausted its administrative remedies, the question is solely one of law, see Nolan v. Fitzpatrick, 9 N.J. 477 (1952); Loboda v. Clark Tp., 74 N.J. Super. 159 (Law Div. 1962), or where the jurisdiction of the administrative tribunal is doubtful, or where the administrative remedy is illusory. See Naylor v. Harkins, 11 N.J. 435 (1953). See, generally, Jorgensen v. Pennsylvania R.R. Co., 25 N.J. 541, 556-568 (1958). The "exhaustion" doctrine has been held to be of "limited application," a rule of convenience and not an indispensable condition precedent. Swede v. City of Clifton, 22 N.J. 303 (1956). Furthermore, the instant case, involving statutory construction, is one in which initial application to administrative officials before the courts is usually not mandatory. See, e.g., Deaney v. Linen Thread Co., 19 N.J. 578, 581 (1955). In any event, under R.R. 4:88-14 the trial court may determine that notwithstanding the availability of administrative review, the exhaustion of that remedy need not be required where it is manifest that the interests of justice require *360 otherwise. Thus, as was recently reiterated by our Supreme Court in Durgin v. Brown, 37 N.J. 189, 202-203 (1962): "The requirement for the exhaustion of the administrative remedy is neither jurisdictional nor absolute in its terms. * * * The cited rule [R.R. 4:88-14] which reflects prior decisional law, vests discretion in the trial court to determine whether the interests of justice require that the administrative process be by-passed. There is no rigid formula for the exercise of that discretion. * * * The public interest in a speedy determination may be considered." The court finds that the invocation of the judicial forum to determine (by way of declaratory judgment) the issues in this case was proper. The public importance of the issues and the overriding need for statutory construction justify the course of action taken. Plaintiff's demand for injunctive relief is denied. I should add, finally, that the public importance of the case disposes of defendants' contention that plaintiff is barred by laches. Cf. Schultz v. Wilson, 44 N.J. Super. 591, 605 (App. Div. 1957). A form of judgment may be submitted in accordance with this opinion. NOTES [*] (Note: In 1960 the remaining 11 banks, and their two branches did not offer the service. In terms of total banking facilities, 31 out of 44 banks offered the services of demand deposit subject to withdrawal by check.)

{ "pile_set_name": "FreeLaw" }

263 N.W.2d 863 (1978) 200 Neb. 472 William J. HUBBELL, Appellant, v. The FARMERS INSURANCE GROUP, Appellee. No. 41401. Supreme Court of Nebraska. March 29, 1978. *864 James P. Miller, Omaha, for appellant. John K. Green of Kennedy, Holland, DeLacy & Svoboda, Omaha, for appellee. Heard before WHITE, C. J., and McCOWN, CLINTON, and BRODKEY, JJ., and HENDRIX, District Judge. BRODKEY, Justice. William J. Hubbell, plaintiff and appellant herein, brought this action against defendant, The Farmers Insurance Group, to recover $4,200 for the theft of his car, which he alleged was insured by the defendant under an insurance policy providing for theft coverage. Defendant denied liability under the policy, and moved for summary judgment. After a hearing, the trial court concluded that no genuine issue of fact existed, sustained defendant's motion, and dismissed the petition with prejudice. Plaintiff's motion for new trial was overruled, and plaintiff has appealed to this court, contending that the District Court erred in granting summary judgment in favor of the defendant. We affirm the judgment of the District Court. The insurance policy in question covered loss of plaintiff's automobile caused by "theft," and had an effective date of May 7, 1975. In his petition plaintiff alleged that on or about May 7, 1975, he had suffered a theft loss of his automobile. He then alleged: "A subsequent investigation by Mr. William J. Hubbell revealed that said automobile had been repossessed by Gilbert Gibreal, an Omaha car dealer, and subsequent investigation revealed that Mr. Gilbert Gibreal had a superior title due to the fact that Mr. Hubbell had purchased the car from an individual who had been able to secure a valid Nebraska title based on foreign title i. e. from the District of Columbia." At the hearing on the motion for summary judgment, the defendant offered in evidence several exhibits relevant to the issue of whether the automobile was taken by theft, or repossessed by a person with superior title to the plaintiff. Relying solely on statements in the briefs of the parties, it appears that Gilbert Gibreal had sold the car to one Donald Branch, retaining title to the vehicle. Branch then somehow obtained a District of Columbia title, and used it to secure a second, Nebraska, title which did not reflect Gibreal's interest in the vehicle. The plaintiff purchased the automobile from Branch, who gave plaintiff the second, Nebraska, title. Gibreal then repossessed the car, and plaintiff brought a replevin action against Gibreal to recover the car. As stated in plaintiff's brief, "the issue of possession was decided against Mr. Hubbell in a replevin action by the Omaha, Nebraska, Municipal Court." Plaintiff then filed this action against the defendant. The exhibits offered and received in evidence at the hearing on the motion for summary judgment, however, are not before this court because the plaintiff did not have a bill of exceptions prepared and filed in this court. *865 The law is that the moving party is not entitled to summary judgment except where there exists no genuine issue as to any material fact in the case and where under the facts he is entitled to judgment as a matter of law. The trial court examines the evidence, not to decide any issue of fact, but to discover if any real issue of fact exists. See, Barnes v. Milligan, 196 Neb. 50, 241 N.W.2d 508 (1976); Green v. Village of Terrytown, 189 Neb. 615, 204 N.W.2d 152 (1973). In the absence of a proper bill of exceptions, however, any assignment of error that requires an examination of evidence cannot prevail on appeal. In such a case, the only question presented on appeal is the sufficiency of the pleadings to sustain the judgment of the trial court. Boosalis v. Horace Mann Ins. Co., 198 Neb. 148, 251 N.W.2d 885 (1977); State v. Jacobsen, 194 Neb. 105, 230 N.W.2d 219 (1975). Depositions, affidavits, answers to interrogatories, and requests for admissions offered in evidence on a motion for summary judgment must be included in a bill of exceptions to be reviewed in this court on appeal. See, Brown v. Shamberg, 190 Neb. 171, 206 N.W.2d 846 (1973); Lange v. Kansas Hide & Wool Co., 168 Neb. 601, 97 N.W.2d 246 (1959). In the present case the plaintiff has not filed a bill of exceptions in this court containing the exhibits received at the hearing on the motion for summary judgment; therefore, the only question presented on appeal is the sufficiency of the pleadings to sustain the judgment of the trial court. Boosalis v. Horace Mann Ins. Co., supra. Plaintiff alleged in his petition that his automobile was repossessed by a person who had superior title to the vehicle. This repossession was the basis for plaintiff's claim that the loss of his automobile had been caused by "theft." In Raff v. Farm Bureau Ins. Co., 181 Neb. 444, 149 N.W.2d 52 (1967), this court stated that the term "theft" as used in an insurance policy "is not necessarily synonymous with larceny, but may have a much broader and more inclusive meaning. It could cover pilferage, swindling, embezzlement, conversion, and other unlawful appropriations as well as larceny." See, also, Modern Sounds & Systems, Inc. v. Federated Mut. Ins. Co., 200 Neb. 46, 262 N.W.2d 183 (1978). In the latter case we stated: "Automobile theft insurance is uniformly viewed as furnishing protection only against losses arising from criminal takings of the insured vehicle and there is apparently no judicial dissent from that proposition. * * * There can be no recovery under such a policy for a loss asserted to amount to a theft in the absence of proof of the existence of a criminal intent on the part of the taker." It is apparent that automobile theft insurance does not furnish protection against the lawful repossession of a vehicle by a person with superior title to the insured. Repossession by a person with superior title cannot be said to be a criminal taking. See Modern Sounds & Systems, Inc. v. Federated Mut. Ins. Co., supra. Since plaintiff's loss, as alleged in his pleadings, was the result of repossession of his automobile by a person with superior title, we conclude the District Court was undoubtedly correct in concluding that summary judgment should be granted to the defendant. The pleadings support the judgment of the trial court, and therefore the judgment is affirmed. AFFIRMED.

{ "pile_set_name": "FreeLaw" }

60 Wn.2d 372 (1962) 374 P.2d 177 ARNOLD THOMPSON, Appellant, v. TITUS MOTOR COMPANY, Respondent.[*] No. 36051. The Supreme Court of Washington, Department One. August 16, 1962. Comfort, Dolack & Hansler (Robert A. Comfort, of counsel), for appellant. Burkey, Marsico & Burkey, for respondent. HILL, J. The sole issue on this appeal is whether an instruction on last clear chance should have been given to the jury. The plaintiff was painting an emblem on an advertising panel above the high fence which separated the defendant's used car lot from an alley. He was standing on an aluminum plank (fourteen inches in width), one end of which rested on the ten-foot rung of a three-legged ladder, one leg of which ladder the plaintiff had placed between the right rear fender and the bumper of one of the used cars on the lot. An employee of the defendant moved the car and, in so doing, pulled the ladder down, which resulted in the plaintiff sustaining the injuries for which he seeks damages in this action. Preliminary to moving the car, the defendant's employee approached it and entered it from the left side. There is no contention that he saw the leg of the ladder between the right fender and the bumper. The negligence, if any, is based on the proposition that he should have seen it. The negligence of the plaintiff, in placing a leg of the supporting ladder in such a position, is unquestioned; and that it contributed to his injury cannot be gainsaid. The trial court submitted the case to the jury on the issues of negligence and contributory negligence, and the jury brought in a verdict for the defendant. From the judgment of dismissal, entered on that verdict, the plaintiff appeals, urging that the trial court erred in refusing to instruct the jury on last clear chance. *374 We have very recently, in Glasper v. Westbo (1962), 59 Wn. (2d) 596, 599, 369 P. (2d) 313, pointed out that: "The doctrine [last clear chance] has two phases as applied in this state. In the first phase, the plaintiffs' negligence may continue up to the time of the injury if the defendants actually see the peril; in the second, the plaintiffs' negligence must have terminated or culminated in a situation of peril from which the plaintiffs could not, by the exercise of reasonable care, extricate themselves if the defendants did not actually see the peril but, by the exercise of reasonable care, should have seen it. Leftridge v. Seattle, 130 Wash. 541, 228 Pac. 302 (1924)." (Italics ours.) [1] There is no testimony from which the jury could have found that the man who moved the car either knew or appreciated the danger of the situation; and the first phase of the doctrine is not applicable to the present case. Jess v. McNamer (1953), 42 Wn. (2d) 466, 255 P. (2d) 902; Coins v. Washington Motor Coach Co. (1949), 34 Wn. (2d) 1, 208 P. (2d) 143. The plaintiff argues that prior to moving the car the defendant's employee should have seen the plaintiff's perilous situation and, therefore, the second phase of the doctrine should apply because the plaintiff's negligence had terminated or he was in a position of peril from which he could not extricate himself. [2] We cannot agree that either his negligence had terminated, or that he was in a position of peril from which he could not extricate himself. His remaining on the plank, supported by a ladder placed as this one was, constituted continuing negligence. Not until the defendant's employee entered the car, for the purpose of moving it, was plaintiff in a position of peril from which he could not have extricated himself by getting down off the plank, and even then he could have shouted a warning to the person entering the car. See Coins v. Washington Motor Coach Co., supra. [3] An answer to the plaintiff's contention that he was painting and was oblivious to the danger caused by the approach of defendant's employee, who moved the car, is that *375 ignorance of the situation is not the equivalent of actually being in a position from which one cannot escape. Prosser in his Law of Torts (2d ed.), pages 293, 294, says: "In another group of cases, the plaintiff's situation is not one of helplessness and he is still in a position to escape, but his negligence consists of failure to pay attention to his surroundings and discover his own peril.... "If the defendant does not discover the plaintiff's situation, but merely might do so by proper vigilance, it is obvious that neither party can be said to have a `last clear' chance. The plaintiff is still in a position to escape, and his lack of attention continues up to the point of the accident, without the interval of superior opportunity of the defendant which has been considered so important. The plaintiff may not demand of the defendant greater care for his own protection that he exercises himself...." It seems to us that the facts of this case do not fit the formula of last clear chance, as we have applied it in this state, no matter how much the plaintiff tries to stretch it. The primary negligence is that of the plaintiff in the placing of the ladder; he thereafter took no precautions for his own safety. The negligence of the defendant's employee, if any, is that he failed to see what he should have seen, i.e., that a leg of the ladder was between the fender and the bumper of the car he was going to move. He could have seen the plaintiff painting the sign and never have appreciated that the plaintiff was in a position of peril, unless, and until, he saw the ladder leg between the right rear fender and the bumper of the car which he approached and entered from the left side. [4] It is pointed out in one of the late texts: If an inattentive defendant negligently fails to see an inattentive (but not helpless) plaintiff, the case falls into the category where both plaintiff and defendant are negligently unaware of an impending peril; the plaintiff could have saved himself as long as defendant could have saved him. Under such circumstances, most American courts and the the American Law Institute rule[1] out last clear chance. 2 Harper and James, Law of Torts § 22.13, p. 1252. *376 The trial court properly refused to give a last clear chance instruction. The judgment is affirmed. FINLEY, C.J., WEAVER, ROSELLINI, and FOSTER, JJ., concur. October 8, 1962. Petition for rehearing denied. NOTES [*] Reported in 374 P. (2d) 177. [1] 2 Restatement of Torts § 480.

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120 Ill. App.3d 282 (1983) 458 N.E.2d 54 BARBARA E. MURPHY, Plaintiff-Appellee, v. UNITED STATES FIDELITY AND GUARANTY COMPANY, Defendant-Appellant. No. 83-74. Illinois Appellate Court Fifth District. Opinion filed December 8, 1983. *283 John E. Jacobsen and Carl L. Favreau, both of Campbell, Furnall, Moore & Jacobsen, P.C., of Mt. Vernon, for appellant. Donald R. Brandon, of Craig, Brandon and Murphy, of Herrin, for appellee. Judgment affirmed. JUSTICE JONES delivered the opinion of the court: At issue in the instant appeal is whether the plaintiff's action to compel arbitration of her uninsured motorist claim against the defendant insurance company is governed by the two-year statute of limitations applicable to personal injury actions (Ill. Rev. Stat. 1981, ch. 83, par. 15, now Ill. Rev. Stat. 1981, ch. 110, par. 13-202) or by the 10-year statute of limitations applicable to contract actions (Ill. Rev. Stat. 1981, ch. 83, par. 17, now Ill. Rev. Stat. 1981, ch. 110, par. 13-206). The trial court ruled that the plaintiff's action was not barred by the two-year statute of limitations for personal injury actions and ordered the defendant to submit the plaintiff's claim to arbitration as provided by the insurance contract between the parties. We affirm. *284 On September 10, 1979, the plaintiff, Barbara Murphy, was involved in an automobile accident with Delores Mulkins, who was later certified by the Illinois Department of Transportation as an uninsured motorist. At the time of the accident the plaintiff was covered by a policy of insurance issued by the defendant, United States Fidelity and Guaranty Company. Under the policy the defendant was obligated "to pay all sums which the insured * * * shall be legally entitled to recover as damages from [an uninsured motorist] because of bodily injury sustained by the insured * * *." The policy further provided that a determination as to whether the insured was legally entitled to recover such damages and the amount thereof was to be made by agreement between the insured and the company or, if they failed to agree, by arbitration. The policy contained no provision as to when such a demand for arbitration should be made. The parties were unable to agree regarding the plaintiff's claim for uninsured motorist benefits, and, on September 23, 1981, the plaintiff made a written demand to the defendant for arbitration of her claim. When the defendant refused to submit to arbitration, the plaintiff, on December 1, 1981, filed a petition to compel arbitration against the defendant in the circuit court of Williamson County. The defendant filed a motion to dismiss the plaintiff's petition because the petition was filed more than two years after the accident in question. The defendant contended that since it was obligated to pay to its insured only such sums as the insured was legally entitled to recover from the uninsured motorist, and since the plaintiff's claim against the uninsured motorist was barred by the two-year statute of limitations for personal injury actions, the plaintiff could no longer seek to recover from the defendant under the uninsured motorist provisions of her policy. The defendant's motion to dismiss was denied by the trial court, and the cause proceeded to trial. At the close of the plaintiff's case the defendant filed a motion for judgment in its favor in which it again raised the statute of limitations issue. The court denied the motion, ruling that the case was governed by the statute of limitations for contract actions because the plaintiff's cause of action arose out of the contractual obligation of the defendant insurer to pay damages caused by the negligence of an uninsured motorist. The court entered judgment for the plaintiff, and the defendant has appealed from that judgment. On appeal the defendant contends that the policy language obligating it to pay those amounts that the plaintiff was "legally entitled to recover" from an uninsured motorist effectively precluded the *285 plaintiff from seeking recovery from the defendant once the two-year period for filing an action against the uninsured motorist had passed. Since, the defendant asserts, the plaintiff's claim for uninsured motorist benefits under the policy depended upon her ability to recover against the uninsured motorist for injuries sustained in the accident, the instant action by the plaintiff must be governed by the statute of limitations applicable to personal injury actions rather than that applicable to contract actions. The defendant urges that this result is not only mandated by the essential nature of the claim involved but is also consistent with the legislative purpose behind the statute providing for uninsured motorist coverage (Ill. Rev. Stat. 1981, ch. 73, par. 755(a)) and is necessary to protect the subrogation rights of an insurer against an uninsured motorist. In other jurisdictions where courts have considered the applicable statute of limitations for making a claim based upon uninsured motorist insurance, it has been generally held that such claims are governed by the contract rather than the tort statute of limitations. (See Annot., 28 A.L.R.3d 580, 584-87 (1969 & Supp. 1983); Widiss, A Guide to Uninsured Motorist Coverage sec. 2.25 (1969 & Supp. 1981); Booth v. Fireman's Fund Insurance Co. (1968), 253 La. 521, 218 So.2d 580; Schleif v. Hardware Dealer's Mutual Fire Insurance Co. (1966), 218 Tenn. 489, 404 S.W.2d 490; DeLuca v. Motor Vehicle Accident Indemnification Corp. (1966), 17 N.Y.2d 76, 215 N.E.2d 482, 268 N.Y.S.2d 289; Lemrick v. Grinnell Mutual Reinsurance Co. (Iowa 1978), 263 N.W.2d 714; Pickering v. American Employers Insurance Co. (1971), 109 R.I. 143, 282 A.2d 584; Franco v. Allstate Insurance Co. (Tex. 1974), 505 S.W.2d 789; North River Insurance Co. v. Kowaleski (1976), 275 Or. 531, 551 P.2d 1286; Sahloff v. Western Casualty & Surety Co. (1969), 45 Wis.2d 60, 171 N.W.2d 914; contra, Vaughn v. Collum (1976), 236 Ga. 582, 224 S.E.2d 416; Brown v. Lumbermens Mutual Casualty Co. (1974), 285 N.C. 313, 204 S.E.2d 829.) The Illinois appellate court has likewise held that, in the absence of a specific statutory provision regarding the period within which uninsured motorist claims must be brought, the statute of limitations to file contract actions must govern. (Burgo v. Illinois Farmers Insurance Co. (1972), 8 Ill. App.3d 259, 290 N.E.2d 371; see Hartford Accident & Indemnity Co. v. Holada (1970), 127 Ill. App.2d 472, 262 N.E.2d 359; Witkowski v. Covenant Security Insurance Co. (1971), 1 Ill. App.3d 1074, 275 N.E.2d 709.) The defendant contends, however, that these latter cases can be distinguished on their facts from the case at bar (cf. Holada (insured had filed timely suit against uninsured motorist so still an open question as to whether he was "legally entitled" to *286 recover from uninsured motorist); Witkowski (insurer was put on notice that plaintiff demanded arbitration less than month after accident)) and should not control the result here. 1 Upon consideration of the issue of the applicable statute of limitations in the instant case, we find persuasive the reasoning of the majority view that the phrase "legally entitled to recover," as used in the policy to denote a condition of the insured's right to recover from the insurer, was designed to indicate fault and not to bar recovery from the insurer merely because the tort-feasor, in an action against him by the insured, could have asserted a statute of limitations defense. (See DeLuca v. Motor Vehicle Accident Indemnification Corp.; Selected Risks Insurance Co. v. Dierolf (1975), 138 N.J. Super. 287, 350 A.2d 526; Edwards v. State Farm Insurance Co. (Mo. App. 1978), 574 S.W.2d 505.) As such, this language means simply that the insured must be able to establish fault on the part of the uninsured motorist that gives rise to damages and prove the extent of those damages. (Allstate Insurance Co. v. Elkins (1978), 63 Ill. App.3d 62, 381 N.E.2d 1, aff'd (1979), 77 Ill.2d 384, 396 N.E.2d 528; Booth v. Fireman's Fund Insurance Co.; contra, Brown v. Lumbermens Mutual Casualty Co.) We therefore find no merit in the defendant's contention that this provision served to incorporate the two-year statute of limitations for tort actions into the parties' insurance contract. In dealing with a similar argument that an arbitration demand filed more than two years after the occurrence in question was untimely, the court in Hartford Accident & Indemnity Co. v. Holada stated: "* * * [I]n the nature of a true statute of limitations, such as the one for personal injuries involved in this case, a defense based thereon must be affirmatively raised to be successful, and, if not so raised, the insured could still be `legally entitled' even though his lawsuit were filed after the running of the statute." (127 Ill. App.2d 472, 482, 262 N.E.2d 359, 364.) The court thus indicated that the statute of limitations defense, being personal to the uninsured motorist tortfeasor (see 25 Ill. L. & Prac. Limitations secs. 8, 164 (1956); Conley v. Rust (1973), 12 Ill. App.3d 26, 297 N.E.2d 397), could be raised only by that party and did not affect the insurer's obligation under its contract to pay those amounts which the insured would otherwise be legally entitled to recover from the tortfeasor. (See Schulz v. Allstate Insurance Co. (1968), 17 Ohio Misc. 83, 244 N.E.2d 546; Booth v. Fireman's Fund Insurance Co.; see also Witkowski v. Covenant Security Insurance Co.) Similarly, in the instant case, since the insurer's obligation derived not from the *287 uninsured motorist but from its insurance contract, the insurer did not stand in the shoes of the uninsured motorist (Allstate Insurance Co. v. Elkins) and could not raise that party's statute of limitations defense on its own behalf. 2 We likewise reject the defendant's contention in the same vein that the plaintiff's claim against the defendant insurer was essentially an action to recover for personal injuries and thus should be governed by the statute of limitations applicable to such actions. The plaintiff's action here was based solely upon her contract with the insurer for uninsured motorist coverage for which she paid an additional premium. Absent that contract, the plaintiff would have had no claim against the insurer and the defendant would have had no liability to the plaintiff to indemnify her for damages resulting from the tortious actions of the uninsured motorist. (See Selected Risks Insurance Co. v. Dierolf; Schleif v. Hardware Dealer's Mutual Fire Insurance Co.) The plaintiff's suit, brought to enforce the terms of a contractual obligation, was thus essentially a contract action to be governed by the statute of limitations for such actions. If, within the framework of its contractual obligation, the defendant had desired to limit the time for making an arbitration demand to a period of two years after the accident, it could have inserted this condition into the parties' insurance contract. (See Schulz v. Allstate Insurance Co.) Such a limitation provision has been held to be valid and not against public policy, as it places the accident victim in at least as good a position as he would have been had the tortfeasor obtained the minimum insurance required by the Illinois Safety Responsibility Law (Ill. Rev. Stat. 1981, ch. 95 1/2, par. 7-203). (Coyne v. Country Mutual Insurance Co. (1976), 39 Ill. App.3d 279, 349 N.E.2d 485.) In the absence of a provision to the contrary, we conclude, as did the court in Hartford Accident & Indemnity Co. v. Holada, that "the [insurer] itself did not wish to be bound by any statute of limitations (other than the 10-year limitation for contract actions) in working out a settlement before proceeding with arbitration." Hartford Accident & Indemnity Co. v. Holada (1970), 127 Ill. App.2d 472, 480-81, 262 N.E.2d 359, 363. The defendant's further contention that the legislative purpose behind the statute providing for uninsured motorist coverage (Ill. Rev. Stat. 1981, ch. 73, par. 755(a)) requires that the plaintiff have no longer time to bring suit than if the uninsured motorist had been insured is not well taken. While it is established that the purpose of the uninsured motorist statute is to protect the victim of an uninsured motorist at least to the extent that compensation would be available *288 to one injured by a motorist insured within the minimum legal limits (Severs v. Country Mutual Insurance Co. (1982), 89 Ill.2d 515, 434 N.E.2d 290; Putnam v. New Amsterdam Casualty Co. (1970), 48 Ill.2d 71, 269 N.E.2d 97), this rationale has not been extended by the courts of this State to limit an insured's right to recover from his insurer in the absence of a specific limitation period contained in the policy. (Cf. Coyne v. Country Mutual Insurance Co. (two-year policy limitation period upheld as not in contravention of public policy); Burgo v. Illinois Farmers Insurance Co. (one-year limitation period struck on public policy grounds and 10-year contract statute of limitations held applicable); but cf. Brown v. Lumbermens Mutual Casualty Co. (court held application of tort statute of limitations consistent with objective of placing insured in same position as if other motorist had been insured).) In view of other considerations expressed in this opinion, we decline to hold that the public policy of this State requires that the plaintiff's claim in the instant case be barred by the two-year tort statute of limitations. 3 The defendant contends finally that to allow the plaintiff to assert her claim against the defendant for uninsured motorist benefits after the time for filing suit against the uninsured motorist had run would effectively deprive the defendant of its subrogation rights against the uninsured motorist, which would arise upon payment of the plaintiff's claim. While this argument appears compelling on its face, the loss of the insurer's subrogation rights in these circumstances must be considered in light of the insurer's ability to protect its subrogation rights prior to the running of the statute against the uninsured motorist. (See Widiss, A Guide to Uninsured Motorist Coverage sec. 2.23 (1969 & Supp. 1981); Widiss, Perspectives on Uninsured Motorist Coverage, 62 Nw. U.L. Rev. 497, 508-11 (1967).) Under the standard uninsured motorist endorsement of the instant policy, the insured was required to give the defendant insurer written notice of the particulars of her accident "as soon as practicable." Following such notice, the insurer, under the cooperation provision of the policy, was entitled to require the plaintiff "to take such action as may be necessary or appropriate to preserve [her] right [and the insurer's right by subrogation] to recover damages from any person * * * alleged to be legally responsible for the bodily injury." Thus, by virtue of this provision, the insurer had the right to compel the plaintiff to such action as would preserve all rights against the uninsured motorist, which included the instituting of a legal action to toll the statute of limitations and preserve the defendant's subrogation rights. (Widiss, A Guide to Uninsured Motorist Coverage sec. 2.23, at 49 (1969).) *289 As stated by the court in Selected Risks Insurance Co. v. Dierolf (1975), 138 N.J. Super. 287, 296, 350 A.2d 526, 531: "One of the functions of the notice provision of an insurance policy is to bring to the insurer's attention the possible existence of subrogated rights. By virtue of the Cooperation provision of the endorsement * * * the initial responsibility to act to protect subrogated rights is upon the insurer. To hold otherwise would penalize a claimant for his insurer's failure to act under its own cooperation provision." (Emphasis added.) See also American States Insurance Co. v. Williams (1972), 151 Ind. App. 99, 278 N.E.2d 295; Booth v. Fireman's Fund Insurance Co. The defendant in the instant case has made no claim that it failed to receive notice of the plaintiff's accident in time for it to act to protect its subrogation rights against the uninsured motorist. Thus, any prejudice to the defendant's rights resulting from the timing of the plaintiff's arbitration demand has been occasioned by its own neglect and should not dictate the use of the shorter tort statute of limitations. (See La Marsh v. Maryland Casualty Co. (1962), 35 Misc.2d 641, 231 N.Y.S.2d 121.) Further, while the defendant asserts that the plaintiff's demand for arbitration should have been filed within the two-year period for tort actions so as to alert the defendant to the necessity of protecting its subrogation rights, this is not the function of an arbitration demand, which is to be resorted to only if the insurer and its insured fail to agree as to fault or damages. (Selected Risks Insurance Co. v. Dierolf.) We therefore find no merit in the defendant's contention that the plaintiff's action must be governed by the two-year tort statute of limitations in order to preserve the defendant's rights against the uninsured motorist. For the reasons set forth in this opinion, we hereby affirm the trial court's ruling that the plaintiff's action to compel arbitration against the defendant is governed by the 10-year statute of limitations applicable to contract actions. Affirmed. HARRISON and KASSERMAN, JJ., concur.

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732 N.W.2d 887 (2007) IN RE ESTATE OF RANSCHAU. No. 06-0640. Court of Appeals of Iowa. March 14, 2007. Decision without published opinion. Affirmed.

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281 S.W.2d 330 (1955) T. B. McDONALD et al., Petitioners, v. J. C. ALVIS et ux., Respondents. No. A-5230. Supreme Court of Texas. July 20, 1955. Carney & Mays, Atlanta, Woodrow Edwards, Mt. Vernon, for petitioners. R. T. Wilkinson and Leonard Passmore, Mt. Vernon, for respondents. CULVER, Justice. In October of 1951 Alvis and wife brought this suit to cancel a certain mineral deed executed by them to one Kelley on May 14, 1937, alleging fraud. The trial court withdrew the case from the jury and rendered judgment that the plaintiffs take nothing. On appeal, by Alvis and wife, the Court of Civil Appeals reversed and remanded for another trial, holding on its own motion that all necessary parties were not before the court and despite a motion for rehearing joined in by both parties, plaintiff and defendant, requesting the court to consider the case on its merits. 276 S.W.2d 957. In this we think the Court of Civil Appeals was in error. It appears that negotiations leading up to the execution of the 1937 deed to Kelley were conducted between Alvis and Dove McDonald. In 1940 Kelley conveyed all of his interest by warranty deed to T. B. and Claude McDonald, trustees. On the trial the evidence showed that Dove and Charlie *331 McDonald were beneficiaries of the trust in the deed from Kelley to the trustees. All four of the McDonalds were brothers and owned the property in common. Dove McDonald appeared and testified in the case. Kelley, a brother-in-law of Dove McDonald, died prior to the institution of this suit. His unknown heirs are not necessary parties, for the reason that Kelley had conveyed all of his interest to the McDonalds and no relief of any kind or character was sought against the estate of Kelley or his unknown heirs. Antwine v. Reed, 145 Tex. 521, 199 S.W.2d 482. "A `necessary party' to a suit, according to the general understanding of that term, is one who is so vitally interested in the subject-matter of the litigation that a valid decree cannot be rendered without his presence as a party." Commonwealth Bank & Trust Co. v. Heid Bros., Inc., 122 Tex. 56, 52 S.W.2d 74, 75; First National Bank v. Pierce, 123 Tex. 186, 69 S.W.2d 756. Grelling and Moran were not necessary parties. At one time they owned an oil and gas lease covering the property but by its terms this lease had expired prior to the institution of this suit. Both of these parties expressly disclaimed any interest. The beneficiaries for whom T. B. and Claude McDonald took title as trustees were not necessary parties. Article 7425b-25, Vernon's Ann.Civ.St., reads in part: "In the absence of contrary or limiting provisions in the instrument creating the trust, or a subsequent order or decree of a court of competent jurisdiction, the trustee of an express trust is authorized: * * * "B. To grant options and to sell real or personal property at public auction or at private sale for cash, or upon credit secured by a lien upon the property sold or upon such property or a part thereof and/or other property. * * * "E. To compromise, contest, arbitrate, or settle any and all claims of or against the trust estate or the trustee as such. * * * "G. Generally to execute and deliver any deed or other instrument and to do all things in relation to such trust necessary, desirable, or advisable for carrying out any of the above powers or those considered incident to the purposes of such trust. * * *." While in the general rule in suits affecting trust property the beneficiary is a necessary party, the general rule is limited by many exceptions. Cavers v. Sioux Oil & Refining Co., Tex.Com.App., 39 S.W.2d 862; Ebell v. Bursinger, 70 Tex. 120, 8 S.W. 77. In Slay v. Burnett Trust, 143 Tex. 621, 187 S.W.2d 377, the court cites with approval Bogert's Trust & Trustees, Vol. 3, Sec. 593, to the effect that a trustee may represent cestui que trust in all actions when there is no conflict of interest between cestui que trust and the trustee or between the several cestuis que trust. The deed from Kelley to McDonald, Trustee, did not indicate how many or who the beneficiaries were. In our opinion the beneficiaries, Dove and Charlie McDonald, undisclosed in the deed, were not necessary parties to this suit. David v. Carter, Tex. Civ.App., 222 S.W.2d 900; Lower Colorado River Authority v. Chemical Bank & Trust Co., Tex.Civ.App., 185 S.W.2d 461. The judgment of the Court of Civil Appeals is reversed and the cause remanded to that court for decision on the merits of the appeal.

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United States Court of Appeals FOR THE EIGHTH CIRCUIT ___________ No. 06-2320 ___________ United States of America, * * Appellee, * * Appeal from the United States v. * District Court for the * District of Nebraska. Tiloe C. Williams, * * Appellant. * ___________ Submitted: October 19, 2006 Filed: February 13, 2007 ___________ Before WOLLMAN, RILEY, and GRUENDER, Circuit Judges. ___________ WOLLMAN, Circuit Judge. A jury found Tiloe Williams guilty of being a felon in possession of a firearm in violation of 18 U.S.C. § 922(g). Williams argues on appeal that the district court1 erred by failing to suppress firearms evidence resulting from a search warrant in which the affiant officer omitted material facts concerning the reliability of a confidential informant. We affirm. 1 The Honorable Joseph F. Bataillon, United States District Judge for the District of Nebraska. I After receiving a citizen’s complaint that drugs were being sold on the premises, Omaha police officers Wells and Milone directed a confidential informant, Randy Conway, to purchase crack cocaine from the residence of Tiloe Williams on April 11, 2005. Although the officers watched Conway approach the house, they lost sight of him as he reached its entrance. Conway was not equipped with any recording device or transmitter. Soon after, they received a cell-phone call from Conway. He was “excited, talking really fast, [and] breathing heavily.” Conway stated that he spoke to a man at the doorway about buying crack; he told the man that he knew him a long time ago, whereupon the man pointed a rifle at Conway, who immediately fled the residence. The officers met up with Conway in person and observed that he was still “excited, breathing heavily, and talking a mile a minute.” Conway repeated the same story, described the man he encountered, and identified the man as Williams when presented with Williams’s mug shot. Subsequent to this encounter, Officer Wells learned of Williams’s status as a convicted felon. He and Officer Milone submitted an affidavit that included the information provided by Conway in an application for a search warrant of Williams’s residence. Their affidavit also mentioned that Conway had been utilized by the police unit in several prior narcotics operations, and that his assistance had resulted in search warrants and several felony narcotics arrests. It further averred that Conway had experience making controlled purchases of illegal narcotics for which preliminary field tests of the purchases had positively indicated cocaine. Finally, the affidavit stated that Conway was not on any terms of parole, probation, or work release at the time he approached Williams. The affidavit did not mention that Conway had been arrested for providing false information to a police officer in 2003. At that time, Conway knew of an outstanding warrant for his arrest when a police officer pulled over the car in which he was riding. -2- When the officer asked the passengers for their respective names, Conway identified himself with a false name to avoid being arrested and losing his job. The officer discovered Conway’s deceit, and Conway subsequently pled guilty to a misdemeanor offense for lying to the officer and was sentenced to a single day in jail. The affidavit also failed to mention that Conway had been convicted for two felonies and had been arrested on a charge of felony theft for receiving stolen property. Finally, the affidavit did not mention Conway’s financial arrangement with the police under which he received payment for his confidential informant services depending on the type of service he provided and the outcome of the investigation. Citing these omissions, Williams moved for a hearing to suppress the entry of the firearms into evidence. A magistrate judge2 granted the hearing but limited the scope of the inquiry to the omissions of Conway’s conviction for lying to a police officer and Conway’s financial relationship with the police department. At the conclusion of the hearing, the magistrate judge found that Officer Wells had intentionally omitted the information at issue, but that even had the information not been omitted, the affidavit would still have provided probable cause for the warrant. Accordingly, the magistrate judge recommended a denial of Williams’s suppression motion. The district court reviewed the magistrate judge’s recommendations and likewise considered the omitted information material and relevant. After reviewing all of the evidence de novo, and even after assuming, arguendo, the truth of the full extent of Conway’s criminal history, the district court concluded that probable cause would have existed had the omitted information been part of the affidavit and accordingly denied the motion to suppress. 2 The Honorable F.A. Gossett, III, United States Magistrate Judge for the District of Nebraska. -3- Williams appeals from his conviction, arguing that the district court erred (1) by not remanding the case to the magistrate judge for further inquiries into Conway’s criminal history in light of the limitations that the magistrate judge imposed on the scope of the hearing and (2) by finding that probable cause would still have existed even with the inclusion of the omitted information. The government responds that Williams was not even entitled to a hearing because he failed to make a substantial preliminary showing that Officer Wells omitted facts with an intent to make, or in reckless disregard of whether they made, the affidavit misleading. It further contends that even had Williams made such a showing, he failed to show that the omitted facts would have altered the probable cause finding; therefore, any procedural errors that might have occurred during the hearing were harmless. II We review factual findings supporting the denial of a suppression motion for clear error, and we review de novo the legal conclusions pertinent to the ultimate question of whether the Fourth Amendment has been violated. United States v. Allen, 297 F.3d 790, 794 (8th Cir. 2002). The Fourth Amendment requires a showing of probable cause before a search warrant may be issued. Determinations of probable cause must be premised on the totality of the circumstances. “The task of the issuing magistrate is simply to make a practical, common-sense decision whether, given all the circumstances set forth in the affidavit before him . . . there is a fair probability that contraband or evidence of a crime will be found in a particular place.” Illinois v. Gates, 462 U.S. 213, 238 (1983). Where an issuing judge’s probable cause determination was premised on an affidavit containing false or omitted statements, the resulting search warrant may be invalid if the defendant can prove by a preponderance of evidence “(1) that the police omitted facts with the intent to make, or in reckless disregard of whether they thereby made, the affidavit misleading . . . and (2) that the affidavit, if supplemented by the -4- omitted information would not have been sufficient to support a finding of probable cause.” United States v. Reivich, 793 F.2d 957, 961 (8th Cir. 1986) (citations omitted); see also United States v. Jacobs, 986 F.2d 1231, 1234 (8th Cir. 1993). To be entitled to a hearing on this issue (“Franks hearing”) a defendant must make a substantial preliminary showing that includes allegations of deliberate falsehood or of reckless disregard for the truth[.] [T]hose allegations must be accompanied by an offer of proof. They should point out specifically the portion of the warrant affidavit that is claimed to be false; and they should be accompanied by a statement of supporting reasons. Affidavits or sworn or otherwise reliable statements of witnesses should be furnished, or their absence satisfactorily explained. Allegations of negligence or innocent mistake are insufficient. The deliberate falsity or reckless disregard whose impeachment is permitted . . . is only that of the affiant, not of any nongovernmental informant. Franks v. Delaware, 438 U.S. 154, 171 (1978). While clear proof of these elements is not required at the stage at which the defendant is demonstrating an entitlement to an evidentiary hearing, United States v. Owens, 882 F.2d 1493, 1498 (10th Cir. 1989), the defendant still must make a “substantial preliminary showing” comprised of specific allegations along with supporting affidavits or similarly reliable statements. Cf. Franks, 438 U.S. at 171 (describing the showing requirements for false statements in warrant affidavits). Because “[t]here is . . . a presumption of validity with respect to the affidavit supporting the search warrant[, t]o mandate an evidentiary hearing, the challenger's attack must be more than conclusory and must be supported by more than a mere desire to cross-examine.” Id. The substantiality requirement is not lightly met. United States v. Wajda, 810 F.2d 754, 759 (8th Cir. 1987). -5- III In its order granting the Franks hearing, the magistrate judge found that the defendant made a substantial preliminary showing that fficer Wells may have omitted information from the search warrant affidavit with a reckless disregard for the truth. Such a finding alone is legally insufficient to justify a Franks hearing absent a determination that the intentionally or recklessly omitted information may have rendered the affidavit misleading and may have otherwise made a probable cause finding unsupportable. Because neither the magistrate judge nor the district court fully addressed whether a Franks hearing was even justified, we now consider the sufficiency of Williams’s preliminary showing. In support of his motion for a Franks hearing, Williams alleged that Officer Wells omitted the following facts from his affidavit: (1) the details of the financial arrangement between the police department and Conway and (2) Conway’s criminal background, which includes a conviction for lying to officers in 2003. Williams offered support for his contention that Officer Wells was aware of each and suggests that they would have made a probable cause finding improbable if they had been included in the original affidavit. A. Omission of the Confidential Informant Agreement Omitting the details and existence of the bargaining agreement between Conway and Wells was not misleading. We have held that an affidavit is not robbed of its probative effect by its failure to mention that the informant “was a paid informant who avoided prosecution by virtue of her testimony. . . .” United States v. Milton, 153 F.3d 891, 896 n.3 (8th Cir. 1998); see also Reivich, 793 F.2d at 962-63; United States v. Wold, 979 F.2d 632, 635 (8th Cir. 1992); United States v. Furlong, 844 F. Supp. 624, 628 (D. Mont. 1994), rev’d in part on other grounds sub nom. United States v. Hand, 61 F.3d 913 (9th Cir. 1995) (unpublished table decision) -6- (stating that it was reasonable for the affiant to assume that the issuing justice would have supposed that the informant had an ulterior motive, such as a reward, for providing the information). In fact, a properly developed pay-based incentive system with appropriate consequences for invalid information may even bolster reliability. Nothing in Williams’s Franks hearing motion, brief in support of the motion, or attached affidavits suggests that the omission of Conway’s agreement with the police renders the warrant application misleading. Williams cites United States v. Medina-Reyes, 877 F. Supp. 468, 475 (S.D. Iowa 1995), in which a district court granted the defendant’s suppression motion after a Franks hearing in part because the affiant officers failed to disclose details of the cooperation and plea agreement. The district court emphasized the relevance of an unusual incentive system in which the informant stood to benefit from a suspended sentence or parole only if he succeeded in making a prosecutable case against specifically named defendants within a fixed period of time. Id. at 475 (“in an allegorical sense, [he had to] deliver the head[] of ‘Medina-Reyes’ . . . to the prosecutor on a silver platter.”).3 Nothing in Williams’s Franks motion, supporting affidavits, or showing of proof suggests that Conway’s agreement or associated behavior might adversely impact his reliability, unlike the powerful incentive in the Medina-Reyes agreement for the informant to submit unreliable information.4 Without more, the omission of the terms of Conway’s agreement does not materially 3 Furthermore, the omission of the agreement’s terms was considered even more egregious when coupled with the affiant officer’s concomitant failure to state that the informant had a history of violating the agreement – a fact with direct bearing on the informant’s reliability. Medina-Reyes, 877 F. Supp. at 475. 4 In fact, the resulting Franks hearing established that Conway would be blacklisted as an informant by the entire police department if he provided unreliable information, and that leading up to his participation in the Williams operation, Conway had received only nominal payments in the $20-$80 range if his information yielded tangible results. Nothing about this system encourages unreliable behavior. -7- change Conway’s apparent reliability or otherwise render the warrant application misleading. B. Omission of Conway’s Criminal Background The Supreme Court has indicated that a misstatement must be the product “of deliberate falsehood or of reckless disregard for the truth . . . . Allegations of negligence or innocent mistake are insufficient.” Franks, 438 U.S. at 171. Franks offers little guidance in determining whether an omission-based misrepresentation was made with reckless disregard for the truth or merely out of negligence. See United States v. Namer, 680 F.2d 1088, 1094 (5th Cir. 1982). We have acknowledged that recklessness may be “inferred from the fact of omission of information from an affidavit . . . when the material omitted would have been ‘clearly critical’ to the finding of probable cause.” Reivich, 793 F.2d at 961-62 (citing United States v. Martin, 615 F.2d 318, 329 (5th Cir. 1980)); see also United States v. Jacobs, 986 F.2d 1231, 1235 (8th Cir. 1993) (stating that officers act with reckless disregard if they knowingly withhold facts that “[a]ny reasonable person would have known . . . was the kind of thing the judge would wish to know.”). Assuming that Officer Wells’s omission of Conway’s prior misdemeanor conviction and the remainder of Conway’s criminal background was made with reckless disregard of whether it rendered the warrant application misleading, we conclude that in light of Conway’s extensive history as a reliable police informant and Officer Wells’s personal observations of his demeanor, the supplementation of the affidavit with Conway’s criminal background would not alter the probable cause finding and therefore would not warrant a Franks hearing. “The core question in assessing probable cause based upon information supplied by an informant is whether the information is reliable.” United States v. Williams, 10 F.3d 590, 593 (8th Cir. 1993) (citing Draper v. United States, 358 U.S. 307, 313 (1959)). We have held that probable cause is not defeated by a failure to inform the magistrate judge of an informant's criminal history if the informant's information is at least partly corroborated, see, e.g., Wold, 979 F.2d at 635; United -8- States v. Flagg, 919 F.2d 499, 501 (8th Cir. 1990) (per curiam); United States v. Parker, 836 F.2d 1080, 1083 (8th Cir. 1987); United States v. Dennis, 625 F.2d 782, 791-92 (8th Cir. 1980). Probable cause is likewise not found wanting where the affiant establishes the information’s reliability through some other means. Williams, 10 F.3d at 593 (“Information may be sufficiently reliable to support a probable cause finding if the person providing the information has a track record of supplying reliable information, or if it is corroborated by independent evidence.”); see also United States v. Wright, 145 F.3d 972, 974-75 (8th Cir. 1998) (“The reliability of a confidential informant can be established if the person has a history of providing law enforcement officials with truthful information ”); United States v. Goodson, 165 F.3d 610, 614 (8th Cir. 1999); United States v. Lucca, 377 F.3d 927, 933 (8th Cir. 2004). Despite the lack of independent corroboration, the judicial officer issuing the warrant knew that Conway had provided truthful and useful information and had made controlled drug purchases for the police department on five previous occasions.5 See, e.g., United States v. Gabrio, 295 F.3d 880, 883 (8th Cir. 2002) (finding that the informant’s provision of reliable information on at least two occasions, coupled with his return of stolen property, established his reliability). This represents an extensive history of reliable assistance that postdated Conway’s dishonesty-related conviction. Furthermore, although Conway initially related the events by phone, Officer Wells met with Conway soon after the incident and had ample opportunity to directly assess Conway’s credibility by observing his demeanor as he recounted the events that had occurred and as he identified Williams as the man involved when presented with Williams’s mug shot. See id. at 883 (citing the affiant officer’s direct observations of the informant subsequent to a criminal incident as pertinent to a credibility determination). Taken as a whole, and balanced against Conway’s criminal history, these considerations more than suffice to validate Conway’s status as a sufficiently 5 In fact, every single time Conway served as a confidential informant, the police considered his contributions valuable enough to reward him for his efforts. -9- reliable informant to justify a finding of probable cause based upon the information he provided. Williams suggests that Conway’s track record as a reliable informant should be disregarded because Conway’s prior assistance involved drug crimes, not gun crimes. We assume from this that Williams believes Conway’s lack of expertise with guns renders suspect his information pertaining to a gun crime. It does not; one needs no special expertise in gun crimes to be aware that a gun is pointed at one’s face. In this case, were we to consider Conway’s reliability as a historically trustworthy informant diminished by his lack of experience with guns, we would be exercising “excessively technical dissection of [the] informant’s tips, with undue attention being focused on isolated issues that cannot sensibly be divorced from the other facts presented to the magistrate.” Gates, 462 U.S. at 234-35. This we will not do. IV We conclude that Williams failed to make a substantial preliminary showing sufficient to justify a Franks hearing. Every fact allegedly omitted was either not misleading because it could have been assumed by the warrant-issuing judicial officer or otherwise would not have altered the probable cause determination. Accordingly, any errors that may have occurred during the Franks hearing were necessarily harmless, given that the hearing ultimately resulted in the denial of Williams’s suppression motion. The judgment is affirmed. ______________________________ -10-

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30 Kan. App.2d 889 (2002) 53 P.3d 1232 STATE OF KANSAS, Appellee, v. DANIEL W. ALVIS, Appellant. No. 86,471[1] Court of Appeals of Kansas. Opinion filed April 26, 2002. Randall L. Hodgkinson, assistant appellate defender, and Jessica R. Kunen, chief appellate defender, for the appellant. Richard A. Olmstead, assistant district attorney, Nola Foulston, district attorney, and Carla J. Stovall, attorney general, for the appellee. Before, PIERRON, P.J., JOHNSON, J., and BUCHELE, S.J. BUCHELE, J.: Daniel Alvis appeals his sentence. He claims the trial court improperly classified two prior convictions as person felonies for the purpose of determining his criminal history score. We affirm in part and reverse in part. Alvis pled guilty to four counts of aggravated indecent liberties, all contrary to K.S.A. 21-3503(a)(3)(A). Before sentencing, Alvis objected to his criminal history as set forth in his presentence investigation report. Specifically, Alvis argued that two convictions of burglary and one conviction of attempted burglary were improperly classified as person felonies. The trial court heard evidence at the sentencing hearing about the prior convictions at issue. The State conceded that one burglary conviction should have been counted as a nonperson felony. The other two convictions involved houses that were not yet occupied, as they were still under construction. The court found that the houses were "substantially completed" and the State had proved by a preponderance of the evidence that the houses were dwellings. *890 Accordingly, the court found the prior convictions had been properly classified as person felonies. On December 8, 2000, the trial court, using a criminal history score of B, imposed a prison sentence of 216 months for Count I, and concurrent prison sentences of 59 months for each of counts II-IV. On appeal, Alvis argues the two convictions at issue should have been classified as nonperson felonies because the houses involved were still under construction and "not yet suitable for human habitation." The State counters that the houses, while not yet occupied, were clearly intended for human habitation; therefore, the convictions were properly classified as person felonies. This issue involves the interpretation of statutes, thus providing this court with unlimited review. See Herrick v. State, 25 Kan. App.2d 472, 474-75, 965 P.2d 844, rev. denied 266 Kan. 1108 (1998). For the purpose of determining criminal history, a prior burglary is scored as a person felony if the prior conviction was classified as a burglary as described in K.S.A. 21-3715(a). K.S.A. 2001 Supp. 21-4711(d)(1). K.S.A. 21-3715(a) defines burglary as "knowingly and without authority entering into or remaining within any: Building, manufactured home, mobile home, tent or other structure which is a dwelling, with intent to commit a felony, theft or sexual battery therein." A dwelling is "a building or portion thereof, a tent, a vehicle or other enclosed space which is used or intended for use as a human habitation, home or residence." K.S.A. 21-3110(7). Both parties look to Herrick to support their respective arguments. Herrick filed a motion to correct an illegal sentence, arguing his prior attempted burglary conviction was improperly classified as a person felony for the purpose of calculating his criminal history score. The attempted burglary was of a house in the same residential area in which Herrick lived. Importantly, Herrick knew it was a house and that no one lived there. When he broke in, there were doors, windows, and pieces of wood lying all over the house. The police report indicated that the house was being used for storage. The district court granted Herrick's motion and ruled the conviction should have been classified as a nonperson felony. The State *891 appealed, raising the question of whether an unoccupied house that was being used for storage at the time of a burglary constituted a dwelling under K.S.A. 21-3110(7). This court reversed the district court and held that the house was, indeed, a dwelling: "The definition of dwelling used in the Kansas burglary statute is particularly broad. A dwelling is not only a building which is used as a human habitation, home, or residence, but one that is intended for use as one. This would seem to indicate that the building does not have to be presently used as human habitation, home, or residence for it to be considered a dwelling." 25 Kan. App.2d at 478. In the present case, both structures at issue were unoccupied houses. The record reveals scant information regarding the condition of the houses. Though still under construction, each house had doors, windows, and locks. The owner of the first house testified that he had planned to move into the house 5 days after the attempted burglary had occurred. The evidence also showed there was some drywall up in the second house at the time of the burglary. Alvis maintains that the evidence failed to show the houses were habitable at the time of the offenses and, therefore, it cannot be said they were dwellings as defined in K.S.A. 21-3110(7). For support, Alvis notes the lack of evidence showing that either of the houses had such things as electricity, running water, and toilets. Alvis' arguments appear to be derived from the following language used by the Herrick court: "There seems to be no serious argument denying that the building in question was intended for use as a home, although it was not being used that way at the time of the burglary. Neither does it appear that it was so dilapidated as to raise the issue of whether it could be used as a human habitation." 25 Kan. App.2d at 478-49. As previously mentioned, the definition of dwelling is quite broad. Herrick, 25 Kan. App.2d at 478; see State v. Kirkland, 23 Kan. App.2d 530, 530-31, 933 P.2d 160, rev. denied 262 Kan. 966 (1997)(held prior juvenile adjudication for burglary of funeral home was properly scored as person felony where first floor was used for business and second floor was used as residence; although room burglarized was a self-contained storage room, there remained *892 a possibility of contact with people because part of building was used as a residence "regardless of whether the burglar had direct access to that part of the building"). Regarding Alvis' conviction for attempted burglary, we are convinced there was sufficient evidence presented that the subject house was a dwelling. See K.S.A. 21-3110(7). The evidence that the owner was to move in 5 days later compels such a finding. Accordingly, the trial court did not err in classifying the attempted burglary as a person felony. See K.S.A. 21-3715(a); K.S.A. 2001 Supp. 21-4711(d)(1). However, the same cannot be said for the burglary conviction. We know the house was under construction and had not yet been lived in. Whether the house was capable of human habitation is unknown. The record is so lacking in information regarding the house's condition that we cannot conclude the house qualified as a dwelling under K.S.A. 21-3110(7). The State simply failed to carry its burden in this regard. Therefore, we hold that the trial court erred in classifying Alvis' burglary conviction as a person felony. On remand, the trial court must classify the burglary conviction as a nonperson felony for the purpose of redetermining Alvis' criminal history score. See K.S.A. 21-3715(b); K.S.A. 2001 Supp. 21-4711(d)(2). We note that the purpose for making a burglary involving a dwelling a person felony is to prevent contact with people. Herrick, 25 Kan. App.2d at 477. We believe our holding in this case comports with this objective and the reasoning set forth in Herrick. Affirmed in part, reversed in part, and remanded with directions. NOTES [1] REPORTER'S NOTE: Previously filed as an unpublished opinion, the Supreme Court granted a motion to publish by an order dated July 11, 2002, pursuant to Rule 7.04 (2001 Kan. Ct. R. Annot. 46).

