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153 F.Supp.2d 883 (2001)
Norman B. GILLIS, Jr., D/B/A Pike Ctr Mart Shopping Center Plaintiff
v.
The GREAT ATLANTIC & PACIFIC TEA CO., INC. and R&M FOODS Defendants.
No. CIV.A. 3:00CV829WS.
United States District Court, S.D. Mississippi, Jackson Division.
March 12, 2001.
*884 Wayne Dowdy, Magnolia, MS, for plaintiff.
Steven J. Allen, Brunini, Grantham, Grower & Hewes, Jackson, MS, J. Robert Ramsay, Bryant, Clark, Dukes, Blakeslee, Ramsay & Hammond, Hattiesburg, MS, for defendants.
ORDER REMANDING CASE TO STATE COURT
WINGATE, District Judge.
Before the court is plaintiff's motion to remand this lawsuit to the Chancery Court of Pike County, Mississippi, pursuant to the dictates of Title 28 U.S.C. § 1447(c)[1]. The Great Atlantic & Pacific Tea Co., Inc., defendant herein, removed this lawsuit from state court to this federal court under Title 28 U.S.C. §§ 1332[2] and 1446,[3] claiming that the plaintiff fraudulently had joined the other defendant, R&M Foods, a resident of Mississippi, in order to defeat complete diversity of citizenship, a circumstance under § 1332 which would provide this court subject jurisdiction over this dispute. Plaintiff, Norman B. Gillis, Jr., d/b/a Pike CTR Mart Shopping Center, and defendant, The Great Atlantic & Pacific Tea Co., Inc., are of diverse citizenship. So, the sole question here is whether the diversity-destroying presence of R&M Foods is here proper. After having reviewed the motion, the parties' briefs, and having heard oral arguments, this court finds that the plaintiff's motion to remand is well taken for the reasons which follow.
In reviewing a claim of fraudulent joinder, the district court must evaluate all factual allegations and ambiguities in the controlling state law in favor of the plaintiff. If there is any possibility that the plaintiff has stated a cause of action against any non-diverse defendant, the federal court must conclude that joinder is proper, thereby defeating complete diversity, and the case must be remanded. Sid Richardson Carbon & Gasoline Co. v. Interenergy Resources, Ltd., 