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91 F.3d 132 1996-2 Trade Cases P 71,469 NOTICE: Fourth Circuit Local Rule 36(c) states that citation of unpublished dispositions is disfavored except for establishing res judicata, estoppel, or the law of the case and requires service of copies of cited unpublished dispositions of the Fourth Circuit.Urvashi B. PATEL, an Individual, Plaintiff-Appellant,v.SCOTLAND MEMORIAL HOSPITAL, A North Carolina Corporation;W. Harley Davidson; Gregory C. Wood, Defendants-Appellees. No. 95-2704. United States Court of Appeals, Fourth Circuit. Argued April 3, 1996.Decided July 10, 1996. Appeal from the United States District Court for the Middle District of North Carolina, at Rockingham. William L. Osteen, Sr., District Judge. (CA-94-284-3). ARGUED: Clifford Neil Ribner, Tulsa, Oklahoma, for Appellant. Peter J. Covington, SMITH, HELMS, MULLISS & MOORE, L.L.P., for Appellees. ON BRIEF: Denise S. Cline, MOORE & VAN ALLEN, Raleigh, North Carolina, for Appellant. James H. Guterman, Maurice O. Green, SMITH, HELMS, MULLISS & MOORE, L.L.P.; George C. Covington, KENNEDY, COVINGTON, LOBDELL & HICKMAN, L.L.P., Charlotte, North Carolina, for Appellees. Before WIDENER, MURNAGHAN, and WILLIAMS, Circuit Judges. OPINION PER CURIAM: 1 Urvashi B. Patel, plaintiff-appellant, filed a lawsuit against Scotland Memorial Hospital ("SMH"), Harley Davidson, SMH's Chief of Staff during most of the time the events at issue occurred, and Gregory Wood, who was promoted to be SMH's Chief Administrator during the relevant time period, (collectively "the defendants"), alleging a violation of the Sherman Antitrust Act § 1, 15 U.S.C. § 1 (1988). Additionally, she raised numerous state law claims--namely, a violation of North Carolina's antitrust laws, tortious interference with contractual relations, intentional infliction of severe emotional distress, and breach of contract. The district court dismissed four of the five claims for failure to state a claim upon which relief could be granted and subsequently dismissed the remaining claim for lack of subject matter jurisdiction. Patel appeals the district court's dismissal of her claims as well as its refusal to allow her to amend her complaint a second time. Federal jurisdiction is based both on federal question jurisdiction, 28 U.S.C. § 1331 (1988), and diversity-of-citizenship jurisdiction, 28 U.S.C. § 1332 (1988). For the following reasons, we affirm. I. 2 In 1988, Patel entered into the first of a series of contracts with SMH. Under her contract, she agreed to serve as the Medical Director of the Department of Anesthesiology at SMH, to provide 24-hour anesthesiology services to SMH, and to direct SMH's certified registered nurse anesthetists ("CRNAs"). In return, SMH agreed not to enter into any other similar contracts.1 With the help of CRNAs, Patel was able to supervise anesthesiology services in multiple operations simultaneously and to build a lucrative practice, earning as much as $750,000 per year. 3 As a condition of her contract, Patel agreed to pass her medical boards in anesthesiology within two years. Patel, however, failed to pass her boards within two years. Consequently, SMH notified her in October 1990 of its intent to terminate her contract, but allowed her temporarily to maintain her privileges under the contract. Subsequently, on March 27, 1991, SMH terminated the contract and withdrew Patel's contract privileges. While SMH allowed Patel to maintain staff privileges and to practice anesthesiology at the hospital, it forbade all CRNAs from working with her. CRNAs were allowed, however, to work with all other doctors with staff privileges. 4 The loss of the use of CRNAs meant that Patel could not maintain the practice she had built by superving the anesthesiology in numerous operations simultaneously. She was forced to cancel contracts she had with other physicians to provide anesthesiology services and she experienced a dramatic loss of income in her practice. 5 Patel filed a lawsuit against SMH, Davidson, and Wood alleging: (1) a Sherman Antitrust Act § 1 violation, 15 U.S.C. § 1; (2) a violation of North Carolina's antitrust laws; (3) tortious interference with contractual relations; (4) intentional infliction of severe emotional distress; and (5) breach of contract. Patel asked for and was granted permission to amend her complaint once. 6 The district court dismissed all claims against the defendants under Federal Rule of Civil Procedure 12(b)(6) for failure to state a claim upon which relief could be granted, with the exception of the breach of contract claim against SMH. Patel subsequently requested permission to amend her complaint a second time. The district court denied her motion to file a second amended complaint on the grounds that the amendment would be futile. The district court also dismissed the remaining contract claim for lack of subject matter jurisdiction, and dismissed the lawsuit. Patel appealed. II. 7 Patel argues that the district court erred by: (1) dismissing her Sherman Antitrust Act, state antitrust, tortious interference with contract, and intentional infliction of emotional distress claims for failure to state a claim upon which relief could be granted; (2) refusing to allow her to amend further her complaint; and (3) refusing to exercise its supplemental jurisdiction over her breach of contract claim against SMH. We address each argument in turn. A. Rule 12(b)(6) Dismissals 8 We review dismissals pursuant to Rule 12(b)(6) of the Federal Rules of Civil Procedure de novo. Estate Constr. Co. v. Miller & Smith Holding Co., 14 F.3d 213, 217 (4th Cir.1994). In conducting our review of a Rule 12(b)(6) dismissal, we construe the factual allegations in the nonmoving party's complaint as true. We will affirm "only if it appears that the plaintiff[ ] would not be entitled to relief under any facts which could be proved in support of[her] claim." Id. at 218 (citation omitted). Thus, we do not evaluate whether Patel has established any facts in comparison to those alleged by the defendants, but rather examine whether, if all the facts she alleged were true, she could make out her claims. 1. Sherman Act § 1 Claim 9 Patel argues that Davidson, Wood, and SMH conspired in violation of the Sherman Antitrust Act § 1, 15 U.S.C. § 1, to prevent her from using CRNAs, which were essential to her practice. She concedes that SMH, Davidson, and Wood had a right to terminate her contract based on her failure to pass the Boards. Her claim is based, thus, only on the defendants' decision to disallow CRNAs from working with her, which she contends was motivated by a malicious intent to destroy her practice. 10 Section one of the Sherman Antitrust Act prohibits combinations or contracts in restraint of trade.2 In order to survive the defendants' Rule 12(b)(6) motion on a § 1 claim, Patel must allege facts which, if proven true, would establish the necessary elements of a Sherman Act § 1 violation: (1) an agreement between at least two legally distinct persons or entities; and (2) that the agreement imposed an unreasonable restraint on trade. Estate Constr., 14 F.3d at 220-21. Patel's amended complaint fails to allege adequately those two elements. 11 a. Agreement to Conspire 12 Unilateral action is not considered actionable under § 1 of the Sherman Act. Thus § 1 applies only to concerted action. Monsanto Co. v. Spray-Rite Serv. Corp., 465 U.S. 752, 761 (1984). "Proof of concerted action requires evidence of a relationship between at least two legally distinct persons or entities." Oksanen v. Page Memorial Hosp., 945 F.2d 696, 702 (4th Cir.1991) (en banc), cert. denied, 502 U.S. 1074 (1992). Under the doctrine of intraenterprise immunity, courts generally find that a company cannot conspire with its officers or employees because of the unity of economic interest between the company and its employees. Copperweld Corp. v. Independence Tube Corp., 467 U.S. 752, 769-71 (1984). 13 We have previously found that where the hospital staff acts as an agent of the hospital, the Board of Trustees of a hospital and the medical staff comprise a single entity and, therefore, are immune from Sherman Act § 1 lawsuits. Oksanen, 945 F.2d at 699, 703. Contra Bolt v. Halifax Hosp. Medical Ctr., 891 F.2d 810, 818-19 (11th Cir.), cert. denied, 495 U.S. 924 (1990) (rejecting the rule that a hospital cannot conspire with its medical staff for purposes of § 1 liability).3 We reasoned that a hospital and its staff have a unity of interest in seeking to provide and upgrade the quality of patient care. Oksanen, 945 F.2d at 703. "Far from being a competitor with the hospital, the medical staff [i]s in fact a natural component of the hospital's management." Id. Similarly, here, we conclude that SMH and its medical staff could not conspire with one another in violation of Sherman Act § 1 where the staff acted as the hospital's agent. 14 Patel seeks to distinguish Oksanen by arguing that Davidson and Wood did not act as agents of the hospital when they conspired to direct SMH's CRNAs not to work with her. We are not convinced. Members of the hospital staff, especially those with administrative positions, such as Chief Administrator, clearly have responsibilities to ensure adequate and quality care by the staff at the hospital, protect against malpractice, ensure efficient operation, cut costs, and the like. Staffing decisions and directives by the staff, and particularly the Chief of Staff or Chief Administrator, to that end are made as agents of the hospital. Patel had failed to meet the conditions of her contract. Thus, SMH and its agents had reasons to terminate her contract and to restrict her access to hospital resources. 15 Patel also argues that an exception to the intraenterprise immunity doctrine applies. Where the individuals on the medical staff have an independent personal stake in obtaining the objectives of the alleged conspiracy, intraenterprise immunity does not apply. Id. at 705. In Oksanen we explicitly limited the personal stake exception, however, to include only instances where the individual conspiring has a personal financial interest in the conspiracy independent of the principal--here SMH. Id.; see also Siegel Transfer, Inc. v. Carrier Express, Inc., 54 F.3d 1125, 1136-37 (3d Cir.1995) (exception to intraenterprise conspiracy doctrine arises "only where an agent acts to further his own economic interest in a marketplace actor which benefits from the alleged restraint and causes his principal to take the anticompetitive actions"); Pink Supply Corp. v. Hiebert, Inc., 788 F.2d 1313, 1318 (8th Cir.1986) (personal stake exception applies only where agent of employer has "an economic stake in the gain to be realized from the anticompetitive conspiracy"). None of the defendants had a direct economic interest in Patel's status at SMH or competed with her. Thus, the personal stake exception does not apply. 16 Finally, Patel attempts to limit the holding in Oksanen to the peer review process only--the process by which the doctor in Oksanen had been excluded from practicing at a hospital and through which the doctor alleged the hospital and its staff had effected an illegal restraint of trade. We find the peer review distinction unhelpful. Where hospital staff acts as an agency of the hospital--whether it is through peer review or mere staffing decisions regarding efficiency, safety, quality, or similar issues--there is a unity of interests. That unity is only destroyed where the staff acts for a personal economic motive outside of its agency. 17 b. Antitrust Injury 18 Patel has also failed to allege adequately facts necessary to demonstrate an antitrust injury. Mere economic injury to Patel alone is insufficient. Instead, Patel must demonstrate an impact on the competition as a whole within the relevant market. Oksanen, 945 F.2d at 708.4 There are two methods of demonstrating economic injury. The first is to demonstrate per se illegal agreements whose effects are so plainly anticompetitive that no elaborate study of the industry is needed. National Soc'y of Professional Eng'rs v. United States, 435 U.S. 679, 692 (1978). Patel concedes in her brief that she does not allege a per se Sherman Act violation. 19 The second approach is termed "the rule of reason." Id. at 692-93. Under a rule of reason analysis, the plaintiff must demonstrate an unreasonable restraint of trade. That requires Patel to allege in her complaint a relevant market, facts demonstrating that trade was restrained in that market, and that the defendants played a significant role in restraining trade. Oksanen, 945 F.2d at 708-09. 20 Patel alleges that the defendants' actions, which prohibited her from using CRNAs, destroyed her medical practice. The district court found, however, that her complaint was completely void of any allegations as to the effect of the defendants' actions on competition in the market for anesthesiology services, effect on the price of anesthesiology services, or effect on the availability of anesthesiology services to the public. Rather, it found her complaint focused on the injuries she incurred, not those the competitive market incurred. We agree. 21 All Patel has alleged is a staffing decision, allegedly based on malice, which the court is not in a position to second guess. Only where the anticompetitive effects were obvious could Patel rely on her meager pleadings. Oksanen, 945 F.2d at 79. Furthermore, there were legitimate grounds for the staffing decision--Patel failed to pass her Boards as required by her contract. Thus, the defendants had reason to limit Patel's access to the hospital's resources. Repeatedly, courts have found that a staffing decision by a single hospital as to a single practitioner, in the absence of harm to the relevant market, does not constitute an antitrust injury. Oksanen, 945 F.2d at 708-10; BCB Anesthesia Care, Ltd. v. Passavant Memorial Area Hosp. Ass'n, 36 F.3d 664, 667-69 (7th Cir.1994) (listing numerous cases). Personal economic injury alone, e.g., loss of income, is simply not enough to support a claim under § 1 of the Sherman Act. There must be some cognizable effect on the competitive market. Thus, we affirm the district court's dismissal of Patel's Sherman Antitrust Act § 1 claim. 2. Remaining State Claims 22 The district court also dismissed Patel's state antitrust claim, her tortious interference with contractual relations, and her intentional infliction of emotional distress claims for failure to state a claim upon which relief could be granted. We have reviewed those claims and the record and adopt the reasoning of the district court as to those claims. B. Rule 12(b)(1) Dismissal 23 The district court dismissed Patel's one remaining claim against SMH for lack of subject matter jurisdiction. Patel alleged breach of contract against the defendants for failure to reimburse her for expenditures she incurred on their behalf. Patel conceded that the claim applied only to SMH. After the dismissal of Patel's Sherman Act claim, no federal question jurisdiction remained. After the dismissal of three of the four remaining state claims, diversity jurisdiction no longer applied because the sole remaining claim was for $45,000--an amount insufficient to meet the jurisdictional requirements of diversity jurisdiction. 28 U.S.C. § 1332(a). SMH therefore moved to dismiss the breach of contract claim under Rule 12(b)(1) of the Rules of Federal Civil Procedure for lack of subject matter jurisdiction. 24 The district court refused to exercise its supplemental jurisdiction over the breach of contract claim and dismissed it without prejudice. Where the district court has dismissed all claims that conferred federal jurisdiction, it may decline to exercise its supplemental jurisdiction. 28 U.S.C. § 1367(c)(3). Patel contends on appeal, however, that the district court should have exercised its supplemental jurisdiction over the breach of contract claim. 25 We review a refusal to exercise supplemental jurisdiction for abuse of discretion. Shanaghan v. Cahill, 58 F.3d 106, 112-13 (4th Cir.1995). Courts generally refuse to exercise supplemental jurisdiction where the claims conferring jurisdiction were dismissed at a very early stage and there is no overriding interest in economy or convenience dictating that the federal court retain jurisdiction. Carnegie-Mellon Univ. v. Cohill, 484 U.S. 343, 350 n. 7 (1988); Stetka v. Hunt Real Estate Corp., 859 F.Supp. 661, 668-69 (W.D.N.Y.1994). Indeed, dismissal in such a case is the preferred course of action unless there are overriding factors in favor of retaining federal jurisdiction. Here, no factors dictated that the court retain its jurisdiction. Therefore, we conclude that the district court did not abuse its discretion. 26 C. Refusal to Allow Further Amendments to Complaint 27 The district court allowed Patel to amend her complaint once. It, however, refused to allow Patel to amend her complaint a second time. We review the district court's denial of Patel's second motion to amend her complaint for abuse of discretion. New Beckley Mining Corp. v. International Union, United Mine Workers of America, 18 F.3d 1161, 1164 (4th Cir.1994). 28 Rule 15(a) of the Federal Rules of Civil Procedure provides that "a party may amend the party's pleading only by leave of the court or by written consent of the adverse party" after a responsive pleading had been served. "[L]eave shall be freely given when justice so requires." Fed.R.Civ.P. 15(a). Leave, however, need not be granted where the proposed amendment would be futile. New Beckley Mining, 18 F.3d at 1164. We have reviewed Patel's proposed second amended complaint and conclude that the district court's finding that the amendment would be futile and resulting refusal to allow the amendment were not an abuse of discretion. For the foregoing reasons, we 29 AFFIRM. 1 As alleged in her complaint, Patel's contract provided that she was "to serve as the Medical Director of the Department of Anesthesiology at SMH, supervise its certified registered nurse anesthetists ("CRNAs") and provide twenty-four hour per day three-hundred-sixty-five days-per-year coverage of anesthesiology services for SMH, in exchange for which SMH agreed not to make any similar contractual agreement to any other anesthesiologist 'for the medical direction of CRNAs.' " Complaint p 7, amended complaint p 7, and proposed second amended complaint, p 7 2 Section 1 provides, in pertinent part: Every contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce among the several States, or with foreign nations, is declared to be illegal. 3 The Eleventh Circuit has rejected expressly our holding in Oksanen, reasoning that the agency relations in the corporate context are different from those in a hospital where it finds that staff members are distinct and independent from the hospital. See also Oltz v. St. Peter's Community Hosp., 861 F.2d 1440, 1450 (9th Cir.1988) (rejecting application of intraenterprise immunity doctrine to the hospital context) 4 Patel argues that the exclusion of a single doctor from the market is sufficient to allege an antitrust injury. We first note that Patel has not necessarily even been excluded from the relevant market. She has only been denied the use of CRNAs at SMH. She may still practice anesthesiology at SMH by herself (although her ability to compete is somewhat hampered because of her inability to use CRNAs). There are no allegations that she has been unable to practice elsewhere because of SMH's actions. Furthermore, the case law she relies on, Summit Health, Ltd. v. Pinhas, 500 U.S. 322 (1991), addresses the jurisdictional prerequisite for filing an antitrust lawsuit. Oksanen, 945 F.2d at 702 n. 1. In Oksanen, a summary judgment ruling, we found that while the jurisdictional prerequisite had been met, the plaintiff still failed to demonstrate an antitrust injury for purposes of surviving a motion for summary judgment. 945 F.2d at 702 n. 1, 709. Patel's reliance on Pinhas asks the court, in essence, to adopt a more lenient standard on a motion to dismiss than is required on a motion for summary judgment. See Bracken v. Allegheny General Hosp., 64 F.3d 869, 875-78 (3d Cir.1995). In effect, she requests that the court adopt a standard for alleging an antitrust injury that is similar, if not identical, to the jurisdictional requirement. The question of federal jurisdiction, however, is distinct from that of whether the underlying claim which supports jurisdiction fails to state a claim upon which relief can be granted. Re/Max Internat'l v. Realty One, Inc., 900 F.Supp. 132, 150 n. 10 & 150 (N.D.Ohio 1995). Thus, we have held that when confronted with a Rule 12(b)(6) motion to dismiss a Sherman Antitrust Act § 1 claim, "we must determine whether allegations covering all the elements that comprise the theory for relief have been stated as required." Estate Constr., 14 F.3d at 220 (citation omitted). In an antitrust lawsuit, we require that the plaintiff plead facts in terms that are neither vague nor conclusory. Id. at 220-21. We, therefore, conclude that to survive a 12(b)(6) motion the plaintiff must allege sufficiently a cognizable antitrust injury, which includes allegations of negative impact on the relevant market

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76 F.3d 377 NOTICE: Fourth Circuit Local Rule 36(c) states that citation of unpublished dispositions is disfavored except for establishing res judicata, estoppel, or the law of the case and requires service of copies of cited unpublished dispositions of the Fourth Circuit.Danny Lamont YARBOROUGH, Plaintiff--Appellant,v.J.E. SETZER, Jr., Judge, Defendant--Appellee. No. 95-7681. United States Court of Appeals, Fourth Circuit. Submitted Jan. 11, 1996Decided Jan. 25, 1996 Appeal from the United States District Court for the Eastern District of North Carolina, at Raleigh. Terrence W. Boyle, District Judge. (CA-95-851-5-CT-BO) Danny Lamont Yarborough, Appellant Pro Se. E.D.N.C. AFFIRMED. Before RUSSELL, HALL and WILKINSON, Circuit Judges. PER CURIAM: 1 Appellant appeals from the district court's order denying relief on his 42 U.S.C. § 1983 (1988) complaint. We have reviewed the record and the district court's opinion and find no reversible error. Accordingly, we affirm on the reasoning of the district court. Yarborough v. Setzer, No. CA-95-851-5-CT-BO (E.D.N.C. Oct. 11, 1995). We dispense with oral argument because the facts and legal contentions are adequately presented in the materials before the court and argument would not aid the decisional process. AFFIRMED

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NOT FINAL UNTIL TIME EXPIRES TO FILE REHEARING MOTION AND, IF FILED, DETERMINED IN THE DISTRICT COURT OF APPEAL OF FLORIDA SECOND DISTRICT DANIEL WESNER, d/b/a FISH TALES, ) ) Appellant, ) ) v. ) Case No. 2D16-4646 ) JMS MARINAS, LLC, d/b/a MAXIMO ) HARBORAGE MARINA, a Delaware ) limited liability company, ) ) Appellee. ) ___________________________________ ) Opinion filed August 25, 2017. Appeal pursuant to Fla. R. App. P. 9.130 from the Circuit Court for Pinellas County; Thomas H. Minkoff, Judge. Kathleen Sweeney Ford, of Ford & Ford, P.A., St. Petersburg, for Appellant. Samuel J. Heller, of Heller Goldberg, P.A., St. Petersburg, for Appellee. SILBERMAN, Judge. Daniel Wesner, d/b/a Fish Tales ("Wesner"), seeks review of the partial summary judgment awarding JMS Marinas, LLC, d/b/a Maximo Harborage Marina ("JMS"), possession of the leased premises that are the subject of this action for eviction and related damages. We conclude that the trial court erred in granting summary judgment because there is a genuine issue of material fact regarding JMS's standing to seek possession of the leased premises. We therefore reverse and remand for further proceedings. The underlying action arose from a dispute over the payment of percentage rents under a commercial lease agreement. The lease was executed by Wesner as tenant and Maximo Harborage Marina, LLC ("Maximo Harborage"), as landlord. The lease requires the tenant to pay the landlord a base rent or percentage of its gross annual revenues, whichever is greater. Wesner was current on the base rents, but Maximo Harborage asserted that since January 2008, Wesner failed to provide financial information necessary to calculate percentage rents. Maximo Harborage filed its complaint and a motion to determine rents in July 2014. At that time, however, Maximo Harborage was not entitled to "maintain any action, suit, or proceeding in any court" in Florida because it had not complied with Florida's registration requirements. See § 865.09(9)(a), Fla. Stat. (2014). Maximo Harborage eventually acknowledged this deficiency and was granted leave to file an amended complaint substituting JMS as the plaintiff. The lease defines the landlord as "the current owner or owners of the fee title to the Demised Premises or the leasehold estate under a ground lease of the Demised Premises at the time in question." It also provides that in the event the landlord transfers its title or interest in the property to a third party, the third party will be recognized as the landlord. Both the original and amended complaint contain allegations that the plaintiff is the landlord and owner of the real property that is the subject of the eviction action. -2- Since the inception of the action, Wesner has been asserting that he is unsure of the identity of the proper plaintiff. In his answer to the amended complaint, Wesner denied the material allegations. Wesner also challenged JMS's claim that it was the owner of the demised premises and raised the issue of the identity of the landlord or its agent. Additionally, Wesner challenged JMS's assertions that it had entered into a lease with Wesner and was entitled to maintain any action against Wesner. Wesner tried to assert that JMS was not his landlord at a March 25, 2015, pretrial hearing, but the court refused to allow the argument because it was not properly noticed. And Wesner again questioned JMS's standing to sue in opposing JMS's motion for partial summary judgment of possession. Wesner also filed a supplemental response to JMS's motion to determine rents in which he asserted, among other things, that JMS was not the owner of the property in question. Wesner asserted that original landlord Maximo Harborage changed its name to Harborage Marina, LLC ("Harborage Marina"), and that Wesner paid rent to Harborage Marina from January 2008 to June 2009. In June 2009, Harborage Marina conveyed the real property including the demised premises to Harborage Land, LLC ("Harborage Land"). Since that time, Wesner has been paying rent to nonparty Harborage Land. Wesner also filed a certified copy of the warranty deed in the record. At the June 16, 2015, hearing on JMS's motion to determine rents, Wesner asserted, "I was hoping that the plaintiffs would clarify who exactly was suing." The court responded, "That sounds to me like you're leading up to ground[s] we've -3- hashed over at previous hearings, [counsel]. I think it's pretty clear who's suing your client." The court prohibited Wesner from making any further standing arguments. In an apparent response to Wesner's assertions, JMS elicited testimony from John Stanford Johnson, one of its owners, that JMS is the "successor landlord to the entity that originally signed the lease." During cross-examination, Wesner inquired into the basis for this assertion. Defense counsel showed Johnson a copy of the June 2009 warranty deed in which Harborage Marina (f/k/a Maximo Harborage) conveyed the real property to Harborage Land. Johnson testified that the warranty deed was executed when "we split the marina from the wet portion to—and the dry portion into two portions that are in turn held by Harborage Marina, LLC. So you've got Harborage Land, LLC. It split that off into a separate LLC." Counsel asked Johnson whether the warranty deed conveyed all the land owned by Harborage Marina, but the court interrupted and told counsel to focus on the amount of rents due.1 Wesner placed the standing issue squarely before the court by filing three affidavits challenging JMS's standing in response to the motion for partial summary judgment of possession. In the first affidavit, Wesner himself asserted that JMS is not and has never been his landlord. Wesner said that several years after he signed the lease, the marina managers told him that Maximo Harborage changed its name to Harborage Marina and directed him to pay the rent to Harborage Marina. Some years later, the managers told him that the property had been transferred to Harborage Land and directed him to pay the rent to Harborage Land. Wesner asserted that Harborage 1 The trial court seemed to believe that the standing issue had been previously resolved, but it is evident from the record that the issue had not been fully addressed in earlier proceedings. -4- Land was his current landlord. Wesner also claimed that Harborage Land had contacted him to discuss his use of the property while the eviction proceedings were pending. In the second affidavit, attorney Kathleen Ford confirmed Wesner's recent contact with Harborage Land. In the third affidavit, attorney Martin Awerbach asserted that he had conducted a title search which confirmed that Harborage Land was the current record title holder of the property and that JMS had no interest in the property. He also asserted that the Pinellas County Official Records and Sunbiz.org revealed that JMS's only connection with the property is that it executed the 2009 deed as manager for Harborage Marina, the grantor. These sources do not identify JMS as the manager of grantee Harborage Land or as having authorization to act on its behalf. JMS filed a motion to strike Awerbach's affidavit as improper opinion testimony and inadmissible hearsay. The court granted JMS's motion to strike Awerbach's affidavit as inadmissible hearsay and entered an order granting JMS partial summary judgment for possession. The court determined that Johnson's testimony at the previous hearing on the motion to determine rents established that JMS "is the 'successor' to the record owner of the leased premises."2 Thus, the court concluded that any facts suggesting that JMS was not the record owner were not material to the issue of JMS's entitlement to a judgment for possession. 2 The court also found that Johnson's testimony was unsuccessfully challenged on appeal of the order granting JMS's motion to determine rents. However, as we stated previously, the issue of JMS's standing to sue was not fully argued or ruled upon until it was raised in opposition to JMS's motion for partial summary judgment of possession. -5- On appeal, Wesner first argues that the trial court erred in striking the Awerbach affidavit. We conclude that the court properly struck the Awerbach affidavit as hearsay based on the failure to attach certified copies of the public records on which he relied. See Fla. R. Civ. P. 1.510(e) ("Sworn or certified copies of all documents or parts thereof referred to in an affidavit must be attached thereto or served therewith."); see also Zoda v. Hedden, 596 So. 2d 1225, 1226 (Fla. 2d DCA 1992); Coleman v. Grandma's Place, Inc., 63 So. 3d 929, 933 (Fla. 4th DCA 2011). Wesner's second argument is that the trial court erred in determining there was no genuine issue of material fact regarding JMS's entitlement to a judgment for possession. This court conducts a de novo review of a summary judgment. Buck-Leiter Palm Ave. Dev., LLC v. City of Sarasota, 212 So. 3d 1078, 1081 (Fla. 2d DCA 2017) (citing Volusia County v. Aberdeen at Ormond Beach, L.P., 760 So. 2d 126, 130 (Fla. 2000)). Summary judgment is proper if the moving party establishes entitlement to judgment as a matter of law and there is no genuine issue of material fact. Id. "In reviewing a summary judgment ruling, we must consider the evidence in the light most favorable to the nonmoving party, and if the record raises the slightest doubt that an issue might exist, we must reverse the summary judgment." Id. We conclude that partial summary judgment was improper because, even without the Awerbach affidavit, there is a genuine issue of material fact regarding JMS's standing to seek possession. When the amended complaint was filed, the plaintiff was changed from named landlord Maximo Harborage to JMS. There is nothing in the record establishing the relationship between Maximo Harborage and JMS except Johnson's testimony that JMS is the "successor landlord to" Maximo Harborage. -6- In opposition to JMS's motion for partial summary judgment, Wesner presented evidence that Maximo Harborage changed its name to Harborage Marina after the lease was executed. And Harborage Marina conveyed the real property including the demised premises to Harborage Land in 2009. Under the plain language of the lease, it is arguable that Harborage Land is the current landlord because it owns the fee title to the demised premises. In addition, Wesner presented evidence that Harborage Land had been acting as his landlord since 2009 by sending him rent invoices and accepting his rent payments. Harborage Land also contacted him to discuss his use of the property while the eviction proceedings were pending. We recognize that a landlord or its agent may file a complaint seeking removal of a tenant. See § 83.21, Fla. Stat. (2014). However, JMS did not assert it was acting as the agent of original landlord Maximo Harborage or any subsequent landlord. Instead, it asserted that it owned the property and was the successor landlord. The evidence presented by Wesner thus raises a question of fact regarding whether JMS has standing to seek possession as the landlord. Accordingly, we reverse the partial summary judgment for possession and remand for further proceedings. Reversed and remanded. NORTHCUTT and SLEET, JJ., Concur. -7-

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timeframe for the offenses, the district court impermissibly modified the murder charge, and the judgment of conviction did not contain statutory subsections for the offenses. To the extent that appellant claimed that his sentence should be modified, he failed to demonstrate that the district court relied on mistaken assumptions regarding his criminal record that worked to his extreme detriment. See Edwards v. State, 112 Nev. 704, 708, 918 P.2d 321, 324 (1996). Appellant also failed to demonstrate that his sentence was facially illegal or that the district court lacked jurisdiction. See id. Appellant's claims regarding the validity of his judgment of conviction fell outside the narrow scope of claims permissible in a motion to modify or correct a sentence. See id. We therefore conclude that the district court did not err in denying appellant's motions. Accordingly, we ORDER the judgment of the district court AFFIRMED. 2 / J. H ardesty P C0.4.0$1 Parraguirre 2 We have reviewed all documents that appellant has submitted in proper person to the clerk of this court in this matter, and we conclude that no relief based upon those submissions is warranted. To the extent that appellant has attempted to present claims or facts in those submissions which were not previously presented in the proceedings below, we have declined to consider them in the first instance. SUPREME COURT OF NEVADA 2 (0) 1947A mrf-wir,t 5e,...vA - cc: Hon. Jerome Polaha, District Judge Steven Floyd Voss Attorney General/Carson City Washoe County District Attorney Washoe District Court Clerk SUPREME COURT OF NEVADA 3 (0) 1947A

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FILED United States Court of Appeals UNITED STATES COURT OF APPEALS Tenth Circuit FOR THE TENTH CIRCUIT May 22, 2019 _________________________________ Elisabeth A. Shumaker Clerk of Court WAYNE PENN SCHAFER, Trustee of the Wayne Penn Schafer Separate Property Trust Established October 5, 1982, as Amended and Restated on July 9, 2007, Plaintiff - Appellant, v. No. 18-5054 (D.C. No. 4:17-CV-00365-GKF-FHM) CENTERPOINT ENERGY (N.D. Okla.) OKLAHOMA GAS, d/b/a CenterPoint Energy Resources Corp, Defendant - Appellee. _________________________________ ORDER AND JUDGMENT * _________________________________ Before HOLMES, BACHARACH, and PHILLIPS, Circuit Judges. _________________________________ This appeal stems from a property dispute. The landowner alleges that a pipeline is being operated on his land without an easement, and the * Oral argument would not materially help us to decide this appeal. We have thus decided the appeal based on the briefs and the appendix. See Fed. R. App. P. 34(a)(2); 10th Cir. R. 34.1(G). This order and judgment does not constitute binding precedent except under the doctrines of law of the case, res judicata, and collateral estoppel. But the order and judgment may be cited for its persuasive value if otherwise appropriate. Fed. R. App. P. 32.1(a); 10th Cir. R. 32.1(A). pipeline owner insists that it has an easement. The district court granted summary judgment to both sides on some issues and denied summary judgment on other issues. The landowner was dissatisfied with these rulings and appealed, but we lack appellate jurisdiction. The landowner asserted three claims (unjust enrichment, trespass, and nuisance) against the pipeline owner, seeking damages and a permanent injunction. Both sides moved for partial summary judgment, and the district court granted the pipeline owner’s motion on  the applicability of state law to the part of the trespass claim arising after the pipeline owner had obtained a certificate of competency 1 and  the unavailability of unjust enrichment and punitive damages. The court also granted partial summary judgment to the landowner on multiple affirmative defenses. But the court denied the landowner’s request for a permanent injunction, concluding that the landowner had not shown actual success on the trespass claim. Generally, appellate jurisdiction is confined to a district court’s final decisions. 28 U.S.C. § 1291. But the rulings here did not constitute a final decision because the district court has not yet conducted a trial on  the landowner’s claims for trespass and nuisance and  some of the pipeline owner’s affirmative defenses. 1 The federal government issued the certificate in 1950, removing federal restrictions on alienation of the land. 2 In the absence of a final decision, a party can appeal under 28 U.S.C. § 1292(a)(1) for orders “granting, continuing, modifying, refusing, or dissolving injunctions.” 28 U.S.C. § 1292(a)(1). But even when an injunction is involved, a party cannot appeal the denial of summary judgment based on unresolved factual issues. Switzerland Cheese Ass’n, Inc. v. E. Horne’s Market, Inc., 385 U.S. 23, 25 (1966). 2 This limitation applies here: The district court denied the landowner’s request for a permanent injunction because the landowner had not proven actual success on the merits. And factual issues remain on the defense of a prescriptive easement. We thus conclude that appellate 2 In Tri-State Generation & Transmission Association, Inc. v. Shoshone River Power, Inc., we used broad language when referring to the scope of appellate jurisdiction for denials of injunctive relief: “We agree with the Eleventh Circuit in Cable Holdings of Battlefield, Inc. v. Cooke [citation omitted], that an interlocutory order expressly granting or denying injunctive relief fits squarely within the plain language of section 1292(a)(1).” 874 F.2d 1346, 1351 (10th Cir. 1989). But this broad language “must be interpreted with reference to the circumstances of the particular case and the question under consideration.” Bryan Garner, et al., The Law of Judicial Precedent 80 (2016) (citation omitted). In Tri-State, we didn’t address the applicability of § 1292(a)(1) when the district court denied summary judgment on an injunction claim based on the existence of unresolved factual issues. There the district court had denied a summary- judgment motion for injunctive relief based on interpretation of a contract rather than the presence of a factual issue. Tri-State, 874 F.2d at 1350. 3 jurisdiction cannot be based on § 1292(a)(1). Given the absence of appellate jurisdiction, we dismiss the appeal. Entered for the Court Robert E. Bacharach Circuit Judge 4

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646 S.E.2d 77 (2007) The STATE v. EVANS. No. S07A0033. Supreme Court of Georgia. June 4, 2007. *78 Paul L. Howard Jr., Dist. Atty., Marc A. Mallon, Bettieanne C. Hart, Asst. Dist. Attys.; Thurbert E. Baker, Atty. Gen., Department of Law, Atlanta, for Appellant. Averick Walker, Walker Law Office, Atlanta, for Appellee. HINES, Justice. The State seeks to appeal the trial court's judgment acquitting Jason Evans on charges of malice murder, felony murder, and aggravated assault. Finding that the State cannot appeal such a judgment and that this Court is therefore without jurisdiction to address this matter, we dismiss the appeal. Evans, together with Sovensky Maddox, was indicted for malice murder, felony murder, and two counts of aggravated assault, in connection with the death of LaFayette Smith. Evans moved to sever his trial from that of Maddox, and, before jury selection began, argued in the alternative that the trial court conduct a bench trial for him simultaneously with Maddox's jury trial. The court did so over the State's objection. Following the trial, the court pronounced Evans not guilty on all counts, and entered an appropriate order of acquittal. The State filed a notice of appeal. The circumstances of the appeal require that this Court inquire into its jurisdiction. See Collins v. State, 277 Ga. 586, 591 S.E.2d 820 (2004). "In OCGA § 5-7-1(a), the General Assembly has set forth only a limited right of appeal for the State in criminal cases. [Cits.]" Howard v. Lane, 276 Ga. 688, 581 S.E.2d 1 (2003). If the State attempts an appeal outside the ambit of OCGA § 5-7-1(a), the appellate courts do not have jurisdiction to entertain it. Id. OCGA § 5-7-1(a) does not purport to authorize the State to appeal a judgment of acquittal, nor is a trial court's decision to proceed with a bench trial over the State's objection one of the statutorily-enumerated rulings that the State can appeal.[1] In fact, in Howard, id., the State wished to prevent a bench trial in lieu of a jury trial, and this Court specifically noted that, under OCGA § 5-7-1(a), the State has "no right" to directly appeal the trial court's ruling that a bench trial would occur. Id. at 689, 581 S.E.2d 1. While OCGA § 5-7-1(a) has been amended since this Court's decision in Howard, the General Assembly did not include any provision that would embrace this situation. Nonetheless, the State asserts that the trial court's order is appealable under OCGA § 5-7-1(a)(5), which empowers the State to take an appeal from a judgment "where the court does not have jurisdiction or the order is otherwise void under the Constitution or laws of this state." The State contends that the acquittal is void, likening a bench trial over its objection to a jury trial in which the *79 jurors were not sworn, in which instance, the proceeding is a nullity. See Spencer v. State, 281 Ga. 533, 640 S.E.2d 267 (2007); Slaughter v. State, 100 Ga. 323, 28 S.E. 159 (1897). But, here there is no question of the trial court's oath of office and concomitant authority, only the proper exercise of that authority. In a prior case, this Court has determined that a trial court cannot conduct a criminal bench trial over the State's objection. See Zigan v. State, 281 Ga. 415, 638 S.E.2d 322 (2006). However, that decision does not create a right of appeal for the State; creation of any such right is a function for the General Assembly, not this Court. Nor is it the case that any improper exercise of a trial court's authority renders a judgment void. In the specific situation of an adjudication on the question of guilt in a criminal bench trial when a bench trial is erroneously conducted over the State's objection, the result of such bench trial is an ineffective waiver of the right to a trial by jury, not a void judgment. See Zigan, supra at 416-417, 638 S.E.2d 322. Rather, the judgment following an ineffective waiver may be reviewed on its merits on appeal, if one is available. See, e.g., Balbosa v. State, 275 Ga. 574, 571 S.E.2d 368 (2002). But, the question of whether an appeal is available to the State from the decision of a trial court to proceed with a bench trial over the State's objection has been decided by the General Assembly, and it has decided that the answer is "no." The decision below does not implicate the trial court's subject matter jurisdiction, or its jurisdiction over the person of the defendant. See Collins, supra. The judgment was entered by a court of competent jurisdiction. See State v. Glover, 281 Ga. 633, 641 S.E.2d 543 (2007). It is not void, no appeal was available to the State, and consequently this appeal must be dismissed. Appeal dismissed. All the Justices concur. NOTES [1] OCGA § 5-7-1(a) provides that: (a) An appeal may be taken by and on behalf of the State of Georgia from the superior courts, state courts, City Court of Atlanta, and juvenile courts and such other courts from which a direct appeal is authorized to the Court of Appeals of Georgia and the Supreme Court of Georgia in criminal cases and adjudication of delinquency cases in the following instances: (1) From an order, decision, or judgment setting aside or dismissing any indictment, accusation, or petition alleging that a child has committed a delinquent act or any count thereof; (2) From an order, decision, or judgment arresting judgment of conviction or adjudication of delinquency upon legal grounds; (3) From an order, decision, or judgment sustaining a plea or motion in bar, when the defendant has not been put in jeopardy; (4) From an order, decision, or judgment suppressing or excluding evidence illegally seized or excluding the results of any test for alcohol or drugs in the case of motions made and ruled upon prior to the impaneling of a jury or the defendant being put in jeopardy, whichever occurs first; (5) From an order, decision, or judgment of a court where the court does not have jurisdiction or the order is otherwise void under the Constitution or laws of this state; (6) From an order, decision, or judgment of a superior court transferring a case to the juvenile court pursuant to subparagraph (b)(2)(B) of Code Section 15-11-28; (7) From an order, decision, or judgment of a superior court granting a motion for new trial or an extraordinary motion for new trial; (8) From an order, decision, or judgment denying a motion by the state to recuse or disqualify a judge made and ruled upon prior to the defendant being put in jeopardy; or (9) From an order, decision, or judgment issued pursuant to subsection (c) of Code Section 17-10-6.2.

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642 F.2d 441 Cuppv.Kurtz 79-2761 UNITED STATES COURT OF APPEALS Third Circuit 1/19/81 1 W.D.Pa. AFFIRMED

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777 A.2d 446 (2001) R.M. v. Barbara S. BAXTER, Guardian Ad Litem for T.M., Huntingdon County Children's Services, M.E.M., Mother, N.M.M., Father, John and Jane Doe, Foster Parents. Appeal of Barbara S. Baxter, Guardian Ad Litem for T.M. and Huntingdon County Children's Services. Supreme Court of Pennsylvania. Argued December 4, 2000. Decided August 21, 2001. *447 Barbara S. Baxter, Huntingdon, for guardian ad litem, Peter McManamon, Huntingdon, for Huntingdon County Child Services. Robert Ferguson, Lewistown, for E.M., Elaine J. Novacco, Warriors Mark, for R.M. Before FLAHERTY, C.J., and ZAPPALA, CAPPY, CASTILLE, NIGRO, NEWMAN and SAYLOR, JJ. OPINION ZAPPALA, Justice: We granted allocatur to determine whether 23 Pa.C.S. § 5313 confers standing upon a grandparent to file a complaint for custody and/or visitation of a grandchild after the child has been adjudicated dependent. The trial court held that a grandparent lacks standing under these *448 circumstances and dismissed the complaint. The Superior Court reversed and remanded, holding that the statute confers automatic standing upon a grandparent to seek physical and legal custody of a grandchild. For the reasons that follow, we affirm. T.M. was born on March 9, 1996. The child resided with his biological parents from the date of his birth until June 26, 1996, when he was seriously injured as a result of shaken baby syndrome. While T.M. was hospitalized, Huntingdon County Children's Services (the Agency) obtained an emergency protective order to prevent T.M. from being returned to his parents' home. T.M.'s mother subsequently pled guilty to the offense of endangering the welfare of a child. With the consent of his parents, T.M. was declared to be a dependent child and was placed in the legal custody of the Agency on July 16, 1996. T.M. was subsequently placed with foster parents. The goal in the dependency action is adoption.[1] On September 2, 1997, T.M.'s paternal grandmother, R.M. (Grandmother), filed a Complaint for Custody or Partial Custody and/or Visitation.[2] Therein, she alleged that she has genuine care and concern for her grandson and that it was in his best interests to be in her care and custody. Grandmother asserted that her relationship with T.M. began with the consent of both of his parents and that she has continuously visited him when she was permitted to do so. She further asserted that she deems it necessary to assume responsibility for T.M. due to his mother's criminal conviction for endangering his welfare. T.M.'s guardian ad litem and the Agency (hereinafter Appellants)[3] filed preliminary objections to the complaint. They contended that Grandmother failed to satisfy the standing requirements of Section 5313, which provides as follows § 5313. When grandparents may petition. (a) Partial custody and visitation.If an unmarried child has resided with his grandparents or great-grandparents for a period of 12 months or more and is subsequently removed from the home by his parents, the grandparents or great-grandparents may petition the court for an order granting them reasonable partial custody or visitation rights, or both, to the child. The court shall grant the petition if it finds that visitation rights would be in the best interest of the child and would not interfere with the parent-child relationship. (b) Physical and legal custody.A grandparent has standing to bring a petition for physical and legal custody of a grandchild. If it is in the best interest of the child not to be in the custody of either parent and if it is in the best interest of the child to be in the custody *449 of the grandparent, the court may award physical and legal custody to the grandparent. This subsection applies to a grandparent (1) who has genuine care and concern for the child; (2) whose relationship with the child began with the consent of a parent of the child or pursuant to an order of court; and (3) who for 12 months has assumed the role and responsibilities of the child's parent, providing for the physical, emotional and social needs of the child, or who assumes the responsibility for a child who has been determined to be a dependent child pursuant to 42 Pa.C.S. Ch. 63 (relating to juvenile matters) or who assumes or deems it necessary to assume responsibility for a child who is substantially at risk due to parental abuse, neglect, drug or alcohol abuse or mental illness. The court may issue a temporary order pursuant to this section. 23 Pa.C.S. § 5313 (emphasis added). The trial court sustained Appellants' preliminary objections and dismissed Grandmother's complaint. It held that subsection (a) of Section 5313 did not confer standing because T.M. never resided with Grandmother. It found that Grandmother met the criteria of subsections (b)(1) and (b)(2) because she pled that she had genuine care and concern for the child and that her relationship began with the consent of the child's parents. It held, however, that Grandmother failed to plead the existence of one of the three sets of circumstances conferring standing in subsection (b)(3). Specifically, the court held that T.M. was not "substantially at risk due to parental abuse" because he had already been declared dependent and was outside of the abusive parental home. The Superior Court reversed and remanded. R.M. v. Baxter, 725 A.2d 775 (Pa.Super.1999). It agreed that subsection (a) did not apply and that Grandmother satisfied the requirements of subsections (b)(1) and (b)(2). The court held, however, that the fact that T.M. had been declared dependent did not prevent Grandmother from satisfying the language in subsection (b)(3) regarding T.M. being "substantially at risk due to parental abuse." The court reasoned that otherwise, anytime an agency sought dependent status for a child, a grandparent's ability to seek custody of his grandchild would be negated. The court concluded that such result would be in clear opposition to the mandate of the statute, which unequivocally states that a "grandparent has standing to bring a petition for physical and legal custody of a grandchild." Id. at 779. In ruling on whether preliminary objections should have been granted, an appellate court must determine whether it is clear from doubt from all the facts pleaded that the pleader will be unable to prove facts legally sufficient to establish a right to relief. Pennsylvania AFL-CIO v. Commonwealth of Pennsylvania, 563 Pa. 108, 757 A.2d 917 (2000). Here, the facts are undisputed. The issue of whether the statute confers standing upon a grandparent to seek custody and/or visitation is purely one of law, over which our review is plenary. Phillips v. A-Best Products Co., 542 Pa. 124, 665 A.2d 1167 (1995). Initially, we note that prior to the 1996 enactment of Section 5313(b), a grandparent had no right to seek visitation or partial custody of a grandchild unless a parent was deceased, 23 Pa.C.S. § 5311, the parents' marriage was dissolved or the parents separated, id. at § 5312, or the child had resided with the grandparent for 12 months or more and was subsequently removed from the home by his parents, id. *450 at § 5313. See also Herron v. Seizak, 321 Pa.Super. 466, 468 A.2d 803 (1983) (grandparents have no right to visit child where neither parent was deceased, parents' marriage was not dissolved, and child had not resided with grandparent for 12 months or more). The 1996 amendment changed the heading title of Section 5313 (from "When child has resided with grandparents" to "When grandparents may petition"), designated the former text as subsection (a) and added the text set forth in subsection (b). The new subsection (b) recognized a grandparent's claim for "physical and legal custody" of a grandchild, rather than the previous reference to "partial custody and visitation." Thus, the 1996 legislation expanded grandparents' rights and specifically addressed the issue of grandparent standing in a custody matter. In previous case law discussing third-party suits for visitation or partial custody, a stringent test for standing arose out of a respect for the traditionally strong right of parents to raise their children as they see fit. Ken R. v. Arthur Z., 438 Pa.Super. 114, 651 A.2d 1119 (1994). The courts generally found standing in third-party visitation and custody cases only where the legislature had specifically authorized the cause of action. Id. We must determine whether section 5313 serves as such authority in this case. Appellants argue that the legislature did not authorize Grandmother to petition for visitation and/or custody at any time after T.M. was adjudicated dependent. They assert that standing could not arise from 23 Pa.C.S. § § 5311 and 5312 because Grandmother's son, T.M.'s father, was not deceased, nor did T.M.'s parents separate or divorce. They also assert that Section 5313(a) does not confer standing because T.M. never resided with Grandmother. These conclusions are undisputed. The crux of the argument lies with Section 5313(b). Contrary to the holding of the Superior Court, Appellants contend that this section does not give all grandparents automatic standing, but instead only confers standing to those grandparents who satisfy the specific requirements stated therein. According to Appellants, there are three requirements to afford a grandparent standing to petition for physical and/or legal custody of his/her grandchild: (1) the grandparent has genuine care and concern for the child; (2) the relationship began with the consent of a parent or pursuant to a court order; and (3) any one of the following: (I) the grandparent has in loco parentis status; (ii) the grandparent assumes responsibility for a grandchild who has been adjudicated a dependent child under 42 Pa.C.S. Ch. 63; or (iii) the grandparent assumes or deems it necessary to assume responsibility for a grandchild who is substantially at risk because of parental abuse, neglect, drug or alcohol abuse or mental illness. Thus, Appellants view the circumstances set forth in subsection (b) as setting forth conditions that must be satisfied before a grandparent has standing to pursue his/ her custody claim. Specifically, as they argued before the lower courts, Appellants contend that the third scenario in subsection (b)(3) has not been met because T.M. is not a child "who is substantially at risk" because he had been adjudicated dependent at the time the complaint for custody was filed. They maintain that for Grandmother to have standing under the circumstances of this case, she would have had to petition for custody prior to the Agency's involvement in the case and prior to the adjudication of T.M. as a dependent child. To the contrary, Grandmother contends that Section 5313(b) confers automatic standing upon a grandparent to file for custody of her grandchild simply by virtue *451 of the familial relationship. She asserts that the new legislation was added to address the increasing need for grandparents to obtain physical and legal custody of grandchildren they perceive are at risk due to parental abuse or neglect, whether due to alcohol abuse, drug abuse or mental illness. Grandmother maintains that Section 5313(b) permits a grandparent who is aware of such a situation to petition the court for temporary physical or legal custody until such time as his/her child or partner obtains the counseling they require and the grandchild is no longer at risk. She asserts that, unfortunately, she did not become aware of the parental abuse until after the Agency became involved. Grandmother maintains that she utilized the new legislation in an attempt to obtain temporary custody of her grandson after his mother had pled guilty to the criminal offense of endangering his welfare. We find that Grandmother's interpretation of the statute is more consistent with the plain text of the provision. The unqualified language of the statute states, "A grandparent has standing to bring a petition for physical and legal custody of a grandchild." This clear and unambiguous pronouncement cannot be ignored or modified by the subsequent reference to whom the provision, as a whole, is intended to apply. It is well settled that words and phrases contained in a statute shall be construed according to rules of grammar and according to their common and approved usage. Commonwealth v. Burnsworth, 543 Pa. 18, 669 A.2d 883 (1995); 1 Pa.C.S. § 1903(a). When the words of a statute are clear and free from ambiguity, the letter of it is not to be disregarded under the pretext of pursuing its spirit. Id. at § 1921(b). The language providing that, "This subsection applies to a grandparent who ...," refers to the requirements a grandparent must establish to prevail on the merits of the custody claim. This is evidenced by the fact that "this subsection" is entitled, "Physical and legal custody," rather than "Standing." As cogently stated by the Superior Court, [t]he circumstances set forth in subsections (1), (2) and (3) are questions of fact to be resolved by the trial court after a hearing held to determine "[I]f it is in the best interests of the child not to be in the custody of either parent and if it is in the best interests of the child to be in the custody of the grandparent...." 23 Pa.C.S. § 5313(b). 725 A.2d at 778. Here, however, Grandmother was never given the opportunity to prove her claim on the merits because the trial court sustained Appellant's preliminary objections and dismissed Grandmother's claim based on lack of standing.[4] Accordingly, we affirm the order of the Superior Court, reversing the trial court's dismissal of the custody complaint, and remand to the trial court for further proceedings consistent with this opinion. Mr. Justice SAYLOR files a dissenting opinion in which Mr. Justice CASTILLE joins. SAYLOR, Justice, dissenting: As the majority emphasizes, Section 5313(b) of the Domestic Relations Code *452 provides that "[a] grandparent has standing to bring a petition for physical and legal custody of a grandchild." 23 Pa.C.S. 5313(b). Immediately following this conferral of standing, the General Assembly set forth the substantive standard that must be satisfied in order for custody to be obtained: "If it is in the best interest of the child not to be in the custody of either parent and if it is in the best interest of the child to be in the custody of the grandparent, the court may award physical and legal custody to the grandparent." Id. In the same subsection, however, the General Assembly expressly qualified both the conferral of standing and the ability to invoke the substantive standard for obtaining custody as follows: "This subsection applies to a grandparent" who meets three specific threshold criteria (genuine care and concern; existing relationship pursuant to parental consent or court order; and 12 months in the role of a parent, or assumption of responsibility for a child deemed dependent or in danger). Id. The understanding that the legislative qualification serves as a limitation upon standing is supported by the heading of Section 5313, "When grandparents may petition," id. 23 Pa.C.S. § 5313; see also 1 Pa.C.S. § 1924 (prescribing that headings may be considered as aids in the construction of a statute); and by the application of the precept that courts are to give effect to all of the provisions of a statute, see 1 Pa.C.S. § 1922(a). To the extent that there is any ambiguity, further support for the above can be found in the legislative history of Section 5313. Initial versions of legislation contained fewer restrictions on a grandparent's right to seek custody than Section 5313(b).[1] Various legislators, however, expressed concern that such proposals failed to impose adequate limitations upon interference by grandparents in a parent's right to control his or her child's upbringing. One Senator observed that the legislation: establishes bases upon which grandparents could initiate custody litigation seeking custody of their grandchildren over and against the children's parents under certain circumstances. I just want to note my concern that the potential is for litigation which will be too broad in nature. The bill, I think needs some further limiting and I am confident there will be further consideration of it in the House. Statement of the Honorable David W. Heckler, Pa. Legis. JournalSenate, p. 544 (May 23, 1995). A Representative stated: We would not want grandparents disrupting or invading the privacy and home life of their children seeking custody of their grandchildren if in fact it was not absolutely necessary. The words "over an extended period of time" [indicate that] where a debilitating instance exists with the natural parents [it] might be appropriate to give them standing in court. Statement of the Honorable Kevin Blaum, Pa. Legis. JournalHouse, p.2033 (June 28, 1996) (emphasis added). These comments are clearly phrased in terms of imposing restrictions upon which grandparents *453 may seek custody, as opposed to which grandparents may ultimately obtain custody; they plainly reflect the concern of at least two legislators that third-party challenges to parental rights should be closely regulated. The additional restrictions that were ultimately included in the final enactment as signed into law further support the conclusion that the General Assembly sought to carefully limit the situations in which a petition could be filed by grandparents. The legislative history of the statute dovetails with the well-settled restrictions upon standing in the child custody arena. See J.A.L. v. E.P.H., 453 Pa.Super. 78, 86-87, 682 A.2d 1314, 1318-19 (1996)(explaining that, in matters regarding child custody, standing requirements are designed not only to assure that actions are litigated by appropriate parties, but also to prevent interference with parental rights by outsiders). Both reinforce a restrictive conception of the circumstances in which parents will be haled into court to defend custody of their children. Both provide additional support for the conclusion that Section 5313, on its face, evidences a clear intention of the Legislature to balance the need to protect the right of parents to raise their children with a desire to afford grandparents a statutory basis upon which to seek custody in limited situations in which children are in special need and/or the grandparents have firmly established themselves in the role of primary caregiver.[2] The majority's conclusion that Section 5313 confers a general right of standing upon all grandparents, regardless of whether they satisfy any of the criteria of Section 5313(b), subjects parents to legal proceedings seeking to deprive them of custody of their children despite having done nothing to suggest that they are unfit. Although such an effort by grandparents who do not meet the statutory criteria must ultimately fail, according to such a construction, parents must nonetheless endure a full-blown custody proceeding. See Majority Op. at 451 ("the circumstances set forth in subsections (1), (2) and (3) are questions of fact to be resolved by the trial court after a hearing held to determine `[i]f it is in the best interests of the child not to be in the custody of either parent and if it is in the best interests of the child to be in the custody of the grandparent'" (citations omitted)). I find such a result inimical to the Legislature's intent as conveyed by its choice of words and to application of principles of statutory construction. It may be unfortunate (at least in some circumstances) that, in fashioning Section 5313(b), the General Assembly has not distinguished between situations in which a grandparent's custody petition would challenge custody reposited in biological parents from those in which the state has undertaken the parental role. While the majority's decision ameliorates the effects of any imprecision in legislative drafting as applied to the circumstances of this case, I would leave it to the General Assembly to make appropriate adjustments where it has evinced its intent to regulate challenges to custody by third parties, and the *454 guiding policy considerations are at least mixed. In such circumstances, it is my view that the legislative branch represents the superior forum in which to perform the necessary balancing of relevant concerns.[3] The remaining question is whether Grandmother can satisfy the statutory requirement that she is seeking to assume responsibility for a child who is "at risk." See 23 Pa.C.S. § 5313(b)(3). Again, I believe that the plain language of the statute should control. Pursuant to the requirements of Section 5313(b)(3), a child who has been removed from a dangerous environment, placed in a secure situation, and whose parents' rights have been terminated, cannot be considered at risk from parental abuse or neglect. Again, there may be a legitimate concern in the circumstances of the case regarding the best interests of the child as it relates to the environment established by a Children's Services placement versus the grandparents' claim to a superior bond based upon the familial relationship. Again, however, in terms of the conferral of third-party standing to challenge an established and ongoing caregiver relationship, I believe that the General Assembly is best suited to balance the salient policies and provide the necessary direction. In this case, T.M. was no longer at risk at the time Grandmother sought custody; he had been living for well over a year with a stable foster family who wished to adopt him. I would therefore conclude that Grandmother lacks the requisite standing, as she has failed to allege facts sufficient to satisfy the requirements to seek custody of T.M. pursuant to Section 5313(b)(3). Hence this dissent. CASTILLE, Justice, joins this dissenting opinion. NOTES [1] The Agency and T.M.'s guardian assert in their brief that T.M.'s mother executed a consent for adoption on November 24, 1997, and that the trial court confirmed the consent and terminated mother's parental rights on January 30, 1998. Appellee's Brief at 6. They further submit that T.M.'s father executed a consent for adoption and that the trial court confirmed the consent and terminated father's parental rights on August 19, 1998. Id. at 6-7. As these matters are not of record, they will not be considered by our Court in resolution of this appeal. [2] Grandmother has been afforded the opportunity to visit her grandson since the adjudication of dependency. Trial court opinion at 3. It is unclear from the record, however, whether the court directed such visitation or whether the parties merely agreed to allow the same. [3] T.M.'s biological parents and foster parents are also named appellants, although they have not participated in this appeal. [4] It must be recognized, however, that the legislature's conferral of automatic standing to seek the physical and legal custody of a grandchild does not affect a grandparent's evidentiary burden to prove his/her custody claim on the merits. It merely eliminates the preliminary standing requirement that a party establish a direct and substantial interest in the custody proceeding before the court. [1] For example, Section 5313(b)(3), as originally passed by the Senate, granted the right to seek custody to a grandparent: (3) who has assumed the role and responsibilities of the child's parent, providing for the physical, emotional and social needs of the child, or who deems it is necessary to assume the role and responsibilities of the child's parent due to physical or sexual abuse or neglect, or parental dysfunction, such as drug or alcohol abuse or emotional or mental illness or instability. Senate Bill 434 of 1995 (Printer's No. 453). [2] It is questionable whether a statute granting to grandparents a general right to seek custody of their grandchildren would survive constitutional challenge. In Troxel v. Granville, 530 U.S. 57, 120 S.Ct. 2054, 147 L.Ed.2d 49 (2000), a plurality of the United States Supreme Court invalidated a Washington statute granting a general right to petition for visitation regardless of the parents' fitness, finding the sweeping breadth of the law violative of a parent's fundamental right to care, custody, and control of his children as guaranteed by the Due Process Clause of the United States Constitution. See id. at 75, 120 S.Ct. at 2066. [3] This would also avoid the creation of controlling authority elevating the substantive terms of a statute ("A grandparent has standing to bring a petition for physical and legal custody of a grandchild") over express qualifying provisions ("This section applies to a grandparent who...."). I strongly disfavor this sort of precedent, as I believe that its application to other instances of legislative drafting is bound to yield idiosyncratic results; further, I believe that it complicates the already difficult task of legislative drafting.

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IN THE COURT OF CRIMINAL APPEALS OF TENNESSEE AT NASHVILLE FILED NOVEMBER 1998 SESSION January 7, 1999 Cecil W. Crowson Appellate Court Clerk MARVIN K. MASSEY, ) ) C.C.A. No. 01C01-9711-CR-00520 Appellant, ) ) Davidson County V. ) ) Honorable J. Randall Wyatt, Jr., Judge ) STATE OF TENNESSEE, ) (Post-Conviction) ) Appellee. ) FOR THE APPELLANT: FOR THE APPELLEE: Thomas Edward Nelson John Knox Walkup 211 Third Ave., N. Attorney General & Reporter Nashville, TN 37201 Kim R. Helper Assistant Attorney General Criminal Justice Division 425 Fifth Avenue North Nashville, TN 37243-0493 Victor S. (Torry) Johnson III District Attorney General Lila Statom Assistant District Attorney General Washington Square, Suite 500 222 Second Ave., N. Nashville, TN 37201-1649 ORDER FILED: ___________________ AFFIRMED PURSUANT TO RULE 20 PAUL G. SUMMERS, Judge ORDER The petitioner pled guilty to second-degree murder in exchange for a twenty-two year sentence. No direct appeal was taken. The petitioner subsequently filed the instant petition alleging that he received ineffective assistance of counsel. After a hearing the trial court denied relief, finding that the petitioner received “sound advice from counsel [and] detailed instruction by the Court.” Upon our review of the record, we find that the evidence does not preponderate against the trial court's findings. We further find that no error of law requiring reversal or other action is apparent on the record. Accordingly, the judgment of the trial court is affirmed in accordance with Rule 20 of the Court of Criminal Appeals of Tennessee. It is so ordered. __________________________ PAUL G. SUMMERS, Judge CONCUR: _____________________________ JOE G. RILEY, Judge _____________________________ L. T. LAFFERTY, Senior Judge -2-

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679 F.Supp.2d 1034 (2010) CATHEDRAL SQUARE PARTNERS LIMITED PARTNERSHIP; West Park, Ltd.; 46th Street Partners Limited Partnership; and Riverview Properties, Ltd., Plaintiffs, v. SOUTH DAKOTA HOUSING DEVELOPMENT AUTHORITY, Defendant and Third-Party Plaintiff, v. Roy Bernardi, Acting Secretary, United States Department of Housing and Urban Development, Third-Party Defendant. No. Civ. 07-4001. United States District Court, D. South Dakota, Southern Division. March 30, 2009. *1035 Joel D. Vos, Heidman Law Firm, Sioux City, IA, for Plaintiffs. *1036 Michael L. Luce, Murphy Goldammer & Prendergast, LLP, Sioux Falls, SD, for Defendant. MEMORANDUM OPINION AND ORDER LAWRENCE L. PIERSOL, District Judge. Plaintiffs, Cathedral Square Partners Limited Partnership, West Park, Ltd., 46th Street Partners Limited Partnership, and Riverview Properties, Ltd., have sued Defendant and Third-Party Plaintiff, South Dakota Housing Development Authority ("SDHDA"), alleging that SDHDA breached their Housing Assistance Payment ("HAP") contracts which were established and are administered pursuant to Section 8 of the United States Housing Act of 1937. SDHDA's alleged breach stems from administering these HAP Contracts in accordance with the 1994 Amendments made by Congress to the statutes governing Section 8 and in accordance with Notice H 95-12, issued by the Housing Development Authority ("HUD") implementing the Congressional amendments. In turn, SDHDA sued Roy Bernardi ("the Secretary"), Acting Secretary of the United States Department of Housing and Urban Development in his official capacity. SDHDA contends that this Court has subject matter jurisdiction over its Third-Party Complaint by invoking the Court's general federal question jurisdiction under 28 U.S.C. § 1331 together with the waivers of sovereign immunity provided by the Administrative Procedures Act ("APA"), 5 U.S.C. § 701, et seq., or in the alternative, Section 1404a of the United States Housing Act of 1937, 28 U.S.C. § 1404a. The Secretary has moved to dismiss the Third-Party Complaint, alleging that these claims are within the exclusive jurisdiction of the Federal Court of Claims pursuant to the Tucker Act, 28 U.S.C. § 1491, and in the alternative, that this Court lacks jurisdiction to hear these claim as they fall outside the APA's and the United States Housing Acts's limited waivers of sovereign immunity. (Doc. 43.) BACKGROUND Pursuant to Section 8 of the United States Housing Act of 1937, as amended, the United States, acting through the U.S. Department of Housing and Urban Development ("HUD"), subsidizes the rents of low-income tenants of privately-owned dwellings. 42 U.S.C. § 1437f. The rent subsidy is provided in one of two ways: either HUD enters into a Housing Assistance Payments contract ("HAP contract") directly with a private landlord or HUD enters into an Annual Contributions Contract ("ACC") with a public housing agency and the public housing agency enters into a HAP contract with the landlord. In either case, the HAP contract specifies a monthly contract rent for particular housing units. The contract rent is initially set by HUD to approximate the fair market value of the rental property for the local area, taking into account certain adjustments to reflect additional costs associated with complying with Section 8 requirements. The tenant pays the landlord a portion of the contract rent based on the tenant's income, and either HUD or the public housing agency pays the landlord the difference between the tenant's payment and the contract rent. In addition to setting initial contract rents, HUD is responsible for adjusting the contract rents on at least an annual basis to reflect changes in the fair market rentals. The means by which HUD adjusts rents under its contracts are as follows: "The adjusted monthly amount of the Contract Rent of a dwelling unit shall be determined by multiplying the Contract Rent in effect on the anniversary date of the contract by the applicable Automatic *1037 Annual Adjustment Factor. . . ." 24 C.F.R § 888.203(b). HUD publishes these Adjustment Factors at least annually by notice in the Federal Register. HUD entered into ACCs with Defendant/Third-Party Plaintiff, South Dakota Housing Development Authority ("SDHDA"), and SDHDA entered into HAP contracts with Plaintiffs Cathedral Square Partners Limited Partnership, West Park, Ltd., 46th Street Partners Limited Partnership, and Riverview Park, Ltd. Each of the HAP contracts that SDHDA entered into with Plaintiffs provided that "[o]n each anniversary date of the Contract, the Contract Rents shall be adjusted by applying the applicable annual adjustment factor most recently published by the Government." In 1994, Congress amended Section 8 in two relevant respects. First, the Amendments provided that, "[w]here the maximum monthly rent, for a unit in a new construction, substantial rehabilitation, or moderate rehabilitation project, to be adjusted using an annual adjustment factor exceeds the fair market rental for an existing dwelling unit in the market area, the Secretary shall adjust the rent only to the extent that the owner demonstrates that the adjusted rent would not exceed the rent for an unassisted unit of similar quality, type, and age in the same market area, as determined by the Secretary." 42 U.S.C. § 1437f(c)(2)(A) (1994). Second, the amendments provided that "[f]or any unit occupied by the same family at the time of the last annual rental adjustment, where the assistance contract provides for the adjustment of the maximum monthly rent by applying an annual adjustment factor and where the rent for the unit is otherwise eligible for an adjustment based on the full amount of the annual adjustment factor, 0.01 shall be subtracted from the amount of the factor, except that the annual adjustment factor shall not be reduced to less than 1.0" Id. As part of its effort to implement the 1994 amendments, HUD issued Notice H 95-12 requiring owners to file timely rent comparability studies containing at least three examples of unassisted housing in the same market area of similar age, type and quality in order to receive a rent increase. According to the directive, any adjustment to the contract rent would be limited to the lesser of (1) the "adjusted comparable rent," determined by adding to the comparable rent the initial difference (the amount by which the original contract rent exceeded the original comparable rent), or (2) the rent level adjusted by the appropriate annual adjustment factor. As it was bound to do so under law, SDHDA administered its HAP contracts with the Plaintiffs in accordance with Congress's Amendments and HUD's Notice H 95-12. Plaintiffs allege that by administering its HAP contracts with Plaintiffs in accordance with the 1994 Congressional Amendments and Notice H 95-12, SDHDA breached Plaintiffs' rights under the HAP Contracts and wrongly deprived them of rent increases for many years. In their Second Amended Complaint which was filed on June 24, 2008, Plaintiffs allege that SDHDA breached their HAP contracts on three grounds: (1) by failing to increase contract rents or by increasing contract rents less then the amount called for in the HAP contracts; (2) by reducing the annual adjustment factor by .01 for units occupied by the same family in consecutive years; and (3) by requiring plaintiffs to submit rent comparability studies. Plaintiffs request that the Court award compensatory damages for SDHDA's alleged breaches of contract as well as reimbursement for costs and expenses incurred in pursuing this matter in court. Additionally, Plaintiffs *1038 asks the Court to order SDHDA to increase the contract rents at Plaintiff's rental housing project to reflect the rent increases to which Plaintiffs are entitled under their HAP Contracts with SDHDA. On June 10, 2008, SDHDA filed a Third-Party Complaint against Roy Bernardi, Acting Secretary, United States Department of Housing and Urban Development in which it alleges three claims for relief. First, SDHDA alleges that "[i]f HUD has caused SDHDA to breach Plaintiffs' HAP Contracts and to apply incorrect requirements and procedures to the adjustment of contract rents for other HAP Contracts to which SDHDA is a party, HUD's actions are arbitrary, capricious, an abuse of discretion, contrary to law, and contrary of constitutional right, in violation of 5 U.S.C. § 706." Accordingly, SDHDA contends that "HUD must provide any additional housing assistance payments, retroactive or prospective, to which plaintiffs or other Section 8 housing owners are entitled when adjustments to the contracts rents are calculated correctly and in conformance with applicable legal requirements." Second, SDHDA claims that if HUD has caused SDHDA to breach its HAP Contracts with Plaintiffs, HUD has breached the related ACCs with SDHDA and SDHDA is "entitled to indemnification by HUD for all costs and expenses it has sustained or will sustain to remedy those breaches." Third, SDHDA "seeks a declaration of its rights and responsibilities in applying the 1994 amendments and Notice H 95-12 with respect to future adjustments of Contract Rents for the HAP Contracts to which it is a party, and its right to have such rent adjustments funded by HUD pursuant to the related ACCs." The Secretary contends that the Court lacks jurisdiction over all claims asserted against him as they fall outside the waivers of sovereign immunity under the Administrative Procedures Act ("APA"), 5 U.S.C. § 701, et. seq., and Section 8 of the United States Housing Act of 1937, 42 U.S.C. § 1404a. The Secretary asserts that pursuant to the Tucker Act, 28 U.S.C. §§ 1491, 1346(a)(2), these claims are within the proper jurisdiction of the Court of Federal Claims. The Secretary has thus moved to dismiss the Third-Party Complaint in its entirety. STANDARD OF REVIEW To sue the United States, a plaintiff must show both a waiver of sovereign immunity and a grant of subject matter jurisdiction. V.S. Ltd. P'ship v. HUD, 235 F.3d 1109, 1112 (8th Cir.2000) (citing Presidential Gardens Assocs. v. United States, 175 F.3d 132, 139 (2d Cir.1999)). "It is axiomatic that the United States may not be sued without its consent and that the existence of consent is a prerequisite to jurisdiction." United States v. Navajo Nation, 537 U.S. 488, 502, 123 S.Ct. 1079, 1089, 155 L.Ed.2d 60 (2003) (citation omitted). Even when the federal government does waive its immunity from suit, "limitations and conditions upon which the Government consents to be sued must be strictly observed, and exceptions thereto are not to be implied." Lehman v. Nakshian, 453 U.S. 156, 161, 101 S.Ct. 2698, 69 L.Ed.2d 548 (1981) (citation omitted). In considering the Secretary's challenge to its jurisdiction, the Court is not limited to the pleadings, but may consider the complaint, other undisputed facts in the record, and may make its own determination of disputed factual issues that bear on its jurisdiction. Harris v. P.A.M. Transport, Inc., 339 F.3d 635, 637 n. 4 (8th Cir.2003). DISCUSSION SDHDA invokes the waiver of sovereign immunity provided by the Administrative *1039 Procedures Act ("APA"), 5 U.S.C. § 701, et seq. together with the Court's general federal question jurisdiction under 28 U.S.C. § 1331.[1] SDHDA asserts that its claims fall within the waiver of sovereign immunity under Section 702 and 704 of the APA because it is challenging the legitimacy of an agency action. 5 U.S.C. § 702. Specifically, SDHDA contends that HUD's implementation of Congress's 1994 Amendments and issuance of Notice H 95-12 caused it to breach its ACC Contracts with SDHDA and in turn, caused SDHDA to breach its HAP Contracts with Plaintiffs and that such actions are "arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with the law." 5 U.S.C. § 702. SDHDA also contends that its claims fall within Section 8 of the United States Housing Act of 1937's waiver of sovereign immunity which provides that "[t]he Secretary of Housing and Urban Development may sue and be sued only with respect to its functions under the United States Housing Act of 1937." 42 U.S.C. § 1404a. SDHDA argues that federal courts have held that when Congress authorizes and agency to "sue and be sued," it is presumed that Congress has fully waived sovereign immunity for such suits, provided that the funds to satisfy any judgment come from funds under HUD's control, as SDHDA argues they do here, rather than general treasury revenue funds. The Secretary, however, argues that SDHDA's claims do not fall within either the APA's waiver of sovereign immunity or within the waiver of sovereign immunity under Section 8 of the United States Housing Act of 1937 and that under the Tucker Act such actions are within the exclusive jurisdiction of the Court of Federal Claims. Accordingly, the Secretary has moved to dismiss all the claims asserted by SDHDA in its Third Party Complaint. I. Has sovereign immunity been waived in this Court under the APA? The Secretary contends that these claims are within the exclusive jurisdiction of the Court of Federal Claims pursuant to the Tucker Act and in the alternative, that the district court lacks jurisdiction to hear these claims as they fall outside the APA's waiver of sovereign immunity. "The Tucker Act gives the Court of Federal Claims jurisdiction to hear monetary claims against the United States founded either upon an express or implied contract or upon a provision of the Constitution, or any Act of Congress, or any regulation of the executive department that `can fairly be interpreted as mandating compensation by the Federal Government for the damages sustained.'" Cartwright Int'l Van Lines v. Doan, 525 F.Supp.2d 187, 194 (D.D.C.2007) (quoting United States v. Mitchell, 463 U.S. 206, 217, 103 S.Ct. 2961, 77 L.Ed.2d 580 (1983)). The Tucker Act consists of two parts: 28 U.S.C § 1491 and 28 U.S.C. § 1346(a)(2), which is commonly known as the "Little Tucker Act." The Little Tucker Act makes the jurisdiction of the Court of Federal Claims concurrent with the district court for civil actions or claims against the United States for $10,000 or less. 28 U.S.C. § 1346(a)(2). *1040 The parties dispute whether claims founded upon a contract exceeding $10,000 are within the exclusive jurisdiction of the Court of Federal Claims. The Secretary states that every Circuit Court of Appeals to address the issue has concluded that the Tucker Act gives the Court of Federal Claims exclusive jurisdiction over all claims founded on a contract, a provision of the Constitution, a statute or executive regulation exceeding $10,000 and `impliedly forbids' an award of declaratory and injunctive relief in a district court under the APA. (Sec'y Br. in Supp. of Mot. To Dismiss at 8-9.) SDHDA contends that "[a]lthough some circuit courts have ruled that the Tucker Act does impliedly forbid district courts from exercising jurisdiction over contract claims under the APA, those rulings find no support in the language of the Tucker Act, itself, and they are at odds with the Supreme Court's decision in Bowen." The Court need not address this issue because, as discussed below, the claims SDHDA asserts in its Third-Party Complaint fall outside the waivers of sovereign immunity under the APA and Section 8. The Supreme Court has explained that a litigant may invoke the APA's waiver of sovereign immunity to challenge the legitimacy of agency actions[2] in district court if the litigant can satisfy the several limitations Congress has placed on the waiver of sovereign immunity pursuant to both 5 U.S.C § 702 and 5 U.S.C. § 704. Bowen v. Massachusetts, 487 U.S. 879, 891-92, 108 S.Ct. 2722, 2730-31 101 L.Ed.2d 749 (1988). In order to establish a waiver of sovereign immunity under the APA, a plaintiff must prove all of the following: (1) that it is seeking relief other than money damages, 5 U.S.C. § 702; (2) that no other statute that grants consent to suit expressly or impliedly forbids the relief which is sought, 5 U.S.C. § 702; and (3) that there is no adequate remedy available elsewhere, 5 U.S.C. § 704. See also Transohio Sav. Bank v. Dir., Office of Thrift, 967 F.2d 598, 607 (D.C.Cir.1992). The Secretary argues that all three limitations on the APA's waiver of sovereign immunity apply in this case and has thus moved to dismiss SDHDA's Third-Party Complaint for lack of subject matter of jurisdiction. Specifically, the Secretary argues that SDHDA primarily seeks compensatory, monetary damages. Additionally, the Secretary asserts that the Tucker Act impliedly forbids relief under the APA in this case because SDHDA's claims against the Secretary are based on allegations of breach of contract exceeding $10,000 over which, the Secretary argues, the Court of Federal Claims has exclusive jurisdiction. Finally, the Secretary claims that the Tucker Act provides an adequate remedy because pursuant to the Act, SDHDA may sue the Secretary in the Court of Federal Claims to recover indemnification for any retroactive or prospective increases in contract rents for which SDHDA may be found liable. "[I]n determining whether a plaintiffs suit is to be heard in district court or the Court of Federal Claims, [a Court] must look beyond the form of the pleadings to the substance of the claim." Suburban Mortgage Assoc., Inc. v. HUD, 480 F.3d 1116, 1125 (Fed.Cir.2007); Reconstruction Fin. Corp. v. MacArthur Mining Co., 184 F.2d 913, 918 (8th Cir.1950). Courts "will not tolerate a litigant's attempt to artfully recast its complaint to circumvent the jurisdiction of the Court of Federal Claims." Consol. Edison Co. v. U.S. Dept. of Energy, 247 F.3d 1378, 1385 (Fed.Cir.2001); *1041 Sellers v. Brown, 633 F.2d 106, 107-08 (8th Cir.1980) (per curiam). The Court finds that the best place to begin in determining whether this Court has jurisdiction to hear the claims presented by SDHDA in its Third-Party Complaint is by analyzing whether the Court of Federal Claims can provide an adequate remedy under the Tucker Act for the alleged wrong. Except in limited circumstances not applicable in the present case,[3] the Court of Federal Claims has no power to grant equitable and prospective relief. Bowen v. Massachusetts, 487 U.S. 879, 905, 108 S.Ct. 2722, 2737, 101 L.Ed.2d 749 (1988); see also Noot v. Heckler, 718 F.2d 852, 858 (8th Cir.1983). However, when a plaintiff's claims, regardless of the form in which the complaint is drafted, may be satisfied by a money judgment, then the proper forum for resolution of the dispute is not a district court under the APA but the Court of Federal Claims under the Tucker Act. Suburban Mortgage Assoc., Inc. v. HUD, 480 F.3d 1116, 1126 (Fed.Cir.2007). In its Third-Party Complaint, SDHDA alleges three causes of action against the Secretary. First, SDHDA alleges that "[i]f HUD has caused SDHDA to breach Plaintiffs' HAP Contracts and to apply incorrect requirements and procedures to the adjustment of contract rents for other HAP Contracts to which SDHDA is a party, HUD's actions are arbitrary, capricious, an abuse of discretion, contrary to law, and contrary of constitutional right, in violation of 5 U.S.C. § 706." Accordingly, SDHDA states that HUD "must provide additional housing assistance payments, retroactive or prospective, to which plaintiffs or other Section 8 housing owners are entitled when adjustments to the Contract Rents are calculated correctly and in conformance with applicable legal requirements." Second, SDHDA claims that if HUD has caused SDHDA to breach its HAP Contracts with Plaintiffs, HUD has breached the related ACCs with SDHDA and SDHDA is "entitled to indemnification by HUD for all costs and expenses it has sustained or will sustain to remedy those breaches." Third, SDHDA "seeks a declaration of its rights and responsibilities in applying the 1994 amendments and Notice H 95-12 with respect to future adjustments of Contract Rents for the HAP Contracts to which it is a party, and its right to have such rent adjustments funded by HUD pursuant to the related ACCs." The Secretary argues that a money judgment by the Federal Court of Claims provides SDHDA an adequate remedy in this case. (Sec'y Br. in Supp. of Mot. to Dismiss at 7.) In particular, the Secretary states that any retroactive payments due to SDHDA under its ACC contracts or to Plaintiffs under their HAP contracts are satisfied by a money judgment. Moreover, the Secretary contends that res judicata principles address any concerns about obtaining prospective relief from potential disputes regarding future rent adjustments. (Id. at 8.) While "[t]he availability of an action for money damages under the Tucker Act or Little Tucker Act is presumptively an `adequate remedy' for Section 704 purposes," Telecare Corp. v. Leavitt, 409 F.3d 1345, 1349 (Fed.Cir.2005), SDHDA argues that a money judgment in the Court of Federal Claims is insufficient under the unique *1042 facts of this case. In support of its position, SDHDA discusses at length the United States Supreme Court's decision in Bowen v. Massachusetts, 487 U.S. 879, 108 S.Ct. 2722, 101 L.Ed.2d 749 (1988). In Bowen, the Commonwealth of Massachusetts brought a suit challenging a decision by the Secretary of Health and Human Services that certain services provided in part by the state for the mentally retarded did not qualify for reimbursement under Medicaid regulations. The Court concluded that a money judgment against the United States in the Court of Federal Claims was an inadequate remedy in the case in "light of the rather complex ongoing relationship between the parties." Id. at 905, 108 S.Ct. at 2738. Specifically, the Court in Bowen noted that "the interaction between the State's administration of its responsibilities under an approved Medicaid plan and the Secretary's interpretation of his regulations may make it appropriate for judicial review to culminate in the entry of declaratory or injunctive relief that requires the Secretary to modify future practices." Id. The Court also doubted whether the Court of Federal Claims even had jurisdiction to entertain the action or to enter a specific money judgment against the United States. Id. SDHDA argues that as in Bowen, it is seeking interpretation of regulations and statutes[4] which may result in modifying the ongoing and allegedly complex contractual relationships between it and HUD and as such, a monetary judgment in the Court of Federal Claims is an inadequate remedy. Specifically, SDHDA contends that: [T]he alleged breaches of plaintiffs' HAP and ACC Contracts affect not only past rent increases that were denied, but also future annual rent increases during the remaining terms of the contracts, which range from 5 to 11 years. Moreover, SDHDA is a party to similar HAP Contracts which cover 77 properties and 2385 housing units, SDHDA cannot properly and uniformly administer these contracts on an ongoing basis without prospective relief that establishes, for all these properties, (a) SDHDA's obligations with respect to calculating annual rent increases, and (b) HUD's obligations with respect to calculating and funding annual rent increases. (SDHDA Br. in Resp. to Supplemental Authority at 4.) SDHDA argues further that under Bowen, this Court has jurisdiction to award the monetary relief it seeks because such relief is incidental to the prospective, equitable relief it seeks under various statutes and *1043 regulations which allegedly govern HUD's funding obligations under Section 8. In Bowen, the Court recognized that the waiver of immunity under Section 702 is confined explicitly to claims seeking "other than money damages." Bowen, 487 U.S. at 900, 108 S.Ct. at 2735. The Court concluded that the State's suit to overturn a decision by the Secretary disallowing reimbursement under the Medicaid Act was not seeking money "in compensation for the damage sustained by the failure of the Federal Government to pay as mandated; rather, it [was] a suit seeking to enforce the statutory mandate itself, which happens to be one for the payment of money." The Court therefore concluded that the substance of the State's suit was one for specific relief, not money damages, and thus the suit fell within Section 702's waiver of immunity. Id. at 900-01, 108 S.Ct. at 2735-36. The Court finds that contrary to the Court's holding in Bowen, a money judgment in the Court of Federal Claims is an adequate substitute for the prospective relief that SDHDA seeks in this case. The facts of this case are actually quite different from that in Bowen. The allegation in Bowen was that the Secretary of Health and Human Services was interpreting Medicaid regulations contrary to what Congress had intended. A decision by the district court on the interpretation issue in Bowen could therefore affect future reimbursement payments under the Medicaid program. The claim in this case, however, is not that HUD is improperly administering the 1994 Congressional Amendments, but rather that the Amendments and HUD's subsequent implementation of those regulations through Notice H 95-12 are themselves unlawful because they violate the Constitution and various statutes and regulations which mandate funding by the Government of the Section 8 contracts. The statutes and regulations cited by SDHDA, unlike those in Bowen, may not serve to modify the future rights and responsibilities of the parties because there is no dispute that the 1994 Amendments are the supreme law of the land. Cuyahoga Metro. Hous. Auth. v. United States, 65 Fed.Cl. 534, 544 (2005) ("There is no real debate that the 1994 Act is the law of the land."). There is no evidence in the record of anything in the ACC and HAP contracts which purportedly barred the Government from changing the way in which it regulated Section 8. United States v. Winstar Corp., 518 U.S. 839, 868, 116 S.Ct. 2432, 2452, 135 L.Ed.2d 964 (1996). Such contracts, the United States Supreme Court has concluded, should be "interpreted as one to pay damages if performance is prevented rather than one to render a performance in violation of law." Id. at 869, 116 S.Ct. at 2452 (quoting Restatement (Second) of Contracts § 264). For these reasons, the argument by SDHDA that the Court has jurisdiction to hear its claims because it primarily seeks prospective relief pursuant to various statutes and regulations governing the rights and responsibilities of the parties under Section 8 is without merit. The fact that the statutes and remedies do not provide SDHDA a right to relief in this case does not mean SDHDA is without a remedy, as the Government will still be responsible for any breach of contract which may result from the new legislation. Cuyahoga Metro Housing Auth. v. United States ("Cuyahoga II"), 57 Fed.Cl. 751, 779 (Fed.Cl.2003) (stating that the unmistakability doctrine was not applicable to shield the government from liability for breach of HAP contracts which occurred when Congress passed 1994 amendments to the United States Housing Act because such legislation deliberately targeted HUD's contractual obligations under preexisting HAP contracts in an effort to reduce outlays under the Section 8 program.). The Court finds, however, that a *1044 money judgment in the Court of Federal Claims for any such breach will be adequate. With regard to the retroactive payments SDHDA seeks under the ACC and HAP Contracts, a money judgment in the Court of Federal Claims will give the parties the exact relief sought. The Court understands that the Court of Federal Claims does not have the power to grant future payments to which SDHDA and Plaintiffs may be entitled under the terms of their contracts. However, the Court finds that as in Consol. Edison Co. v. U.S. Dept. of Energy, 247 F.3d 1378, 1384-85 (Fed.Cir.2001), that any such prospective relief will be satisfied by the res judicata effect of a money judgment. See also Bowen, 487 U.S. at 926-27, 108 S.Ct. at 2749 (Scalia J., dissenting) (disagreeing with majority that there was no adequate remedy in the Claims Court since a successful claims for money damages in the Claims Court would have precedential as well as collateral estoppel effect and therefore would be as effective in establishing the state's future "rights as would a declaratory judgment in district court."). The Court understands that the unfortunate result of its decision is that SDHDA will have to engage in piecemeal litigation first in this Court as a Defendant and then, if Plaintiffs are successful, seek relief from the Secretary in the Court of Federal Claims. However, inconvenience is simply an insufficient reason to circumvent the jurisdiction of the Court of Federal Claims. II. Has sovereign immunity been waived in this Court under the Section 8 of the United States Housing Act of 1937? SDHDA contends that sovereign immunity is waived under Section 1404a of the United States Housing Act of 1937. 42 U.S.C. § 1404a. Section 1404a provides that the "[t]he Secretary of the Housing and Urban Development may sue and be sued only with respect to its functions under the United States Housing Act of 1937." 42 U.S.C. § 1404a. The Secretary argues that he is only a nominal party and that the suit is in reality a suit against the United States because any judgment would be satisfied from the public treasury and therefore sovereign immunity bars jurisdiction in this Court. While SDHDA names the Secretary rather than the United States as a party to this action, "the nominal classification attached to a party is not dispositive for sovereign immunity inquiries." 5th Bedford Pines Apartments, Ltd. v. Brandon, 262 F.Supp.2d 1369, 1375-76 (N.D.Ga.2003) (citing Land v. Dollar, 330 U.S. 731, 738, 67 S.Ct. 1009, 91 L.Ed. 1209 (1947)). "Instead, the nature of the relief sought is the guiding factor in determining whether a suit is against an agency or the United States itself. To avoid the bar of sovereign immunity, `any judgment for the plaintiff must be recoverable from funds in the possession and control of the Secretary that are severed from Treasury funds and Treasury control.'"[5]Id. (quoting Indus. *1045 Indent. Inc. v. Landrieu, 615 F.2d 644, 646 (5th Cir.1980)); see Weeks Constr., Inc. v. Oglala Sioux Hous. Auth., 797 F.2d 668, 676 n. 9 (8th Cir.1986) (stating that resolving questions of Tucker Act jurisdiction requires a court to distinguish between suits against the United States and suits against federal instrumentalities. "Drawing this distinction requires a determination whether any recovery of damages may be had only from funds in the possession and control of the agency or whether recovery may be had from public funds in the United States Treasury."). As discussed above, the statutes and regulations cited by SDHDA may not serve to modify the future rights and responsibilities of the parties as SDHDA seeks to do, and its only avenue of relief against the Secretary is for breach of its ACC contracts. All of the cases that have examined the issue have concluded that funds from ACC contracts come from the public treasury, not from funds within the control of HUD. Portsmouth Redevelopment & Hous. Auth. v. Pierce, 706 F.2d 471, 473 (4th Cir.1983) ("The funds appropriated to HUD for payment of operating subsidies clearly originate in the public treasury, and they do not cease to be public funds after they appropriated."); 5th Bedford Pines Apartments, Ltd. v. Brandon, 262 F.Supp.2d 1369 (N.D.Ga. 2003) (evaluating whether terms of a contract between landlord and HUD required HUD to pay housing assistance payments into state magistrate court's registry to make up the difference between tenant's subsidized rent amount and full amount of rent that was being required by court for tenant); Fryar v. Kemp, 774 F.Supp. 1033 (W.D.La.1991); Carlyle Gardens Co. v. Del. State Hous. Auth., 659 F.Supp. 1300 (D.Del.1987); 1610 Corp. v. Kemp, 753 F.Supp. 1026 (D.Mass.1991); Greenleaf Ltd. P'ship v. Ill. Hous. Dev. Auth., Nos. 08-2480, 08-3446, 2009 WL 449100 (N.D.Ill. Feb. 23, 2009). For the foregoing reasons, the Court finds that the claims asserted by SDHDA in its Third-Party Complaint are against the United States, as the real party in interest. The United States has not waived its immunity as to these claims *1046 under 42 U.S.C. § 1404a and the claims are therefore dismissed for lack of jurisdiction.[6] It is hereby ORDERED that the Secretary's Motion to Dismiss SDHDA's Third Party Complaint, Doc. 43, is GRANTED. SDHDA's claims fall outside the waivers of sovereign immunity under the APA and the United States Housing Act of 1937 and thus this Court lacks subject matter jurisdiction over these claims. SDHDA's claims against the Secretary are dismissed without prejudice. NOTES [1] In the Court's Order of December 15, 2008, the Court asked the parties to respond to whether the claims of Plaintiffs, Cathedral Square Partners Limited Partnership, West Park, Ltd., 46th Street Partners Limited Partnership, and Riverview Park, Ltd., arose under federal law such that this Court has jurisdiction over the case. The Court appreciates the parties' response to this matter and after reading briefs submitted by both parties as to this issue, the Court is satisfied that it has jurisdiction over the claims brought by Plaintiffs. The focus of this opinion will therefore be on whether the Court has jurisdiction over the claims asserted by SDHDA in this Third-Party Complaint. [2] Section 702 of the APA provides in relevant part: "A person suffering legal wrong because of agency action, or adversely affected or aggrieved by the agency action within the meaning of a relevant statute, is entitled to judicial review thereof." [3] 28 U.S.C. § 1491(a)(2) provides that "[t]o provide an entire remedy and to complete the relief afforded by the judgment, the [Court of Federal Claims] may, as an incident of and collateral to any such judgment, issue orders directing restoration to office or position, placement in appropriate duty or retirement status, and correction of applicable records.. . ." [4] For example, SDHDA cites 42 U.S.C. § 1437f(c)(5) which provides that "[t]he Secretary shall take such steps as may be necessary. . . to assure that assistance payments are increased on a timely basis to cover increases in maximum monthly rents or decreases in family incomes." Furthermore, SDHDA states that HUD regulation 24 C.F.R. § 883.604(b)(1), provides that a segregated project account will be established and maintained by HUD from each project from which payments will be made for housing assistance payments and fees for SDHDA administration, if appropriate, when needed to cover increases in contract rents and for other costs approved by the Secretary. SDHDA cites further HUD regulation 24 C.F.R. § 883.604(b)(2), which provides that whenever a HUD-approved estimate of required payments under an ACC for a fiscal year exceeds the maximum annual commitment, HUD will take such additional steps as may be necessary to assure that payments under the ACC will be adequate to cover increase in contract rents. (SDHDA Br. in Opp'n to Sec'y Mot. To Dismiss at 14.) SDHDA also Cherokee Nation of Okla. v. Leavitt, 543 U.S. 631, 646, 125 S.Ct. 1172, 161 L.Ed.2d 66 (2005) for the proposition that the 1994 Congressional Amendments and Notice 95-12 may violate the Constitution because they retroactively repudiate the Government's contractual obligations. (SDHDA Br. in Resp. to Supplemental Authority at 4.) [5] In reading the parties' briefs in support of and in opposition to the Secretary's motion to dismiss, it appeared that they were in agreement that whether a claim for relief is considered as against the United States for purposes of a waiver of sovereign immunity under 42 U.S.C. § 1404a depends on whether recovery of damages will be had from the public treasury. However, in its response to the Secretary's Notice of Supplemental Authority, SDHDA appears to contradict its first assertion by arguing to the Court that under the Eighth Circuit's opinion in Bor-Son Bldg. Corp. v. Heller, 572 F.2d 174, 180-81 (8th Cir.1978), the Court need not look at the source of funds in deciding the sovereign immunity question, but just at whether the claims at issue relate to acts performed by the Secretary in carrying out his functions under the United States Housing Act of 1937. (Response to Supplemental Authority at x.) While the Supreme Court has recognized that "sue-and-be-sued waivers are to be `liberally construed,' notwithstanding the general rule that waivers of sovereign immunity are to be read narrowly in favor of the sovereign," FDIC v. Meyer, 510 U.S. 471, 480, 114 S.Ct. 996, 127 L.Ed.2d 308 (1994), the Court finds the Eighth Circuit's decision in Weeks Constr., Inc. v. Oglala Sioux Hous. Auth., 797 F.2d 668, 676 n. 9 (8th Cir.1986) to be controlling in this case. As a result, the resolution of this jurisdictional issue requires the Court to determine the source of funds that will be used to pay a judgment in this case. Bor-Son Bldg. Corp. concerned the applicability of the "sue and be sued" provision under the National Housing Act, 12 U.S.C. § 1702, which is not at issue in this case, whereas Weeks focused on the precise question that is before the Court. In Weeks, the Eighth Circuit examined whether jurisdiction was proper in the district court under Section 1404a of the United States Housing Act of 1937, 42 U.S.C. § 1404a, or whether jurisdiction properly lay in the Court of Federal Claims pursuant to the Tucker Act, 28 U.S.C. § 1491. The Court held that resolving questions of Tucker Act jurisdiction requires a court to distinguish between suits against the United States and suits against federal instrumentalities. Id. at 676 n. 9. The jurisdiction of the Federal Court of Claims under the Tucker Act is limited to claims "against the United States, founded either upon the Constitution, or any Act of Congress or any regulation of an executive department, or upon any express or implied contract with the United States. . . ." 28 U.S.C. § 1491(a)(1), whereas a waiver of sovereign immunity under 42 U.S.C. § 1404a will be found only for claims that are not considered to be against the United States. "Drawing this distinction," the Court in Weeks stated, "requires a determination whether any recovery of damages may be had only from funds in the possession and control of the agency or whether recovery may be had from public funds in the United States." Weeks, 797 F.2d at 676 n. 9. [6] The Court also notes that if the Secretary and not against the United States is deemed as the real party in interest for Section 1404a purposes, jurisdiction may not lie in the Court of Federal Claims under the Tucker Act. Tucker Act jurisdiction is limited to claims "against the United States founded either upon the Constitution, or any Act of Congress or any regulation of an executive department, or upon any express or implied contract with the United States." 28 U.S.C. § 1491. This view is further supported by Weeks, 797 F.2d at 676 n. 9, in which the Eighth Circuit explicitly stated that whether jurisdiction is proper in the district court under Section 1404a of the United States Housing Act of 1937, 42 U.S.C. § 1404a, or whether jurisdiction properly lay in the Court of Federal Claims pursuant to the Tucker Act, 28 U.S.C. § 1491, depends on whether the action is one against the United States or a federal instrumentality. It does not appear in the briefs that SDHDA argues that the Court of Federal Claims lacks jurisdiction under the Tucker Act to hear the claims presented by SDHDA in its Third-Party Complaint. SDHDA contends, rather, that a monetary judgment in the Court of Federal Claims is an inadequate remedy in this case and that the district court also has jurisdiction to hear these claims pursuant to the waivers of immunity found in the APA and Section 1404a of the United States Housing Act of 1937.

{ "pile_set_name": "FreeLaw" }

582 N.W.2d 264 (1998) Ka Ying VUE, et al., Respondent, v. STATE FARM INSURANCE COMPANIES, petitioner, Appellant. No. C1-97-632. Supreme Court of Minnesota. August 6, 1998. Meagher & Geer, P.L.L.P., William M. Hart, Katherine A. McBride, Leatha G. Wolter, Minneapolis, for appellant. Katz & Manka, Ltd., Scott A. Teplinsky, Cameron M. Parkhurst, Minneapolis, for respondent. Heard, considered, and decided by the court en banc. OPINION GARDEBRING, Justice. In this case, an automobile insurer challenges the presumption, created by statute and case law, that the person named on an automobile title as buyer is the vehicle's owner. Instead, the insurer, relying on the theories of joint ownership arising out of marital dissolution laws, asks us to establish a presumption that the spouse of the individual named on the vehicle title is also an owner. Because we find no basis in the Minnesota *265 No-Fault Act or in our previous cases for such a position, we reject the insurer's claim and affirm the court of appeals. Respondent Ka Ying Vue was a passenger in a 1985 Buick Skylark driven by her husband Ker Vang on January 22, 1996, when the car was involved in a collision with an uninsured stolen motor vehicle.[1] The Buick Skylark title named only Vang as the buyer of the vehicle; it was not insured at the time of the collision. However, appellant State Farm Insurance Companies ("State Farm") had issued an insurance policy covering Vang's other vehicle, a 1979 Chevrolet van, and Vue was an additional insured under that policy. Vue filed suit against State Farm, claiming uninsured motorist benefits under the State Farm policy covering the Chevrolet van, based on the uninsured status of the stolen vehicle. State Farm filed a motion for summary judgment against Vue, claiming that Vue was not covered under the policy because she was occupying an owned but uninsured vehicle at the time of the accident. The district court granted State Farm's motion for summary judgment, concluding that there was no coverage because: (1) the Buick Skylark was not an "uninsured vehicle" under the policy, which excluded uninsured motorist coverage if the uninsured vehicle was one "[o]wned by or furnished or available for the regular use of you or any family member;" and (2) the Buick Skylark was a "family vehicle," and therefore the exclusion for injury "to any insured while occupying a motor vehicle owned or leased by the insured if it is not insured for uninsured motor vehicle coverage" was applicable to Vue's claim. On appeal, the court of appeals reversed. See Vue v. State Farm Ins. Companies, 568 N.W. 2d 527 (Minn.App.1997). The court held that Vang, who held legal title to the Buick Skylark, was the vehicle owner, and not Vue. Id. at 529. Since Vue was not an owner of the Buick Skylark, the court held that the exclusion for injury "to any insured while occupying a motor vehicle owned or leased by the insured" did not apply to Vue. Id. The court also held that, to the extent the trial court based its decision on the uninsured status of the Buick Skylark, the court erred in granting summary judgment, since the claim for coverage was based on the uninsured status of the other vehicle involved in the collision, and not on the uninsured status of the Buick Skylark. Id at fn. 3. State Farm now appeals. On appeal from summary judgment, this court must determine whether there are any genuine issues of material fact and whether the trial court erred in its application of the law. Vesta State Bank v. Independent State Bank, 518 N.W.2d 850, 853 (Minn.1994). Questions of statutory construction are questions of law, and thus subject to de novo review. Hibbing Educ. Ass'n v. Public Employment Relations Bd., 369 N.W.2d 527, 529 (Minn.1985). Interpretation of an insurance policy, and its application to the facts of the case, are likewise questions of law. Meister v. Western Nat'l Mut. Ins. Co., 479 N.W.2d 372, 376 (Minn.1992). Although State Farm concedes that Vue has alleged facts sufficient to establish a prima facie case of coverage for uninsured motorist benefits, the insurer argues that Vue is nevertheless precluded from receiving benefits because of an exclusionary clause in the policy.[2] The policy on the Chevrolet van *266 provides that "there is no [uninsured motorist] coverage * * * for bodily injury to any insured while occupying a motor vehicle owned or leased by the insured if it is not insured for uninsured motor vehicle coverage." State Farm argues that Vue is a co-owner of the Buick Skylark that she was occupying at the time of the accident and was therefore "occupying a motor vehicle owned or leased by the insured." Thus, it is State Farm's position that she is barred from recovering uninsured motorist benefits under the policy. Both parties agree that the sole issue on review is whether Vue is an owner of the uninsured Buick Skylark. If Vue is an owner, the exclusionary clause would apply to preclude coverage for her injuries; if Vue is not an owner, then the exclusionary clause would not apply and Vue would be entitled to receive uninsured motorist benefits as an "insured" under her husband's policy on the Chevrolet van.[3] The State Farm policy does not define the "owner" of a motor vehicle. However, the legislature has provided guidance on this issue. The Minnesota No-Fault Automobile Insurance Act, Minn.Stat. §§ 65B.41-.71 (1996) (hereinafter, "No-Fault Act") defines an "owner" of a motor vehicle as "a person, other than a lienholder or secured party, who owns or holds legal title to a motor vehicle or is entitled to the use and possession of a motor vehicle." Minn.Stat. § 65B.43, subd. 4. Vue's husband Vang is listed on the title as the sole buyer of the vehicle. This court has previously established that the certificate of title creates a rebuttable presumption of ownership for purposes of both the No-Fault Act and the Motor Vehicle Certificate of Title Act, Minn.Stat. ch. 168A (1996). Arneson v. Integrity Mut. Ins. Co., 344 N.W.2d 617, 618 (Minn.1984). We have also made clear that a party may introduce extrinsic evidence to rebut the presumption and prove that someone else actually owns the vehicle in question. Id. State Farm, however, argues that as the spouse of the owner named on the title, Vue is a presumptive co-owner of the vehicle. To support its argument, State Farm points to the statutory presumption in marital dissolution that any property acquired during a marriage "by the parties * * * to a dissolution, legal separation, or annulment" is presumed to be marital property "regardless of whether title is held individually or by the spouses in a form of coownership." Minn.Stat. § 518.54, subd. 5 (1996). State Farm argues that the same deference accorded to the marital relationship in the context of property division for dissolution purposes should be constructively applied to the marital relationship in the context of motor vehicle insurance. As additional support for its general argument that Vue is not entitled to received uninsured motorist benefits, State Farm directs our attention to the policy enunciated in Hanson v. American Family Mut. Ins. Co., 417 N.W.2d 94 (Minn.1987). In Hanson and its progeny, this court recognized that the 1985 amendments to the Minnesota No-Fault Act "reflect a broad policy decision to tie uninsured motorist * * * coverage to the particular vehicle involved in an accident." Id. at 96. Hanson interpreted the 1985 amendments to preclude uninsured motorist coverage where the injured claimant was driving his own uninsured vehicle but owned another insured motor vehicle.[4]Id. The amendments provided in part: (7) The uninsured and underinsured motorist coverages required by this subdivision *267 do not apply to bodily injury of the insured while occupying a motor vehicle owned by the insured, unless the occupied vehicle is an insured motor vehicle. Minn.Stat. § 65B.49, subd. 3a(7). In the present case, however, this statutory provision does not apply, for the same reason that the policy provision that mirrors it does not applybecause, based on the present state of the record, there is no indication that Vue was occupying a motor vehicle she owned. State Farm also argues that Minn.Stat. § 65B.49, subd. 3a(5) should operate to preclude benefits for Vue in this case. That section provides that (5) If at the time of the accident the injured person is occupying a motor vehicle, the limit of liability for uninsured and underinsured motorist coverages available to the injured person is the limit specified for that motor vehicle. However, if the injured person is occupying a motor vehicle of which the injured person is not an insured, the injured person may be entitled to excess insurance protection afforded by a policy in which the injured party is otherwise insured. Minn.Stat. § 65B.49, subd. 3a(5). Vue was certainly occupying a motor vehicle at the time of the accident. Ordinarily, subdivision 3a(5) would operate to require the injured occupant to look first and exclusively to the policy limits on the occupied vehicle for uninsured motorist benefits. However, the statute allows an injured occupant to look to another policy that might provide coverage, if the injured person is not an "insured" of the motor vehicle occupied. Since no insurance policy, as required by the No-Fault Act, existed for the Buick Skylark at the time of the accident, Vue was not an "insured" of that vehicle and can look to the policy on the Chevrolet van, under which she is an insured. We also find the trial court's reliance on Petrich ex rel Lee v. Hartford Fire Ins. Co., 427 N.W.2d 244 (Minn. 1988) to be misplaced. The issue in Petrich was whether an insured stepson could collect uninsured motorist benefits from his stepfather's policy after a single-car collision in an uninsured motor vehicle owned by the stepfather. Id. at 245. The key difference between Petrich and this case is that in Petrich it was the uninsured status of the occupied vehicle that was asserted in order to claim uninsured motorist benefits. However, in this case the other vehicle involved in the collision was uninsured, forming the basis of Vue's claim for uninsured motorist benefits. In the face of applicable statutory language, our previous cases and even the provisions of its own policy, State Farm urges this court either to recognize a new rebuttable presumption, that the spouse of the person named on the title as the vehicle's owner is also a co-owner of the vehicle, or to read into the statute and contract at issue prohibitions that simply do not exist. We decline to do either. No-fault automobile insurance is not judicially created, but the product of statute and contract. We recognize the legislative interest in requiring owners of motor vehicles in this state to maintain insurance policies to compensate for losses associated with maintenance or use of a motor vehicle. See Minn. Stat. § 65B.42(1). We also recognize the policy argument that "a family owning two motor vehicles should not be permitted to pay for insurance on only one and recover benefits for injuries sustained while operating the other." Nygaard v. State Farm Mut. Auto. Ins. Co., 301 Minn. 10, 18-19, 221 N.W.2d 151, 156 (1974). However, there is no provision in either the No-Fault Act or the State Farm insurance policy before us that precludes uninsured motorist coverage on the facts of this case, as presently developed. Further, we think that to import into the tightly drafted statutory scheme of no-fault insurance, property concepts from marital dissolution, another statutory creature, is to risk disrupting both areas of the law and creating significant unintended consequences. Finally we note that State Farm is not without a remedy. Both the statute and the contract provide a mechanism by which State Farm can rebut the statutory presumption that Vang, as the sole owner listed on the title, is the sole owner of the Buick Skylark. We cannot attribute to Vue ownership of the Buick Skylark when State Farm has not even inquired into the factual basis for its claim *268 that she is an owner of the Buick. On remand, State Farm may yet delve into the factual questions behind the naked title to establish "use or possession" of the Skylark by Vue to prove that Vue is an owner of the Buick Skylark. On summary judgment, however, we are limited to the record before us, which is devoid of any such extrinsic evidence to rebut the presumptive evidence of the title that Vang is the sole owner of the Buick Skylark. We emphasize that our holding today is limited to the issue before us. We simply hold that, in the absence of extrinsic evidence to rebut the presumption that the injured claimant is not an owner of the vehicle she was occupying at the time of the accident, the exclusionary clauses in the policy and Minn.Stat. § 65B.49, subds. 3a(5), (7) do not preclude uninsured motorist benefits. Accordingly, we affirm the decision of the court of appeals, reversing the trial court's grant of summary judgment in favor of State Farm. Affirmed and remanded for proceedings consistent with this opinion. NOTES [1] Since the vehicle that collided with the Buick Skylark was a stolen vehicle, it was uninsured for purposes of this litigation. The driver of the stolen vehicle ran through a stop sign while attempting to elude police. [2] In an action to determine insurance coverage, the insured bears the initial burden of proof to establish a prima facie case of insurance coverage and entitlement to benefits. SCSC Corp. v. Allied Mut. Ins. Co., 536 N.W.2d 305, 311 (Minn.1995). Once the insured has established a prima facie case of coverage, the burden shifts to the insurer to prove the applicability of any exclusionary clause asserted as an affirmative defense to the insured's claim of coverage. Id. at 313. The policy covering the Chevrolet van provided that State Farm "will pay damages for bodily injury an insured is legally entitled to collect from the owner or driver of an uninsured motor vehicle. The bodily injury must be caused by accident arising out of the operation, maintenance or use of an uninsured motor vehicle." In the present case, Vue is an insured under the Chevrolet van policy, which defines an insured, in relevant part, as "1. the first person named in the declarations; [and] 2. his or her spouse." Vang was the insured under the van policy; thus, his spouse Vue is also an insured. Further, the Minnesota No-Fault Act, Minn.Stat. §§ 65B.41.71 (1996) (hereinafter, "No-Fault Act"), provides that an insured, for purposes of the act, includes "the named insured and the following persons not identified by name as an insured while (a residing in the same household with the named insured and (b) not identified by name in any other contract * * * as an insured: (1) a spouse." Minn.Stat. § 65B.43, subd. 5. [3] At oral argument, State Farm conceded that under our prior holdings, "the insured" in the exclusionary clause must be construed as the same person as "any insured" earlier in the clause. See Hogs Unlimited v. Farm Bureau Mut. Ins. Co., 401 N.W.2d 381, 384-85 (Minn.1987). Thus, the exclusionary clause would apply to Vue only if Vue owns the Buick Skylark. [4] In Hanson, we expressly reserved the question of "what effect section 65B.49, subd. 3a(7), might have on a claimant who does not own the [vehicle] involved in the accident." Hanson, 417 N.W.2d at 96, n. 2.

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Filed 4/30/18 CERTIFIED FOR PUBLICATION COURT OF APPEAL, FOURTH APPELLATE DISTRICT DIVISION ONE STATE OF CALIFORNIA THE PEOPLE, D071983 Plaintiff and Respondent, v. (Super. Ct. No. MH110895) JOSEPH BOCKLETT, Defendant and Appellant. APPEAL from a judgment of the Superior Court of San Diego County, Howard H. Shore, Judge. Affirmed. Rudy Kraft, under appointment by the Court of Appeal, for Defendant and Appellant. Xavier Becerra, Attorney General, Gerald A. Engler, Chief Assistant Attorney General, Julie L. Garland, Assistant Attorney General, Arlene A. Sevidal and Minh U. Le, Deputy Attorneys General, for Plaintiff and Respondent. Joseph Bocklett appeals from a jury verdict adjudicating him a sexually violent predator (SVP) under the Sexually Violent Predators Act (the Act) (Welf. & Inst. Code, 1 § 6600 et seq.). On appeal, he challenges the constitutionality of Penal Code section 3000, subdivision (a)(4) (hereafter Penal Code section 3000(a)(4)), which tolls the parole period for an SVP on equal protection and ex post facto grounds. He also asserts that the procedure for obtaining conditional release under the Act violates equal protection. We disagree and affirm the judgment. FACTUAL AND PROCEDURAL BACKGROUND In November 2014 the San Diego County District Attorney filed a petition seeking to commit Bocklett as an SVP under the Act. Bruce Yanofsky, Ph.D., a clinical and forensic psychologist, evaluated Bocklett to determine whether he is an SVP. Dr. Yanofsky interviewed Bocklett three times—in 2014, 2015 and 2016. He reviewed Bocklett's criminal records, medical records, probation reports, and police reports for two of Bocklett's crimes. Dr. Yanofsky read a police report regarding the offense Bocklett committed in 1976, and then talked to Bocklett about that conviction. In 1976, when Bocklett was 31 years old, he molested his nine-year old stepdaughter for several months. He then started molesting his five-year-old stepdaughter. Bocklett explained that he started molesting his stepdaughters for sexual gratification and found their innocence appealing. He pleaded guilty to a single count of committing a lewd or lascivious act on his younger stepdaughter in violation of Penal Code section 288. Bocklett was placed on probation 1 Undesignated statutory references are to the Welfare and Institutions Code. 2 and received treatment. He did not find the treatment to be effective and did not "care for it." In 1983, when he was 38 years old, Bocklett married a woman and then began molesting his four-year-old stepson by having the child play with his penis, engaging in mutual oral copulation and then sodomizing the boy. Bocklett admitted to Dr. Yanofsky that he enjoyed molesting the boy, had fantasies about him, and acted out or experimented with some of his fantasies with the boy. The molestation continued for approximately a year, on an almost weekly basis. Bocklett pleaded guilty to sodomy (Pen. Code, § 286, subd. (c)) and was sentenced to 13 years in prison. He was released from prison in 1990 and received treatment. He stopped receiving treatment because he did not want to hear about other people's problems. Bocklett also told Dr. Yanofsky that in 1994 he molested the four-year-old daughter of a woman he had met through a dating service and eventually married. He saw the child naked and became excited. He started "rubbing her." He later orally copulated and digitally penetrated the child. He found the molestation difficult to stop and believed that the conduct was "okay" as long as it was consensual or the child went along with it. He eventually pleaded guilty to a lewd or lascivious act on a child under 14 years old (Pen. Code, § 288, subd. (a)). Dr. Yanofsky determined that Bocklett had three qualifying prior convictions for sexual offenses and thus met the first SVP criteria. Bocklett also satisfied the second SVP criteria, the presence of a mental health condition that predisposes a person to commit sexual crimes. Specifically, Dr. Yanofsky diagnosed him with pedophilic 3 disorder, mixed type and nonexclusive in that Bocklett is sexually attracted to both male and female individuals, young children, and adults. Dr. Yanofsky also determined that Bocklett was likely to engage in violent sex offenses if released, the third SVP criteria. Dr. Yanofsky testified that Bocklett's reoffense would be predatory in nature because Bocklett has a history of forming relationships with vulnerable woman to gain access to their children to gratify his sexual needs. Harry Goldberg, Ph.D., a forensic psychologist, also interviewed Bocklett three times over three years to determine if Bocklett met the criteria for commitment as an SVP. Dr. Goldberg also reviewed Bocklett's records, including police reports. Dr. Goldberg opined that Bocklett met the criteria for commitment as an SVP. Brian Abbott, Ph.D., a licensed clinical psychologist, testified for the defense. He interviewed Bocklett three times—in March 2015, April 2016 and January 2017. Dr. Abbott testified that Bocklett does not currently suffer from pedophilic disorder. Dr. Abbott found that Bocklett "may have continued to have pedophilic arousal through 2008," but there was no evidence that Bocklett suffered from the disorder after 2008. Dr. Abbott did not believe that Bocklett posed a serious and well-founded risk of engaging in sexually violent predatory acts. Dr. Abbott reviewed the evaluations prepared by Drs. Yanofsky and Goldberg. Dr. Abbott criticized the clinically adjusted actuarial approach utilized by Drs. Yanofsky and Goldberg to evaluate Bocklett. Although such an approach identifies sources of risk, Dr. Abbott testified that an SVP evaluation is concerned with the probability or 4 likelihood of risk. Thus, in Dr. Abbott's opinion, the approach utilized by Drs. Yanofsky and Goldberg is not relevant in addressing the substantial danger threshold. DISCUSSION I. THE ACT An SVP is defined as "a person who has been convicted of a sexually violent offense against one or more victims and who has a diagnosed mental disorder that makes the person a danger to the health and safety of others in that it is likely that he or she will engage in sexually violent criminal behavior." (§ 6600, subd. (a)(1).) Whenever the director of the Department of Corrections and Rehabilitation determines that a defendant serving a prison term may be an SVP, a screening is conducted in accordance with an assessment protocol developed by the Department of State Hospitals (DSH). (People v. Hurtado (2002) 28 Cal.4th 1179, 1183.) " 'If that screening leads to a determination that the defendant is likely to be [an SVP], the defendant is referred to the [DSH] for an evaluation by two psychiatrists or psychologists. (§ 6601, subds. (b) & (c).) If both find that the defendant "has a diagnosed mental disorder so that he or she is likely to engage in acts of sexual violence without appropriate treatment and custody" (§ 6601, subd. (d)), [DSH] forwards a petition for commitment to the county of the defendant's last conviction (ibid.). If the county's designated counsel concurs with the recommendation, he or she files a petition for commitment in the superior court. (§ 6601, subd. (i).)' " (Ibid.) The trial court reviews the petition and determines "whether the petition states or contains sufficient facts that, if true, would constitute probable cause to believe that the 5 [alleged SVP] is likely to engage in sexually violent predatory criminal behavior upon his or her release." (§ 6601.5.) If the trial court determines the petition, on its face, supports a finding of probable cause, then the court orders that the offender be kept in a secure facility until a probable cause hearing under section 6602 is conducted. (§ 6601.5.) If the trial court finds probable cause, it orders a trial to determine whether the offender is an SVP under section 6600. (§ 6602, subd. (a).) The offender must remain in a secure facility between the time probable cause is found and the time trial is completed. (Ibid.) At trial, the trier of fact determines whether, beyond a reasonable a doubt, the offender is an SVP. (§ 6604.) To establish a person is an SVP, the government must prove the following: (1) the offender has been convicted of a qualifying sexually violent offense against at least two victims, (2) the offender has a diagnosed mental disorder, (3) the disorder makes it likely the offender would engage in sexually violent conduct if released, and (4) this sexually violent conduct will be predatory in nature. (Cooley v. Superior Court (2002) 29 Cal.4th 228, 246 & fn. 9.) The government must establish these elements beyond a reasonable doubt and the jury must unanimously agree before finding the defendant is an SVP. (Reilly v. Superior Court (2013) 57 Cal.4th 641, 648.) If the trier of fact determines the offender is an SVP, the offender is committed for an indefinite term to the custody of the DSH for appropriate treatment and confinement in a secure facility. (§ 6604.) Persons undergoing the commitment process as an SVP and persons committed as an SVP have their parole periods tolled until they are discharged from their SVP commitment. (Pen. Code, § 3000(a)(4).) 6 II. ALLEGED EVIDENTIARY ERROR A. Additional Background The People sought the admission of three exhibits—one relating to each of Bocklett's qualifying offenses. Two of these exhibits contained redacted police reports relating to his 1983 and 1994 qualifying offenses. Defense counsel objected to the admission of the police reports as unreliable hearsay and not admissible under section 6600 and People v. Sanchez (2016) 63 Cal.4th 665 (Sanchez). She contrasted the police reports with probation reports, which are subject to correction should a defendant object to the accuracy of their content. The trial court admitted the exhibits into evidence, explaining that the reports were admissible under section 6600, subdivision (a)(3). B. Analysis Bocklett contends that the admission of the police reports regarding his 1983 and 1994 qualifying offenses violated his right to due process. He claims that the admission of the police reports was highly prejudicial as these reports provided the only real source of information describing his most recent qualifying offense. Even assuming, without deciding, that admission of the police reports was error, we conclude that the assumed error was harmless. " 'Hearsay evidence' is evidence of a statement that was made other than by a witness while testifying at the hearing and that is offered to prove the truth of the matter stated. [¶] . . . Except as provided by law, hearsay evidence is inadmissible." (Evid. Code, § 1200, subds. (a), (b).) On direct examination, experts may testify regarding the matters on which they relied in forming their opinion, but they may not testify as to the 7 details of such matters if they are otherwise inadmissible. (People v. Coleman (1985) 38 Cal.3d 69, 92, disapproved on another point in People v. Riccardi (2012) 54 Cal.4th 758, 824, fn. 32.) "The rule rests on the rationale that while an expert may give reasons on direct examination for his opinions, including the matters he considered in forming them, he may not under the guise of reasons bring before the jury incompetent hearsay evidence." (Coleman, at p. 92.) We apply "the abuse of discretion standard of review to any ruling by a trial court on the admissibility of evidence, including one that turns on the hearsay nature of the evidence in question." (People v. Waidla (2000) 22 Cal.4th 690, 725.) An error regarding the admission of evidence requires reversal if "it is reasonably probable that a result more favorable to the appealing party would have been reached in the absence of the error." (People v. Watson (1956) 46 Cal.2d 818, 836.) In Sanchez, supra, 63 Cal.4th 665, our Supreme Court held that an expert cannot "relate as true case-specific facts asserted in hearsay statements, unless they are independently proven by competent evidence or are covered by a hearsay exception." (Id. at p. 686.) The court nevertheless reaffirmed the principle that an "expert may still rely on hearsay in forming an opinion, and may tell the jury in general terms that he did so." (Id. at p. 685.) The Sanchez rule applies to civil SVP proceedings. (People v. Roa (2017) 11 Cal.App.5th 428, 448-449; People v. Burroughs (2016) 6 Cal.App.5th 378, 403 (Burroughs).) "The existence of any prior convictions [in an SVP proceeding] may be shown with documentary evidence . . . including, but not limited to, preliminary hearing transcripts, trial transcripts, probation and sentencing reports, and evaluations by the 8 [DSH]." (§ 6600, subd. (a)(3).) Our high court later explained that "[b]y permitting the use of presentence reports at the SVP proceeding to show the details of the crime, the Legislature necessarily endorsed the use of multiple-level-hearsay statements that do not otherwise fall within a hearsay exception." (People v. Otto (2001) 26 Cal.4th 200, 208 (Otto), italics added.) The expansive hearsay exception accorded by section 6600, subdivision (a)(3) was intended to relieve victims of the burden of testifying about the details of crimes committed many years ago. (Otto, at p. 208.) The Otto court concluded that the statutory authorization regarding the admission of such evidence did not violate a defendant's right to due process. (Id. at p. 203.) In Burroughs, the court held that police reports were admissible under the Otto hearsay exception. (Burroughs, supra, 6 Cal.App.5th at p. 410.) Bocklett argues that the analysis in Burroughs was flawed. We need not address this issue because, even if the trial court erroneously admitted the police reports, the assumed error was harmless based on the expert testimony that relayed substantially all the conduct stated in the police reports. First, Bocklett tacitly conceded that admission of the police report regarding his 1983 conviction was harmless. The police report for that crime relayed the victim's statement to his mother that Bocklett had " 'stuck his penis up [my] butt.' " Bocklett, however, admitted this conduct to both Drs. Yanofsky and Goldberg. Bocklett told Dr. Yanofsky that he had engaged in mutual oral copulation with and sodomized the victim. Bocklett admitted essentially the same conduct to Dr. Goldberg. 9 The 1994 police report for Bocklett's 2000 conviction contains the victim's statement to her mother that Bocklett had touched her private parts while she was naked. She also told the police that she and Bocklett had put their " 'bodies' " and " 'privacies' " together. Regarding this conviction, Bocklett told Dr. Yanofsky that he rubbed, orally copulated, and digitally penetrated the victim. He also told Dr. Goldberg that he would have the victim "sit on his lap and rock back and forth, and that led him to other incidents in which he would take his clothes off, would place lotion on [the victim] and fondle and penetrate her vagina, and then he also engaged in acts of oral copulation of her." Bocklett does not contest that these statements were admissible under the hearsay exception for a party admission under Evidence Code section 1220. (People v. Hovarter (2008) 44 Cal.4th 983, 1007-1008.) Based on this overwhelming admissible evidence of qualifying sexually violent offenses, any error in receiving the police reports in evidence was harmless. For the same reason, there is no basis for Bocklett's contention that his due process right to a fair trial was violated. III. ALLEGED CONSTITUTIONAL VIOLATIONS A. Alleged Equal Protection Violation Regarding Tolling 1. General background California provides for the involuntary civil commitment of several classes of offenders, either after or in lieu of a term of criminal incarceration, based on the risk of danger that they present to others or to themselves. These include SVP's (§ 6600 et seq.) and mentally disordered offenders (MDO's) (Pen. Code, § 2960 et seq. (the MDO Act)). 10 Under the MDO Act, "offenders who have been convicted of violent crimes related to their mental disorders, and who continue to pose a danger to society, receive mental health treatment during and after the termination of their parole until their mental disorder can be kept in remission. [Citation.] Although the nature of an offender's past criminal conduct is one of the criteria for treatment as [an MDO], the MDO Act itself is not punitive or penal in nature. [Citation.] Rather, the purpose of the scheme is to provide MDO's with treatment while at the same time protecting the general public from the danger to society posed by an offender with a mental disorder." (In re Qawi (2004) 32 Cal.4th 1, 9.) The MDO Act provides that an MDO may be involuntarily committed at three different stages: as a condition of parole (Pen. Code, § 2962), in conjunction with the extension of parole (Pen. Code, § 2966, subd. (c)), and following release from parole (Pen. Code, §§ 2970 & 2972). (Lopez v. Superior Court (2010) 50 Cal.4th 1055, 1061- 1063, disapproved on other grounds by People v. Harrison (2013) 57 Cal.4th 1211, 1230, fn. 2.) 2. Equal protection and the Act "Equal protection requires the state to treat similarly situated persons alike, with some exceptions in which the disparate treatment is sufficiently related to the purpose of the [law] in question." (People v. Jacobs (1992) 6 Cal.App.4th 101, 103.) The equal protection clause applies to civil commitment statutes "to ensure that a particular group of civil committees is not unfairly or arbitrarily subjected to greater burdens." (People v. McKee (2010) 47 Cal.4th 1172, 1199 (McKee I).) The similarly situated inquiry 11 examines whether two groups are similarly situated for purposes of the law challenged, not whether they are similarly situated for all purposes. (Id. at p. 1202.) The threshold question is "whether two classes that are different in some respects are sufficiently similar with respect to the laws in question to require the government to justify its differential treatment of these classes under those laws." (Ibid.) "If persons are not similarly situated for purposes of the law, an equal protection claim fails at the threshold." (People v. Buffington (1999) 74 Cal.App.4th 1149, 1155.) The McKee I court concluded that MDO's and SVP's were similarly situated for purposes of equal protection analysis regarding the length of their commitment and the burden to prove release. (McKee I, supra, 47 Cal.4th at pp. 1202-1203.) The case was remanded to the trial court to determine whether the People could demonstrate "the constitutional justification" (id. at p. 1208) for the indefinite commitment provisions of the Act and imposing on SVP's a greater burden than is imposed on MDO's in order to obtain release from commitment. (McKee I, at pp. 1208-1209.) On remand, the trial court in McKee I, supra, 47 Cal.4th 1172 held an evidentiary hearing and then issued a statement of decision finding that the People established, by a preponderance of the evidence, that the disparate treatment of SVP's "under the Act was based on a reasonable perception of the greater and unique dangers they pose compared to" MDO's. (People v. McKee (2012) 207 Cal.App.4th 1325, 1332 (McKee II).) On review, the appellate court affirmed the trial court's decision: "We, like the trial court, conclude the disparate treatment of SVP's under the Act is reasonable and factually based and was adequately justified by the People at the evidentiary hearing on remand. 12 Accordingly, we conclude the Act does not violate McKee's constitutional equal protection rights." (McKee I, at p. 1348.) The Supreme Court denied review of McKee II. 3. Additional background Under the current version of Penal Code section 3000(a)(4), persons undergoing the commitment process as an SVP and persons committed as an SVP have their parole periods tolled until they are discharged from their SVP commitment. (Pen. Code, § 3000(a)(4)(A).) If the person is ultimately determined not to be an SVP, the parole period is retroactively untolled and the person gets credit for the entire time spent in custody as a prospective SVP. (Pen. Code, § 3000(a)(4)(B).) In contrast, under the MDO Act a state prisoner may be civilly committed for involuntary treatment as a condition of parole if statutorily enumerated criteria are met. (Pen. Code, §§ 2962, 2966.) If the state wishes to continue the committee's involuntary treatment past the expiration of his or her period of parole, the appropriate district attorney must file a petition in the superior court and prove at a hearing that the person continues to qualify for involuntary treatment, in which case treatment will be continued for one year, unless extended again under the same process. (Pen. Code, §§ 2970, 2972.) 4. Analysis Bocklett argues that Penal Code section 3000(a)(4), which tolls the parole period for an SVP, violates his right to equal protection because he is similarly situated to MDO's who do not have a similar tolling provision. Bocklett concedes that he failed to raise this issue below, but claims it is cognizable on appeal because he was not adversely 13 affected by the statutory provisions until he was actually committed as an SVP; thus, there was no point in raising the issue in the trial court. If we determine that trial counsel should have raised this issue, then he claims counsel provided ineffective assistance by failing to do so. The People respond that we should decline to address Bocklett's equal protection argument because the issue is not ripe for review. Assuming the issue is ripe for adjudication, the People claim Bocklett forfeited the issue by failing to raise it once the trial court concluded that he met the SVP criteria. For the sake of argument, we assume that the People's ripeness challenge to this argument is not well taken. We also exercise our discretion to address the argument on its merits to avoid Bocklett's alternative ineffective assistance of counsel claim. (In re Spencer S. (2009) 176 Cal.App.4th 1315, 1323 [we "have discretion to address constitutional issues" raised for the first time on appeal].) Because we find no equal protection violation, we will assume, without deciding, that these two groups are similarly situated for purposes of the restrictions to be placed upon them when they are returned to the community post-commitment and proceed to the second step of the equal protection analysis. (Id. at p. 1325.) Once it is determined that two groups are similarly situated for the purposes of a statute, we next must determine what level of analysis to apply to the distinction. Bocklett asserts that strict scrutiny is the correct standard for disparate involuntary civil commitment schemes because liberty is a fundamental right. The People disagree, arguing that rational basis review applies because the Penal Code section 3000(a)(4) 14 tolling provisions applicable to SVP's do not significantly infringe upon a fundamental right. The People, however, also analyze the issue under the strict scrutiny standard. We need not dwell on this issue because, as we shall explain, Bocklett's disparate treatment argument fails under the strict scrutiny standard. Under "the strict scrutiny standard, the state has the burden of establishing it has a compelling interest that justifies the law and that the distinctions, or disparate treatment, made by that law are necessary to further its purpose. [Citation.] Alternatively stated, applying the strict scrutiny standard, a law 'is upheld only if it is necessary to further a compelling state interest.' " (McKee II, supra, 207 Cal.App.4th at p. 1335.) We conclude that California has shown a compelling interest to toll the parole period for SVP's so that SVP's receive parole supervision after they have been fully discharged from their commitment. Notably, this is not a situation where MDO's are treated differently. Rather, it is a legal impossibility to toll the parole period for an MDO because mental health treatment for an MDO is imposed as a condition of parole. (Pen. Code, §§ 2962, 2966.) On its original enactment, the Act "narrowly target[ed] 'a small but extremely dangerous group of [SVP's] that have diagnosable mental disorders [who] can be identified while they are incarcerated.' " (Cooley v. Superior Court, supra, 29 Cal.4th at p. 253.) In McKee II, the court concluded "that the nature of the trauma caused by sex offenses is generally more intense or severe than the trauma caused by nonsex offenses and is sometimes unique to sex offenses" (McKee II, supra, 207 Cal.App.4th at p. 1343), and thus substantial evidence supported "a reasonable perception by the electorate, as a 15 legislative body, that the harm caused by child sexual abuse and adult sexual assault is, in general, a greater harm than the harm caused by other offenses and is therefore deserving of more protection." (Id. at pp. 1343-1344.) Additionally, SVP's "pose a higher risk of sexual reoffending than do MDO's." (Id. at p. 1342, italics omitted.) While MDO's are "overwhelmingly treated with psychotropic medications, resulting in their stabilization and amenability to psychosocial support" (id. at p. 1344), SVP "treatment plans are not based on medications, but rather on giving them the tools to limit their risk of sexually reoffending." (Id. at p. 1345.) " '[A]s a class, SVP's are clinically distinct from MDO's . . . and . . . those distinctions make SVP's more difficult to treat and more likely to commit additional sexual offenses than . . . MDO's . . . .' In particular, SVP's are less likely to participate in treatment, less likely to acknowledge there is anything wrong with them, and more likely to be deceptive and manipulative." (Id. at p. 1347.) The Legislature added the current version of the tolling provision to the Act by amendment (the 2011 Amendment). (Stats. 2011, ch. 359, § 3, operative Jan. 1, 2012.) Before the 2011 Amendment, Penal Code section 3000 provided that " 'the parole period of any person found to be a [SVP] shall be tolled until that person is found to no longer be [an SVP], at which time the period of parole, or any remaining portion thereof, shall begin to run.' " (Assem. Com. on Public Safety, Analysis of Sen. Bill No. 179 (2011- 2012 Reg. Sess.) July 5, 2011, p. 2.) The amendment was drafted to "close[] a loophole in the law to ensure that sex offenders serve their court-ordered parole time. It does not expand or extend parole—it simply corrects the timing of the parole. [¶] Due to an inconsistency in the law, the parole time for these offenders begins as soon as they are 16 released from prison, and continues while the offender is being assessed in the state hospital under full security—thus receiving overlapping supervision services. As a consequence, some offenders run out the clock on their three year court-ordered parole time and are released into the community with no supervision—contrary to the intent of the law. [¶] [This bill] would instead require that the parole time occur after the offender is released from hospital custody." (Ibid.) An argument made in support of the bill noted that '' '[u]nder current law, the parole period begins to run as soon as the offender is released from prison. This means that an offender believed to be an SVP can effectively complete his or her mandated parole period while confined in a state mental hospital awaiting an often delayed judicial determination of SVP status. As a result, offenders can be released into community with no supervision upon release from the state mental hospital.' " (Id. at p. 4.) Bocklett does not address these concerns. Rather, Bocklett challenges the parole tolling provision that applies to SVP's, arguing that it does not serve a compelling governmental interest for SVP's to remain on parole after they have been fully discharged from their commitment. He maintains that once an SVP has been unconditionally discharged, the person is no longer an SVP and thus the risks identified in McKee II are no longer present. We disagree. The Legislature pointed out that the tolling provision impacts when parole starts; it does not change the length of time an SVP spends on parole. Before the amendment at issue, parole started immediately when an individual's prison sentence ended, before the individual was even determined to be an SVP. Due to the time needed to adjudicate an 17 individual as an SVP, the individual's parole period could expire before the person was even adjudicated an SVP. Thus, an individual could be released into the community from SVP commitment with no parole supervision. The evidence presented in McKee II shows a compelling governmental interest exists for SVP's to receive parole supervision after they have been fully discharged from their commitment. The clinical distinctions between SVP's and MDO's "make SVP's more difficult to treat and more likely to commit additional sexual offenses than [] MDO's." (McKee II, supra, 207 Cal.App.4th at p. 1347.) Critically, an SVP poses a higher risk of sexual reoffending than does an MDO. (Id. at p. 1342.) Although an SVP committee who is unconditionally discharged from custody is deemed not "likely" to reoffend (§ 6600, subd. (a)(1)), this does not mean that the individual poses no risk of reoffending. The risk of reoffense, " 'to a particularly vulnerable class of victims, such as children' " (McKee II, at p. 1347), justifies the requirement that a discharged SVP committee receive parole supervision. (Ibid.) Accordingly, we conclude that the tolling provision of the Act does not violate Bocklett's constitutional equal protection rights. B. Alleged Equal Protection Violation Regarding Conditional Release 1. Additional background a. The MDO Act Under the MDO Act, a state prisoner may be civilly committed for involuntary treatment as a condition of parole if statutorily enumerated criteria are met. (Pen. Code, §§ 2962, 2966.) When MDO treatment is ordered as a condition of parole, the treatment must be inpatient "unless the [DSH] certifies to the Board of Parole Hearings that there is 18 reasonable cause to believe the parolee can be safely and effectively treated on an outpatient basis, in which case the Board of Parole Hearings shall permit the [DSH] to place the parolee in an outpatient treatment program specified by the [DSH]." (Pen. Code, § 2964, subd. (a).) If the state wishes to continue the involuntary treatment of an MDO past the expiration of parole, the state must file a petition in the superior court and prove at a hearing that the person continues to qualify for involuntary treatment, in which case treatment will be continued for one year, unless extended again under the same process. (Pen. Code, §§ 2970, 2972.) Where treatment has been continued, the court "has authority to release the MDO for outpatient treatment so long as it finds 'there is reasonable cause to believe that the committed person can be safely and effectively treated on an outpatient basis.' " (People v. May (2007) 155 Cal.App.4th 350, 359, citing Pen. Code, § 2972, subd. (d).) The statutory language of "reasonable cause to believe" requires the patient to "raise a strong suspicion in a person of ordinary prudence that outpatient treatment would be safe and effective." (People v. Gregerson (2011) 202 Cal.App.4th 306, 319.) This is similar to the "probable cause" standard imposed on the prosecution at a preliminary hearing. (Id. at pp. 318-319.) b. The Act Three routes exist for an SVP to qualify for placement in an outpatient treatment program. First, the director of DSH (the Director) "shall authorize the person to petition the court for conditional release to a less restrictive alternative" (§ 6604.9, subd. (d)) if the DSH determines in its annual report that "conditional release to a less restrictive 19 alternative is in the best interest of the person and conditions can be imposed that adequately protect the community." (Id. at subds. (d), (a).) Second, after a year of commitment in a facility designated by the Director, an SVP is permitted to petition the court for conditional release without the permission of the DSH. (§ 6608, subd. (a), (f).) If a patient files a petition for conditional release, the patient is required to prove, by a preponderance of the evidence, his or her suitability for conditional release. (§ 6608, subd. (k).) Finally, the Director may forward a report and recommendation for conditional release under section 6608 when the Director "determines that the person's diagnosed mental disorder has so changed that the person is not likely to commit acts of predatory sexual violence while under supervision and treatment in the community." (§ 6607, subd. (a).) If the Director makes this determination, the Director forwards "a report and recommendation for conditional release in accordance with Section 6608 to the county attorney designated in subdivision (i) of Section 6601, the attorney of record for the person, and the committing court." (§ 6607, subd. (a).) When such a report and recommendation is filed, the court must "set a hearing in accordance with the procedures set forth in Section 6608." (§ 6607, subd. (b).) 2. Analysis Bocklett asserts that the Director is ignoring the duty under section 6607 to recommend conditional release and that this portion of the Act violates equal protection. As support for this contention, Bocklett notes that a California Public Records Act request revealed that from 2006 to the present only 17 people have been recommended 20 for release by the treatment staff to the Director and in each of those cases the Director failed to recommend release. Bocklett claims that disparate treatment exists because MDO's are routinely released from custody into conditional release under favorable terms, but SVP's almost never are released. 2 The People respond that this claim is not ripe for review. We agree. "It is well-settled law that the courts will not give their consideration to questions as to the constitutionality of a statute unless such consideration is necessary to the determination of a real and vital controversy between the litigants in the particular case before it. It is incumbent upon a party to an action or proceeding who assails a law invoked in the course thereof to show that the provisions of the statute thus assailed are applicable to him and that he is injuriously affected thereby." (People v. Perry (1931) 212 Cal. 186, 193; People v. Williams (1966) 247 Cal.App.2d 169, 170; see People v. Carroll (2007) 158 Cal.App.4th 503, 508, fn. 2 [declining to issue advisory opinion as to constitutionality of Act provision that did not apply to decision under review].) We decline to issue an advisory opinion on the issue whether the Director should have forwarded a report and recommendation for Bocklett's conditional release in accordance with section 6608 because Bocklett failed to make a threshold factual showing that his "diagnosed mental disorder has so changed that [he] is not likely to 2 Bocklett requests that we take judicial notice of the relatively low rate at which the DSH approves persons committed as SVP's for release as support for his argument that there are constitutional flaws in the current version of section 6608. The People oppose the request on the ground that the documents were never presented to the trial court. The request for judicial notice is denied because Bocklett has failed to explain why this new evidence was never offered to the trial court in a motion for new trial. (Estate of Schluttig (1950) 36 Cal.2d 416, 423.) 21 commit acts of predatory sexual violence while under supervision and treatment in the community" as required by subdivision (a) of section 6607. Because Bocklett is appealing from his initial SVP commitment order and he has not challenged the sufficiency of the evidence supporting this commitment, Bocklett cannot make this showing as a matter of law. Moreover, Bocklett may not raise equal protection claims of other hypothetically disadvantaged SVP committees as a basis to invalidate the statute's application to the circumstances of his case. (People v. Garcia (1999) 21 Cal.4th 1, 11- 12 [whether statute had hypothetical potential for equal protection violation "must await a case in which it is actually presented"].) Bocklett also asserts that the Act violates equal protection because MDO's are immediately eligible for conditional release following their commitment, whereas SVP's must wait a year after commitment to file a petition (§ 6608, subd. (f)), and a new petition cannot be filed until a year after the prior petition has been denied. (Id. at subd. (j).) We shall assume, without deciding, that this argument is ripe for review because it is easily disposed of under McKee I and McKee II. Both decisions considered in their equal protection analyses the disparate treatment of SVP's resulting from the requirement that under the Act the SVP be committed for an indeterminate commitment period. (McKee I, supra, 47 Cal.4th at p. 1203; McKee II, supra, 207 Cal.App.4th at p. 1347.) Again, the McKee II court found that the People had presented evidence showing that (1) the inherent nature of the mental disorder of SVP's makes recidivism significantly more likely as a class than for MDO's (McKee II, supra, 207 Cal.App.4th at p. 1340); (2) victims of sex offenses suffer unique and generally greater trauma than victims of nonsex 22 offenses (id. at p. 1342); and (3) SVP's are significantly different from MDO's in terms of diagnosis and treatment (id. at p. 1344). The McKee II court also rejected the defendant's argument that the Act was unconstitutional unless it adopted the least restrictive means available to further the state's compelling interests. (McKee II, at pp. 1348-1349.) The court stated: "We are unpersuaded the electorate that passed Proposition 83 in 2006 was required to adopt the least restrictive means available (e.g., a two-year or other determinate term of civil commitment) in disparately treating SVP's and furthering the compelling state interests of public safety and humane treatment of the mentally disordered." (Id. at p. 1349.) Bocklett's argument that immediately upon his initial commitment he should be allowed to petition for release, rather than wait a year, is simply a repackaging of the argument rejected in McKee II that a less restrictive means existed (e.g., a shorter commitment term, such as immediate release) to further "the compelling state interests of public safety and humane treatment of the mentally disordered." (McKee II, supra, 207 Cal.App.4th at p. 1349.) Applying the reasoning in McKee II, we conclude that the one- year waiting period is necessary to further the compelling state interest in providing treatment to SVP's and protecting the public, and that there is no less burdensome alternative to effectuate those interests. Accordingly, we conclude that the one-year waiting periods in the Act do not violate Bocklett's constitutional equal protection rights. 3 3 Although not entirely clear, Bocklett appears to also claim that SVP's and MDO's are subject to disparate treatment regarding either the burden of proof to obtain 23 D. Alleged Ex Post Facto Violation Regarding Tolling 1. Additional background As originally enacted effective September 13, 1996, Penal Code section 3000(a)(4) provided: "Any finding made pursuant to [the Act], that a person is a [SVP] shall not toll, discharge, or otherwise affect that person's period of parole." (Pen. Code, § 3000(a)(4), as enacted by Stats. 1996, ch. 462, § 3, eff. Sept. 13, 1996.) Effective September 20, 2006, the Legislature amended Penal Code section 3000(a)(4) to provide: "For any person being evaluated as [an SVP] pursuant to [the Act], parole shall toll from evaluation through the period of commitment, including conditional release under court monitoring, if any. The period during which parole is tolled shall include the filing of a petition for commitment, hearing on probable cause, trial proceedings, actual commitment, and any time spent on conditional release under court monitoring. . . . Time spent on conditional release under the supervision of the court shall be subtracted from the person's period of parole." (Pen. Code, § 3000(a)(4), as amended by Stats. 2006, ch. 337, § 45, eff. Sept. 20, 2006.) Effective November 8, 2006, the statute was amended by the voters to provide: "The parole period of any person found to be [an SVP] shall be tolled until that person is found to no longer be [an SVP], at which time the period of parole, or any remaining conditional release, or what must be proven to obtain conditional release. We conclude either argument is not ripe for review because Bocklett has not filed a petition for conditional release under section 6608. Thus, the question whether he is disadvantaged as compared to an MDO, by what he is required to show or how he must make the showing, seeks an advisory opinion based on hypothetical facts, which we are not permitted to render. 24 portion thereof, shall begin to run." (Pen. Code, § 3000(a)(4), as amended by Prop. 83, § 17, eff. Nov. 8, 2006.) Penal Code section 3000(a)(4), was amended in 2011, effective January 1, 2012. (Cal. Const., art. IV, § 8, subd. (c)(1) [statutes enacted at a regular session go into effect on Jan. 1 of the following year].) As amended, the statute tolls the period of parole for a person subject to SVP proceedings upon a finding of probable cause rather than upon a finding that the person is actually an SVP. (Pen. Code, § 3000(a)(4), as amended by Stats. 2011, ch. 359, § 1.5.) At the same time, Penal Code section 3000, subdivision (a)(5), was added to provide as follows: "Paragraph (4) applies to persons released by the Department of Corrections and Rehabilitation on or after January 1, 2012. Persons released by the Department of Corrections and Rehabilitation prior to January 1, 2012, shall continue to be subject to the law governing the tolling of parole in effect on December 31, 2011." (Pen. Code, § 3000, subd. (a)(5), as added by Stats. 2011, ch. 359, § 1.5, eff. Jan. 1, 2012.) 2. Analysis Bocklett argues that the current version of Penal Code section 3000(a)(4), rather than the initial version enacted alongside the Act in 1996, violates his right to be free from ex post facto laws under the California and United States Constitutions. The People argue this claim is not ripe because Bocklett will not be aggrieved by the operation of this statute unless he is found to no longer meet the criteria for commitment as an SVP, granted his unconditional discharge from DSH, and released on parole. Assuming the claim is ripe, the People contend Bocklett forfeited the claim by not raising it below. For 25 purposes of analysis, we assume, without deciding, that Bocklett's claim is ripe for review and we exercise our discretion to address the issue on its merits. The federal and state ex post facto clauses (U.S. Const., art. I, § 10, cl. 1; Cal. Const., art. I, § 9) prohibit legislation " 'which makes more burdensome the punishment for a crime, after its commission . . . .' " (Collins v. Youngblood (1990) 497 U.S. 37, 42 (Collins); People v. McVickers (1992) 4 Cal.4th 81, 84.) The ex post facto prohibition is intended to ensure that individuals have " 'fair warning' about the effect of criminal statutes [and] 'restricts governmental power by restraining arbitrary and potentially vindictive legislation.' " (Landgraf v. USI Film Products (1994) 511 U.S. 244, 267.) "The ex post facto clause prohibits only those laws that 'retroactively alter the definition of crimes or increase the punishment for criminal acts.' " (McKee I, supra, 47 Cal.4th at p. 1193.) In Hubbart v. Superior Court (1999) 19 Cal.4th 1138 (Hubbart) our high court addressed whether commitment of a prisoner under the Act violated the ex post facto prohibition if it was based on sexually violent offenses committed before the effective date of the Act. (Hubbart, at p. 1171 ["The basic issue raised by [the prisoner was] whether the [Act] inflicts 'punishment' within the meaning of Collins, supra, 497 U.S. 37, 43."].) The Hubbart court held that "the [Act] does not 'affix culpability' or seek 'retribution' for criminal conduct" (Hubbart, at p. 1175), and rejected a prisoner's ex post facto argument. (Ibid.; see also McKee I, supra, 47 Cal.4th at pp. 1193-1195 [rejecting an ex post facto challenge to Act amendments modifying rules for release from commitment].) A judicial determination that a law is not punitive "removes an essential 26 prerequisite for. . . .ex post facto claims." (Kansas v. Hendricks (1997) 521 U.S. 346, 369.) Since the Act is not punitive in nature, the constitutional provisions prohibiting ex post facto laws are inapplicable. Moreover, Bocklett committed his latest offense in 1994, but the Act and Penal Code section 3000(a)(4) were not enacted until 1996. (Hubbart, supra, 19 Cal.4th at p. 1143; Pen. Code, § 3000(a)(4), as enacted by Stats. 1996, ch. 462, § 3, eff. Sept. 13, 1996.) Accordingly, because the Act did not exist at the time of Bocklett's offenses he was not subject to any increase in punishment based upon the tolling provision in the most recent version of the law as this provision is "clearly intended to operate and protect the public in the present, not to serve as additional punishment for past crimes." (In re E.J. (2010) 47 Cal.4th 1258, 1278, 1279-1280 [application of residency restrictions under Penal Code section 3003.5 to individuals released on parole after effective date of law does not violate ex post facto laws].) For this reason, we hold that application of the law here did not impose any unconstitutional, increased punishment on Bocklett. 27 DISPOSITION The judgment is affirmed. NARES, J. WE CONCUR: HUFFMAN, Acting P. J. GUERRERO, J. 28

{ "pile_set_name": "FreeLaw" }

662 S.W.2d 116 (1983) The ESTATE OF Edith W. BRIDGES, Deceased, and Agri-Place, Inc., Appellants, v. Betty Jean MOSEBROOK, Individually and as Custodian for her children, Mark Mosebrook and Michael Mosebrook; Nancy Ann Bridges and Barbara Lynn Bridges, Appellees. No. 2-83-065-CV. Court of Appeals of Texas, Fort Worth. November 17, 1983. Rehearing Denied December 28, 1983. *118 John A. Pace, Dallas, for Estate of Edith W. Bridges. Jonathan A. Pace, Dallas, for Agri-Place, Inc. Albon O. Head, Jr., and Robert J. Keffler, McLean, Sanders, Price, Head & Ellis, Fort Worth, for appellees. Before HUGHES, BURDOCK and JOE SPURLOCK, II, JJ. OPINION BURDOCK, Justice. This is an appeal from a declaratory judgment wherein the trial court held appellees to be owners of approximately 59 percent of the stock of a closely-held corporation. In addition, the trial court ordered appellants to account for all income and revenue of the corporation from July 13, 1977 to the date of judgment. Finally, the trial court ordered that a writ of mandamus be issued ordering appellants to properly execute the stock certificates in appellees' possession. We affirm. Appellants claim ownership of the corporation through a testamentary bequest from Edith Weaver Bridges, and they predicate their appeal on four points of error. Appellants argue: (1) the trial court erred in holding that the shares of stock of the corporation had been issued because none of the shares were signed by the president or vice president; (2) the trial court erred in finding that the shares of stock had been delivered to appellees and in holding that the issuance of stock constituted a valid inter vivos gift to the appellees; (3) the trial court erred in holding that W.L. Bridges, Sr. had the power and authorization to deliver the stock to appellees because the real estate in the corporation was the separate property of Edith W. Bridges; and (4) the trial court erred in failing to find that the fee title to the land in the corporation was vested in Edith W. Bridges as her separate property. Because of the complex fact situation of the present case, we find it necessary to set forth the facts in detail. W.L. Bridges, Sr. had a son, W.L. Bridges, Jr., by a prior marriage. The appellees, plaintiffs below, are the children of Bridges, Jr. and grandchildren of Bridges, Sr., namely Nancy Ann Bridges, Barbara Lynn Bridges, and Betty Jean Mosebrook, individually and as custodian for her children, Mark Mosebrook and Michael Mosebrook. In 1944, Bridges, Sr. married Edith Weaver Bridges, also referred to as Edith. The appellants are Paulette Jackson, a niece *119 of Edith W. Bridges, and her husband, Tracy Jackson, co-executors of the estate of Edith W. Bridges. The corporation in question, Agri-Place, Inc., is a closely-held Texas corporation incorporated on October 27, 1969. The initial and principal asset of the corporation was a twenty-acre tract of land, purchased in 1949 by Bridges, Sr. and his son Bridges, Jr., located in Arlington, Texas. Although there was testimony to the contrary, the trial court found that the down payment on the twenty-acre tract, known as Red Wright Farm, was paid with funds from a joint bank account maintained by Bridges, Sr. and his son. On April 2, 1956, Bridges, Sr. conveyed the farm to his brother-in-law, Paul Weaver, in an effort to avoid seizure of the property by the Internal Revenue Service. No consideration was exchanged for the property. Thereafter, Weaver executed two deeds purporting to convey Red Wright Farm. The first deed, dated April 4, 1956 named Edith W. Bridges as grantee and was not recorded until November 24, 1982. No consideration was given by Edith to Weaver for this transfer. The second deed, dated October 28, 1969, named Agri-Place, Inc. as grantee and was recorded on March 15, 1971. Bridges, Jr. testified that the purpose for organizing Agri-Place, Inc. was to transfer ownership of Red Wright Farm to a corporate entity and, thereafter, to distribute the stock in that corporation to members of his father's and step-mother's respective families. Bridges, Sr. and his wife, Edith, intended to make a gift of shares of the common stock of Agri-Place, Inc., and in 1971, Bridges, Sr. engaged an attorney to assist him in issuing 20,000 shares. The stock was first issued to Weaver, and Weaver then deeded Red Wright Farm into Agri-Place, Inc. After this transaction, Weaver's shares were cancelled, and the attorney issued stock, in specified amounts, to the following persons: Betty Jean Mosebrook (3,500 shares), Mark Mosebrook (625 shares), Michael Mosebrook (625 shares), Nancy Ann Bridges (3,500 shares), Barbara Lynn Bridges (3,500 shares), Bobby Weaver Rapp (1,250 shares), Paulette Jackson (3,500 shares), and Shane Jackson (3,500 shares). These stock certificates were delivered to the above named individuals but retained by Bridges, Sr. It was further established that the stock certificates were signed by Betty Jean Mosebrook, secretary of the corporation, but not by Bridges, Sr., the president of the corporation. The stock registry of Agri-Place, Inc. and the minutes of the stockholder meetings showed the appellees to be owners of the respective shares of stock, as previously set forth. During these shareholder meetings and in preparation of the corporation minutes, both W.L. and Edith Bridges recognized and acknowledged that appellees were stockholders in Agri-Place, Inc. Testimony at trial also showed that Bridges, Sr. stated to the corporation's accountant that neither he nor Edith owned any shares in the corporation. Furthermore, Edith stated to the accountant that the appellees owned their respective number of shares in the corporation. Income tax returns were filed for the corporation, signed by Bridges, Sr. and/or Edith, acknowledging that the appellees were owners of a certain percentage of the outstanding stock of Agri-Place, Inc. The Red Wright Farm was sold in 1973, and the corporation received in exchange a house located in Arlington, Texas, 112 acres of oil producing property in Erath County, Texas and a promissory note in the amount of $160,000.00. In 1977, Bridges, Sr. wanted to make a gift of 2,000 shares of capital stock, out of the previously issued 20,000, to the Lions and Shriners organizations. The corporation's attorney informed Bridges, Sr. and Edith that stock transfer powers would be required from the appellees before stock could be given to these organizations. Bridges, Sr. died in 1977 and the stock transfer powers had not been obtained. Furthermore, none of the appellees were informed of Bridges, Sr. intent toward these organizations prior to his death. In 1977, subsequent to the death of Bridges, Sr., appellee Betty Jean Mosebrook, on behalf of all appellees herein, *120 requested an accounting of Agri-Place, Inc., but such request was refused by Edith. Appellees also requested Edith to execute, i.e., sign, as president of Agri-Place, Inc., the stock certificates issued to them, but again she refused. Thereafter, Edith unilaterally cancelled the previously issued shares, and issued stock certificate number 23 to herself in the amount of 20,000 shares of Agri-Place, Inc. This suit resulted. In their first point of error, appellants contend that the trial court erred in holding that the shares of stock of Agri-Place, Inc. had been issued because none of the shares were signed by the president or vice president of the corporation. They further assert that the farm in question was purchased from Edith's separate funds and thus the appellants, as devisees under her will, own the corporation and are entitled to the stock certificates. It must first be pointed out that the certificate of stock is not the stock in a corporation itself, but rather, a muniment of title which is evidence of the ownership of the stock. Yeaman v. Galveston City Co., 106 Tex. 389, 167 S.W. 710, 720 (Tex. 1914); State Board of Insurance v. Southwest Gen. Ins. Co., 401 S.W.2d 369, 371 (Tex.Civ.App.Austin 1966, writ ref'd n.r. e.). It is not necessary for complete ownership of stock that a certificate even be issued. Yeaman, supra. The rule in this area has been clearly set forth in Greenspun v. Greenspun, 194 S.W.2d 134 (Tex.Civ.App. Fort Worth), affirmed, 145 Tex. 374, 198 S.W.2d 82 (1946). The appellate court held: As between transferor and transferee, it seems to be the rule that transfer of title may take place though there is no delivery of the certificates themselves, nor endorsement of them, nor transfer of them on the books of the corporation, and even though the sale be by parol. In each case the inquiry is whether the minds of transferor and transferee met, whether there was an intention that the stock should then and there be vested in the transferee, and whether there were acts in the nature of a symbolical delivery of the property. In this latter connection it is to be remembered that the certificates of stock are not in themselves property, but are only evidence of the interest of the stockholder in the corporation. It is possible under some circumstances for one to own stock in a corporation though no certificate has been issued to him or endorsed or delivered to him, and likewise it is possible under some circumstances for title to the stock to pass without delivery of the certificate of stock or without written assignment of it. Greenspun, 194 S.W.2d at 137. We agree with the trial court's finding that the stock of Agri-Place, Inc. was actually issued in the present case. The intent on the part of Bridges, Sr. to cause the issuance of the stock is apparent from a review of the record. The attorney who prepared the stock certificates testified that Bridges, Sr. instructed him to issue shares of stock in Agri-Place, Inc. to the previously named individuals. The appellees testified that Bridges handed each of them their respective stock certificates informing them of their ownership in the corporation. Each shareholder, however, left their stock certificates with Bridges, Sr. because he wanted to retain possession for them. Bridges, Sr. and Edith both acknowledged and recognized the appellees as stockholders. The appellees were referred to as stockholders in the corporate minutes and also listed as such in the 1977 tax return. The appellants urge that because the shares of stock had not been signed by the president or vice president, there could be no issuance. TEX.BUS.CORP.ACT ANN. art. 2.19 (Vernon 1980) provides: A. A corporation shall deliver certificates representing all shares to which shareholders are entitled; and such certificates shall be signed by the president or a vice president and either the secretary or assistant secretary or such officer or officers as the bylaws of the corporation shall prescribe, and may be sealed with the seal of the corporation or a facsimile thereof.... Appellants' analogy to the signatures required on other documents (deeds, *121 promissory notes, financing statements, etc.) is unpersuasive. Those documents, unlike certificates of stock, create property rights in and of themselves, by virtue of the contractual obligations contained therein. The execution of such documents is tantamount to the preservation and enforcement of the rights and obligations created by those instruments. As previously mentioned, a stock certificate is not the actual ownership of a corporation, but merely evidence that the corporation recognizes the holder as owning an interest in that corporation. We hold that art. 2.19 does not require a signature as a condition precedent to issuance; rather, it provides the owner of such stock a right to demand that the corporation provide the signatures omitted from the certificates. Appellants also contend in their first point of error that the person or persons who furnished the consideration for the corporation stock are the persons who own the corporation. Although there was testimony that the down payment of the principal asset, Red Wright Farm, was made from Edith's separate funds, the trial court found that it was purchased with funds from a joint bank account of Bridges, Sr. and Bridges, Jr. Appellants' first point of error is overruled. In their second point of error, appellants argue that the trial court erred in holding that the shares of stock had been delivered as required to constitute a completed inter vivos gift. Appellees assert that the overwhelming evidence shows that both Bridges, Sr. and Edith intended to make gifts of stock in the corporation to each of the appellees, and thereafter delivered the shares of stock to the appellees. We agree. In order to consummate a gift of corporation stock, there must be donative intent on the part of the donor, delivery to the donee, and relinquishment of dominion and control by the donor. Carrington v. C.I.R., 476 F.2d 704, 708-09 (5th Cir.1973); Ellsworth v. Ellsworth, 151 S.W.2d 628, 632 (Tex.Civ.App.El Paso 1941, writ ref'd). As previously noted, we find that the record more than sufficiently shows the requisite donative intent on the part of Bridges, Sr. and Edith. Appellants argue, however, that no delivery was made because the certificates remained in the possession of Bridges, Sr., and that he never relinquished his right to exercise dominion and control over the certificates. Appellants' argument fails for several reasons. As discussed in appellants' first point of error, ownership of stock may exist independently of possession of the stock certificate. Greenspun, 194 S.W.2d at 137. Furthermore, physical delivery of the stock certificates and possession thereof is not the only method by which a donor may make a gift of corporate stock to a donee. What will constitute delivery depends upon the nature of the corpus and the circumstances of the case. Webb v. Webb, 184 S.W.2d 153, 156-57 (Tex.Civ.App.Eastland 1944, writ ref'd). Actual delivery is not always necessary; rather, where the circumstances make actual delivery impractical, delivery may be symbolical or constructive. Webb, supra, at 156. The controlling issue is not who had possession of the certificates, but who had actual ownership of the stock, as evidenced by all the circumstances. See Greenspun, 194 S.W.2d at 138. The evidence reveals that Bridges, Sr. handed each appellee their respective stock certificates, stating that the stock belonged to them but that he would retain possession of the certificates. As previously mentioned, Bridges, Sr. and Edith treated the appellees as stockholders in Agri-Place, Inc., and acknowledged as much to several other persons. We find the evidence sufficient to prove the required delivery and overrule appellants' second point of error. Appellants' third point of error asserts that the trial court erred in holding Bridges, Sr. had the power and authority to deliver the shares of stock to appellees because title to the farm was the separate property of Edith, and any gift thereof would constitute a fraud on her property rights. *122 It is well settled law in Texas that property acquired during marriage is presumed to be the community property of the spouses. TEX.FAM.CODE ANN. § 5.02 (Vernon 1975). The burden is on the party asserting otherwise to overcome the presumption by clear and satisfactory evidence. Gaston v. Gaston, 608 S.W.2d 332, 334 (Tex.Civ.App.Tyler 1980, no writ). It is disputed as to who contributed the funds for the purchase of the Red Wright Farm. Bridges, Jr. testified that the down payment for the farm came from proceeds of a joint bank account maintained by him and his father, Bridges, Sr. To sustain their burden of tracing the character of the farm, appellants rely on the statements of Edith Bridges contained in her oral deposition. Appellants argue that Edith was given a tract of land in Colorado by her father as her separate property, and that the proceeds from the sale of this property were used as the down payment on the Red Wright Farm; thus, the Red Wright Farm would also be her separate property. During her deposition, however, Edith stated that she did not remember if the money was deposited in a checking account or a savings account, nor could she remember in what bank the money was deposited. Furthermore, when the Red Wright Farm was purchased in 1949, title to the property was listed in the names of William Levi Bridges and Edith Weaver Bridges. We hold that the appellants have failed in their burden of overcoming the community property presumption. The factors used in determining whether a gift of community property by one spouse constitutes a constructive fraud on the property rights of the other spouse include the relationship between the donor and donee, whether special circumstances tend to justify the gift, and whether community funds used for such gift are reasonably proportionate to the community assets remaining. Redfearn v. Ford, 579 S.W.2d 295, 297 (Tex.Civ.App.Dallas 1979, writ ref'd n.r.e.). In Horlock v. Horlock, 533 S.W.2d 52 (Tex.Civ.App.Houston [14th Dist.] 1975, writ dism'd), the donor made gifts of community property to his daughters from a prior marriage. The appellate court, in upholding the validity of the gifts, reasoned that the daughters were the natural objects of his bounty, the tax advantages to both spouses were substantial, and the remaining assets were sufficient to provide for the needs of the wife. Horlock, supra, at 55-56. We find nearly the identical fact situation in the present case. The gifts of stock were not only made to the grandchildren of Bridges, Sr., but stock was also given to relatives of Edith. It is undisputed that the primary and motivating factor behind the incorporation of Agri-Place, Inc. and the subsequent gifts of the stock therein was Bridges' desire to avoid the possible loss of the property to the Internal Revenue Service. Although the corporation was valued at approximately $240,000.00 and undisputably comprised a substantial part of the estate of Bridges, Sr. and Edith, the total value of the estate is not apparent from the record. Furthermore, only 59 percent of the stock was given to Bridges, Sr.'s issue; the remainder went to the relatives of Edith. Appellants rely heavily on Land v. Marshall, 426 S.W.2d 841 (Tex.1968) in support of their constructive fraud argument. In Land, the husband established an inter vivos trust and through this trust granted all of his and his wife's community property to their daughter as trustee without his wife's knowledge or consent. After the trustor's death, the widow sought to cancel the trust. The Texas Supreme Court held that the trust was wholly invalid, and that the grantor's widow was entitled to recover her undivided one-half interest in the trust property. We do not find the Land decision binding in the present case. That decision focused on the validity of an inter vivos trust and distinguished that situation from an inter vivos gift. Furthermore, and more importantly, the defrauded spouse in Land was unaware of her husband's disposition of their community property until three weeks before his death. In the present case, Edith not only knew of the gift of stock of Agri-Place, *123 Inc., she consented to and participated in the disposition of their community property and never once objected thereto. We hold that there was no fraud, either actual or constructive, perpetrated on Edith's property rights and uphold the inter vivos gift of their community property. Appellants' third point of error is overruled. Appellants assert in their fourth point of error that the warranty deed from Paul J. Weaver, dated April 4, 1956, naming Edith Weaver Bridges as grantee, vested title to the farm in Edith's name as her separate property, and that the deed from Paul J. Weaver to Agri-Place, Inc., dated October 29, 1969, did not vest title to the farm in the corporation. We have previously held that upon acquiring the farm in 1949, title was held in the names of William Levi Bridges and Edith Weaver Bridges as their community property. The question to be decided now is whether the transactions subsequent to 1949 changed the character of ownership in the farm to the separate property of Edith Bridges. As previously noted, on April 2, 1956, Bridges, Sr. conveyed the Red Wright Farm to Edith's brother, Paul Weaver, in an effort to avoid seizure of the farm by the Internal Revenue Service. No consideration was exchanged for the property. Weaver then executed a deed to Edith W. Bridges, dated April 4, 1956, purporting to convey the farm to her as her separate property. No consideration was given by Edith to Weaver for this transfer, and the deed was not recorded until November 24, 1982. On October 28, 1969, Weaver executed a second deed naming Agri-Place, Inc. as grantee, and this deed was recorded on March 15, 1971. Weaver was issued 20,000 shares of stock in the corporation in exchange for the farm. It has been held that mere recitals in a deed as to the separate character of property are not conclusive as to the true character of the property and may be rebutted by evidence to the contrary. Alexander v. Alexander, 373 S.W.2d 800, 804 (Tex.Civ.App. Corpus Christi 1963, no writ). Although there was no specific finding of fact as to the nature of this property, we hold that the findings of fact and conclusions of law, viewed together with the evidence presented, overwhelmingly support an implied finding that the property in question was the community property of Bridges, Sr. and Edith. Edith made no objection at the time the farm was deeded into the corporation, nor did she object in 1973 when the farm was sold in exchange for the house in Arlington, the oil producing property in Erath County and the promissory note in the amount of $160,000.00. Title to these properties has always been held in the name of the corporation. Edith was also an officer in the corporation and, therefore, obviously aware of these transactions, but she never claimed any of the property as her separate property. Furthermore, Edith has never paid taxes on these properties in an individual capacity or filed any tax returns alleging such ownership; rather, the corporation has reported the ownership of these assets on its corporate tax returns. We hold that the community property status was not altered by the transactions discussed above. Appellants' fourth and final point of error is overruled. The judgment is affirmed.

{ "pile_set_name": "FreeLaw" }

158 F.3d 1294 332 U.S.App.D.C. 388 McCARTY FARMS, INC., et al., Petitioners,v.SURFACE TRANSPORTATION BOARD and United States of America,Respondents.Burlington Northern and Santa Fe Railway Company, Intervenor. Nos. 97-1632, 98-1304. United States Court of Appeals,District of Columbia Circuit. Argued Sept. 3, 1998.Decided Oct. 20, 1998. [332 U.S.App.D.C. 389] On Petitions for Review of an Order of the Surface Transportation Board. Tim L. O'Neill argued the cause for petitioners, with whom Timothy R. Engler was on the briefs. Thomas J. Stilling, Attorney, Surface Transportation Board, argued the cause for respondents, with whom Joel I. Klein, Assistant Attorney General, United States Department of Justice, Robert B. Nicholson, and John P. Fonte, Attorneys, Henri F. Rush, General Counsel, Surface Transportation Board, and Ellen D. Hanson, Deputy General Counsel, were on the brief. Samuel M. Sipe, Jr. argued the cause for intervenor Burlington Northern and Santa Fe Railway Company, with whom Carolyn Doozan Clayton, Richard E. Weicher and Michael E. Roper were on the brief. Before: SENTELLE, HENDERSON, and GARLAND, Circuit Judges. SENTELLE, Circuit Judge: 1 Petitioners McCarty Farms, Inc., et al. (collectively "McCarty Farms") and the State of Montana Department of Commerce, et al. (collectively "State of Montana") challenge a decision of the Surface Transportation Board ("STB" or "Board") in which the STB ruled that petitioners had failed to demonstrate that the rates charged by Burlington Northern Railroad ("BN") to transport wheat and barley from Montana to the Pacific Northwest [332 U.S.App.D.C. 390] were unreasonable. The STB's decision covered three sets of claims: (1) single-car wheat shipments moving before September 12, 1980 (Docket No. 37809), (2) multiple-car and trainload shipments of wheat and barley (Docket No. 37815S), and (3) single-car shipments of barley and single-car wheat shipments moving after September 12, 1980 (Docket No. 37809 (Sub-No. 1)). We conclude that we have jurisdiction over the second and third categories of claims, but not the first. We further conclude that, in rendering its decision, the Board did nothing that was arbitrary, capricious, or contrary to law. As a result, we affirm the Board's ruling with respect to those claims over which we have jurisdiction. I. BACKGROUND 2 This case has a long and complex history. Indeed, these proceedings have been winding their way through the courts in one form or another for approximately 18 years. As Judge Williams noted five years ago when this case was last before this court: "McCarty Farms started this dispute's crawl through the legal system in 1980 by filing a class action on behalf of Montana farmers under 49 U.S.C. § 11705(c)(1) and 28 U.S.C. § 1337 in the U.S. district court for the District of Montana." Burlington Northern R.R. v. ICC, 985 F.2d 589, 592 (D.C.Cir.1993). In their Montana suit, McCarty Farms and the other class representatives alleged that BN was charging unreasonable rates for transporting single cars of wheat for the two-year period ending September 12, 1980, in violation of 49 U.S.C. § 10701(a) of the Interstate Commerce Act. See McCarty Farms, Inc. v. Burlington Northern, Inc., 787 F.Supp. 937 (D.Mont.1992). 3 Under the doctrine of primary jurisdiction, the district court referred the action to the Interstate Commerce Commission ("ICC" or "Commission") to determine the rate reasonableness issues. On March 27, 1981, McCarty Farms filed the referred complaint with the ICC (Docket No. 37809), in which it challenged not only BN's single-car wheat rates, but also its single-car rates for barley. McCarty Farms sought a prescription on future rates and did not limit its request for reparations to the two-year period specified in its complaint filed with the district court. McCarty Farms' Petition for Declaratory Order and Complaint at 6 (March 27, 1981). In an unpublished decision served on December 14, 1981, an Administrative Law Judge found that (1) BN had market dominance over wheat and barley traffic, (2) BN's present and past rates were unreasonable insofar as they exceeded 200% of the variable cost of service, and (3) a revenue-to-variable cost ratio of 200% was to be the maximum reasonable rate for the transportation of wheat and barley. 4 McCarty Farms was not alone, however, in challenging the reasonableness of BN's rates. In a separate proceeding filed with the ICC (Docket No. 37815S), the State of Montana challenged BN's rates for multiple-car and trainload shipments of wheat and barley and sought prescription for reasonable rates for the future. In an unpublished decision served on July 30, 1982, the ICC reopened the case filed by McCarty Farms (Docket No. 37809). The ICC instituted a separate proceeding regarding the reasonableness of barley rates (Docket No. 37809 (Sub-No. 1)) because it did not believe they were part of the district court's referral. The ICC consolidated the proceedings filed by McCarty Farms and those filed by the State of Montana. 5 The three consolidated cases before the ICC were held in abeyance indefinitely. In May 1984, McCarty Farms and the other class representatives filed a complaint in the district court, seeking a writ of mandamus. In response, the ICC reopened the proceedings on September 11, 1984. In a decision served on December 28, 1984, the ICC ruled that, to the extent market dominance issues had not been developed, additional evidence concerning market dominance would be accepted. After extensive discovery, on May 22, 1987, the ICC ruled that BN was market dominant over the subject wheat and barley shipments moving from Montana to the Pacific Northwest. McCarty Farms v. Burlington Northern, Inc., 3 I.C.C.2d 822 (1987). 6 Having determined that BN was market dominant for the movements at issue, the ICC turned to the rate reasonableness analysis. [332 U.S.App.D.C. 391] On February 5, 1988, the ICC decided that the Revenue-to-Variable Cost ("R/VC") standard was an appropriate means for testing the challenged rates and found that the rates charged by BN were unreasonable. The ICC directed BN to (1) compute the reparations due, (2) modify its existing rate structure, and (3) present a proposal of compliance to the ICC. On February 21, 1989, the ICC issued an unpublished decision that corrected several costing problems in the R/VC test and recomputed the ratios by which reparations were to be calculated. The ICC directed BN to submit a quantification of reparations due the class based on the corrected procedure and a proposal for modifying its existing rate structure so that BN would comply with the maximum reasonableness standard in the future. 7 On March 20, 1991, the ICC affirmed its earlier decisions in which it concluded that BN was market dominant over the movement of wheat and barley and that BN's rates for this traffic were unreasonable. The ICC calculated the amount of reparations owed by BN through 1986 to be $9,685,918 plus interest, and imposed on BN a future rate prescription procedure. McCarty Farms v. Burlington Northern, Inc., 7 I.C.C.2d 1026 (1991). On July 5, 1991, BN filed a petition for clarification of the March 20, 1991 decision, asking the ICC to modify the calculations. In an unpublished decision served on November 26, 1991, the ICC entered an order which affirmed the amount of reparations and interest due through July 1, 1991. However, the ICC sua sponte vacated the rate prescription order contained in its March 20, 1991 decision. 8 McCarty Farms, the State of Montana, and BN then sought review of the ICC decisions by this court. In an opinion issued in 1993, we questioned the theoretical basis of the R/VC test and remanded the proceedings to the ICC for the purpose of reconsidering whether it was appropriate to use the R/VC test instead of the Constrained Market Pricing ("CMP") test to evaluate the reasonableness of the challenged rates. Burlington Northern R.R. v. ICC, 985 F.2d 589 (D.C.Cir.1993). 9 In an unpublished opinion served on March 26, 1993, the ICC directed the class representatives and the State of Montana to advise the Commission whether (1) they wanted to proceed using the CMP test, (2) the proceedings should be held in abeyance pending the development of a suitable reasonableness methodology, or (3) there was some other course of action that was appropriate. On April 23, 1993, McCarty Farms notified the ICC of its election to proceed using the CMP test. On May 10, 1993, BN notified the ICC of its agreement to use the CMP test in the proceedings. Effective January 1, 1996, the ICC Termination Act of 1995, Pub.L. No. 104-88, 109 Stat. 803, abolished the ICC and transferred certain functions, including the disposition of these proceedings, to the STB. After the transfer, the STB ruled that McCarty Farms had failed to show (under the CMP test) that the challenged rates were unreasonably high, and discontinued the proceedings. McCarty Farms, Inc. v. Burlington Northern, Inc., Nos. 37815S, 37809 & 37809 (Sub-No. 1) (Aug. 20, 1997) (the "1997 Decision"). 10 Instead of petitioning the STB to correct alleged computational errors and to reconsider issues they contended were incorrectly decided, McCarty Farms and the State of Montana filed their petition for review with this court on October 14, 1997. McCarty Farms also filed an appeal with the U.S. District Court for the District of Montana, which was stayed pending the outcome of this appeal. After examining McCarty Farms' brief to this court, the STB agreed that there were certain errors in its 1997 Decision and issued a supplemental decision to correct those determinations it agreed were erroneous. McCarty Farms, Inc. v. Burlington Northern, Inc., Nos. 37815S, 37809 & 37809 (Sub-No. 1) (May 11, 1998) (the "1998 Decision"). However, even after it made these corrections, the STB still concluded that BN's rates were reasonable. II. DISCUSSION A. Jurisdiction 11 McCarty Farms challenges this court's jurisdiction to review several claims raised in this suit. The claims at issue relate to the [332 U.S.App.D.C. 392] following three categories of rates covered by the STB's decision: (1) single-car wheat shipments moving before September 12, 1980 (Docket No. 37809), (2) multiple-car and trainload shipments of wheat and barley (Docket No. 37815S), and (3) single-car shipments of barley and single-car shipments of wheat moving after September 12, 1980 (Docket No. 37809 (Sub-No. 1)). We conclude that we have jurisdiction over the second and third categories of claims, but not the first. 12 1. Single-car shipments of wheat for the two-year period ending September 12, 1980 13 Normally, this court has jurisdiction to review decisions of the STB under the Hobbs Act, 28 U.S.C. §§ 2321(a) and 2342(5). However, Congress has provided an exception to our Hobbs Act jurisdiction. Under 28 U.S.C. § 1336(b), review of orders of the STB that "arise" out of a referral from a district court are within that court's exclusive jurisdiction. Specifically, Section 1336(b) provides as follows: 14 When a district court ... refers a question or issue to the Surface Transportation Board for determination, the court which referred the question or issue shall have exclusive jurisdiction of a civil action to enforce, enjoin, set aside, annul, or suspend, in whole or in part, any order of the Surface Transportation Board arising out of such referral. 15 28 U.S.C. § 1336(b). 16 McCarty Farms asserts that claims relating to single-car shipments of wheat moving before September 12, 1980 (Docket No. 37809) fall within the exception to this court's jurisdiction found in Section 1336(b). These claims initially were raised in McCarty Farms' complaint filed with the U.S. District Court for the District of Montana and were referred by that court to the ICC. We agree that we do not have jurisdiction over this first category of claims. Indeed, we addressed this question the last time this case was before us. In Burlington Northern, we concluded that "any appeal as to the single-car wheat shipments moving before September 12, 1980 lies in the district court for the District of Montana." 985 F.2d at 592. Therefore, it is clear that we have no jurisdiction over the first set of claims. 17 2. Multiple-car and trainload shipments of wheat and barley 18 We have previously ruled, and the parties agree, that we have jurisdiction over claims relating to rates charged for multiple-car shipments of wheat and barley (Docket No. 37815S) pursuant to the Hobbs Act, 28 U.S.C. §§ 2321(a) and 2342(5). In Burlington Northern, we concluded that Section 1336(b) "has no application" to this second category of claims because they "arise out of the Montana Department of Agriculture complaint, not the district court referral." 985 F.2d at 592. 19 3. Single-car shipments of barley and single-car shipments of wheat moving after September 12, 1980 20 The determination of our jurisdiction over the third set of claims is more difficult. Characterizing this jurisdictional question as "exceptionally difficult," we declined to decide this issue in Burlington Northern on the grounds that it was not necessary to resolve all jurisdictional questions where "the merits of a case are clearly against a party seeking to invoke the court's jurisdiction." Id. at 593. However, in light of the Supreme Court's intervening decision in Steel Co. v. Citizens for a Better Environment, 523 U.S. 83, 118 S.Ct. 1003, 140 L.Ed.2d 210 (1998), this position is no longer tenable. As Justice Scalia noted in that case, proceeding to the merits despite jurisdictional objections "carries the courts beyond the bounds of authorized judicial action and thus offends fundamental principles of separation of powers." Id. at ----, 118 S.Ct. at 1012. Therefore, we must resolve all jurisdictional questions before proceeding to the merits. 21 McCarty Farms challenges this court's jurisdiction over the third category of claims on the ground that these claims fall within the statutory exception to our jurisdiction found in 28 U.S.C. § 1336(b). McCarty Farms argues that these claims "arose" out of the referral from the Montana district court and that the district court therefore has exclusive [332 U.S.App.D.C. 393] jurisdiction to review the STB's decision regarding these claims on appeal. In order to determine whether we have jurisdiction over the third category of claims, we must start with the text of Section 1336(b). The question of which court has jurisdiction turns on the construction of the term "arising" in Section 1336(b). In general usage, the meaning of the term "arise" is "to originate." Black's Law Dictionary 99 (5th ed.1979). Consistent with this usage, the third category of claims cannot be said to have "arisen" out of the district court's referral. 22 In no sense did the third category of claims originate in the district court's referral. The referral did not mention rates for shipments of barley or rates for shipments of wheat moving after September 12, 1980. The complaint filed with the district court did not even reference these rates. See McCarty Farms, 787 F.Supp. at 942 & n. 10 (reproducing relevant sections of the amended complaint). Indeed, McCarty Farms has petitioned the district court to "clarify" its referral order so that it specifically references these claims, but the district court has refused to do so. Id. at 947. We find McCarty Farms' argument that the claims may "arise" out of a referral that makes no mention of them unpersuasive. McCarty Farms has supplied no workable definition of the term "arise" supporting its contentions. 23 We acknowledge that other courts have noted that the legislative history of Section 1336(b) evidences an intent on the part of Congress to avoid "piecemeal appeals" by directing the district court to review all claims "arising" from its referral. See Railway Labor Executives' Ass'n v. ICC, 894 F.2d 915, 917 (7th Cir.1990) ("The insight behind section 1336(b) is that if a question within the purview of the ICC arises in the course of a district court proceeding, submission of the ICC's answer in the first instance to the district court rather than to the court of appeals will avoid a cumbersome and potentially protracted bifurcation of judicial review." (citing S.Rep. No. 1394, 88th Cong., 2d Sess. (1964))). Some courts have pointed to this legislative history in justifying a broad construction of the term "arising" in order to further this congressional goal. See, e.g., Union Pacific R.R. v. Ametek, Inc., 104 F.3d 558, 561 (3rd Cir.1997) (noting that a narrow construction of the term "arising" would lead to "problems arising out of parallel proceedings in different courts arising out of a single controversy"). 24 Nevertheless, we hold that we have jurisdiction over the third category of claims on the present facts. McCarty Farms could not have filed the third category of claims in the district court, even if it had wanted to do so. In the complaint it filed with the ICC, McCarty Farms sought a prescription on future rates, a remedy not available in the district court. See 49 U.S.C. § 11705(b)(1) (1988). The fact that these claims as outlined in the administrative complaint could not have been brought in the district court demonstrates that they could not have "arisen" from the district court's referral. Congress did not intend to authorize litigants to expand the district court's jurisdiction beyond its legitimate scope by filing complaints with the ICC and then seeking review of those complaints by the district court pursuant to Section 1336(b). 25 Moreover, the third category of claims could not have been brought in the district court because, by the time McCarty Farms filed its complaint with the ICC, the district court had been divested of jurisdiction to hear those claims. On October 1, 1980, approximately six months before McCarty Farms filed its complaint with the ICC on March 27, 1981, Congress enacted the Staggers Rail Act. The Staggers Act provides in relevant part that "[t]he jurisdiction of the Board over ... transportation by rail carriers ... is exclusive." 49 U.S.C. § 10501(b). After the parties petitioned the district court to "clarify" its referral order, that court rightly held that the Staggers Act had divested it of jurisdiction over the third category of claims. As a result, the court concluded that it could not allow McCarty Farms to amend its complaint to include the third category of claims, and it could not itself alter its referral order to specifically reference those claims. The court reasoned as follows: 26 [The Staggers Act] did, contrary to the assertion of the plaintiffs, divest this court of jurisdiction over challenges to the reasonableness [332 U.S.App.D.C. 394] of rail rates in effect on or after the effective date of the Staggers Rail Act, i.e., October 1, 1980. Because the court would not have had jurisdiction to entertain the challenges advanced by the plaintiffs to rail rates in effect as of October 1, 1980, the court cannot acquire jurisdiction by retroactive amendment of the order of referral. 27 McCarty Farms, 787 F.Supp. at 947. These claims, not being within the jurisdiction of the district court, could not have "arisen" out of any referral from that court. 28 Despite any lack of clarity in either the text of Section 1336(b) or its legislative history, we are satisfied that our construction is consistent with congressional intent. Although members of Congress may have expressed an intent to further judicial economy, that laudable goal will not compel a construction whereby claims that are only tangentially related to those referred by the district court arise out of that referral along with those specifically referenced by the district court. Further, there is little danger of "piecemeal appeals" where the disputed claims are not raised with the district court, but rather are brought before the STB in the first instance. Moreover, given the specific facts in this case, there necessarily will be some duplication of judicial effort since it is undisputed that we have jurisdiction over the second category of claims, and it is clear that the district court has jurisdiction over the first category. 29 We have stated before that the exception to our jurisdiction under the Hobbs Act found in Section 1336(b) is a "narrow" one. Overland Express, Inc. v. ICC, 996 F.2d 356, 358 n. 1 (D.C.Cir.1993), judgment vacated, 511 U.S. 1103, 114 S.Ct. 2095, 128 L.Ed.2d 658 (1994) (noting that " § 1336(b) is a narrow exception to our jurisdiction over challenges to Commission proceedings under the Hobbs Act"). Construing the statute narrowly gives the parties a bright line rule they may follow in seeking review of an STB decision. See Ametek, 104 F.3d at 566 (Roth, J., dissenting) ("The application of such a strict interpretation of § 1336(b) would reduce the chance that appeals are made to the wrong court. Counsel need only look to the language of the district court's referral to determine whether the issue was properly reviewable by a district court...."). Under a strict construction of Section 1336(b), issues expressly set out in the district court's referral order are reviewed by the district court. The court of appeals reviews all other issues. 30 We note that the district court has come to the same conclusion, ruling that "the scope of the court's jurisdiction to review the Interstate Commerce Commission's decisions is determined by the scope of the referral order itself." McCarty Farms, 787 F.Supp. at 942. After reviewing its own referral to the ICC, that court concluded that the third category of claims at issue here did not "arise" from its referral. Id. at 943 ("Contrary to the assertion of the plaintiffs, the express language of the court's order of referral cannot be read to have encompassed single-car, multiple-car, and trainload rates assessed by the Burlington Northern on shipments of wheat which occurred from September 12, 1980, forward and for the future, nor on single-car, multiple-car, and trainload rates on barley from March 26, 1981, the date plaintiffs filed their administrative complaint, forward, and for the future."). 31 In sum, we are convinced that the disputed claims, not having been within the jurisdiction of the district court, cannot have arisen out of a referral from that court. We further hold that this conclusion is consistent with the intent of Congress as expressed in Section 1336(b). B. The STB's Decision 32 Having established that we have jurisdiction over the second and third categories of claims, we now turn to the merits. We review final decisions of the STB under the deferential arbitrary and capricious standard of the Administrative Procedure Act, 5 U.S.C. § 706(2)(A). Under that standard, we must uphold a decision of the STB unless it is "arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law." Id. In reviewing the STB's determination of rate reasonableness issues, we must also decide whether the STB's decision is supported by "substantial evidence." 5 U.S.C. § 706(2)(E). We must "leave the [332 U.S.App.D.C. 395] Board's judgment undisturbed" if its findings rest on "such relevant evidence as a reasonable mind might accept as adequate to support a conclusion" and it has articulated a "rational connection between the facts found and the [decision] made." Burlington Northern R. Co. v. STB, 114 F.3d 206, 210 (D.C.Cir.1997) (internal citations omitted). 33 In its petition for review, McCarty Farms contends that the STB made a number of technical errors in implementing the CMP test's stand-alone cost constraint. Under the stand-alone cost constraint, the reasonableness of a railroad's rates are judged against simulated competitive prices so that the efficiencies of a contestable market serve as the guide for establishing maximum rates. The stand-alone cost is the hypothetical cost of an efficient producer to independently provide service to a shipper or group of shippers. Thus, in implementing the CMP test's stand-alone cost constraint, the STB considers a hypothetical railroad in order to determine the maximum rates that may be charged in providing service to a shipper or group of shippers. McCarty Farms asserts that the STB erred in determining several cost components of the investment necessary to construct the hypothetical stand-alone railroad. Specifically, McCarty Farms alleges that the STB erred in (1) calculating a variety of investment costs, (2) calculating revenues, (3) rejecting McCarty Farms' proposed operating plan, (4) calculating the lease rates for locomotive and rail cars, and (5) calculating depreciation expense. 34 Upon review of the STB's decision, we cannot conclude that any of these alleged errors constitute the sort of "arbitrary" and "capricious" decisionmaking that would warrant reversal. See Ethyl Corp. v. EPA, 541 F.2d 1, 34 (D.C.Cir.1976). Rather, we conclude that the STB has rationally set forth the grounds on which it acted, and its findings are based on substantial evidence. See Burlington Northern, 114 F.3d at 210-11. Moreover, the STB has taken steps to correct those technical errors in its 1997 Decision which it acknowledged by issuing its supplemental 1998 Decision.1 Where an agency has rationally set forth the grounds on which it acted, as the STB has in this case, this court may not substitute its own judgment for that of the agency. Bowman Transp., Inc. v. Arkansas-Best Freight System, Inc., 419 U.S. 281, 285, 95 S.Ct. 438, 42 L.Ed.2d 447 (1974) (citing Citizens to Preserve Overton Park, Inc. v. Volpe, 401 U.S. 402, 416, 91 S.Ct. 814, 28 L.Ed.2d 136 (1971)). III. CONCLUSION 35 For the foregoing reasons, we conclude that we have jurisdiction over claims relating to (1) multiple-car and trainload shipments of wheat and barley (Docket No. 37815S) and (2) single-car shipments of barley and single-car wheat shipments moving after September 12, 1980 (Docket No. 37809 (Sub-No. 1)). With respect to those claims over which we have jurisdiction, we conclude that the STB's decision was based on substantial evidence and was not arbitrary, capricious, or contrary to law. We therefore affirm the decision of the Board. 1 McCarty Farms has moved to strike any reference in these proceedings to the STB's 1998 Decision on the grounds that it was issued after McCarty Farms had filed its appeal with this court. Because we find the decision helpful to the court and not prejudicial to the parties, we deny the motion

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114 Cal.App.3d 588 (1981) 170 Cal. Rptr. 755 In re JEROME S. STANLEY on Habeas Corpus. Docket No. 10977. Court of Appeals of California, Third District. January 13, 1981. *589 COUNSEL Stanley & Wing and Christopher H. Wing for Petitioner. George Deukmejian, Attorney General, Robert H. Philibosian, Chief Assistant Attorney General, Arnold O. Overoye, Assistant Attorney General, Edmund D. McMurray and Willard F. Jones, Deputy Attorneys General, for Respondent. *590 OPINION PARAS, J. In this original proceeding petitioner asks us to invalidate a judgment of contempt issued by the municipal court in Sacramento. The facts are not in dispute. Petitioner is attorney of record for a defendant in a criminal case. Trial was originally scheduled for June 4, 1980. On May 28 petitioner prepared a motion to continue which was filed on May 29, to be heard on June 2. Because he was scheduled to appear in federal court that day, an associate appeared to argue the motion; it was granted. The trial was rescheduled for June 23. Petitioner's associate noted the new trial date on the file he carried to court but did not record it elsewhere for office calendaring and did not inform petitioner of it. Petitioner never asked his associate or anyone else about the new trial date. When the case was called for trial on June 23, the People were ready to proceed and the defendant was present. Neither petitioner nor his associate (whom he had asked to handle his court appearances that day while he was out of town) appeared for the trial. The court issued an order to show cause for contempt and scheduled a hearing thereon for June 25. Petitioner appeared at the hearing with counsel. He and his associate both testified the failure to appear was caused by a breakdown in their office procedures regarding the scheduling of court appearances. Petitioner testified he assumed he was told the outcome of the motion hearing, but never inquired of anyone as to the date to which the trial was continued and was never aware of the new date. The court found petitioner's failure to appear on the new trial date a willful violation of Code of Civil Procedure section 1209, subdivisions 3 and 5[1] in that petitioner had a duty to make a followup inquiry on a case in which he had a continuance motion pending. Petitioner was adjudged in contempt of court and ordered to pay a fine of $500 and spend three days in county jail.[2] *591 Petitioner's several contentions are premised on the theory that he cannot be held accountable for failure to appear because he did not actually know that trial date. We reject the proposition. Elusive attorneys have long been a recurring problem in trial courts. (Arthur v. Superior Court (1965) 62 Cal.2d 404, 409 [42 Cal. Rptr. 441, 398 P.2d 777].) "When an attorney fails to appear in court with his client, particularly in a criminal matter, the wheels of justice must temporarily grind to a halt. The client cannot be penalized, nor can the court proceed in the absence of counsel. Having allocated time for this case, the court is seldom able to substitute other matters. Thus, the entire administration of justice falters." (Id., at p. 411.) (1) An attorney's failure to appear at the scheduled time without valid excuse is a species of direct contempt and may be punished summarily. (Chula v. Superior Court (1962) 57 Cal.2d 199, 203 [18 Cal. Rptr. 507, 368 P.2d 107, 97 A.L.R.2d 421].) Due process does, however, require the court to afford an opportunity for the attorney to present a valid excuse (Inniss v. Municipal Court (1965) 62 Cal.2d 487 [42 Cal. Rptr. 594, 399 P.2d 50]), as was done in this case. (2) Whether certain acts constitute contempt is a jurisdictional question to be determined by the trial court. (In re Ciraolo (1969) 70 Cal.2d 389, 394 [74 Cal. Rptr. 865, 450 P.2d 241].) As a reviewing court, our role is merely to ascertain whether there was sufficient evidence before the trial court to sustain the judgment and order. The power to weigh the evidence rests with the trial court. (Id., at p. 394.) (3) In this case the trial court rejected petitioner's proferred excuse based on a breakdown of office calendaring procedures, and determined that his failure to inquire about the new trial date was a breach of duty which led to his failure to appear. It is clear that petitioner had a duty to present himself in court and diligently continue with a trial he had undertaken and not to delay it unduly for any personal matter reasonably within his control.[3] (Lyons v. Superior Court (1955) 43 Cal.2d *592 755, 758 [278 P.2d 681].) Implicit in this duty is the obligation to be informed of required dates and times for court appearance. (See ABA, Model Code of Prof. Responsibility (1980) DR 6-101 (3) at p. 31.) Petitioner failed in these duties. His omissions were willful in that his failure to inquire and consequent scheduling of an out-of-town appointment evidenced "a ... willingness to commit the ... omission" (Lyons, supra, 43 Cal.2d at p. 759), and an indifferent disregard of the duty to obey court orders promptly (In re Karpf (1970) 10 Cal. App.3d 355, 372 [88 Cal. Rptr. 895]). There was sufficient evidence to support the trial court's findings. (4) Petitioner's additional argument that the sentence imposed was an abuse of discretion is without merit; the penalty is well within statutory limits. (Code Civ. Proc., § 1218.) The order to show cause is discharged and the petition for writ of habeas corpus is denied. The stay heretofore issued by this court will be dissolved on finality of this opinion. Puglia, P.J., and Wolters, J.,[*] concurred. Petitioner's application for a hearing by the Supreme Court was denied March 20, 1981. Bird, C.J., and Tobriner, J., were of the opinion that the application should be granted. NOTES [1] Code of Civil Procedure section 1209: "The following acts or omissions ... are contempts ... "3. Misbehavior in office, or other wilful neglect or violation of duty by an attorney ... "5. Disobedience of any lawful judgment, order, or process of the court...." [2] The judgment recites the court considered "numerous occasions in the past" when it had given petitioner verbal warnings "when he has failed to show for trial, when he has had multiple cases set for trial on the same day and other numerous occasions wherein he was late for court or had conflicts with his calendar." After the judgment issued, petitioner applied to the superior court which ordered the municipal court to reconsider the sentence without reference to past conduct. The municipal court did so and imposed the same sentence. [3] Since there was no appearance by anyone on behalf of petitioner's client on June 23, we need not consider the effect of his arrangement with his associate to cover for him that day. [*] Assigned by the Chairperson of the Judicial Council.

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FILED United States Court of Appeals Tenth Circuit UNITED STATES COURT OF APPEALS March 31, 2011 TENTH CIRCUIT Elisabeth A. Shumaker Clerk of Court STANIMIR GEORGIEV PAVLOV, a/k/a Atanas Velichkov Yordanvo, Petitioner - Appellant, v. No. 11-1040 (D. Colo.) WARDEN SMELZER, [sic]; JOHN W. (D.C. No. 10-CV-01282-ZLW) SUTHERS, Attorney General of the State of Colorado, Respondents - Appellees. ORDER DENYING MOTION FOR LEAVE TO PROCEED ON APPEAL IN FORMA PAUPERIS, DENYING REQUEST FOR CERTIFICATE OF APPEALABILITY, AND DISMISSING APPEAL Before O'BRIEN, McKAY, and TYMKOVICH, Circuit Judges. Stanimer Pavlov filed a pro se1 28 U.S.C. §2254 habeas petition. The District Court dismissed it as “barred by the one year limitation period in 28 U.S.C. §2244(d),” explaining why. It also prospectively decided that no Certificate of Appealability (COA) would issue because Pavlov “has not made a substantial showing of the denial of a constitutional right.” (R. Doc. 23 at 8.); See 28 U.S.C. § 2253(c)(2). Pavlov then filed a 1 We liberally construe his pro se filings. See Ledbetter v. City of Topeka, Kan., 318 F.3d 1183, 1187 (10th Cir. 2003). Notice of Appeal with the district court. Later, in this Court, he filed several documents: a “Statement” on February 28, 2011, which we construed as a motion for issuance a COA; on March 9, 2011, a two- page “Combined Opening Brief and Application for Certificate of Appealability,” which we construed as a supplement to his “Statement,” and on March 10, 2011, a Brief and Application for COA. The parties are familiar with the facts so they will not be repeated here. We have reviewed Pavlov’s proposed opening brief and application for a COA in light of the district court’s decision. A COA may be issued only upon “a substantial showing of the denial of a constitutional right.” 28 U.S.C. § 2253(c)(2). We are confident jurists of reason would not find the district court’s analysis debatable or wrong. Slack v. McDaniel, 529 U.S. 473, 484, (2000). The district court also denied Pavlov’s request to appeal in forma pauperis (ifp), concluding it was “not taken in good faith.” (R. Doc. 30.); see 28 U.S.C. § 1915(a). He renews his ifp request here. To proceed ifp on appeal, he “must show a financial inability to pay the required filing fees and the existence of a reasoned, nonfrivolous argument on the law and facts in support of the issues raised on appeal.” DeBardeleben v. Quinlan, 937 F.2d 502, 505 (10th Cir. 1991) (emphasis added). We have solicitously reviewed his filings. He has utterly failed to pass the threshold. An appeal on a matter of law is frivolous where “[none] of the legal points [are] arguable on their merits.” Anders v. California, 386 U.S. 738, 744 (1967). Pavlov’s arguments are either irrelevant or contrary to settled law; and he makes no reasoned argument for modification of that law. -2- Pavlov’s application for a COA and his motion to proceed ifp on appeal are DENIED. He must pay the filing and docket fees in full to the clerk of the district court. See Kinnell v. Graves, 265 F.3d 1125, 1129 (10th Cir. 2001). Entered by the Court: Terrence L. O’Brien United States Circuit Judge -3-

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478 F.2d 1405 Littwinv.Gottschalk 72-1603 UNITED STATES COURT OF APPEALS Seventh Circuit 5/25/73 1 N.D.Ill. AFFIRMED

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122 S.E.2d 186 (1961) Ara Virginia HENTHORN, Admrx., Etc., v. Carl LONG. No. 12103. Supreme Court of Appeals of West Virginia. Submitted September 19, 1961. Decided October 24, 1961. Rehearing Denied December 4, 1961. *188 James W. Pyles, Jack Hawkins, Pros. Atty., New Martinsville, for plaintiff in error. Snyder & Hassig, New Martinsville, for defendant in error. CALHOUN, Judge. This case involves a wrongful death action growing out of a motor vehicle collision resulting in a verdict for the defendant, which the trial court declined to set aside. The basic defense was predicated on the sudden emergency doctrine. On the morning of August 11, 1958, Arthur William Henthorn and Howard Eugene Miller were proceeding in a northwesterly direction on State Route No. 20 and 7 toward New Martinsville in Wetzel County in a 1951 model Chevrolet automobile, owned and then being operated by Henthorn. At a point referred to in the testimony as the "twin bridges", Henthorn stopped his automobile near the eastern end of a narrow concrete bridge and on his right side of the highway, in order to permit an oncoming pickup truck, and perhaps one or more other vehicles following the pickup truck, to cross the narrow bridge from the opposite direction. While the automobile was stationary at that place, it was struck from the rear by a 1956 model 2-ton Ford truck then owned and being operated by Carl Long. As a consequence of that collision, the automobile was rammed into the right side of the concrete bridge on the eastern end thereof with such force and violence that the automobile was demolished, Henthorn, the driver, was killed, and Miller, the passenger in the automobile suffered a broken back and other injuries. In this wrongful death action consequently instituted in the Circuit Court of Wetzel County by Ara Virginia Henthorn, as administratrix of the estate of her deceased husband, Arthur William Henthorn, against Carl Long, a jury returned a verdict in favor of the defendant. From a judgment entered on such verdict by the trial court on May 27, 1960, the administratix prosecutes this writ of error. The plaintiff has filed a motion to reverse, pursuant to leave granted by this Court on May 8, 1961. A consideration of the several assignments of error urged in behalf of the plaintiff necessitates a rather extended summary of the pertinent facts and circumstances disclosed by the testimony. The collision occurred about 7:45 a. m., while Henthorn and Miller were proceeding from their respective homes in Wetzel County with an intention to go to Weirton, West Virginia. The impact caused Henthorn to be thrown forward against the steering wheel of his automobile, causing its horn "to stick and blow". His resultant death apparently was instantaneous. From photographs exhibited and from the testimony of witnesses it appears that eastward from the point of impact, the direction from which both vehicles had proceeded, there is a slight and gradual ascent extending for perhaps as much as 1,000 feet. The weather was clear and dry. At a point 475 feet eastward from the bridge, there was a highway marker bearing the words "Narrow Bridge". The paved portion of the highway at the eastern edge of the bridge was 17 feet, 6 inches in width. The defendant was familiar with the highway *189 in the area in question, having traveled over it frequently prior to the date of the accident. Arthur William Henthorn owned and operated a small farm near Piney in Wetzel County, and Howard Eugene Miller lived with his grandmother on an adjoining farm. Miller testified that during the trip from Piney to the scene of the accident, Henthorn operated the automobile at a speed of about 40 to 45 miles an hour; that at Porters Falls, a distance of ten or eleven miles eastward from the twin bridges, he first noticed the Long truck following at a distance of about 500 feet in the rear of the automobile; that he observed the truck three or four times thereafter; that he last observed the truck at almost the instant it struck the automobile and prior to that time he last observed the truck about one mile eastward from the scene of the accident at a place of business known as the "Cabbage Patch"; that Henthorn's automobile was then traveling approximately 45 miles an hour; that the truck was "keeping about the same distance" or "holding about the same distance" from the automobile each time he observed it prior to the moment of collision; that Henthorn gave an appropriate arm signal and stopped his automobile on the right side of the highway at a point near the third guard rail post eastward from the eastern end of the bridge; that the Henthorn automobile was in its stationary position about twelve seconds prior to the time it was struck from the rear by the truck; and that he had "no idea" of the speed of the truck when he last saw it immediately preceding the impact. Riley Beegle, a constable of Magnolia District of Wetzel County, a witness for the plaintiff, testified that he went to the scene of the accident at the suggestion or request of the chief of police of the City of New Martinsville; that he arrived at the scene about the time the ambulance was leaving with the two injured persons; and that one of such persons "looked like he was dead." Beegle testified further that at that time and place Carl Long, the defendant, told him "it was his fault, that he was on his way to New Martinsville to get his brakes fixed"; and that he said "he was sorry because these boys were both friends of his, and he was sorry that happened, and he said they came down the hill there, that he pumped his brakes on the truck, and he didn't have any brakes"; that he was about three hundred feet, apparently from the Henthorn automobile, when he first undertook to apply his brakes; and that he stated further that he "found out he didn't have any brake, and he reached across to an emergency brake, and he hit a button there which throwed it into neutral". Constable Beegle testified that there was on the floor of the cab of the truck a can lying on its side, from which was flowing or spilling a liquid which "looked like, smelled like brake fluid". The witness denied that Long stated that he was going to New Martinsville to have his brakes merely "tightened" or "adjusted" or to have his battery checked, but rather that Long stated he was going to New Martinsville to have his brakes "fixed". At the request of Sheriff S. W. Westerman, Beegle took the defendant to New Martinsville for questioning. S. W. Westerman, Sheriff of Wetzel County, arrived at the scene of the accident after Long's truck had been moved westward across the bridge and parked in front of a nearby store. As a witness for the plaintiff, he testified that the "Chevrolet was completely smashed in. It was shoved clear to the front. The Ford truck was damaged on the right side. The better part of the damage was on the right side of the front." This testimony relative to the nature of damage to the two vehicles is confirmed by photographs which are made exhibits. Sheriff Westerman did not talk with the defendant at the scene of the accident, but he did question him later in New Martinsville. In relation thereto the sheriff testified: "Well, he told me that he washe left Reader, and he had about a half a brake * * *. He told that to me, that he had about a half a brake, and he *190 was starting to New Martinsville to have his brakes repaired. He came to within three hundred feet of the bridge where the accident occurred, and he pumped on his brake, and his brake wouldn't work. He pumped several times and it wouldn't work. He grabbed for his emergency, and by grabbing for his emergency, he hit some kind of a buttonI don't know what it is and threw it into neutral, thereby the emergency brake wouldn't work at all." The sheriff testified further that he caused the truck to be examined later that day on the premises of Bridgeman Motors in New Martinsville by Carl Reed, an automotive mechanic, and that such examination "revealed very little brake fluid in the cylinders." Carl Reed, an automotive mechanic since 1946, testifying for the plaintiff, stated that he examined the defendant's truck on Bridgeman Motors' used car lot on the day on which the accident occurred. He testified that on a truck of this type there is a "master cylinder" under the floor boards on the driver's side, sufficient in size to contain one-half pint of brake fluid, and that each wheel is equipped with a cylinder for the purpose of containing brake fluid as a part of the braking system. The brake fluid is forced from the master cylinder to the several wheel cylinders by a "vacuum booster." He testified further that the master cylinder "governs" all the wheel brakes, and that when he examined the truck, he discovered that the master cylinder was empty. From his testimony it appears that "pumping" the foot brake causes the brake fluid to be supplied to the several wheel cylinders, and that if one of such wheel cylinders develops a leak, the brake fluid in the master cylinder eventually may become emptied therefrom. Apparently "pumping" the foot brake will hasten this process of forcing the brake fluid from the braking system. From the examination of the truck made by the witness, he was unable to state when or how the brake fluid left the braking system. It appears rather clearly from the testimony of the witness that when a leak develops in one of the wheel cylinders, the loss of braking capacity is not sudden, but rather the loss of effectiveness of the wheel brakes takes place gradually with the increased loss of the brake fluid. He was asked the following questions, and he gave the following answers: "Q. Mr. Reed, if the wheel cylinder goes out, does that make the entire braking system go out? Does that affect the other wheels? A. In due time when it leaks enough fluid out your master cylinder is dry. It will affect all brakes. "Q. But if it just commences to leak, what effect does that have before it has leaked all the fluid out? A. My experience I found it will give you a sponge pedalsoft pedal. Instead of the pedal going so far and stopping, it will be kind of spongy like. "Q. But it can stop the vehicle? Is that correct? A. Yes." John Bridgeman of Bridgeman Brothers or Bridgeman Motors, Ford Dealer at New Martinsville, a witness for the plaintiff, examined the defendant's truck on the used car lot on the day of the accident. He testified: "I tried the brake pedal, and it went clear to the floor. It didn't have any reserve pedal." He testified further that the "right rear wheel cylinders were replaced." Later he spoke of "cylinder" in the singular rather than "cylinders". He was asked the following questions and gave the following answers: "Q. Was there brake fluid on the wheel? A. Yes, sir. "Q. Can you tell what was wrong with the cylinder? A. The rubber caps were leaking. "Q. Do you know what made the leak, if you know? A. Wear and tear, I imagine. "Q. Did you in addition to replacing the cylinder, tighten the brake? A. *191 I couldn't tell you. I don't recall. It is possible we did. "Q. After you replaced the cylinder, I assume you also put brake fluid in it? A. Yes." John E. Titus, a witness for the defendant, testified that he, as an employee of the defendant, had operated the truck in question almost exclusively; that Carl Long may have "been in it two or three times * * * but he had never delivered a load that I know of, but he had driven the truck empty a time or two, but outside of that I was the only man that operated it." Titus further testified that on the preceding Friday he delivered a load of lumber with the truck from the defendant's sawmill, situated one mile below Reader on Route 20, to a mine near Moundsville; and that he did not operate the truck thereafter prior to the day of the accident. Titus testified further that on Monday morning, the day on which the accident occurred, it was necessary to push the truck in order to start the operation of its motor, because "the starter wouldn't work." Apparently Carl Long was in the driver's position when his employees pushed the truck in order to get its motor operating. In relation to the situation then existing, Titus testified as follows: "Well, Mr. Long pulled back in, * * * and got out of the truck, and he said, `Well, I will have to get that starter fixed', and I said to him, I said, `If you are going to get the starter fixed,' and I said to him, I said, `If you are going to get that starter fixed, you better have the brakes adjusted, they are beginning to get loose,' and he said, `Well, you go ahead and operate the mill. I will take the truck to the garage.'" Titus was asked the following questions, and gave the following answers: "Q. You said something about the brakes being loose? A. The brakes was loose. They needed adjusted up. The pedal didn't have sufficient to pedal it. "Q. How much pedal did it have? A. It had plenty of pedal to stop the truck without pumping. Of course, I didn't try to work it that morning at all, but you could have pumped the brake and got more pedal, but I didn't. I drove it in there and stopped on the emergency brake." (Italics supplied.) In another portion of his testimony, in relation to the brakes, Titus testified: "They were down some, but they had plenty of pedal capable of stopping an empty truck or unloaded truck if it was stopped in a reasonable distance." (Italics supplied.) Titus denied that there was any brake fluid in the cab of the truck on the day in question, but he says that on Sunday, the day before the accident, he took a can of brake fluid from the truck and used it to restore the brakes in his own automobile, and did not replace it in the truck. Nevertheless, he testified: "At the time I drove it to the Ford garage there was a mashed up can of brake fluid in the glove compartment of the truck, and it leaked over the maps and everything, put in there by somebody else. I don't know how it got there." (Italics supplied.) Immediately thereafter he testified as follows: "Q. Do you recall how many days it was after that accident you found it in the glove compartment? A. It was so we got the truck back. They worked on the truck on Tuesday, and we got the truck back on Wednesday. Wednesday, the same day, I could smell the brake fluid, and it was in the glove compartment of the truck leaking out." (Italics supplied.) It is clear from the testimony of the defendant and of Carl Reed, the mechanic, that the emergency brake operated independently of the brakes on the truck wheels, which were operated by the foot pedal. The defendant testified that, on the gear shift lever located to the right of the driver, there was a "switch button" which controlled the two-speed axle. Long testified further that Titus had told him over the week-end that he was going to have his brakes "adjusted", and that at the sawmill on the morning in *192 question it was his intention to have the starter fixed and the brakes "adjusted". In connection with the situation at that time and place he testified: "I tried my brakes, and they was low. That is, low on the pedal, and I pumped them, the brake come up, see. I would say it wasn't quite half a pedal as we say was the pedal range * * *." Consequently, he left the sawmill "between seven-fifteen and seven-thirty" intending to go to Bridgeman Brothers' garage. He admitted on cross-examination that instead of traveling fourteen miles to New Martinsville, he could have traveled four or five miles of "level driving" to Pine Grove, and that he could have had his starter and brakes repaired at one of the garages located at that place. He testified that he had no difficulty with the brakes until he neared the scene of the accident as hereinafter stated. Meantime, he recalled having observed the Henthorn automobile ahead and following it "through several miles". In descending two hills known as Long Point and Slim Chance, he noted that the foot brake "I would say, would be about one-third of the pedal. Just a little better than around two inches." He recalled having seen the Henthorn automobile ahead about four to five hundred feet, as he "passed the location known as the Cabbage Patch". He testified that he observed the Henthorn automobile in a stationary position near the bridge, and that when he came over the hill about one thousand feet eastward, he could see it. The defendant testified further that when perhaps three hundred feet or more eastward, he observed the Henthorn automobile "stopped", and at a point about two hundred and seventy feet eastward, he undertook to apply his foot brake "and it went to the floor. I didn't have no brake." In relation to the situation at that juncture, he stated: "At that time I reached for my emergency brake. I don't remember hitting this button, but that is the only thing that I can realize that caused it to jump into neutral, and I heard this whining in the drive shaft, and I know she jumped out of gear." He testified that he continued without success to pump his foot brake and that he tried unsuccessfully to get the truck back in gear. Consequently, the severe and violent impact resulted as stated earlier herein. In brief, the defendant asserts in substance that without previous fault on his part, a sudden emergency was created by the failure of his foot brakes to operate when he undertook to apply them at a point about two hundred and seventy feet from the Henthorn automobile; that thereafter he acted as a reasonably prudent man in such emergency; and that, therefore, he is not subject to liability to the plaintiff for damages in this action. Over objection of the plaintiff the trial court gave the defendant's instructions numbered three and four, respectively, dealing with the sudden emergency doctrine, as follows: "Instruction No. 3: The Court instructs the jury that where a person is confronted with a sudden emergency, the failure on his part to exercise the best judgment the situation renders possible does not establish such lack of care on his part as will render him liable for any resulting injury. Stated another way, the law does not require of a person who is acting in the face of sudden danger that his act be infallible or even that he act wisely. Therefore, in this case, if you believe from the evidence that as the defendant, Carl Long, approached the place where the Henthorn automobile was located, the defendant, while theretofore operating his truck with reasonable care and caution under the circumstances, was suddenly confronted with an emergency in the effectiveness of his brakes, which condition he had not observed and by the exercise of reasonable care could not have observed before that time, and if you further find that the said Carl Long upon the discovery of such condition did what an ordinary, reasonable and prudent person would have done under similar circumstances, then the defendant Carl Long was not guilty of negligence. *193 "Instruction No. 4. The Court instructs the jury that even though they may believe from a preponderance of the evidence in this case that at the instance of the collision in this case between the motor vehicle of the plaintiff's decedent Arthur William Henthorn and the defendant Carl Long, the foot brake on the motor vehicle of the defendant Carl Long was inoperative because of a defect, and was not in good working order or adequate to control the movement of and to stop and hold such motor vehicle as required by the statutes of the State of West Virginia, yet if the jury further believe from a preponderance of the evidence that, under the facts and circumstances in this case, such brake failure occurred wholly without the fault of the defendant Carl Long, under circumstances which made it impossible for such defendant to comply with such statutory requirements at the moment complained of, and under circumstances which due care and prudence on his part could not have guarded against prior to such collision, then any such violation of such particular statute by the defendant Carl Long under such circumstances is excusable." The court reporter's transcript of the testimony and of the other trial proceedings does not disclose, in the usual way, any objections to any of the instructions offered. However, in a separate bill of exceptions, the plaintiff sets forth the instructions copied above, and the bill of exceptions states that objections to such instructions were as follows: "The Plaintiff offered objections to Instruction No. 3 and 4 saying that Instruction No. 3 used the phrase `Which condition he had not observed and by exercise of reasonable care could not have observed before that time.' This instruction is unclear as to the meaning of the word observe. The Plaintiff objected to the giving of Instruction No. 4 saying it limits the brake failure to the words `moment complained of.' Plaintiff felt that there was sufficient evidence in this case to show that the brakes needed some work on them when the Defendant left Reader, and that he had an opportunity to drive four miles to Pine Grove to a garage, but he chose to come to New Martinsville, a distance of fourteen miles and over hilly, twisting roads, and we feel that there was sufficient evidence that Carl Long should have examined the brakes before leaving from the saw mill at or near Reader." While such objections are somewhat general, we deem them adequate to question the sufficiency of the evidence to support them and to challenge the propriety of the court's action in instructing the jury in relation to the sudden emergency doctrine in the light of the testimony, facts and circumstances properly exhibited by the record. The sudden emergency doctrine was summarized in the second point of the syllabus of the case of Reilley v. Byard, W. Va., 119 S.E.2d 650, 651, as follows: "A person in a sudden emergency, not created in whole or in part by his own negligence, who acts according to his best judgment or who, because of insufficient time to form a judgment, fails to act in the most judicious manner, is not guilty of actionable negligence if he exercises the care which would be exercised by a reasonably prudent person in like circumstances." (Italics supplied.) See also Reece v. Hall, 142 W.Va. 365, 372, 95 S.E.2d 648, 653. An important aspect or qualification of the doctrine is succinctly stated in the tenth point of the syllabus in the recent case of Crum v. Ward et al., W.Va. 122 S.E.2d 18, as follows: "In an action for damages for personal injuries, a defendant can not rely on the sudden emergency doctrine where his own action has created, in whole or in part, the sudden emergency." (Italics supplied.) The second point of the syllabus of Cline v. Christie, 117 W.Va. 192, 184 S. E. 854, is as follows: "The driver of a *194 motor vehicle who has violated rules of the road may not invoke the doctrine of sudden emergency to relieve himself from liability to one injured as a result of such violation." The same proposition is stated in similar language in the tenth point of the syllabus of Elswick v. Charleston Transit Co., 128 W.Va. 241, 36 S.E.2d 419, 422 as follows: "The driver of a motor vehicle cannot invoke the doctrine of sudden emergency to relieve himself from liability to another whom he has injured as the result of his violation of a regulatory traffic statute." See also Somerville v. Dellosa, 133 W.Va. 435, 443, 56 S.E.2d 756, 762; Isabella v. West Virginia Transportation Co., 132 W. Va. 85, 93, 51 S.E.2d 318, 323; Chaney v. Moore, 101 W.Va. 621, pt. 5 syl., 134 S.E. 204, 47 A.L.R. 800. There is in this case no testimony from which the jury could have determined reasonably and properly either that an emergency arose suddenly or that, if there was an emergency within legal contemplation, it arose without negligence or fault on the part of the defendant. The defendant knew, before he embarked upon the 14-mile journey over a hilly highway, that the brakes on the truck were defective. He knew this because Titus so advised him, and also because, while still at his place of business, he tested the brakes and found that they were "low", had "less than a half a pedal." Obviously, he knew it as he proceeded on his journey, because he does not contend that the impaired condition of the brakes later became corrected or lessened. On the other hand, he admits that while descending the two hills described in his testimony, he had a one-third pedal, apparently less than the approximately one-half pedal which he discovered before he left the sawmill. We are not impressed by the tenacious adherence of Long and Titus to the contention that the foot brakes merely needed to be "adjusted" or "tightened", rather than "fixed", as Constable Beegle quoted Long as having stated; or "repaired", as Sheriff Westerman quotes Long as having described the purpose of his journey to New Martinsville. Indeed the testimony clearly refutes the accuracy of the terminology employed by Long and Titus in saying or implying that the brakes merely needed to be adjusted or tightened. The defense, on the contrary, is predicated on the proposition that an emergency was caused because of a loss of brake fluid; and while John Bridgeman and Carl Reed testified fully concerning the subsequent correction of the defective condition of the brakes, there was no effort to develop by either of such witnesses that the brakes were "tightened" or "adjusted", or that they were in need of anything of that nature. On the contrary, the entire testimony discloses unmistakably that the wheel brakes were defective because of loss of brake fluid. The defendant testified that he had operated motor vehicles for forty-one years. His testimony gives evidence of a rather unusual knowledge of automotive mechanics and of experience in that field. He testified at length, and apparently with peculiar knowledge, concerning the operation of both the foot brakes and of the emergency brake on a truck such as that herein involved. The defense evidence discloses that extra brake fluid was regularly carried in the truck. It is reasonable to assume that the defendant knew the characteristics or symptoms of lack of adequate brake fluid in the braking system, and that he knew the significance thereof. The evidence fails to disclose that the "leak" in the cylinder on the right rear wheel of the truck was of such a nature as to cause the brakes to become completely inoperative suddenly or without reasonable basis for prior adequate warning. Since the defective nature of the brakes is not accounted for on any other basis, and since the evidence utterly fails to disclose that the brakes needed to be "adjusted" or "tightened" on any other basis or in any other manner than by correcting the situation pertaining to brake fluid in the braking system, we must assume that the leak commenced prior to the time when Titus drove the truck with defective brakes to the sawmill on the preceding Friday and stopped it there by means of the emergency brake. *195 The case is somewhat unique in that apparently there is no contention that Arthur William Henthorn, the deceased, was guilty of the slightest negligence in the premises, and apparently there is no basis for such an implication or contention. Rather his death resulted from the act of the defendant in deliberately taking a truck with defective brakes upon the highway and the act of the defendant, according to his testimony, in throwing his truck into neutral in undertaking to apply its emergency brake. For reasons stated we feel that neither of such instructions was warranted by the evidence, and that the trial court erred, under the state of the testimony before us, in submitting the question of the defendant's negligence to the jury on the basis of the sudden emergency doctrine. "An instruction which is not sustained by evidence should not be given." State v. Cirullo, 142 W.Va. 56, pt. 4 syl., 93 S.E.2d 526, 528, 535, in which numerous prior decisions of this Court to the same effect are listed. The plaintiff complains of the refusal of the trial court to grant her instruction Number 6, as follows: "The court further instructs the jury that it was the duty of the defendant Carl Long to have the brakes on his truck in such condition so that they would be capable, at all times and under all conditions of loading, of being stopped on a dry, smooth, level road free from loose material upon application of the service (foot) brake, within the distances specified below, or should have been capable of being decelerated at a sustained rate corresponding to these distances. "Feet to stop Deceleration 20 miles per in feet per hour second "Vehicles having brakes on all wheels 30 14 Vehicles not having brakes on all wheels 40 10.7 "And further it was the duty of the defendant Carl Long to maintain his brakes in good working order and to be so adjusted as to operate as equally as practicable with respect to the wheels on opposite sides of the vehicle." The instruction is substantially in the language of that portion of Chapter 129, Acts of the Legislature, Regular Session, 1951, appearing in Code, 1931, as amended, as Chapter 17C, Article 15, Section 31(b) and (c). Counsel for the defendant contend that the instruction was not applicable to the instant situation because the statute refers to a "smooth, level road", and there is no proof that the road at the area in question was a "smooth, level road." We are unable to perceive the force of such reasoning. The statutory provisions deal with the required performance ability of brakes, and the maintenance thereof. Obviously, the time required for stopping a vehicle is greater and the possible deceleration rate is not as rapid on a steep descent as on a smooth, level road. But a motorist is required to have brakes which measure up to the test prescribed by the statute, no matter what is the nature of the public highway upon which the vehicle is being operated. We do not mean to be merely facetious or flippant when we observe that, if the defense contention in this respect were sanctioned and observed, there would be a singular dearth of "smooth, level road" situations in our great state to which such an instruction could be applied properly. The trial judge, over his signature on the instruction, made the following notation: "Instruction does not conform with the statute." On the contrary, the instruction appears to be substantially in the statutory language. We therefore feel that the plaintiff was entitled to an instruction dealing in proper form and language with the statutory provision in question, and that the trial court was not warranted in refusing the instruction on the basis of the reasons assigned for such refusal. At the conclusion of the voir dire examination by the court of the panel of *196 twenty jurors, counsel for the plaintiff requested the court in writing to inquire further of such jurors as follows: "If the plaintiff proves by a preponderance of the evidence that the defendant's fault caused the death of Arthur Henthorn and that the distributees of his estate, namely, Ara Henthorn, his wife, and Bonnie Henthorn, his daughter, suffered pecuniary damages or financial loss in the amount of $20,000, would you be willing to return a verdict for said amount?" The court refused to do so, and also refused to permit counsel to propound a similar inquiry, stating: "The Court sees no useful purpose of this inquiry, in view of the complete, thorough examination heretofore made of the jury, and the Court still feels that such inquiry at this time would only emphasize a possible total verdict and would serve no useful purpose in the trial of this case and might be to the prejudice of the defendant." We feel that the trial court acted with complete propriety in this respect. This proposed inquiry seems to be a technique sometimes advocated as a means of inducing juries to return big verdicts. Courts are not interested in any device or technique designed to induce either large verdicts or small verdicts; but courts are under a solemn obligation at all times to keep the symbolic scales of justice delicately balanced so that every inducement will be held out to the jury, so far as mortal capacity permits, to render a fair verdict. If such an inquiry were propounded and answered in the affirmative by the twelve jurors ultimately selected for trial of the case, there might result a dangerous field for adroit and resourceful counsel in final argument to portray such affirmative answer as something in the nature of a tacit promise to return a verdict for the amount specified in the inquiry. We feel that the trial court, in refusing to propound such inquiry, exercised its discretion wisely in the interest of justice. The trial court, in the exercise of a sound discretion, may properly limit the extent of interrogation even in relation to any of the qualifications of jurors prescribed in Code, 56-6-12. Carpenter v. Hyman, 67 W.Va. 4, pt. 2 syl., 66 S.E. 1078. While jurors may be interrogated on their voir dire within reasonable limits, to elicit facts to enable the litigants to exercise intelligently their right of peremptory challenge, the nature and extent thereof "should be left largely to the discretion of the trial court." State v. Stonestreet, 112 W.Va. 668, pt. 1 syl., 166 S.E. 378, 379. The plaintiff complains of the refusal of the court to require the defendant on the plaintiff's motion to file a specification of defense in accordance with the provisions of Code, 56-4-20. While this case was tried prior to the effective date of the Rules of Civil Procedure for Trial Courts, we observe in passing that Rule 12(e) provides for a motion for a more definite statement of defense. The granting of such request, in accordance with the statutory provision, is within the sound discretion of the trial court, and this Court will not reverse for that cause unless it is clear that the party making such request has been prejudiced by the refusal of the trial court to grant it. State v. Counts, 90 W.Va. 338, pt. 3 syl., 110 S.E. 812; State v. Greater Huntington Theatre Corporation, 133 W.Va. 252, pt. 1 syl., 55 S.E.2d 681. We perceive no error in the action of the trial court in this respect. For the reasons stated herein, the plaintiff's motion to reverse is granted and sustained, the judgment of the Circuit Court of Wetzel County is reversed, the verdict of the jury is set aside, and the plaintiff is awarded a new trial. Judgment reversed; verdict set aside; new trial awarded.

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COURT OF APPEALS SECOND DISTRICT OF TEXAS FORT WORTH NOS. 2-04-275-CR 2-04-276-CR GREGORY THOMAS GEORGE APPELLANT V. THE STATE OF TEXAS STATE ------------ FROM CRIMINAL DISTRICT COURT NO. 4 OF TARRANT COUNTY ------------ MEMORANDUM OPINION[1] ------------ Appellant Gregory Thomas George appeals the trial court=s denial of his motion to suppress. Appellant was charged in two separate indictments with possession of the controlled substance hydrocodone and methamphetamine, respectively. After the trial court denied Appellant=s motion to suppress, Appellant entered an open plea of guilty to both charges. The trial court found Appellant guilty in both instances and sentenced him to eight years= confinement for the possession of hydrocodone and eleven years= confinement for the possession of methamphetamine, with the sentences to run concurrently. In two points, Appellant complains that the trial court erred in denying his motion to suppress evidence because the contraband was discovered incident to an unlawful arrest and because the evidence was the fruit of an unreasonable seizure and search conducted without probable cause. We affirm. BACKGROUND On April 20, 2001, officers of the Hurst Police Department arrested Appellant. The officers acted at the direction of Hurst Corporal Clint Younger, who was then assigned to the Tarrant County Narcotics Task Force. An informant had advised Corporal Younger that Appellant, a man who drove a white van, was involved in narcotics activities and carried around a briefcase with methamphetamine and other drugs. Based on this information, Corporal Younger set up surveillance on Appellant. Corporal Younger observed Appellant exit a residence and get into a white van as described by the informant. Corporal Younger followed Appellant for approximately five blocks until he observed Appellant failing to come to a complete stop before turning right at a red light in the City of Hurst. At that point, Corporal Younger radioed marked patrol units of the Hurst Police Department and asked them to conduct a traffic stop based on the traffic violation he had observed. Corporal Younger followed Appellant as he continuously updated the marked patrol units regarding Appellant=s location. Sergeant Schwobel of the Hurst Police Department confirmed with Corporal Younger that he was following the correct vehicle and then Sergeant Schwobel stopped Appellant. Sergeant Schwobel did not personally observe Appellant=s failure to come to a complete stop at the red light. Appellant was in Hurst when he committed the traffic violation, but he traveled approximately two and a half miles before Sergeant Schwobel had the opportunity to stop Appellant=s vehicle. At the time of the traffic stop, Appellant was in Fort Worth, Tarrant County, Texas, and Fort Worth officers did not participate in the traffic stop. A total of three officers arrived at the scene, placed Appellant under arrest for the red light violation, and recovered contraband following a search of the vehicle incident to the arrest. Corporal Younger testified that he was approximately one hundred yards from Appellant=s vehicle during the traffic stop and that at no time did he actually participate in the traffic stop. After officers arrested Appellant and transported him from the scene, Corporal Younger assisted the officers in organizing the contraband that the officers recovered from Appellant=s van. STANDARD OF REVIEW We review a trial court's ruling on a motion to suppress evidence under a bifurcated standard of review. Carmouche v. State, 10 S.W.3d 323, 327 (Tex. Crim. App. 2000); Guzman v. State, 955 S.W.2d 85, 89 (Tex. Crim. App. 1997). In reviewing the trial court's decision, we do not engage in our own factual review. Romero v. State, 800 S.W.2d 539, 543 (Tex. Crim. App. 1990); Best v. State, 118 S.W.3d 857, 861 (Tex. App.CFort Worth 2003, no pet.). The trial judge is the sole trier of fact and judge of the credibility of the witnesses and the weight to be given their testimony. State v. Ross, 32 S.W.3d 853, 855 (Tex. Crim. App. 2000); State v. Ballard, 987 S.W.2d 889, 891 (Tex. Crim. App. 1999). Therefore, we give almost total deference to the trial court's rulings on (1) questions of historical fact and (2) application-of-law-to-fact questions that turn on an evaluation of credibility and demeanor. Johnson v. State, 68 S.W.3d 644, 652-53 (Tex. Crim. App. 2002); State v. Ballman, 157 S.W.3d 65, 68 (Tex. App.CFort Worth 2005, pet. ref=d); Harrison v. State, 144 S.W.3d 82, 85 (Tex. App.CFort Worth 2004, pet. granted); Best, 118 S.W.3d at 861-62. However, when the trial court=s rulings do not turn on the credibility and demeanor of the witnesses, we review de novo a trial court's rulings on mixed questions of law and fact. Johnson, 68 S.W.3d at 652-53. HOT PURSUIT In his first point, Appellant complains that the trial court erred in denying his motion to suppress because the contraband was discovered incident to an unlawful arrest. Appellant does not challenge the fact that the search was conducted incident to an arrest, but he does challenge the lawfulness of the arrest. Appellant maintains that the arrest was unlawfully made because it was outside the arresting police officers= jurisdiction and was not made in a hot pursuit situation. Appellant contends that the stop was not made in hot pursuit because he did not attempt to flee and he stopped his vehicle soon after officers turned on their lights and sirens to stop him. The State contends that the arrest was lawful because Corporal Younger was in pursuit of Appellant while within Hurst city limits, and the uninterrupted attempt by Corporal Younger and other officers to stop Appellant=s vehicle constituted a pursuit within the meaning of Ahot pursuit.@ A police officer may arrest a person outside the officer=s jurisdiction when the pursuit began within the officer=s geographical boundary and the pursuit was Alawfully initiated on the grounds of suspicion.@ Yeager v. State, 104 S.W.3d 103, 106-107 (Tex. Crim. App. 2003). Additionally, the hot pursuit doctrine does not necessarily require some element of a chase, although often it will. Id. at 106. Therefore, the relevant consideration is whether the initial pursuit was lawfully initiated. Id. at 107. An officer may arrest a person without a warrant for any offense committed in his presence or within his view. Tex. Code Crim. Proc. Ann. art. 14.01(b) (Vernon 2005). In the present case, Corporal Younger witnessed Appellant=s failure to come to a complete stop before turning right at a red light. Corporal Younger followed Appellant from the location where he observed the traffic violation, and throughout his pursuit of Appellant, Corporal Younger updated uniformed officers of Appellant=s location. We hold that the continued pursuit of Appellant constituted hot pursuit within the meaning of Yeager, even absent evidence that Appellant was attempting to flee because the hot pursuit doctrine does not necessarily require an element of chase. See Yeager, 104 S.W.3d at 106-07. Therefore, we hold that the trial court did not err in denying Appellant=s motion to suppress. We overrule Appellant=s first point. PARTICIPATION IN ARREST In his second point, Appellant contends that the trial court erred in denying his motion to suppress because the evidence was the fruit of an unreasonable search and seizure conducted without probable cause. Appellant contends that because Corporal Younger, who witnessed the traffic offense, did not participate in the arresting of Appellant, the arrest was invalid. The State maintains that the actions of Corporal Younger constitute sufficient participation in the arrest of Appellant, and therefore, the search incident to Appellant=s arrest was lawfully conducted. In Texas, a peace officer's authority to make a warrantless arrest is controlled exclusively by statute. Fry v. State, 639 S.W.2d 463, 465 (Tex. Crim. App. [Panel Op.] 1982), cert. denied, 460 U.S. 1039 (1983). Statutory warrantless arrests stand as exceptions to the general rule that an officer must obtain a warrant prior to an arrest. Id. Texas Code of Criminal Procedure article 14.01 provides an exception to the rule, but its conditions must be complied with to result in a lawful arrest. See Tex. Code Crim. Proc. Ann. art. 14.01 (Vernon 2005). Article 14.01(b) states that A[a] peace officer may arrest an offender without a warrant for any offense committed in his presence or within his view.@ Id. 14.01(b). A peace officer who does not himself possess probable cause to make a warrantless arrest may act on information relayed to him by other officers to effect a lawful arrest. Pyles v. State, 755 S.W.2d 98, 109 (Tex. Crim. App.), cert. denied, 488 U.S. 986 (1988). Therefore, an officer may rely on others in determining that probable cause exists, and may in some instances rely on other officers in making the actual arrest. Astran v. State, 799 S.W.2d 761, 764 (Tex. Crim. App. 1990). As long as the facts show that the viewing officer effectively participated in the arrest and was fully aware of the circumstances of the arrest, article 14.01 is satisfied. Id. In Astran, the court of criminal appeals determined that an undercover officer sufficiently participated in the arrest where the officer did not personally see the arrest, but parked two blocks away from the scene of the arrest and maintained radio contact with the arresting officers during the arrest. The court of criminal appeals determined in Armendariz v. State that an undercover officer sufficiently participated in the arrest when the officer observed a traffic violation and radioed other officers to effect the stop, remained in continuous radio contact with the arresting officers, and arrived at the scene a few minutes after the stop. 123 S.W.3d 401, 405 (Tex. Crim. App. 2003), cert. denied, 541 U.S. 974 (2004). Appellant contends that Armendariz is distinguishable from the case at bar because the record contains no evidence that the officers remained in continuous radio contact and because Corporal Younger testified that he did not attend the scene of the arrest and did not approach or personally deal with Appellant. The record does reflect that Corporal Younger maintained a safe distance from the scene to ensure that he did not compromise his undercover status, but he observed the officers making the stop through his binoculars. Though the facts of the present case differ from those facts in Armendariz, they do not establish that Corporal Younger failed to sufficiently participate in Appellant=s arrest simply because there is no evidence that Corporal Younger maintained radio contact with the arresting officers throughout the traffic stop. The record reflects that Corporal Younger personally witnessed Appellant commit the traffic offense. Corporal Younger followed Appellant and radioed for marked patrol units to assist in Appellant=s arrest in order to avoid compromising his undercover status. Though the marked units were not staged to assist Corporal Younger, the marked units were in the area. Corporal Younger continued to follow Appellant and continuously updated the marked patrol units of Appellant=s location. Corporal Younger confirmed with Sergeant Schwobel that Sergeant Schwobel was behind the vehicle in question, and he requested that Sergeant Schwobel stop the vehicle based on probable cause for his failure to come to a complete stop before turning right at the red light. Corporal Younger testified that at the location of the traffic stop, he remained a distance of approximately one hundred yards away, but he personally observed the officers confronting Appellant through the use of binoculars. Although Corporal Younger testified that he did not ever approach and deal with Appellant himself, his testimony reflects that he was fully aware of the circumstances of the arrest. Corporal Younger remained in his observation position until Appellant was transported away from the scene. Based on these facts, we hold that the trial court could have reasonably concluded that Corporal Younger=s participation in and awareness of the circumstances of Appellant=s arrest made him just as much a participant in the arrest as if he had stopped and seized Appellant himself. Therefore, we hold that the trial court did not err in denying Appellant=s motion to suppress. We overrule Appellant=s second point. CONCLUSION Having overruled Appellant=s two points, we affirm the trial court=s judgment. PER CURIAM PANEL A: HOLMAN, LIVINGSTON, and GARDNER, JJ. DO NOT PUBLISH Tex. R. App. P. 47.2(b) DELIVERED: November 10, 2005 [1]See Tex. R. App. P. 47.4.

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57 Cal.2d 479 (1962) ALEX G. VARGAS et al., Plaintiffs and Appellants, v. C. F. HAMPSON, Defendant and Respondent. L. A. No. 26594. Supreme Court of California. In Bank. Mar. 26, 1962. A. L. Wirin and Richard J. Kamins for Plaintiffs and Appellants. Stanley Mosk, Attorney General, Howard H. Jewel, Assistant Attorney General, Dent N. Hand, Jr., Deputy Attorney General, David B. Finkel, Richard H. Floum, Rudolph Pacht, Ephraim Margolin, Richard J. Archer, Spurgeon Avakian, Robert Baca, Lester Bise, Frank F. Chuman, Marvin J. Colangelo, G. Blandin Colburn, Jr., William C. Dixon, Basil Feinberg, Dan Hammack, Bruce Hochman, Jack Levine, Abe F. Levy, Lloyd E. McMurray, Loren Miller, Anthony V. Randles, Gerald L. Rosen, Irving S. Rosenblatt, Jr., Marshall Ross, John E. Thorne and David Ziskind as Amici Curiae on behalf of Plaintiffs and Appellants. Dennin & Poitevin and William W. Dennin for Defendant and Respondent. GIBSON, C. J. Plaintiffs, relying on the Unruh Civil Rights Act (Civ. Code, 51 and 52), brought an action for injunctive relief. General and special demurrers to the complaint were sustained with leave to amend. Plaintiffs failed to amend and are appealing from the judgment of dismissal. The allegations of the complaint may be summarized as follows: Plaintiffs, husband and wife, are of Mexican ancestry and are citizens of the United States. The action is brought in their behalf and as a class action in behalf of all persons discriminated against because of such ancestry. Defendant, a real estate broker, was engaged in that capacity in connection with the sale of real property in a tract development. *481 Plaintiffs desired to purchase a home in the tract, made a cash deposit with defendant, and at his request signed a purchase and sale agreement. Later defendant returned the deposit to plaintiffs and told them that the house and lot would not be sold to them. Defendant "refused to sell" the property to plaintiffs for the sole reason they are of Mexican ancestry, and his refusal was "pursuant to, and in accordance with," his policy as a real estate broker not "to sell" real property to persons of Mexican ancestry. Defendant in the course of his business threatened to, and unless enjoined will, refuse to sell real property to plaintiffs and others solely because of their Mexican ancestry.plaintiffs pray that defendant be enjoined from refusing to sell real property to them and others similarly situated solely because of their race or ancestry. [1, 2] We held in Burks v. Poppy Construction Co., ante, p. 463 [20 Cal.Rptr. 609, 370 P.2d 313], that the Unruh Act is valid, that it applies to real estate transactions, that a person aggrieved by a violation of the act is entitled to injunctive relief, and that he may bring an action for such relief on behalf of all persons similarly situated. In Lee v. O'Hara, ante, p. 476 [20 Cal.Rptr. 617, 370 P.2d 321], we held that the act applies to real estate brokers. [3] The complaint states a cause of action against defendant for violation of the act, and it would have been error to sustain a demurrer without leave to amend. [4a] The special demurrer was based in part upon the ground that the complaint was uncertain, ambiguous, and unintelligible in that it could not be ascertained whether plaintiffs are "complaining of defendant's actions solely as they relate to the conducting of his own business or whether they are complaining of defendant's actions as the agent of third parties." In response to questions by the trial court with respect to an interpretation of the pleading, the attorney for plaintiffs took the position that if defendant acted upon instructions from his principal in telling plaintiffs that the property would not be sold to them, defendant was nevertheless guilty of a violation of the statute. [5] In some circumstances, of course, both a broker and an owner may be guilty of discrimination, but a broker who in good faith does all within his power to serve a member of a racial minority is not liable if the broker's failure to complete the transaction is due solely to the owner's refusal to sell because of the buyer's race or color. *482 [4b] Defendant accepted a cash deposit from plaintiffs and had them sign a purchase and sale agreement. Later he returned the deposit and told plaintiffs the house and lot would not be sold to them. It thus appears that defendant rendered some services to plaintiffs. The allegation that defendant "refused to sell" to plaintiffs can be interpreted as charging him only with a failure to complete the transaction by entering into a contract of sale, and there is no averment that he had the authority to do so. Although the words "refused to sell" can also be interpreted as meaning "refused to render services," the complaint does not specify a failure by defendant to render any service within his power as a broker, such as transmitting the offer of plaintiffs to the owner, and it may have been the owner who refused to consummate the sale. The allegation that the refusal was "pursuant to, and in accordance with," defendant's policy of refusing "to sell" to persons because of their Mexican ancestry does not necessarily show that the refusal involved here was caused by that policy, and in any event clarification was appropriate since this allegation was in conflict with the facts, as alleged, that defendant did render services to plaintiffs notwithstanding their Mexican ancestry. The judgment is affirmed. Traynor, J., Schauer, J., McComb, J., Peters, J., White, J., and Dooling, J., concurred.

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99 F.Supp.2d 1048 (2000) Gerald Keene MOSLEY, Plaintiff, v. Shirley Maxine REEVES, et al., Defendants. No. 1:98CV137 FRB. United States District Court, E.D. Missouri, Southeastern Division. January 21, 2000. *1049 Gerald Keene Mosley, Poplar Bluff, MO, plaintiff pro se. Daniel T. Moore, Moore and Walsh, L.L.P., Poplar Bluff, MO, for Shirley Maxine Reeves, defendant. D. Keith Henson, Paule and Camazine, Clayton, MO, for Kenny Carpenter, defendant. MEMORANDUM AND ORDER BUCKLES, United States Magistrate Judge. Presently pending before the Court is defendants Kenny Carpenter and Poplar Bluff Police Department's Motion for Summary Judgment on Counts II and III (filed April 21, 1999/Docket No. 22). All matters are pending before the undersigned United States Magistrate Judge, with consent of the parties, pursuant to 28 U.S.C. § 636(c). Plaintiff Gerald Keene Mosley brings this cause of action, pro se, alleging that the conduct of defendants Shirley Maxine Reeves, Kenny Carpenter and the Poplar Bluff Police Department resulted in his unlawful arrest which in turn caused his "unlawful incarceration, defamation of character, and extensive damage to his business and social standing." (Compl. at p. 3.) In his original complaint, captioned "Complaint Under the Civil Rights Act 42 USC Section 1983," plaintiff specifically claims that defendant Kenny Carpenter, a police officer for the Poplar Bluff Police Department, violated his constitutional rights by effecting his unlawful arrest; that defendant Poplar Bluff Police Department *1050 violated his constitutional rights in that it "failed in its duty to protect and serve" and engaged in a "pattern of negligence" which culminated in plaintiff's unlawful arrest; and that plaintiff's former wife, defendant Shirley Maxine Reeves, out of retaliation stemming from their divorce, filed a false police report which provided the basis for the unlawful arrest. In an amended complaint filed January 13, 1999, plaintiff raised an additional claim that defendant Reeves obstructed the sale of real property, in violation of the Judgment of Dissolution of Marriage entered November 30, 1998, in the Circuit Court of Butler County, Missouri. Defendants Carpenter and Poplar Bluff Police Department now move for summary judgment on plaintiff's claims against them arguing that there are no genuine issues of material fact and that they are entitled to judgment as a matter of law. Specifically, defendant Carpenter contends that he is entitled to qualified immunity in effecting the arrest of plaintiff. The Poplar Bluff Police Department claims it is not a legal entity and/or government agency capable of being sued, and further contends that nevertheless, plaintiff's allegations fail to raise a claim upon which relief can be granted. Although plaintiff has not responded to defendants' motion,[1] the Court deems plaintiff's original complaint to be verified[2] and thus will consider the complaint in determining the instant motion. See Burgess v. Moore, 39 F.3d 216, 217-18 (8th Cir.1994); Williams v. Adams, 935 F.2d 960, 961-62 (8th Cir.1991). Pursuant to Rule 56(c), Federal Rules of Civil Procedure, a court may grant summary judgment if the information before the court shows that there are no material issues of fact in dispute and that the moving party is entitled to judgment as a matter of law. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). The burden of proof is on the moving party to set forth the basis of its motion, Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986), and the court must view all facts and inferences in the light most favorable to the non-moving party, Matsushita Elec. Indus. Co. v. Zenith Radio, 475 U.S. 574, 587, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986). Once the moving party shows there are no material issues of fact in dispute, the burden shifts to the adverse party to set forth facts showing there is a genuine issue for trial. Id. The non-moving party may not rest upon its pleadings, but must come forward with affidavits or other admissible evidence to rebut the motion. Celotex, 477 U.S. at 324, 106 S.Ct. 2548. Summary judgment is a harsh remedy and should not be granted unless the movant "has established his right to judgment with such clarity as to leave no room for controversy." New England Mutual Life Ins. Co. v. Null, 554 F.2d 896, 901 (8th Cir.1977). The Eighth Circuit has noted, however, that "summary judgment can be a tool of great utility in removing factually insubstantial cases from crowded dockets, freeing courts' trial time for those that really do raise genuine issues of material fact." City of Mt. Pleasant, Iowa v. Associated Elec. Coop., Inc., 838 F.2d 268, 273 (8th Cir.1988). I. Evidence Before the Court on the Motion On November 7, 1998, plaintiff intended to travel to the residence of his former wife, Shirley Maxine Reeves, to retrieve personal property awarded him in relation *1051 to dissolution proceedings between he and Ms. Reeves. (Compl. at p. 3.) A Full Order of Protection was in effect at that time which prohibited plaintiff from entering or staying upon the premises of the dwelling of Ms. Reeves. (Defts.' Mot. Summ.Judg., Exh. C.) In addition, the Full Order of Protection provided that plaintiff: shall not use, attempt to use, or threaten to use physical force against [Ms. Reeves] that would reasonably be expected to cause bodily injury and shall not stalk, abuse, threaten to abuse, molest or disturb the peace of [Ms. Reeves] wherever [Ms. Reeves] may be. (Defts.' Mot.Summ.Judg., Exh. C.) Any violation of the Full Order of Protection was punishable by confinement in jail for a maximum period of five years and a maximum fine of $5,000.00. (Id.) On account of the Full Order of Protection, plaintiff contacted the Poplar Bluff Police Department to seek permission to travel to Ms. Reeves' dwelling to retrieve his property. (Compl. at p. 3.) Officer Hefner verbally advised plaintiff that he would be permitted to do so. No police officer accompanied plaintiff to Ms. Reeves' residence. (Compl. at p. 3.) At approximately 3:00 p.m. on November 7, 1998, plaintiff traveled to Ms. Reeves' residence, retrieved his personal property without incident, and left the premises. (Compl. at pp. 3-4; Defts.' Mot.Summ.Judg., Exh. B.) At approximately 3:50 p.m., the Poplar Bluff Police Department received a report that plaintiff had violated the protective order entered in the divorce proceedings between plaintiff and Ms. Reeves. (Defts.' Mot.Summ.Judg., Exh. A.) In response to this report, Officer Kenny Carpenter of the Poplar Bluff Police Department was dispatched to Ms. Reeves' home. (Id.) Upon Officer Carpenter's arrival, Ms. Reeves reported to Officer Carpenter that approximately thirty minutes after ending a mutually agreed meeting for the transfer of property, plaintiff returned to Ms. Reeves' house, began driving his car back and forth in front of the house, took photographs of the house, and took photographs of Ms. Reeves' son-in-law's truck. (Defts.' Mot.Sum.Judg., Exhs. A, B.) Ms. Reeves reported to Officer Carpenter that she considered plaintiff's conduct to be stalking and harassment. (Id.) In addition, Lee Ray Pickerell reported to Officer Carpenter that he witnessed plaintiff to return to Ms. Reeves' house after retrieving his property, to drive in front of the house, and to take photographs of the house. (Defts.' Mot.Summ.Judg., Exhs. A, D.) After receiving these statements, Officer Carpenter returned to the police station. (Defts.' Mot.Summ.Judg., Exh. A.) Later that same date, plaintiff contacted the Poplar Bluff Police Department to report that he had not retrieved all of his personal property and that some items were missing. (Compl. at p. 4.) Officer Carpenter advised plaintiff to come to the police station. (Id.) Upon plaintiff's arrival at the police station, Officer Carpenter placed plaintiff under arrest for violating the Full Order of Protection. (Id.; Defts.' Mot.Summ.Judg., Exh. A.) Officer Carpenter's arrest of plaintiff was based on the statements and eyewitness accounts of Ms. Reeves and Mr. Pickerell. (Defts.' Mot. Summ.Judg., Exh. A.) II. Discussion A. Officer Carpenter Defendant Carpenter claims that he is entitled to qualified immunity on plaintiff's claim that his arrest of plaintiff was unlawful and thus in violation of plaintiff's constitutional rights. To withstand a motion for summary judgment on the grounds of qualified immunity, a civil rights plaintiff must: (1) assert a violation of a constitutional right; (2) demonstrate that the alleged right is clearly established; and (3) raise a genuine issue of fact as to whether the official would have known that his alleged conduct would have violated plaintiff's clearly established right. *1052 Habiger v. City of Fargo, 80 F.3d 289, 295 (8th Cir.1996). Once it has been established that the relevant predicate facts are not in dispute, the determination as to whether an officer's conduct violated a clearly established right becomes a question of law. See Pace v. City of Des Moines, Iowa, 201 F.3d 1050, 1056 (8th Cir.2000). A person has "a clearly established right under the Fourth Amendment not to be arrested unless there [is] probable cause for [the] arrest." Habiger, 80 F.3d at 295. In the context of a warrantless arrest, probable cause exists when facts known to the arresting officer are sufficient to make a reasonably prudent officer believe that the suspect is committing or has committed an offense. Olinger v. Larson, 134 F.3d 1362, 1366 (8th Cir. 1998). When determining whether a law enforcement officer is entitled to qualified immunity, the issue "is not probable cause in fact but arguable probable cause." Myers v. Morris, 810 F.2d 1437, 1455 (8th Cir.1987). If officers act "with the objectively reasonable belief that they [have] probable cause" to arrest, they are entitled to qualified immunity, even if they were mistaken in their belief. Womack v. City of Bellefontaine Neighbors, 193 F.3d 1028, 1031 (8th Cir.1999). The qualified immunity defense protects "all but the plainly incompetent or those who knowingly violate the law." Malley v. Briggs, 475 U.S. 335, 341, 106 S.Ct. 1092, 89 L.Ed.2d 271 (1986). The undisputed facts before the Court show that Officer Carpenter had arguable probable cause, if not probable cause in fact, to arrest plaintiff for violation of the Full Order of Protection. At the time of the incident, a Full Order of Protection was in place which made it a felony offense for plaintiff to, inter alia, stalk or disturb the peace of Ms. Reeves wherever Ms. Reeves may be. At the time of plaintiff's arrest, Officer Carpenter had information in the form of statements from Ms. Reeves and corroborating statements from an independent eyewitness that plaintiff was driving back and forth in front of Ms. Reeves' home, was taking photographs of Ms. Reeves' home, and was taking photographs of a vehicle parked at the home. See Pace, at 1057 (corroborating statements from witnesses provided support for police officer's finding of probable cause); Clay v. Conlee, 815 F.2d 1164, 1168 (8th Cir.1987) (law enforcement officers entitled to rely on information supplied by crime victim, absent some indication that the information is not reasonably trustworthy or reliable). The undisputed facts before the Court show that this incident occurred separately from and was wholly independent of the consensual encounter between the plaintiff and Ms. Reeves wherein plaintiff was given his personal property without incident. It is not necessary for the Court to decide whether these facts known to Officer Carpenter provided him actual probable cause to arrest plaintiff. Instead, the undisputed facts need only show, and indeed do show, that the facts and information available to Officer Carpenter would support a reasonable law enforcement officer's belief that probable cause existed to arrest plaintiff for violation of the Full Order of Protection, which prohibited plaintiff's stalking and/or disturbing the peace of Ms. Reeves. See Johnson v. Schneiderheinz, 102 F.3d 340, 342 (8th Cir.1996). Plaintiff argues, however, that Officer Carpenter "refused to listen to plaintiff's side of the story and farther [sic] refused to acknowledge that there was a domestic dispute already in existence between the two parties." (Compl. at p. 4.) Plaintiff further claims that Officer Carpenter should have, but failed to, conduct a preliminary investigation of the facts before arresting plaintiff. (Id. at p. 5.) Plaintiff does not state what information he would have provided to Officer Carpenter as to his "side of the story" or that such information would have provided exculpatory evidence sufficient to negate the probable cause necessary for arrest. See Kuehl v. *1053 Burtis, 173 F.3d 646, 650-51 (8th Cir. 1999). In addition, contrary to plaintiff's assertion that Officer Carpenter refused to acknowledge the domestic dispute between plaintiff and Ms. Reeves, Officer Carpenter arrested plaintiff for violating an existing Order of Protection which arose out of such dispute. Finally, plaintiff has presented nothing to the Court to demonstrate that any further investigation would have exonerated plaintiff and thus negated probable cause for arrest. See id.; see also Olinger, 134 F.3d at 1366. Indeed, plaintiff has failed to present any evidence to rebut defendants' showing that plaintiff returned to Ms. Reeves' home after the consensual encounter ended and proceeded to drive back and forth in front of the home while taking photographs of the home and a vehicle parked at the home. As discussed above, a reasonable officer could have believed that such facts constituted probable cause to arrest plaintiff for violating the Full Order of Protection. "That the [officer] may have been mistaken is not enough to find a violation of [plaintiff's] constitutional rights." Johnson v. Schneiderheinz, 102 F.3d at 342. Therefore, in light of the foregoing, defendant Carpenter is entitled to qualified immunity on plaintiff's claim that his arrest of plaintiff was unlawful and in violation of plaintiff's constitutional rights.[3] B. Poplar Bluff Police Department In his complaint, plaintiff claims that the Poplar Bluff Police Department violated his constitutional rights in that it "failed in its duty to protect and serve" and engaged in a "pattern of negligence" which culminated in plaintiff's unlawful arrest. In the instant motion for summary judgment, the Poplar Bluff Police Department argues it is entitled to summary judgment on plaintiff's claims against it inasmuch as it is not a legal entity and/or government agency capable of being sued. The Eighth Circuit Court of Appeals has previously determined that police departments are not suable entities, but instead are merely divisions of city government. See Ketchum v. City of West Memphis, Ark., 974 F.2d 81, 82 (8th Cir.1992); see also Russell v. City of Overland Police Dep't, 838 F.Supp. 1350, 1352 (E.D.Mo. 1993). But see Tilson v. Forrest City Police Dep't, 28 F.3d 802, 807 (8th Cir.1994) (setting out what civil rights plaintiff must show for police department to be liable for constitutional violations).[4] As such, the City of Poplar Bluff is the appropriate suable entity in this cause. See Russell, 838 F.Supp. at 1352. Given the liberal *1054 construction accorded pro se complaints, the Court will construe plaintiff's claims to be against the City of Poplar Bluff, which is the proper suable entity here. Russell, 838 F.Supp. at 1352.[5] To impose liability upon a municipality under 42 U.S.C. § 1983, a civil rights plaintiff must demonstrate that the conduct complained of is attributable to an unconstitutional official policy or custom. Polk County v. Dodson, 454 U.S. 312, 326, 102 S.Ct. 445, 70 L.Ed.2d 509 (1981); Monell v. Department of Social Servs. of the City of New York, 436 U.S. 658, 694, 98 S.Ct. 2018, 56 L.Ed.2d 611 (1978); Johnson v. Outboard Marine Corp., 172 F.3d 531, 535 (8th Cir.1999). For municipal liability to attach, it is not enough for a § 1983 plaintiff to show that the municipality's agents or employees have violated or will violate the Constitution, for a municipality will not be held liable solely on a theory of respondeat superior. Monell, 436 U.S. at 694, 98 S.Ct. 2018. In addition, an allegation of mere negligence is insufficient to demonstrate an unconstitutional policy or custom. See Board of County Commissioners of Bryan County, Okla. v. Brown, 520 U.S. 397, 407, 117 S.Ct. 1382, 137 L.Ed.2d 626 (1997). Instead, the plaintiff must demonstrate that, through its deliberate conduct, the municipality was the "moving force" behind the injury alleged. That is, a plaintiff must show that the municipal action was taken with the requisite degree of culpability and must demonstrate a direct causal link between the municipal action and the deprivation of federal rights. Id. at 404, 117 S.Ct. 1382 (emphasis in original). Further, the existence of a municipal policy, custom or practice cannot be inferred solely from the proof of a single unconstitutional incident. Wedemeier v. City of Ballwin, 931 F.2d 24, 26 (8th Cir. 1991) (generally, an isolated incident of police misconduct by subordinate officers is insufficient to establish municipal policy or custom); Williams v. Mensey, 785 F.2d 631, 635 (8th Cir.1986) (improper to permit jury to infer the existence of a municipal policy or custom solely from proof of one officer's conduct, no matter how egregious the conduct may have been). Here, plaintiff asserts a deprivation of his constitutional rights but appears to claim only respondeat superior liability against the Department/City regarding Officer Carpenter's alleged unlawful arrest. Such respondeat superior claims are not cognizable under § 1983. To the extent plaintiff's complaint can be construed to assert municipal liability under § 1983, plaintiff has failed to identify the official municipal policy or widespread custom or practice that caused his injury. Monell, 436 U.S. at 691, 98 S.Ct. 2018. Although plaintiff claims that the Department's/City's "pattern of negligence" caused his alleged injury, negligence alone is insufficient to state a claim of municipal liability under § 1983. Brown, 520 U.S. at 407, 117 S.Ct. 1382. Nothing before the Court demonstrates that the City of Poplar Bluff, through deliberate conduct or an established policy, custom or practice, caused plaintiff's constitutional rights to be violated. Because plaintiff has failed to identify a custom, policy or practice which resulted in a deprivation of his constitutional rights, defendant Poplar Bluff Police Department/City of Poplar Bluff should be granted judgment as a matter of law as to plaintiff's claims against it. Johnson v. Outboard Marine Corp., 172 F.3d at 536. C. Shirley Maxine Reeves In his original complaint, plaintiff claims that his former wife, defendant Shirley Maxine Reeves, filed a false police report *1055 which provided the basis for his alleged unlawful arrest. In his amended complaint, plaintiff claims that defendant Reeves obstructed the sale of real property, in violation of the Judgment of Dissolution of Marriage entered November 30, 1998, in the Circuit Court of Butler County, Missouri. Because such claims are insufficient to impose liability upon defendant Reeves under 42 U.S.C. § 1983, the undersigned liberally construes plaintiff's complaints to allege pendent state law claims against Reeves. For liability to attach under 42 U.S.C. § 1983, a plaintiff must allege the violation of a right secured by the Constitution and laws of the United States, and must show that the alleged deprivation was committed by a person acting under color of state law. Roe v. Humke, 128 F.3d 1213, 1215 (8th Cir.1997). To hold a private party liable under § 1983, plaintiff "`must allege, at the very least, that there was a mutual understanding, or a meeting of the minds, between the private party and the state actor.'" Miller v. Compton, 122 F.3d 1094, 1098 (8th Cir.1997) (quoting Mershon v. Beasley, 994 F.2d 449, 451 (8th Cir.1993)). Plaintiff makes no allegation in either his original complaint or amended complaint that Reeves acted in concert with any state actor in allegedly filing a false police report or in allegedly obstructing the sale of real property, nor can the complaints be reasonably construed to make such an allegation. A private party's mere invocation of state legal procedures does not constitute joint participation or conspiracy with state officials to satisfy the § 1983 requirement of action under state law. Lugar v. Edmondson Oil Co., 457 U.S. 922, 939 n. 21, 102 S.Ct. 2744, 73 L.Ed.2d 482 (1982). Inasmuch as plaintiff does not allege that defendant Reeves was a state actor or acted in concert with any state actor, plaintiff's allegations, even liberally construed, do not give rise to claims actionable against Reeves under 42 U.S.C. § 1983. See Barnes v. Dorsey, 480 F.2d 1057, 1061 (8th Cir.1973). The Court thus construes plaintiff's complaints to raise only state law claims against defendant Reeves. Cf. Roe, 128 F.3d at 1218 ("The [injury] to plaintiff, while reprehensible and to be condemned in the strongest possible terms, was a private tort committed by a person acting in a purely private capacity."). Inasmuch as the Court will dismiss all claims over which this Court has original jurisdiction, see discussion supra at Sections II.A and B, the undersigned declines to exercise supplemental jurisdiction over these state law claims. 28 U.S.C. § 1367(c)(3). Therefore, for all of the foregoing reasons, IT IS HEREBY ORDERED that plaintiff's "Motion for Leave of Court to File Untimely Amended Pleadings to Statement of Claim" (Docket No. 24) is denied. IT IS FURTHER ORDERED that defendants Kenny Carpenter and Poplar Bluff Police Department's Motion for Summary Judgment on Counts II and III (Docket No. 22) is granted in its entirety. IT IS FURTHER ORDERED that plaintiffs claims against defendant Shirley Maxine Reeves are dismissed without prejudice pursuant to 28 U.S.C. § 1367(c)(3). IT IS FURTHER ORDERED that all motions which remain pending in this cause are denied as moot and without prejudice. Judgment shall be entered accordingly. NOTES [1] On July 26, 1999, plaintiff filed a Motion for Summary Judgment in which plaintiff appears to respond to some of the claims raised in the instant motion. In a Memorandum filed with the Court September 3, 1999, however, plaintiff contends that his Motion for Summary Judgment should "in no way [be] construed" as an opposition to defendants' motion (Pltf.'s Resp. to Defts.' Oppos., filed Sept. 3, 1999, at p. 4), and that, in fact, defendants' motion "was judicially ignored by the Plaintiff[.]" (Id. at p. 1.) [2] Plaintiff's original complaint was sworn and subscribed by plaintiff before a notary public. [3] The undersigned notes that plaintiff currently has pending before the Court a "Motion for Leave of Court to File Untimely Amended Pleadings to Statement of Claim" (filed July 26, 1999/Docket No. 24) in which plaintiff seeks to file an "Amended Statement of Claim Against Defendant Kenny Carpenter." In the proposed amended statement, plaintiff asserts that defendant Carpenter "is unable to produce legal justification for his specific acts and omissions of acts that were instrumental in his probable cause arrest of the plaintiff on November 7, 1998." In light of the foregoing discussion, the amended statement is insufficient to provide a basis upon which to deny defendant Carpenter's motion for summary judgment based on qualified immunity. Inasmuch as the amended statement would be futile to plaintiff's cause, the Court will deny plaintiff's motion for leave to file the amended statement. Williams v. Little Rock Mun. Water Works, 21 F.3d 218, 225 (8th Cir.1994). [4] Under Tilson, a police department may be liable under § 1983 if a civil rights plaintiff shows that the action that is alleged to be unconstitutional implements or executes a policy statement, ordinance, regulation, or decision officially adopted and promulgated by [the Department] or that a constitutional deprivation [was] visited pursuant to governmental "custom" even though such a custom has not received formal approval through the body's official decisionmaking channels. Tilson, 28 F.3d at 807 (citations omitted). Assuming arguendo that a city's police department may be liable under § 1983, the plaintiff here has nevertheless failed to present any evidence to this Court to demonstrate that a policy statement, ordinance, regulation, decision, or custom adopted and promulgated by the Poplar Bluff Police Department resulted in a constitutional deprivation to plaintiff. [5] Indeed, in the instant motion for summary judgment, the Poplar Bluff Police Department appears to argue that plaintiff's claims fail to state a claim even to the extent they attempt to impose liability upon the City of Poplar Bluff.

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United States Court of Appeals Fifth Circuit F I L E D UNITED STATES COURT OF APPEALS FIFTH CIRCUIT June 21, 2005 Charles R. Fulbruge III Clerk 03-50602 Summary Calendar UNITED STATES OF AMERICA, Plaintiff-Appellee, versus MARIO RODRIGUEZ, also known as Joseph Armando Ramirez, Defendant-Appellant. Appeal from the United States District Court for the Western District of Texas (MO-02-CR-105-ALL) Before JONES, BARKSDALE, and PRADO, Circuit Judges. PER CURIAM:* Mario Rodriguez appeals his guilty-plea conviction and sentence (including an upward departure) for possession of a firearm during and in relation to a drug trafficking offense, in violation of 18 U.S.C. § 924(c)(1). Court-appointed counsel filed a motion to withdraw, pursuant to Anders v. California, 386 U.S. 738 (1967); but a member of this court found a potentially nonfrivolous appellate issue: whether Rodriguez’s plea was rendered involuntary by the magistrate judge’s failure to advise * 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. him during rearraignment, pursuant to FED. R. CRIM. P. 11(b)(1)(M), that the court could depart upward from the applicable Sentencing Guidelines range. The order denying leave to withdraw also stated that counsel “should ... include an explanation of the effects of the waiver-of-appeal provision”. In response, however, counsel filed a merits brief that neither addresses the voluntariness of Rodriguez’s plea in the light of Rule 11(b)(1)(M) nor mentions the waiver provision. (The order pre-dated United States v. Booker, 125 S. Ct. 738, (2005) (holding Sentencing Guidelines only advisory).) As to the merits, Rodriguez has not established that his guilty plea was rendered involuntary. Because he did not object in district court during rearraignment, Rodriguez’s claims are reviewed only for plain error. See United States v. Vonn, 535 U.S. 55, 59 (2002). He has not shown that his substantial rights were affected by any error in the magistrate judge’s explanation of the availability of appointed counsel at trial. See United States v. Olano, 507 U.S. 725, 731-37 (1993). In addition, the magistrate judge appropriately advised Rodriguez: about the elements of the offense to which he pleaded guilty, see United States v. Ceballos- Torres, 218 F.3d 409, 413 (5th Cir.), amended on rehearing in part by, 226 F.3d 651 (5th Cir. 2000), and cert. denied, 531 U.S. 1102 (2001); and that the statutory maximum sentence was life imprisonment, see United States v. Sias, 227 F.3d 244, 246-47 (5th 2 Cir. 2000). Rodriguez has not established a violation of the Court Interpreters Act, 28 U.S.C. § 1327(d)(1); the record reflects that he had access to an interpreter at every stage of the proceeding. Although the parties did not address it, this court may sua sponte consider the waiver-of-appeal provision. See United States v. Martinez, 263 F.3d 436, 438 (5th Cir. 2001); cf. United States v. Rhodes, 253 F.3d 800, 804 (5th Cir. 2001)(disregarding a waiver provision if the Government expressly chooses not to rely upon it). Rodriguez voluntarily waived his right to appeal his conviction and sentence, other than claims of ineffective assistance of counsel or prosecutorial misconduct of constitutional dimension not known to him at the time of his sentencing. See United States v. Melancon, 972 F.2d 566, 567-68 (5th Cir. 1992). Consequently, review of certain of Rodriguez’s claims is barred: that the district court erred in adopting the presentence report, despite misstatements contained therein; that the district court wrongly departed upward, despite the Government’s failure to give notice of its intent to seek an upward departure under 21 U.S.C. § 851; and that the upward departure violates the Sixth Amendment. See United States v. McKinney, __ F.3d __, 2005 WL 887153, at *2-3 (5th Cir. 15 Apr. 2005) (holding that, absent a specific provision to the contrary, a valid appeal-waiver provision in a plea agreement precludes a claim of Sixth Amendment error under Booker). 3 Rodriguez also contends: the Government improperly filed a superseding indictment to establish greater bargaining power and breached the plea agreement by requesting an upward departure. Even if these claims allege prosecutorial misconduct of constitutional dimension, Rodriguez was aware of them by the time of sentencing. Therefore, they are barred by the waiver provision. As discussed, counsel failed to address the issues specifically noted by this court in its order denying him leave to withdraw. Accordingly, counsel (David K. Sergi) is ORDERED to show cause within 30 days why he should not be sanctioned for such failure to comply with a court order. AFFIRMED; COUNSEL ORDERED TO SHOW CAUSE WHY SANCTIONS SHOULD NOT BE IMPOSED 4

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537 U.S. 986 GASTELUM-ALMEIDAv.UNITED STATES. No. 02-6443. Supreme Court of United States. October 21, 2002. 1 CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT. 2 C. A. 9th Cir. Certiorari denied. Reported below: 298 F.3d 1167.

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34 Ill. App.3d 448 (1975) 340 N.E.2d 98 SOL I. DVORKIN et al., Plaintiffs-Appellants, v. ILLINOIS BELL TELEPHONE COMPANY et al., Defendants-Appellees. No. 59063. Illinois Appellate Court First District (3rd Division). November 20, 1975. *449 Donald H. Sharp, L. Bow Pritchett, and Edward Butts, all of Chicago, for appellants. Max Earl Sherman, of Chicago, for appellees. Order affirmed. Mr. JUSTICE MEJDA delivered the opinion of the court: Plaintiff, Sol I. Dvorkin, individually and on behalf of a class, commenced an original action in the circuit court of Cook County for damages against defendants Illinois Bell Telephone Company and American Telephone and Telegraph Company. The trial court granted the motion of Illinois Bell to strike the complaint and dismiss the suit for want of jurisdiction. Plaintiff appeals. The sole issue for review is whether the instant complaint states a cause of action which may be commenced originally in the circuit court. We affirm. The complaint filed on April 28, 1972, by plaintiff on his own behalf and on behalf of a class consisting of persons and corporations who have been subscribers, lessees, patrons and customers of Illinois Bell from the date the company first began the practice complained of was in two counts. Count I alleged that Illinois Bell had a policy and practice of providing services for the personal use of certain current, former and retired officers, directors, and employees of Illinois Bell either without charge or at less than the rate established and in force as shown by the schedule filed with the Illinois Commerce Commission, all in contravention *450 and violation of sections 37, 38 and 39 of the Illinois Public Utilities Act (Ill. Rev. Stat. 1971, ch. 111 2/3, pars. 37, 38 and 39); that as a direct result of the loss of revenue, plaintiff and the class are required to pay greater rates for services from Illinois Bell; and prayed that the practice be declared unlawful and enjoined; and that judgment be entered against Illinois Bell for the lost revenue and punitive damages for the use and benefit of the class, and other relief. Count II alleged that the illegal actions were with the knowledge, control, management, connivance and complicity of American Telephone by reason of its ownership of 99 percent of the stock of Illinois Bell, and prayed judgment against American Telephone for the losses and punitive damages to be paid to Illinois Bell for the use and benefit of plaintiff and the class, together with other relief. Section 37 of the Utilities Act prohibited a public utility from charging greater or less or different compensation than the rates specified in its schedules on file and in effect at the time "except such as are regularly and uniformly extended to all corporations and persons." An amendment effective October 1, 1972 (P.A. 77-2759), added a sentence: "No law of the State shall be construed to prohibit a public utility from furnishing its service, product or commodity to its employees, officers, directors or pensioners, or its employees, officers, directors or pensioners from receiving such service, product or commodity, free or at rates or charges less than those specified in its filed schedules." Ill. Rev. Stat. 1973, ch. 111 2/3, par. 37. Section 38 of the Act prohibits the granting of any preference or advantage and the establishment or maintenance of "any unreasonable difference as to rates or other charges, services, facilities, or in any other respect, either as between localities or as between classes of service." Section 39 further prohibits any utility, its officer, agents and employees, from directly or indirectly permitting any corporation or person "to obtain any service, commodity, or product at less than the rate or other charge then established and in force as shown by the schedules filed and in effect at the time." Ill. Rev. Stat. 1971, ch. 111 2/3, pars. 38 and 39. The trial court, in the order granting Illinois Bell's motion to strike, found that the alleged discrimination is "necessarily so intertwined with establishment of rates or tariffs as to constitute rates or tariffs issue, rather than a question of discrimination per se," and that the exclusive jurisdiction for establishing rates and tariffs and for the recovery of refunds or reparation for allegedly excessive charges is in the Illinois Commerce Commission. Since no ruling was made as to American Telephone, nor was the amendment to section 37 challenged in the trial court, neither will be considered. *451 Plaintiff contends that in accordance with section 73 of the Illinois Public Utilities Act (Ill. Rev. Stat. 1971, ch. 111 2/3, par. 77), a civil action may be commenced in any court of competent jurisdiction for the violation by a public utility of sections 37, 38 and 39 of the Act. Further, that the remedy is cumulative under the provisions of section 72 and 74 (pars. 76 and 78). Defendant Illinois Bell, on the other hand, contends that the complaint states a claim for the recovery of refunds as reparation and is governed by section 72 (par. 76) of the Act, and that the exclusive jurisdiction for such recovery is vested in the Illinois Commerce Commission. The pertinent provisions of sections 72, 73 and 74 follow: "§ 72. When complaint has been made to the Commission concerning any rate or other charge of any public utility and the Commission has found, after a hearing, that the public utility has charged an excessive or unjustly discriminatory amount for its product, commodity or service, the Commission may order that the public utility make due reparation to the complainant therefor, with interest at the legal rate from the date of payment of such excessive or unjustly discriminatory amount. * * * The remedy provided in this section shall be cumulative, and in addition to any other remedy or remedies in this Act provided in case of failure of a public utility to obey a rule, regulation, order or decision of the Commission. [Par. 76.] * * * § 73. In case any public utility shall do, cause to be done or permit to be done any act, matter or thing prohibited, forbidden or declared to be unlawful, or shall omit to do any act, matter or thing required to be done either by any provisions of this Act or any rule, regulation, order or decision of the Commission, issued under authority of this Act, such public utility shall be liable to the persons or corporations affected thereby for all loss, damages or injury caused thereby or resulting therefrom, and if the court shall find that the act or omission was wilful, the court may in addition to the actual damages, award damages for the sake of example and by the way of punishment. An action to recover for such loss, damage or injury may be brought in any court of competent jurisdiction by any person or corporation. * * * No recovery as in this section provided shall in any manner affect a recovery by the State of the penalties in this Act provided. [Par. 77.] *452 § 74. This Act shall not have the effect to release or waive any right of action by the State, the Commission, or by any body politic, municipal corporation, person or corporation for any right or penalty which may have arisen or accrued or may hereafter arise or accrue under any law of this State. All penalties accruing under this Act shall be cumulative of each other, and suit for the recovery of one penalty shall not be a bar to or affect the recovery of any other penalty or be a bar to any criminal prosecution against any public utility, or any officer, director, agent or employee thereof, or any other corporation or person. [Par. 78.]" In his brief to this court, plaintiff states that the cause was filed to enforce the anti-discrimination provisions of the Illinois Public Utilities Act and to end the granting of free and reduced rate services to employees, management personnel, and retired employees, and for the return of excess charges levied against the public as a result of the failure of Illinois Bell and its parent company to comply with the Act. 1 Section 72 of the Act provides for the recovery of reparations for excessive or unjustly discriminatory amounts charged by a utility when complaint has been made to the Illinois Commerce Commission. By its terms the remedy provided is cumulative and in addition to any other remedy or remedies in the Act in case of failure of a public utility to obey a rule, regulation, order or decision of the Commission. Section 73 of the Act provides for the recovery of civil damages for loss, damages or injury caused by or resulting from any act or omission contrary to any provision of the Act or of the Commission. Such action may be brought in any court of competent jurisdiction for consequential damages as distinguished from a claim for reparation. (See Malloy v. Illinois Bell Telephone Co. (1973), 12 Ill. App.3d 483, 299 N.E.2d 517.) Section 74 of the Act, consistently with the provisions of sections 72 and 73, provides that the Act shall not release or waive any right of action for any right or penalty. The provision as to cumulative rights is confined to penalties and suits for recovery of penalty. This latter provision is inapplicable to actions for the recovery of damages or reparations. The action herein is not for penalties, but rather, for a refund as damages or reparations for the allegedly illegal practice. The Illinois courts have uniformly held that the jurisdiction of the Illinois Commerce Commission as to proceedings against a public utility to recover reparations for excessive charges is primary and exclusive. See Terminal Railroad Association v. Public Utilities Com. (1922), 304 Ill. 312, 317, 136 N.E. 797; Chicago North Shore & Milwaukee R.R. Co. v. City of Chicago (1928), 331 Ill. 360, 163 N.E. 141; Medusa Portland *453 Cement Co. v. Illinois Central R.R. Co. (1936), 287 Ill. App. 549, 5 N.E. 2d 782; Adler v. Northern Illinois Gas Co. (1965), 57 Ill. App.2d 210, 206 N.E.2d 816; Cummings v. Commonwealth Edison Co. (1965), 64 Ill. App.2d 320, 213 N.E.2d 18; and Malloy v. Illinois Bell Telephone Co. (1973), 12 Ill. App.3d 483, 299 N.E.2d 517. A common-law action will not originally lie "at any time or under any circumstances" for damages on account of excessive rates. (Medusa Portland Cement Co. v. Illinois Central R.R. Co., 287 Ill. App. 549, 565.) Equity will not take jurisdiction of an action in which collateral attack is made on the order of the Commission. Chicago, North Shore & Milwaukee R.R. Co. v. City of Chicago, 331 Ill. 360, 375. In Colton v. Commonwealth Edison Co. (1953), 349 Ill. App. 490, 111 N.E.2d 363, in affirming the dismissal of a class action for injunctive relief which alleged that a revision of rates deprived the class of constitutional rights, the court held that if the legal remedy consists in part of proceedings before an administrative agency, equity should decline jurisdiction; that the Public Utilities Act has superseded all common-law remedies so far as rates are concerned; that the statutory remedies afforded consumers under the Act are exclusive; that the rate filed with the Commission by a utility is presumed to be lawful; that the complaint must be made in the first instance before the Commission; and that the courts do not have jurisdiction to fix rates. In Burke v. Illinois Bell Telephone Co. (1952), 348 Ill. App. 529, 109 N.E.2d 358, the court affirmed the dismissal of a class action which sought a refund for defendant's failure to publish telephone directories semiannually. In holding that the trial court did not have jurisdiction of the subject matter, the court found that the gist of plaintiff's claim was for reparations within the meaning of section 72 and not for consequential or actual damages under section 73 as contended by the plaintiff. In the recent case of Malloy v. Illinois Bell Telephone Co., a class action complaint was filed against Illinois Bell in the circuit court which sought a refund for a six-day period during which electric service had been disrupted by vandalism. There, as in the instant case, plaintiff relied on section 74 in maintaining that the claim was within section 73 and not section 72. The court rejected the argument and affirmed the dismissal of the complaint, concluding that the claim was for reparations under section 72 and not for consequential damages, and that the Illinois Commerce Commission therefore had exclusive jurisdiction. Plaintiff here, as did the plaintiff in Malloy, cites Barry v. Commonwealth Edison Co. (1940), 374 Ill. 473, 29 N.E.2d 1014. In Barry, plaintiff initially filed a petition before the Illinois Commerce Commission *454 for reparations which alleged that the utility wrongfully accused him of unlawfully bypassing the meter and taking electricity, and wrongfully disconnected service and refused restoration until he paid $800, the estimated amount of current alleged to have been taken by fraud. Plaintiff prayed to be exonerated of the unjust charges of fraud and the return of the excess payment, which demand was reduced to $697 on hearing. The Commission refused to determine whether the current was obtained by fraud, and ordered that the petition be dismissed and the parties left to their respective remedies at law. Plaintiff Barry then filed a complaint in court, not as a review of the Commission's order but as a new action. The first two counts alleged the foregoing charges, and additionally, that plaintiff was willing to pay any amount due, and sought damages for a wrongful disconnection of service and for the loss of business thereby sustained. The third count alleged that agents of the utility charged plaintiff with being a thief by stealing current, and therein sought damages for slander. The only issue presented was whether the prior determination by the Commission was a bar to the action at law. The Supreme Court reversed the trial court's dismissal and held that the action was not barred. The Court stated that the finding by the Commission as to reparations involved a claim for the repayment of specific money collected in excess of the legal rate, whereas the action at law involved a claim for unliquidated damages to plaintiff, his business, and for slander resulting from the utility's abuse of power. Barry supports the dismissal in the instant case. 2 Plaintiff argues that the instant action is brought to enforce the antidiscrimination provisions of the Illinois Public Utilities Act and that plaintiff and the class have been and are required to pay greater rates and charges than they would if the practice of granting services without charge or at reduced rates by Illinois Bell had not been permitted. Plaintiff seeks "the return of excess charges." Under somewhat similar facts, in Cummings v. Commonwealth Edison Co. (1965), 64 Ill. App.2d 320, 324, 213 N.E.2d 18, the court stated: "It is apparent that the sole basis for plaintiff's claim, irrespective of the label she chooses to employ, is that she and other customers were charged excessive rates for which she wants reparations. The fact that plaintiff does not seek to upset a rate schedule or fix utility rates for the future does not bring this matter within the powers of a court of equity and outside the exclusive jurisdiction of the Illinois Commerce Commission." Although the complaint in the instant case prays for such exemplary and punitive damages as may be found proper, it addresses itself to the proposition that if Illinois Bell had not given discounted *455 services to some of its employees, plaintiff's rates would have been lower, and that Illinois Bell should be required to repay, account for, refund or credit plaintiff and the class the appropriate loss suffered as a result of the allegedly unlawful practice. This is necessarily predicated upon the allegedly "excess charges" and therefore, upon the excessive rates to plaintiff and the class, and simultaneously, upon the inadequate charges or rates to the employees and officers. Plaintiff, in order to obtain a return of the portion of the charges paid by the class as excess clearly reparations as provided in section 72 seeks to reduce the rates paid by him and the class by eliminating the practice of discounted services to provide the additional revenues necessary to effect such reduction. If the practice is so eliminated and the present rate is held excessive as alleged, a new rate must then be established, based on the new revenues, and applicable to the class as well as the employees and officers. This would require the court to undertake the function of the Commission by fixing what would be considered a reasonable charge if the concession services had not been granted. This would further involve rate-making by the court. The statutory remedies and procedures prescribed by the Illinois Public Utilities Act are primary and exclusive; the court does not have jurisdiction to fix the rates. See Colton v. Commonwealth Edison Co. 3 Plaintiff further contends that without court action the plaintiff class has no adequate remedy at law. He argues that the practice of giving reduced rates and free services dates back to General Order 18 issued by the Commission in 1914; that the Commission, during a certain rate case, rejected the contention that Illinois Bell was acting improperly in providing such free and reduced rate service to employees; and that in view of the Commission's willingness for more than 58 years to permit such practice, contrary to the Act, further resort to the Commission for relief is patently useless. The rate case to which plaintiff refers ultimately reached the Illinois Supreme Court in Illinois Bell Telephone Co. v. Illinois Commerce Com. (1973), 55 Ill.2d 461, 303 N.E.2d 364. On September 23, 1971, Illinois Bell filed with the Illinois Commerce Commission new tariff schedules that provided for a general increase in telephone rates applicable to all exchanges. The matter was there pending when the instant suit was filed on April 28, 1972. Numerous municipalities, persons, organizations and groups filed appearances. On August 11, 1972, the Commission entered an order granting the rate increases. The order contained findings which specifically included a recital that the Independent Voters of Illinois (IVI) proposed several adjustments to both Revenue and Expenses. The order recited: "They advocate the elimination of free service *456 and reduced rates for Company employees and pensioners; the elimination of virtually all advertising, public relations, and charitable contribution expenses of all types and descriptions"; and that "An examination of the Record does not substantiate the sums for which the IVI contended adjustments should be made." The order specifically considered the items of advertising, public relations, and charitable contributions, but did not further mention the elimination of free service and reduced rates. The order did, however, provide that any objections and motions made in the proceedings that remained were disposed of in a manner consistent with the ultimate conclusions contained therein. Following a petition for rehearing, an appeal was taken to the circuit court and later to the Supreme Court as provided by section 68 (Ill. Rev. Stat. 1971, ch. 111 2/3, par. 72). The Commission order was affirmed by the circuit court. On the appeal to the Illinois Supreme Court, the contention that it was error to refuse to disallow the concession service rates as an operating expense was abandoned and not considered. Plaintiff Dvorkin did not seek to intervene or participate in such proceeding at any time, as authorized by statute (Ill. Rev. Stat. 1971, ch. 111 2/3, par. 69), but has instead brought the instant action in equity. Plaintiff maintains that the Commission's willingness, for more than 58 years, to permit the practice makes further resort to the Commission for relief patently useless. In Adler v. Northern Illinois Gas Co., a class action was brought on behalf of all customers of the utility for a declaratory judgment and accounting, alleging that the utility had fraudulently enriched itself through the sale of natural gas to its customers. The complaint, similar to the contention herein, alleged that plaintiff had properly filed no complaint with the Illinois Commerce Commission because "`50 years of history of Illinois utility regulation apparently discloses no precedent for lower rates obtained by individual consumers against large utilities. Such remedy has become largely a fiction or illusion.'" (57 Ill. App.2d 210, 214.) The allegations there were insufficient to avoid the primary jurisdiction of the Commission. The court held that the complaint, although alleging fraud, did not present a cause of action for court proceedings until the prescribed statutory procedures were exhausted. Plaintiff argues that he should not be required to engage in administrative proceedings where the dispute is limited to a purely legal issue and where the outcome is predictable and the result foredoomed. This argument was approved in People ex rel. Naughton v. Department of Public Aid (1973), 12 Ill. App.3d 43, 297 N.E.2d 784; however, the decision was reversed in People ex rel. Naughton v. Swank (1974), 58 Ill.2d 95, 317 N.E.2d 499. The Supreme Court held that an applicant for relief *457 who is dissatisfied with the results of his internal administrative appeal may not ignore the administrative review provided by statute to pursue a review of the determination by any form of action he chooses. The court stated at page 102 that the legislative purpose "was designed to channel into a single procedure the judicial review of the decisions made by administrative agencies in particular cases." In the instant case, plaintiff seeks relief by original proceedings in equity without first taking any action before the Commission for the requested remedy. 4 The doctrine of exhaustion has long been a basic principle of administrative law, and a party aggrieved by administrative action ordinarily cannot seek review in the courts without first pursuing all administrative remedies available to him; however, exceptions recognize the rule that equitable relief will be available if the remedy at law is inadequate. (See Illinois Bell Telephone Co. v. Allphin (1975), 60 Ill.2d 350, 326 N.E.2d 737.) Here, plaintiff would presume not only that the Commission will decide against him, but also that any appeal by administrative review to the trial and appellate courts will not provide appropriate relief. The avoidance of a prior administrative decision would severely undermine the legislative purpose manifest in providing a statutory review. We cannot assume that the Commission's decision will be against plaintiff or that if unsuccessful, appeal will not eventually result in a different decision, or that in any event, the public interest will suffer through loss or probable loss of service. City of Wheaton v. Chicago, Aurora & Elgin Ry. Co. (1954), 3 Ill. App.2d 29, 37, 120 N.E. 2d 370. 5, 6 Plaintiff also argues that the Commission has no jurisdiction to entertain class actions and that the inherent powers of a court of equity are needed to provide redress. The commencement of a class action does not automatically invoke the jurisdiction of equity. The instant proceeding was brought on "behalf of all other persons * * * who have been subscribers * * * from the date upon which said company first began its unlawful practice." Damages are claimed and sought for those who were and are now subscribers. This, plaintiff clearly cannot do. As noted in Burke v. Illinois Bell Telephone Co., 348 Ill. App. 536, "* * * subscribers are served by different exchanges with different classes of service and rates and for varying periods of service"; the claim of each subscriber is legally separate and distinct. Each claim presents a different question with respect to the right of recovery and the amount of alleged damages. The class action herein does not have the requisite common interest in the questions involved. (See Hagerty v. General Motors Corp. (1974), 59 Ill.2d 52, 57-59, 319 N.E.2d 5.) Furthermore, since we have held that plaintiff has no individual cause *458 of action, it necessarily follows that any attempted class action must also fail. Zelickman v. Bell Federal Savings & Loan Association (1973), 13 Ill. App.3d 578, 587, 301 N.E.2d 47; De Phillips v. Mortgage Associates, Inc. (1972), 8 Ill. App.3d 759, 764, 291 N.E.2d 329. 7 Plaintiff finally contends, without citation of any authority, that if the Commission were to take action, the recovery would be limited to a period of one year under section 72 (Ill. Rev. Stat. 1971, ch. 111 2/3, par. 76), and that it makes no sense to restrict the plaintiff class to such limitation where the alleged violations have persisted over 50 years without intervention by the Commission. The contention is without merit. For the foregoing reasons the order of the circuit court of Cook County dismissing plaintiff's complaint is affirmed. Affirmed. DEMPSEY and McNAMARA, JJ., concur.

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527 So.2d 125 (1987) BLUE CROSS AND BLUE SHIELD OF ALABAMA v. PROTECTIVE LIFE INSURANCE COMPANY, Alabama Association of Life Insurance Companies, and Health Insurance Association of America. Civ. 5873. Court of Civil Appeals of Alabama. September 23, 1987. Rehearing Denied October 28, 1987. Certiorari Denied June 24, 1988. *126 William I. Hill II of Hill, Hill, Carter, Franco, Cole & Black, Montgomery, William G. Sommerville, Jr., and Lawrence B. Clark, of Lange, Simpson, Robinson & Somerville, Birmingham, and James W. Rankin, G. Christian Kronberg, and Thomas D. Graber, of Kirkland & Ellis, Chicago, Ill., for appellant. Charles M. Crook and W. Joseph McCorkle, Jr., of Balch & Bingham, Montgomery, and Ryburn H. Bailey, Assoc. Gen. Counsel and John K. Wright, counsel for Protective Life Ins. Co., Birmingham, for appellees. Alabama Supreme Court 87-152. HOLMES, Judge. This is an insurance case requiring statutory interpretation of certain laws pertaining to Blue Cross and Blue Shield of Alabama (Blue Cross). This case originated when Blue Cross filed a "Form A" with the commissioner of the Alabama Department of Insurance (commissioner), by which it sought his approval of its proposed acquisition of United Trust Life Insurance Company (United Trust), an Alabama life insurance company. Protective Life Insurance Company, the Alabama Association of Life Insurance Companies, and the Health Insurance Association of America (intervenors) intervened in the proceedings held before the commissioner, opposing the proposed acquisition. The commissioner issued an order approving the acquisition. The intervenors appealed the commissioner's order to the Montgomery County Circuit Court. Following ore tenus proceedings, the circuit court overruled and vacated the commissioner's order and entered a judgment in favor of the intervenors. The circuit court concluded that it was not permissible under the statutes governing Blue Cross for it to acquire ownership and control of United Trust and to use that subsidiary to market life insurance. Blue Cross, through able counsel, appeals. We affirm. I Blue Cross is purely a statutory creature. Its purpose and all of its powers are derived from Ala.Code (1975), §§ 10-4-100 through -115 (1980 Repl. Vol.). The question now before this court is thus one of statutory interpretationwhether §§ 10-4-100 through -115 permit Blue Cross to acquire a subsidiary and use it to market life insurance.[1] Accordingly, we find the ore tenus rule, which is advanced by the intervenors, to be inapplicable. The cardinal rule in interpreting legislation is to determine the intent of the legislature, which is determined by examining the statute as a whole, in light of its general purpose. Gulf Coast Media, Inc. v. Mobile Press Register, Inc., 470 So.2d 1211 (Ala.1985); Mitchell v. State Child Abuse & Neglect Prevention Board, 512 So.2d 778 (Ala.Civ.App.1987). *127 Words in the statute should be given their natural, plain, ordinary, and commonly understood meaning. See Alabama Farm Bureau Mutual Casualty Insurance Co. v. City of Hartselle, 460 So.2d 1219 (Ala.1984); Mitchell, 512 So.2d 778. In interpreting the statutes governing Blue Cross, we can only conclude that it was not the intent of the legislature that Blue Cross enter the field of life insurance. Ala.Code (1975), § 10-4-100 sets forth the single purpose for which Blue Cross was organized: that of "establishing, maintaining and operating a health care service plan under which health services are furnished to such of the public who become subscribers to such plan." Thus, the one purpose set forth by the legislature for the organization of Blue Cross is the maintenance of a health care service plan for subscribers. Though it is not pertinent to the question before us, it is interesting to note that the evidence shows that, in carrying out its legislative purpose, Blue Cross has apparently become the largest hospital and medical insurer in the state. Blue Cross contends that the trial court erred in focusing its attention on § 10-4-100 and that it has the legal authority to acquire United Trust under what it characterizes as broad grants of power given by §§ 10-4-101 and -103. Section 10-4-101 specifies those items which Blue Cross's certificate of incorporation must contain. It also provides, however, that the certificate "may also contain any other provisions, not inconsistent with the provisions of this article, which the incorporators may desire to insert for the regulation of the business or affairs of the corporation or which would be permitted nonprofit corporations by chapter 3 of this title." Ala.Code (1975), § 10-3A-20(7) (1986 Cum.Supp.), which is part of the aforementioned "chapter 3," grants to nonprofit corporations the power to purchase or otherwise acquire the shares of other corporations, whether they be for profit or nonprofit corporations. Blue Cross contends that § 10-4-101 provides it with the authority of a nonprofit corporation to acquire the shares of United Trust. We disagree. Section 10-4-101 provides that Blue Cross's certificate of incorporation may contain additional provisions, including those permissible for nonprofit corporations under Alabama law, but such provisions must be "not inconsistent with the provisions of this article." In other words, Blue Cross may not acquire the shares of another corporation if it would be inconsistent with any of the provisions of §§ 10-4-100 through -115. Blue Cross contends that the term "inconsistent" as used in § 10-4-101 must be given its plain, ordinary meaning and that "inconsistent" must thus be construed to mean "contradictory" or "mutually repugnant." See City of Mobile v. Collins, 24 Ala.App. 41, 130 So. 369 (1930); Black's Law Dictionary 689 (5th ed. 1979). Blue Cross argues that its acquisition of United Trust is permissible because the evidence shows that marketing life insurance is not inconsistent with, or mutually repugnant to, marketing health insurance. We will assume for purposes of argument that the marketing of both health insurance and life insurance by the same company is not contradictory and may, in fact, be profitable. Such, however, is not the issue before this court. Rather, the issue is whether the marketing of life insurance by Blue Cross, even through the use of a subsidiary, is inconsistent with the statutory provisions governing Blue Cross. Put another way, the issue is whether Blue Cross's interpretation of § 10-4-101 as empowering it to acquire a subsidiary through which to market life insurance can have "concurrent operative effect," Belknap v. Shock, 125 W.Va. 385, 391, 24 S.E.2d 457, 460 (1943), with § 10-4-100 and the other statutes governing Blue Cross. We conclude that it cannot. The powers possessed by a corporation can be no broader than the purposes for which it is organized. See Blue Cross & Blue Shield of Connecticut v. Mike, 184 Conn. 352, 439 A.2d 1026 (1981). This is particularly the case where the corporation is organized for special, as opposed to, general *128 purposes. "Corporations organized for special purposes are limited in their powers to the purposes for which they are organized." Mike, 184 Conn. at 355, 439 A.2d at 1029. See also Woodyard v. Arkansas Diversified Insurance Co., 268 Ark. 94, 594 S.W.2d 13 (1980); Blue Cross of Southwestern Virginia v. Commonwealth, 230 Va. 521, 338 S.E.2d 849 (1986). The Alabama Supreme Court has recognized the distinction of limited purpose corporations and the effect such a limitation has on corporate powers. See Bauman v. Hayes, 379 So.2d 1251 (Ala. 1980); Security Trust & Savings Bank v. Marion County Banking Co., 287 Ala. 507, 253 So.2d 17 (1971). There can be no doubt that Blue Cross is a special purpose corporation, organized under § 10-4-100 for the specific and limited purpose of maintaining a health care service plan for subscribers. Cf. Mike, 184 Conn. 352, 439 A.2d 1026. Marketing life insurance is not included in this limited statutory purpose and is thus impermissible.[2]Cf. Woodyard, 268 Ark. 94, 594 S.W. 2d 13; Mike, 184 Conn. 352, 439 A.2d 1026; Blue Cross of Virginia, 230 Va. 521, 338 S.E.2d 849.[3] Although the language of § 10-4-101 may appear to be a broad grant of power to Blue Cross, such grant can be no greater than, i.e., must not be "inconsistent with," the limited statutory purpose of Blue Cross set forth in § 10-4-100. Clearly, the power to acquire a subsidiary through which to market life insurance would exceed, and thus contradict, Blue Cross's limited statutory purpose. Blue Cross's interpretation of § 10-4-101 as giving it this power is incorrect. Blue Cross makes a similar argument with regard to Ala.Code (1975), § 10-4-103, as that it asserts for § 10-4-101. Section 10-4-103 provides that Blue Cross is to be managed by a board of directors "with the powers and authority necessary or incidental to the purposes of the corporation." Blue Cross contends in brief that the necessary and incidental powers referred to in § 10-4-103 include "anything `appropriate and suitable for the purposes for which the corporation was organized.' Cadden v. Ladd, 358 So.2d 437, 439 (Ala.1978), quoting Paterson [ & ] Edey Lumber Co. v. Bank of Mobile, 203 Ala. 536, 538, 84 So. 721, 722 (1919)." In response, we would simply note again that the powers granted to Blue Cross by § 10-4-103 can be no greater than its limited statutory purpose of maintaining a health care service plan for subscribers. We do not think that the sale of life insurance through a subsidiary can be characterized as incidental to, or even appropriate for, this limited purpose. The fact that marketing both types of insurance may be desirable or profitable to Blue Cross does not mean that such marketing is necessary and incidental to Blue Cross's limited raison d'etre. Cf. Security Trust & Savings Bank, 287 Ala. 507, 253 So.2d 17. We find that the learned and distinguished trial judge correctly interpreted the statutes governing Blue Cross as making it impermissible for Blue Cross to acquire United Trust and to market life insurance through that corporation. II Blue Cross also contends on appeal that the intervenors do not have standing to challenge the commissioner's order which approved the proposed acquisition of United Trust. It claims that the intervenors *129 are merely competitors and that fear of increased competition by Blue Cross is not a valid grievance to confer standing. See Alabama State Florists Association v. Lee County Hospital Board, 479 So.2d 720 (Ala.1985). We would tend to agree with this contention were it not for the fact that standing is conferred on the intervenors by statutes governing the administrative proceedings before the commissioner and appeal therefrom. The intervenors are not simply challenging the acts of Blue Cross as being ultra vires, but are appealing the order of the commissioner, and this case is thus distinguished from Alabama State Florists Association. The administrative proceedings were conducted pursuant to Ala.Code (1975), § 27-29-3(d) (1986 Repl. Vol.), which requires the commissioner to conduct a public hearing before approving any merger or acquisition of control of one insurance company over another. Section 27-29-3(d)(2) provides that at the hearing "any ... person whose interest may be affected thereby shall have the right to [participate]." Ala.Code (1975), § 27-2-30(d), which also governs hearings before the commissioner, provides that the commissioner shall allow persons "whose pecuniary interests are to be directly and immediately affected by the commissioner's order made upon the hearing" to become parties to the hearing by intervention. There is no doubt that the intervenors were properly permitted to become parties to the hearing before the commissioner on Blue Cross's application for approval for the acquisition of United Trust. In fact, as competitors of Blue Cross, the intervenors had a direct financial interest that would be affected by the commissioner's order. Cf. Alabama Power Co. v. Alabama Public Service Commission, 278 Ala. 597, 179 So. 2d 725 (1965). Blue Cross does not seriously challenge on appeal the right of the intervenors to have participated in the proceedings before the commissioner, but focuses upon their appeal from such proceedings. The latter is specifically addressed by Ala.Code (1975), § 27-29-13. Section 27-29-13(a) provides that "[a]ny person aggrieved by any act, determination, rule, regulation or order or any other action of the commissioner pursuant to this chapter may appeal therefrom...." Blue Cross contends that the intervenors lack standing under § 27-29-13(a) because their only grievance is fear of competition from Blue Cross. We disagree. Blue Cross is attempting to place restrictions on standing to appeal under § 27-29-13(a), which we do not think was the intent of the legislature. In determining such legislative intent, we must give to the phrase "person aggrieved by [the] order or any other action of the commissioner" its natural, plain, ordinary, and commonly understood meaning. See Alabama Farm Bureau Mutual Casualty Insurance Co., 460 So.2d 1219; Mitchell, 512 So.2d 778. Black's Law Dictionary 60 (5th ed. 1979) defines an aggrieved party as "[o]ne whose legal right is invaded by an act complained of, or whose pecuniary interest is directly affected by a decree or judgment." (Emphasis supplied.) This definition is quite similar to the language contained in § 27-29-13(a) itself. As competitors of Blue Cross, the intervenors clearly had a pecuniary interest that was directly affected by the commissioner's order. Cf. Alabama Power Co., 278 Ala. 597, 179 So.2d 725. Our interpretation of § 27-29-13(a) is reinforced by Ala.Code (1975), § 27-2-32(a), which governs appeals from hearings before the commissioner. Section 27-2-32(a) broadly grants the right to appeal from such hearings to "[a]ny person who was a party to [the] hearing." The intervenors were not simply competitors of Blue Cross, but were parties to the proceedings before the commissioner on Blue Cross's application to acquire United Trust. As such, they have the right to appeal from those proceedings under § 27-2-32(a). Blue Cross also contends that the intervening associations lack standing because *130 they have no grievance apart from that of their members and that they must be able to show injury in their capacity as associations to have standing. In support of this contention, Blue Cross cites a 1953 Alabama case, City of Birmingham v. Fairview Home Owners Association, 259 Ala. 500, 66 So.2d 775 (1953). Although City of Birmingham may have once governed the standing rights of associations in this state, it does not today. Under the standing rules set forth by the United States Supreme Court in Warth v. Seldin, 422 U.S. 490, 511, 95 S.Ct. 2197, 2211, 45 L.Ed.2d 343 (1975), an association may have standing solely as the representative of its members. See Alabama State Florists Association, 479 So.2d 720. We agree with the circuit court that the intervenors had standing to appeal the commissioner's order. The judgment of the circuit court is due to be affirmed. AFFIRMED. BRADLEY, P.J., and INGRAM, J., concur. NOTES [1] Blue Cross has attempted to characterize the issue as only whether it may acquire the stock of United Trust, not whether it may market life insurance through that subsidiary. It is clear, however, from the Form A Blue Cross filed with the commissioner that such is its intention, and we, therefore, find the legality of such intention to be the key issue before this court. [2] While we do not find it necessary to resort to the legislative history of § 10-4-100 and the other statutes governing Blue Cross to resolve the question of statutory interpretation now before us, we find it highly interesting that the legislature has rejected on at least two occasions Blue Cross's attempts to broaden its limited statutory purpose. [3] We agree with Blue Cross that the cases of other jurisdictions are not direct precedent for our decision in this case since we are faced with a question of interpreting Alabama law. Because the question is one of first impression, however, we find the cases of other jurisdictions which have faced similar issues particularly helpful. We note that the appellate courts of Connecticut, Virginia, and Arkansas in the cases cited in the text have rejected the efforts by the Blue Cross corporations in those states to enter the field of life insurance.

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NUMBER 13-11-00620-CR COURT OF APPEALS THIRTEENTH DISTRICT OF TEXAS CORPUS CHRISTI - EDINBURG LADISLADO MUNOZ GOMEZ, Appellant, v. THE STATE OF TEXAS, Appellee. On appeal from the 404th District Court of Cameron County, Texas. MEMORANDUM OPINION Before Chief Justice Valdez and Justices Garza and Vela Memorandum Opinion Per Curiam Appellant, Ladislado Munoz Gomez, attempts to appeal his conviction for aggravated robbery. The trial court has certified that this Ais a plea-bargain case, and the defendant has NO right of appeal.@ See TEX. R. APP. P. 25.2(a)(2). On December 15, 2011, this Court notified appellant=s counsel of the trial court=s certification and ordered counsel to: (1) review the record; (2) determine whether appellant has a right to appeal; and (3) forward to this Court, by letter, counsel=s findings as to whether appellant has a right to appeal, or, alternatively, advise this Court as to the existence of any amended certification. Following trial court hearings, the trial court found that appellant does not have the right to appeal and that the trial court will not change, modify, undo, rescind, or set aside the trial court’s certification that the appellant does not have the right to appeal. On August 22, 2012, counsel filed a letter brief with this Court. Counsel=s response does not establish that the certification currently on file with this Court is incorrect or that appellant otherwise has a right to appeal. The Texas Rules of Appellate Procedure provide that an appeal must be dismissed if the trial court=s certification does not show that the defendant has the right of appeal. TEX. R. APP. P. 25.2(d); see TEX. R. APP. P. 37.1, 44.3, 44.4. Accordingly, this appeal is DISMISSED. PER CURIAM Do not publish. See TEX. R. APP. P. 47.2(b). Delivered and filed the 27th day of August, 2012. 2

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FILED NOT FOR PUBLICATION OCT 04 2017 UNITED STATES COURT OF APPEALS MOLLY C. DWYER, CLERK U.S. COURT OF APPEALS FOR THE NINTH CIRCUIT CATHY ALATORRE, an individual, No. 15-55882 Plaintiff-Appellant, D.C. No. 3:13-cv-01702-BAS-DHB v. SEAN J. STACKLEY, Secretary, MEMORANDUM* Department of the Navy, Defendant-Appellee. Appeal from the United States District Court for the Southern District of California Cynthia A. Bashant, District Judge, Presiding Argued and Submitted August 8, 2017 Pasadena, California Before: REINHARDT, KOZINSKI, and CHRISTEN, Circuit Judges. 1. The Navy argues that Alatorre’s bankruptcy discharge of the district court’s cost award against her moots this appeal.1 “Article III’s ‘case-or- controversy limitation’ on federal court jurisdiction requires a live controversy * This disposition is not appropriate for publication and is not precedent except as provided by Ninth Circuit Rule 36-3. 1 Because the parties are familiar with the facts and the procedural history, we do not recount them here. between two adversaries.” United States v. Sanchez-Gomez, 859 F.3d 649, 657 (9th Cir. 2017) (en banc). If the district court’s order granting summary judgment were to be reversed on appeal, Alatorre’s claims would proceed to trial and she might ultimately obtain a damages award. Thus, there is a live controversy and her appeal is not moot. Nor does equity counsel us against entertaining this appeal. That Alatorre listed her cause of action against the Navy as an exempt asset in her bankruptcy petition is consistent with the “fresh start” policy animating the Bankruptcy Code. See Rousey v. Jacoway, 544 U.S. 320, 325 (2005). Alatorre did not gain an unfair advantage by filing for bankruptcy; the Navy would be in the same position whether she filed her bankruptcy petition before or after her appeal from the district court’s judgment. 2. “An employer is vicariously liable for an actionable hostile environment created by a supervisor with immediate (or successively higher) authority over the employee.” Hardage v. CBS Broad., Inc., 427 F.3d 1177, 1183 (9th Cir. 2005) (internal quotation marks omitted). Where harassment does not culminate in “a significant change in employment status, such as discharge or undesirable reassignment,” an employer may assert an affirmative defense to vicarious liability. Davis v. Team Elec. Co., 520 F.3d 1080, 1097 (9th Cir. 2008). 2 Alatorre’s transfer to the Public Works Office (PWO) in February 2012 does not qualify as a tangible employment action because she did not show that Bergamini was involved in the decision to transfer her, and Alatorre’s affidavit portrays a positive experience at the PWO. Her transfer back to the Facilities and Maintenance Division (FMD) in May 2012 does not qualify because her stint at the PWO was always intended to be temporary. Moreover, Bergamini and Grant were placed on administrative leave for three weeks immediately after Alatorre filed her informal EEO complaint. Thus, her return to the FMD lasted, at most, slightly more than a fortnight. As for her assignment to online training courses, Alatorre did not meet her burden to show a causal nexus between this assignment and Bergamini’s alleged sexual harassment. Since no tangible employment action occurred, the Navy was entitled to raise its affirmative defense, and it did so successfully. In response to Alatorre’s first complaint about Bergamini, the Navy temporarily transferred her to the PWO. The FMD held a meeting emphasizing the Navy’s zero-tolerance policy after Alatorre returned. When Alatorre filed an informal EEO complaint, the Navy placed Bergamini (and Grant) on administrative leave, transferred Alatorre to the PWO for the second time, and later hired a former EEOC Administrative Law Judge to conduct an investigation of her complaints. The Navy “exercised 3 reasonable care to prevent and correct promptly any sexually harassing behavior,” and by delaying, Alatorre “unreasonably failed” to avail herself of the available corrective mechanisms. See Hardage, 427 F.3d at 1183–84. 3. Alatorre did not establish a prima facie case of co-worker harassment. To make out such a claim, she was required to show that she “was subjected to verbal or physical conduct of a sexual nature, . . . that was unwelcome; and . . . that was sufficiently severe or pervasive to alter the conditions of [her] employment and create an abusive working environment.” E.E.O.C. v. Prospect Airport Servs., Inc., 621 F.3d 991, 997 (9th Cir. 2010). The alleged behavior of Alatorre’s colleagues, while distasteful and offensive, was almost entirely non-sexual in nature. The only incident that bore sexual overtones was Grant’s comment about her legs. But Alatorre did not show that this was more than an isolated incident or so grievous as to “amount to a [discriminatory] change in the terms and conditions of employment.” See Faragher v. City of Boca Raton, 524 U.S. 775, 788 (1998). 4. Alatorre did not exhaust the claim that she was “relegated to taking online courses” in retaliation for engaging in protected activity. “Exhaustion depends upon the ‘fit’ between the administrative claim, the investigation and any subsequent allegations.” Greenlaw v. Garett, 59 F.3d 994, 1000 (9th Cir. 1995). Because this form of harassment was not like or reasonably related to the 4 harassment of which Alatorre complained, she was required to present it to the EEOC. AFFIRMED. 5

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[Cite as State v. Scott, 2017-Ohio-2642.] STATE OF OHIO ) IN THE COURT OF APPEALS )ss: NINTH JUDICIAL DISTRICT COUNTY OF SUMMIT ) STATE OF OHIO C.A. No. 28013 Appellee v. APPEAL FROM JUDGMENT ENTERED IN THE JEREMY SCOTT COURT OF COMMON PLEAS COUNTY OF SUMMIT, OHIO Appellant CASE No. CR 2015 01 0039 DECISION AND JOURNAL ENTRY Dated: May 3, 2017 CALLAHAN, Judge. {¶1} Jeremy Scott appeals from his convictions in the Summit County Court of Common Pleas. This Court affirms. I. {¶2} Mr. Scott sexually abused J.D. from the time she was seven until the time she was twelve. Mr. Scott lived with J.D. the majority of this time, first as her mother’s boyfriend and later as her stepfather. {¶3} A grand jury indicted Mr. Scott for ten counts of rape in violation of R.C. 2907.02(A)(1)(b), ten counts of sexual battery in violation of R.C. 2907.03(A)(5), and four counts of gross sexual imposition in violation of R.C. 2907.05(A)(4). Each count stated that the victim was under the age of thirteen. Counts 1, 2, 3, and 4 further specified that the victim was under the age of ten at the time of those offenses. 2 {¶4} Following a four-day jury trial, Mr. Scott was found guilty on all counts in the indictment. At sentencing, the trial court merged the sexual battery and gross sexual imposition counts into the rape counts. The court sentenced Mr. Scott to a life sentence on each of the counts, with parole eligibility after 15 years on counts 1, 2, 3, and 4, and parole eligibility after 10 years on counts 5, 6, 7, 8, 9, and 10. The court further ordered the sentences to run consecutively. {¶5} Mr. Scott appeals raising one assignment of error. II. ASSIGNMENT OF ERROR IT WAS PLAIN ERROR AND A DENIAL OF FUNDAMENTAL DUE PROCESS FOR THE TRIAL COURT TO ALLOW MULTIPLE CONVICTIONS BASED UPON A DUPLICATIVE INDICTMENT. {¶6} In his sole assignment of error, Mr. Scott argues that he was denied due process because the indictment contained counts that were “duplicative in pairs.” This Court disagrees. {¶7} There was no objection to the indictment in the trial court. The failure to object to an indictment waives all but plain-error review on appeal. State v. Horner, 126 Ohio St.3d 466, 2010-Ohio-3830, ¶ 46. Plain error exists only where there is a deviation from a legal rule, that is obvious, and that affected the appellant’s substantial rights to the extent that it affected the outcome of the trial. State v. Barnes, 94 Ohio St.3d 21, 27 (2002). Plain error is noticed “with utmost caution, under exceptional circumstances and only to prevent a manifest miscarriage of justice.” State v. Long, 53 Ohio St.2d 91 (1978), paragraph three of the syllabus. {¶8} The various counts in Mr. Scott’s indictment covered one-year time periods corresponding to J.D.’s age at the time of each offense. The first ten counts in the indictment alleged Mr. Scott raped J.D. in violation of R.C. 2907.02(A)(1)(b), which prohibits engaging in 3 sexual conduct with a person under the age of thirteen. Counts 1 and 2 covered the time period when J.D. was eight. Counts 3 and 4 covered the time period when J.D. was nine. Counts 5 and 6 covered the time period when J.D. was ten. Counts 7 and 8 covered the time period when J.D. was eleven. Counts 9 and 10 covered the time period when J.D. was twelve. Each pair of counts was identically worded.1 {¶9} Mr. Scott argues that this use of identically-worded counts violated his due process rights. In support, Mr. Scott relies on Valentine v. Konteh, 395 F.3d 626 (6th Cir.2005). Valentine involved a 40-count indictment alleging offenses over a ten-month time period. Id. at 629. The indictment contained 20 identically-worded counts for rape and 20 identically-worded counts for felonious sexual penetration. Id. The prosecution did not delineate the factual bases for the charges in a bill of particulars or at trial. Id. at 628. The court found a due process violation, but noted it was “traceable not to the generic language of the individual counts of the indictment but to the fact that there was no differentiation among the counts.” Id. at 636. Consequently, the court found all but one conviction for rape and one conviction for felonious sexual penetration invalid. Id. at 637. {¶10} Mr. Scott recognizes that this Court distinguished Valentine in State v. Just, 9th Dist. Wayne No. 12CA0002, 2012-Ohio-4094. Mr. Scott contends the distinction was “based on the fact that the [S]tate provided more specific details to the defense through a bill of particulars.” Mr. Scott continues that he filed a motion for a bill of particulars, but there is nothing in the record to show that the State responded or that the court ruled on that motion. Mr. 1 Mr. Scott notes that he was indicted on two identically-worded counts for each one-year time period in counts 11 through 20 (sexual battery) and 21 through 24 (gross sexual imposition) as well, but he does not challenge those counts because they were merged into counts 1 through 10 (rape) for sentencing. 4 Scott notes the general rule that appellate courts will presume that a motion was denied when a trial court fails to explicitly rule on that motion. {¶11} While “[t]his [C]ourt ordinarily holds that a motion that is still pending at the time of the final disposition of a case is presumed to have been denied,” there are exceptions to this general rule. State v. Romandetti, 9th Dist. Summit No. 23388, 2007-Ohio-363, ¶ 7; see also State v. DePaulo, 25 Ohio App.2d 39 (9th Dist.1971), syllabus (holding counsel’s statement that he was present for a hearing on the merits of the case waived the right to hearings on pending motions including a motion for a bill of particulars). “Because a request for a bill of particulars, like a demand for discovery, is filed with the court but made directly to the prosecutor, the defendant is required to bring the [S]tate’s failure to respond to the trial court’s attention at a time when the error can be remedied.” State v. Sims, 9th Dist. Lorain No. 94CA005797, 1994 WL 581408, *3 (Oct. 19, 1994). Based on the record, this Court is unable to discern whether the State did or did not provide Mr. Scott a bill of particulars. If Mr. Scott did not receive a bill of particulars, it was his obligation to bring that to the attention of the trial court. Mr. Scott did not file a motion to compel the State to provide him a bill of particulars or otherwise bring to the trial court’s attention any alleged failure by the State to do so. Consequently, he cannot complain of such on appeal. See State v. Hickle, 6th Dist. Ottawa No. OT-03-034, 2004-Ohio-5250, ¶ 15, (“A defendant who has requested a bill of particulars waives error by proceeding to trial without receiving the bill or requesting a continuance.”). {¶12} In addition, this Court did not hold in Just that a bill of particulars was the only manner to differentiate among counts in an indictment. Rather, this Court noted that Valentine “specified that ‘[t]he due process problems in the indictment might have been cured had the trial court insisted that the prosecution delineate the factual bases for the forty separate incidents 5 either before or during trial.’” (Emphasis added.) Just at ¶ 8, quoting Valentine at 634. This Court found that the State adequately delineated among the counts through the different types of sexual contact and the different locations where the offenses occurred. Just at ¶ 9. The bill of particulars differentiated the types of sexual contact alleged, which was different for all but two of the counts. Id. at ¶ 7. In addition to the bill of particulars, which delineated all but two of the counts, there was a recorded interview between the victim and Children Services and the victim’s testimony, which further differentiated the counts based on the location where the abuse occurred. Id. at ¶ 7, 9. {¶13} In the present matter, multiple lay and professional witnesses testified at trial. Exhibits including J.D.’s medical records and various recordings were also admitted into evidence. Mr. Scott’s argument fails to discuss any of this testimony or evidence, or how the State failed to establish the factual bases for each count during trial. An analysis of that testimony and evidence is necessary in order to determine whether any error occurred. “An appellant has the burden of demonstrating error on appeal.” State v. Mastice, 9th Dist. Wayne No. 06CA0050, 2007-Ohio-4107, ¶ 7; see also App.R. 16(A)(7). Having failed to address the testimony and evidence at trial, Mr. Scott has not demonstrated that an error occurred, much less a plain error. {¶14} Mr. Scott’s assignment of error is overruled. III. {¶15} Mr. Scott’s assignment of error is overruled. The judgment of the Summit County Court of Common Pleas is affirmed. Judgment affirmed. 6 There were reasonable grounds for this appeal. We order that a special mandate issue out of this Court, directing the Court of Common Pleas, County of Summit, State of Ohio, to carry this judgment into execution. A certified copy of this journal entry shall constitute the mandate, pursuant to App.R. 27. Immediately upon the filing hereof, this document shall constitute the journal entry of judgment, and it shall be file stamped by the Clerk of the Court of Appeals at which time the period for review shall begin to run. App.R. 22(C). The Clerk of the Court of Appeals is instructed to mail a notice of entry of this judgment to the parties and to make a notation of the mailing in the docket, pursuant to App.R. 30. Costs taxed to Appellant. LYNNE S. CALLAHAN FOR THE COURT HENSAL, P. J. SCHAFER, J. CONCUR. APPEARANCES: NICHOLAS SWYRYDENKO, Attorney at Law, for Appellant. SHERRI BEVAN WALSH, Prosecuting Attorney, and HEAVEN DIMARTINO, Assistant Prosecuting Attorney, for Appellee.

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UNPUBLISHED UNITED STATES COURT OF APPEALS FOR THE FOURTH CIRCUIT No. 12-7434 UNITED STATES OF AMERICA, Plaintiff - Appellee, v. BERNARD BOSTIC, Defendant - Appellant. Appeal from the United States District Court for the District of South Carolina, at Florence. Terry L. Wooten, District Judge. (4:08-cr-00060-TLW-1) Submitted: November 2, 2012 Decided: November 6, 2012 Before WILKINSON, KEENAN, and THACKER, Circuit Judges. Dismissed by unpublished per curiam opinion. Bernard Bostic, Appellant Pro Se. Unpublished opinions are not binding precedent in this circuit. PER CURIAM: Bernard Bostic seeks to appeal the district court’s order denying his “Motion to Rectify the Record.” We dismiss the appeal for lack of jurisdiction because the notice of appeal was not timely filed. When the United States or its officer or agency is a party, the notice of appeal must be filed no more than sixty days after the entry of the district court’s final judgment or order, Fed. R. App. P. 4(a)(1)(B), unless the district court extends the appeal period under Fed. R. App. P. 4(a)(5), or reopens the appeal period under Fed. R. App. P. 4(a)(6). “[T]he timely filing of a notice of appeal in a civil case is a jurisdictional requirement.” Bowles v. Russell, 551 U.S. 205, 214 (2007). The district court’s order was entered on the docket on April 3, 2012. The notice of appeal was filed on August 19, 2012. * Because Bostic failed to file a timely notice of appeal or to obtain an extension or reopening of the appeal period, we dismiss the appeal. We dispense with oral argument because the facts and legal contentions are adequately presented in the * For the purpose of this appeal, we assume that the date appearing on the notice of appeal is the earliest date it could have been properly delivered to prison officials for mailing to the court. Fed. R. App. P. 4(c); Houston v. Lack, 487 U.S. 266 (1988). 2 materials before the court and argument would not aid the decisional process. DISMISSED 3

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579 So.2d 145 (1991) Pedro GONZALEZ, Appellant, v. The STATE of Florida, Appellee. No. 90-2329. District Court of Appeal of Florida, Third District. March 26, 1991. Rehearing Denied June 7, 1991. Roy L. Taylor and Margaret S. Brodsky, Miami, for appellant. Robert A. Butterworth, Atty. Gen., and Angelica D. Zayas, Asst. Atty. Gen., for appellee. Before NESBITT, COPE and GERSTEN, JJ. PER CURIAM. Appellant, Pedro Gonzalez, appeals the denial of his motion for post conviction relief. We affirm. On plenary appeal, this court affirmed appellant's conviction for first degree murder. *146 Gonzalez v. State, 543 So.2d 386 (Fla. 3d DCA 1989). Appellant then sought post conviction relief based on a claim of ineffective assistance of counsel. Appellant claimed that his attorney improperly admitted collateral evidence which prejudiced him. At the hearing on the motion, appellant's trial attorney testified that the decision to admit the evidence of which appellant now complains, was a joint one. Appellant's trial attorney testified that he and appellant discussed the risks and advantages of entering the complained of testimony into evidence. The attorney characterized these evidentiary decisions as "tactical." Tactical or strategic decisions of counsel do not justify post conviction relief. Buford v. State, 492 So.2d 355 (Fla. 1986); Straight v. Wainwright, 422 So.2d 827 (Fla. 1982). Even where the tactical decision evinces bad judgment, relief is not justified. Fisher v. State, 239 So.2d 863 (Fla. 3d DCA 1970). Finally, in order to obtain relief, appellant must not only show that the errors committed by counsel fell outside the range of professionally acceptable performance, but also that there is a reasonable probability that, but for counsel's errors, the result of the proceeding would have been different. Strickland v. Washington, 466 U.S. 668, 104 S.Ct. 2052, 80 L.Ed.2d 674 (1984). The evidence against appellant was overwhelming and included the testimony of two eye witnesses. Accordingly, we affirm, finding that appellant has failed to show any basis for relief.

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124 F.Supp.2d 1203 (2000) Sam BUSH and Jennifer Bush, Plaintiffs, v. STATE FARM FIRE AND CASUALTY COMPANY, an Illinois corporation, Defendant. No. CIV. 00-605-JO. United States District Court, D. Oregon. November 8, 2000. *1204 Jeffrey W. Hansen, Paul Eberhardt, Smith Freed Heald & Chock, Portland, OR, for plaintiffs. Dianne K. Dailey, Bullivant Houser Bailey, Portland, OR, for defendant. OPINION AND ORDER ROBERT E. JONES, District Judge. Plaintiffs Jennifer and Sam Bush ("the Bushes") bring this action against defendant State Farm Fire and Casualty Company ("State Farm") alleging claims resulting from State Farm's refusal to defend and indemnify the Bushes in a lawsuit arising out of the Bushes' previously-owned residence.[1] This case is now before the court on the parties' cross-motions for summary judgment ( 5,8). For the reasons explained below, defendant's motion is GRANTED and plaintiffs' motions are DENIED. FACTUAL BACKGROUND Before October 16, 1996, the Bushes owned a single-family residence located in Portland, Oregon ("the Lambert Street home"). On October 15, 1996, the Bushes sold the Lambert Street home to a trust for the benefit of Julie Upsher, who continued to live in the house with a second woman, Kristin Dilworth. The Bushes have had a homeowners' insurance policy with State Farm since February 16, 1996, or approximately eight months before they sold the Lambert Street home. The "Declarations Page" of the State Farm policy lists the "residence premises" as 12000 NW Big Fir Circle, Portland, OR ("the Big Fir Circle home"), and does not mention the Lambert Street home. It appears that the Bushes insured the Lambert Street home with Ohio Casualty Insurance Company ("Ohio Casualty"), but that policy is not part of the record before the court.[2] In October 1998, Dilworth sued the Bushes in Multnomah County Circuit Court alleging that she was injured as a result of the Bushes' negligence in repairing and remodeling certain electrical equipment in the Lambert Street home. Specifically, Dilworth alleged that she had suffered electrical shock when she came into contact with an electrical sub-panel inside the house. The Bushes tendered their defense to both State Farm and Ohio Casualty. State Farm rejected the tender of defense on the ground that the Lambert Street home was not covered by its policy. Ohio Casualty, however, did defend and indemnify the Bushes in the lawsuit. Eventually, the case settled for $47,500. The Bushes also incurred approximately $32,000 in attorney fees and costs in defending the lawsuit. It appears that Ohio Casualty paid both the settlement and attorney fees on behalf of the Bushes.[3] *1205 THE PRESENT MOTIONS The Bushes now seek summary judgment in their favor as to Claim 1 (breach of contract), or, in the alternative, partial summary judgment as to State Farm's duty to defend. The Bushes also seek dismissal of State Farm's first affirmative defense, that recovery is barred by Exclusion (II)(1)(d) of the policy. State Farm, in turn, seeks summary judgment in its favor as to Claim 1. In support of their respective motions, the parties proffer substantially different interpretations of the same policy language. STANDARD OF REVIEW Summary judgment should be granted if there are no genuine issues of material fact and the moving party is entitled to judgment as a matter of law. Fed. R.Civ.P. 56(c). If the moving party shows that there are no genuine issues of material fact, the non-moving party must go beyond the pleadings and designate facts showing an issue for trial. Celotex Corp. v. Catrett, 477 U.S. 317, 322-23, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). A scintilla of evidence, or evidence that is merely colorable or not significantly probative, does not present a genuine issue of material fact. United Steelworkers of America v. Phelps Dodge, 865 F.2d 1539, 1542 (9th Cir.1989). The substantive law governing a claim determines whether a fact is material. Anderson v. Liberty Lobby, Inc. 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986); see also T.W. Elec. Service v. Pacific Elec. Contractors, 809 F.2d 626, 630 (9th Cir.1987). Reasonable doubts as to the existence of a material factual issue are resolved against the moving party. T.W. Elec. Service, 809 F.2d at 631. Inferences drawn from the facts are viewed in the light most favorable to the non-moving party. Id. at 630-31. DISCUSSION This case involves a homeowners' insurance policy coverage dispute. Specifically, the case concerns whether the Bushes' general liability coverage under their policy with State Farm covers liability arising from Dilworth's injuries at the Lambert Street home even though only the Big Fir Circle home is identified in the policy Declarations. Because the issue is one of contract interpretation, a question of law, it is well-suited for summary judgment. L.K. Comstock & Co. v. United Engineers and Constructors, Inc., 880 F.2d 219, 221 (9th Cir.1989). 1. Insurance Policy Interpretation in Oregon Under Oregon law, analysis of insurance coverage issues is based on the specific terms of the policy, not on the court's general concepts of what coverage various kinds of insurance should provide. Martin v. State Farm Fire and Cas. Co., 146 Or.App. 270, 279, 932 P.2d 1207 (1997). In Hoffman Construction Co. v. Fred S. James Co. of Oregon, 313 Or. 464, 836 P.2d 703 (1992), the Oregon Supreme Court discussed the proper method for interpretation of an insurance policy. According to the court, "the primary and governing rule of the construction of insurance contracts is to ascertain the intent of the parties ... based on the terms and conditions of the insurance policy." Hoffman, 313 Or. at 469, 836 P.2d 703. In that case, as here, the parties offered competing interpretations of the same policy language. Although the Hoffman court acknowledged the general rule that ambiguous terms contained in insurance policies are to be construed against the insurer, the court elaborated that a term is ambiguous in a sense that justifies application of the rule of construction against the insurer only if two or more plausible interpretations of that term withstand scrutiny, i.e. continues to be reasonable, after the interpretations are examined in the light of, among other things, the particular context in which that term is used in the policy and *1206 the broader context of the policy as a whole. Hoffman, 313 Or. at 470, 836 P.2d 703. Therefore, the interpretations of the specific policy provisions put forth by both the Bushes and by State Farm must be examined in the context of the policy as a whole to assess their reasonableness. 2. Applicability of Exclusion (II)(1)(d) The main focus of the parties' disagreement is on whether Exclusion (II)(1)(d) of the policy applies, thereby excluding from coverage Dilworth's claims arising from the Lambert Street home. Under "Coverage L" of the policy, which provides coverage for general liability, If a claim is made or a suit is brought against an insured for damages because of bodily injury or property damage to which this coverage applies, caused by an occurrence, [State Farm] will ... pay up to [its] limit of liability for the damages for which the insured is legally liable; and ... provide a defense at [its] expense.... Plaintiffs' Memorandum in Support of Motion for Summary Judgment, Exhibit B, p. 17. Excluded from that broad liability coverage is bodily injury or property damage arising out of any premises owned or rented to any insured which is not an insured location. Id. at p. 19 (emphasis added). Resolution of this case requires interpretation of the above policy language. Although not stated in their summary judgment materials, the Bushes conceded at the summary judgment hearing that the Lambert Street home was never an "insured location," as that term is defined in the policy. They theorize, nonetheless, that the above exclusion does not apply to Dilworth's claim because, by its terms, the exclusion applies only to property owned at the time of the "occurrence"[4] that is not an insured location. According to the Bushes, because they did not own the Lambert Street home at the time of Dilworth's injury and it was not an insured location, the exclusion does not apply. Although the Bushes' argument is creative, I decline to accept it. The only reasonable interpretation of the policy language compels the conclusion that there is no coverage for injuries on property not owned by the insured, not covered in any manner as an insured location, not related somehow to any insured location, and not in any way arising out of activities contemplated by the express terms of the policy. Considering the language of Exclusion (II)(1)(d) within the context of the policy as a whole, as required under Oregon law, I find that to the extent that the State Farm policy provided any coverage related to the Lambert Street home, which is doubtful, the exclusion is properly interpreted as excluding coverage of liability arising from activities on locations owned or formerly-owned by an insured but never covered under the policy as an insured location, except as specifically contemplated by other express coverage in the policy. I do not find the temporal connection between the "occurrence" and the insured's ownership to be relevant or controlling for purposes of the Exclusion analysis, as urged by the Bushes. Exclusion (II)(1)(d) does not mention the word "occurrence." It merely excludes coverage for liability arising from ownership, past or present, of property that is "not an insured location." The Bushes cite Martin v. State Farm, supra, 146 Or.App. 270, 932 P.2d 1207, in support of their interpretation. Martin, however, does not support their position. *1207 In Martin, an insured, who was the former owner of contaminated property and was sued by the present owners of the property to recover the costs of remediation, brought suit against the insurer who issued two separate liability policies to him. The first policy covered claims made or actions brought "against an insured for damages because of bodily injury or property damage to which this coverage applies, caused by an occurrence," but excluded from coverage such damage "arising out of the ... discharge ... of pollutants ... at or from premises owned, rented, or occupied by the ... insured." Id. at 273, 932 P.2d 1207. The second policy covered any loss for which the insured was legally obligated to pay damages, excluding from coverage property damage "to your own property." That policy defined "loss" as "an accident that results in personal injury or property damage during the policy period." Martin, 146 Or.App. at 273, 932 P.2d 1207. Concluding that the insurance company did not have a duty to defend the insured under either policy due to the two policy exclusions, the court cited the fact that "[the insured's] liability to the underlying plaintiffs was dependent on his having been an owner." Id. at 275, 932 P.2d 1207. The circumstances of this case are analogous to Martin. But for their ownership of the Lambert Street property, the Bushes would have never been sued by Dilworth. All of the allegations in the Dilworth complaint are premised on the fact that the Bushes owned the Lambert Street home at one time. Thus, under Martin, because the Bushes had "owned" the Lambert Street home, even though it was never an "insured location" covered by the State Farm policy, Exclusion (II)(1)(d) of the policy applies, barring coverage. CONCLUSION Plaintiffs' motion for summary judgment and related motions (# 8) are DENIED. Defendant's motion for summary judgment (# 5) is GRANTED. Any other pending motions are denied as moot, and this action is dismissed. NOTES [1] The Bushes originally alleged two claims against State Farm: breach of contract and negligence. The Bushes withdrew the negligence claim (Claim 2), recognizing that it failed to state a claim under Oregon law. [2] At the summary judgment hearing, the Bushes' counsel explained that the Bushes had not notified Ohio Casualty when they sold the Lambert Street home and, consequently, the Ohio Casualty policy remained in effect through the time of Dilworth's accident. [3] The Bushes' counsel admitted in pleadings and at the hearing that Ohio Casualty retained him to pursue this action. [4] The policy defines "occurrence" as follows: "Occurrence," when used in Section II of this policy, means an accident, including exposure to conditions, which results in: a. bodily injury b. property damage during the policy period. Repeated or continuous exposure to the same general conditions is considered to be one occurrence. Plaintiffs' Memorandum in Support of Motion for Summary Judgment, Exhibit B, p. 17.

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985 F.2d 565 Koettel (Glenn)v.Central Prod. Credit NO. 91-1358 United States Court of Appeals,Eighth Circuit. Oct 25, 1991 1 Appeal From: E.D.Ark. 2 AFFIRMED.

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T.C. Memo. 1996-259 UNITED STATES TAX COURT RICHARD H. DALEY AND ESTATE OF ANNE H. DALEY, DECEASED, RICHARD H. DALEY, EXECUTOR, Petitioners v. COMMISSIONER OF INTERNAL REVENUE, Respondent Docket No. 9816-93. Filed June 5, 1996. Gregory A. Robinson, for petitioners. Thomas S. Dileonardo, for respondent. MEMORANDUM FINDINGS OF FACT AND OPINION WRIGHT, Judge: Respondent determined deficiencies in, an addition to, and penalties on petitioners’ Federal income taxes as follows:1 1 Unless otherwise indicated, all section references are to the Internal Revenue Code in effect for the years at issue, and all Rule references are to the Tax Court Rules of Practice and (continued...) - 2 - Addition to Tax and Penalties Year Deficiency Sec. 6661 Sec. 6662(a) 1988 $11,351 $2,838 --- 1989 11,536 --- $2,307 1990 10,058 --- 2,012 After concessions, the issues for decision are: (1) Whether petitioners' horse activity during the taxable years at issue was engaged in for profit. We hold that it was not. (2) Whether petitioners are liable for the addition to tax under section 6661 for a substantial understatement for taxable year 1988. We hold that they are. (3) Whether petitioners are liable for the accuracy-related penalty under section 6662(a) for a substantial understatement for taxable years 1989 and 1990. We hold that they are. FINDINGS OF FACT Some of the facts have been stipulated and are so found. The stipulation of facts and attached exhibits are incorporated herein. At the time the petition was filed, petitioner2 resided in Phoenix, Arizona. All references to petitioner in the singular are to Richard H. Daley. 1 (...continued) Procedure. 2 Anne H. Daley died during taxable year 1989, and petitioner Richard H. Daley is the executor of Anne H. Daley's estate. - 3 - Petitioner has practiced medicine as a surgeon in Arizona since 1967. His medical practice requires between 50 and 60 hours of his time each week. During the 12-year period ending with 1992, petitioner's average wage income from his medical practice was $266,507. Similarly, during the taxable years at issue, petitioner's average wage income from his medical practice was $299,687. Petitioner has always relied on a professional accountant to manage the books and records of his medical practice. During the years 1972 through 1986, petitioner was a partner in M.L. Leasing, a partnership engaged in the leasing of various types of goods. In 1987, this partnership was dissolved and petitioner began operating M.L. Leasing as a sole proprietorship. Petitioner continued to operate M.L. Leasing as such through at least March 1994. M.L. Leasing's books and records were managed by a professional bookkeeping service. During taxable years 1983 through 1992, petitioner reported the following profits and losses from his interest in M.L. Leasing:3 Year Profit (Loss) 1983 $7,270 1984 1,280 1985 7,565 1986 (2,000) 1987 9,283 1988 4,429 3 Until 1987, M.L. Leasing was a partnership. Accordingly, the amounts reflected for years prior to 1987 indicate petitioner's share of partnership profit and losses. - 4 - 1989 (2,313) 1990 (4,535) 1991 4,665 1992 5,458 Petitioner grew up in rural Nebraska and spent much of his time "on the farm". He developed an interest in horses at a young age and retained that interest into adulthood. Sometime during the 1970's, petitioner developed an interest in "cutting horses". Historically, a cutting horse was a horse bred and trained to serve as a tool for separating (cutting) cattle from a herd. Generally speaking, cutting horses are now assets that are used by their owners to compete against other cutting horse owners in organized "cutting" competitions for prize money. Competitions featuring cutting horses are held at both national and local levels, and entrants are judged on their ability to "cut" a single steer from a herd of steers. Petitioner began engaging in cutting horse activities in 1979. This activity has continued uninterrupted since its commencement and has involved breeding and training horses to compete in organized events. Petitioner entered his horse activity without the aid of a written market study, and he has not relied on a formal profit or business plan at any time. In managing the affairs of his activity, petitioner used a ledger to record various transactions and events. He also maintained a separate "drop" file for most of his horses. The ledger and drop - 5 - files, however, are not completely accurate, and some significant discrepancies and omissions exist in each. During the course of the 14-year period ending with 1992, petitioner owned in excess of 30 horses.4 These horses were either purchased by petitioner or born to horses that he already owned. In either event, most were eventually sold during this 14-year period, although some died and others were donated to various people or organizations. Throughout the entire course of his horse activity, petitioner never experienced a net profit, although he did generate some income. Income was generated from several sources, including prize winnings, foal sales, and stud fees. Expenses from petitioner's horse activity, however, always exceeded such income. Boarding and training costs have constituted the majority of such expenses. Petitioner rode his horses in the evenings and on weekends. He also rode his horses at numerous organized cutting horse events. Although petitioner's spouse had little interest in horses, petitioner's two children occasionally rode certain horses for various reasons. On the average, petitioner devoted 10 to 12 hours each week to his horse activity. 4 In any one year petitioner owned as few as 2 and as many as 11 horses. Petitioner owned an average of approximately eight horses per year. - 6 - Petitioner boarded his horses at a local stable and relied extensively on the services of a David Costello (Costello) to maintain and train his horses. The maintenance performed by Costello consisted of typical physical labors associated with horse ownership. Costello is a professional horse trainer and has a national reputation in the cutting horse industry. He owned and operated the stables and training facility used by petitioner during the taxable years at issue. Petitioner began deducting expenses associated with his horse activity in 1979, its year of inception. The following table lists the income, expenses, and losses reported by petitioner during the 12-year period ending with 1992: Year Gross Receipts Expenses Loss 1981 $0 $27,598 $27,598 1982 8,770 41,149 32,379 1983 15,050 49,715 34,665 1984 4,746 33,498 28,752 1985 1,949 33,397 31,448 1986 2,531 36,888 34,357 1987 12,580 72,858 60,278 1988 7,588 46,295 38,707 1989 3,927 37,414 33,487 1990 1,273 33,448 32,175 1991 167 33,438 33,271 1992 3,271 46,460 43,189 ______ _______ _______ Total 61,852 492,158 430,306 Respondent determined that petitioner did not operate his horse activity with the intent of earning a profit and disallowed - 7 - the claimed expenses to the extent such expenses exceed the income generated by the activity for each taxable year at issue. OPINION We must decide whether section 183 applies to petitioner's horse activity. Respondent maintains that section 183 limits the amount of expenses petitioner is entitled to deduct to an amount equal to the amount of gross income earned from his horse activity. In contrast, petitioner contends that section 183 is inapplicable because he conducted his horse activity with the requisite profit motive. We agree with respondent. Section 183 allows only specified deductions unless an activity is engaged in for profit. Section 183(c) defines an activity not engaged in for profit as any activity other than one with respect to which deductions are allowable under section 162 or under paragraphs (1) or (2) of section 212. An activity engaged in for profit is one in which the taxpayer has an actual and honest objective of making a profit. Dreicer v. Commissioner, 78 T.C. 642, 645 (1982), affd. without opinion 702 F.2d 1205 (D.C. Cir. 1983). This profit expectation need not have been reasonable, but the activity must have been either entered into or continued with a bona fide objective of making a profit. Taube v. Commissioner, 88 T.C. 464, 478-479 (1987); Dreicer v. Commissioner, supra at 644-645; sec. 1.183-2(a), Income Tax Regs. Profit in this context means economic profit, - 8 - independent of tax consequences. Antonides v. Commissioner, 91 T.C. 686, 694 (1988), affd. 893 F.2d 656 (4th Cir. 1990). The determination of profit objective is factually based and requires a consideration of all the surrounding facts and circumstances. Finoli v. Commissioner, 86 T.C. 697, 722 (1986); sec. 1.183-2(b), Income Tax Regs. Although the purpose of the inquiry is to ascertain the taxpayer's subjective intent, greater weight is given to objective facts than to self-serving statements of intent. Beck v. Commissioner, 85 T.C. 557, 570 (1985); sec. 1.183-2, Income Tax Regs. In conducting the profit objective analysis, courts have relied on a nonexclusive list of nine factors enumerated in the regulations under section 183. See Hendricks v. Commissioner, 32 F.3d 94 (4th Cir. 1994), affg. T.C. Memo. 1993-396; Independent Elec. Supply, Inc. v. Commissioner, 781 F.2d 724 (9th Cir. 1986), affg. Lahr v. Commissioner, T.C. Memo. 1984-472; Elliott v. Commissioner, 90 T.C. 960 (1988), affd. without published opinion 899 F.2d 18 (9th Cir. 1990). No single factor is determinative of the issue, however. Golanty v. Commissioner, 72 T.C. 411 (1979), affd. without published opinion 647 F.2d 170 (9th Cir. 1981). The nine factors set forth under section 1.183-2(b), Income Tax Regs., are: (1) The manner in which the taxpayer carries on the activity; (2) the expertise of the taxpayer or his advisers; (3) the time and effort expended by the taxpayer in carrying on other similar or dissimilar activities; (4) the - 9 - expectation that the assets used in the activity may appreciate in value; (5) the success of the taxpayer in carrying on other similar or dissimilar activities; (6) the taxpayer's history of income or losses with respect to the activity; (7) the amount of occasional profits, if any, that are earned; (8) the financial status of the taxpayer; and (9) the elements of personal pleasure or recreation involved in the activity. A careful review of the entire record in this case convinces us that petitioner has failed to carry his burden in proving that his horse activity was motivated by an actual and honest objective of making a profit. The objective facts indicate that most of the above-enumerated factors weigh in favor of respondent. Issue 1. Profit Motive Businesslike Manner & Adequate Records The fact that an activity is carried on in a businesslike manner and complete and accurate books and records are maintained is a factor indicating the existence of a profit objective with respect to such activity. Sec. 1.183-2(b)(1), Income Tax Regs. Respondent argues that petitioner failed to operate his horse activity in a businesslike manner. In support of this argument, respondent advances several contentions.5 First, respondent argues that petitioner failed to conduct a formal market study 5 To the extent that such arguments are not addressed herein, we have found them to be without merit. - 10 - prior to undertaking his horse activity. Respondent also contends that petitioner's failure to formulate a credible business or profit plan indicates that his actions were not businesslike and that he lacked a profit motive. We agree with both of these contentions. While the law does not require a taxpayer to engage in extensive formalities prior to undertaking a venture, it does require that the taxpayer conduct a basic investigation of the factors that would affect profit. Golanty v. Commissioner, supra at 432. Although petitioner testified that he started his horse activity after consultation with various professionals within the industry, such testimony was not credible, and it appears that petitioner did little else in terms of an investigation. Petitioner undertook his horse activity with no concept of what his ultimate costs might be or how he might achieve any degree of cost efficiency. Similarly, petitioner entered and conducted his activity not knowing the amount of revenues he could expect or what risks might impair the generation of such revenues. It is quite likely that this stems from his failure to consider any type of financial planning instrument during the course of his activity. Moreover, at trial petitioner was asked whether he was aware of the amount of losses incurred since the inception of his horse activity. Not only was petitioner unaware of the amount of total losses incurred, but he was also unaware of the amount of losses incurred during 1993, the year immediately prior to trial. It seems to us peculiar - 11 - that someone claiming a particular activity is motivated by profit would not know simple but significant information such as this with respect to that activity. Respondent also points to numerous omissions in petitioner's records as further support for her contention that petitioner lacked the requisite profit motive with respect to his horse activity. We agree. While maintaining less than precise records does not conclusively establish the lack of a profit objective, see Engdahl v. Commissioner, 72 T.C. 659, 666-667 (1979), petitioner's records are so fraught with omissions and inconsistencies that it is difficult to imagine how they served any beneficial purpose. Petitioner's records do not reflect the income and expenses associated with each individual horse, and petitioner testified that he could not otherwise tell from his records whether any one horse was profitable in any particular year. Similarly, as noted earlier, petitioner's records do not reflect the activity's past losses. Furthermore, petitioner testified that the ledger contained various data pertaining to each horse; however, respondent has shown that much of such data is lacking from the ledger. Petitioner's drop files are equally incomplete. In fact, petitioner failed to maintain a drop file on several of his horses. The drop files are supposed to contain information pertaining to registration and breeding, among other things, but such information is lacking from several of the files that do exist. Not only are petitioner's records incomplete, - 12 - some contain inconsistencies of a significant nature. Inconsistencies also exist between petitioner's records and the information contained on some of his tax returns. In light of the facts before us, we find that petitioner did not operate his horse activity in a businesslike manner. We also find that he maintained inadequate and insufficient records with respect to such activity. Accordingly, we find that this factor weighs in favor of respondent. Taxpayer Expertise The expertise of the taxpayer or his or her advisers is another factor relevant to the determination of whether such taxpayer possessed the requisite profit motive with respect to the activity in question. Sec. 1.183-2(b)(2), Income Tax Regs. Petitioner lacked any meaningful degree of expertise with regard to his horse activity, and we are not convinced that he was developing an expertise merely as a result of his associations with professionals within the cutting horse industry. However, petitioner relied extensively on Costello, an individual possessing much expertise involving horses. Because of the extent Costello was involved in petitioner's horse activity, we conclude that this factor favors petitioner. Time and Effort Expended The time and effort expended by the taxpayer in carrying on the activity at issue is an indication of whether a profit motive existed with respect to such activity, particularly if there are - 13 - no substantial personal or recreational elements associated with such activity. Sec. 1.183-2(b)(3), Income Tax Regs. Petitioner maintains that he spent 10 to 12 hours each week engaged in his horse activity. Yet he failed to produce credible evidence explaining the type of work he performed. The available evidence indicates that petitioner spent much of his time riding his horses. Petitioner contends, however, that such riding was not recreational. Instead, petitioner maintains that his riding served several business purposes, including exercising and training. Petitioner also maintains that the reason he rode his horses during competitive events was to develop a better appreciation for his business and illustrate to perspective purchasers that his horses were suitable for novice riders. The record does not support petitioner's arguments. Essentially, by relying on Costello to maintain and train his horses, petitioner avoided the rigors of his horse activity and indulged himself with its pleasantries. Petitioner's testimony otherwise is simply not credible, and we are reluctant to accept Costello's testimony as corroboration in light of his business relationship with petitioner. We conclude that petitioner's horse activity contained substantial elements of a recreational and personal nature. Accordingly, we find that this factor favors respondent. - 14 - Expectation that Assets will Appreciate An expectation that assets used in the activity in question may appreciate in value may also be an indication of the taxpayer's motive with respect to such activity. Sec. 1.183- 2(b)(4), Income Tax Regs. Petitioner contends that a principal factor underlying his motivation for engaging in his horse activity was the expectation that he would experience appreciation in the value of his horses. We recognize that appreciation in the horse industry often requires the passage of many years and is frequently dependent upon on a successful breeding and training program. It is not enough, however, that petitioner maintained the objective that his horse activity would eventually become profitable as a result of appreciation in the value of his horses. It is necessary that the objective be to realize a profit on the entire operation. Bessenyey v. Commissioner, 45 T.C. 261, 274 (1965), affd. 379 F.2d 252 (2d Cir. 1967). This presupposes not only future net earnings but also future net earnings sufficient to recoup the losses which have been sustained in prior years. Id. Petitioner failed to produce credible evidence that would suggest that his activity had any realistic chance of recovering the enormous losses previously incurred. In light of this record, we are not convinced that petitioner maintained a good faith belief that his horses would appreciate over time and that such appreciation would eventually - 15 - be sufficient to account for the losses experienced prior to such appreciation. Accordingly, we find that this factor favors respondent. Other Activities The success of the taxpayer in carrying on other activities can also be some indication of whether the taxpayer had a profit motive for the activity in question. Sec. 1.183-2(b)(5), Income Tax Regs. Petitioner has no experience in similar activities; however, both his medical practice and his leasing business are successful profit-oriented activities. In any event, we find that this factor neither supports nor weakens either party's position. Income, Losses, and Occasional Profits A history of income, losses, and occasional profits with respect to an activity can be indicative of whether a profit objective exists with respect to such activity. Sec. 1.183- 2(b)(6), Income Tax Regs. Respondent contends that the history of losses relating to petitioner's horse activity suggests that he lacked the requisite profit motive necessary to render section 183 inapplicable. We agree. Petitioner's contention that he expected to eventually experience a profit is self-serving, unsupported by the record, and otherwise unrealistic. The uninterrupted series of losses has been sustained beyond the period which is customarily necessary to bring a similar operation to profitable status. See Engdahl v. Commissioner, 72 - 16 - T.C. 659 (1979). In light of the instant facts, we find that petitioner's history of losses suggests that he lacked a profit motive in carrying on his horse activity. Accordingly, we find that this factor favors respondent. Amount and Frequency of Occasional Profits The amount and frequency of occasional profits earned from the activity at issue may also be indicative of a profit objective. Sec. 1.183-2(b)(7), Income Tax Regs. Petitioner's horse activity had several sources of income, yet none proved fruitful. While an opportunity to earn a substantial ultimate profit in a highly speculative venture may be sufficient to indicate that the activity is engaged in for profit even though only losses are generated, sec. 1.183-2(b)(7), Income Tax Regs, we are convinced that such a likelihood was too remote in the instant case. Accordingly, we find that this factor favors respondent. Petitioner's Financial Status The lack of substantial income from sources other than the activity in question may indicate the existence of a profit motive with respect to such activity. Sec. 1.183-2(b)(8), Income Tax Regs. As petitioner is a successful orthopedic surgeon earning in excess of $250,000 per year, there is little doubt that this factor favors respondent. - 17 - Personal Pleasure or Recreation The absence of personal pleasure or recreation relating to the activity in question may indicate the presence of a profit motive. Sec. 1.183-2(b)(9), Income Tax Regs. As noted earlier in this opinion, we are convinced that petitioner's horse activity contained significant recreational aspects that gave rise to many personal pleasures. We find that the personal pleasure derived from petitioner's horse activity was the principal factor motivating his decision to enter into and carry on such activity. Accordingly, we find that this factor favors respondent. Having considered the facts and circumstances of this case in light of the factors set forth in section 1.183-2(b), Income Tax Regs., we conclude that petitioner did not engage in his horse activity with an actual and honest objective of making a profit within the meaning of section 183. Issue 2. Addition to Tax, Sec. 6661 Respondent determined that petitioners are liable for the addition to tax pursuant to section 6661 for taxable year 1988 due to a substantial understatement of income tax. This determination is benefited by a presumption of correctness. Rule 142(a). The addition to tax is 25 percent of any underpayment attributable to a substantial understatement. Sec. 6661(a). A - 18 - substantial understatement is one that exceeds the greater of 10 percent of the tax required to be shown on the return, or $5,000. Sec. 6661(b)(1). If a taxpayer has substantial authority for the tax treatment of any item on the return, the understatement is reduced by the amount attributable to such authority. Sec. 6661(b)(2)(B)(i). Similarly, the amount of the understatement is reduced for any item adequately disclosed either on the taxpayer's return or in a statement attached to the return. Sec. 6661(b)(2)(B)(ii). Because petitioner has presented no argument on this issue other than to deny the underlying deficiencies, respondent's determination is sustained. Issue 3. Accuracy-Related Penalty, Sec. 6662 Respondent determined that petitioners are liable for the accuracy-related penalty pursuant to section 6662 for taxable years 1989 and 1990 because the underpayment of income tax for such years was attributable to a substantial understatement. Again, respondent's determination is benefited by a presumption of correctness. Rule 142(a). The accuracy-related penalty is equal to 20 percent of the portion of an underpayment to which section 6662 applies. Sec. 6662(a). Section 6662(b)(2) provides that section 6662 applies to an underpayment attributable to any substantial understatement of income tax. A substantial understatement is one that exceeds the greater of 10 percent of the tax required to be shown on the - 19 - return, or $5,000. Sec. 6662(d)(1)(A). Petitioner has presented no argument on this issue other than to deny the underlying deficiencies. Because the understatements at issue are substantial and neither is subject to reduction pursuant to section 6662(d)(2)(B)(i), section 6662(d)(2)(B)(ii), or section 6664(c)(1), respondent's determination is sustained. To reflect the foregoing, Decision will be entered under Rule 155.

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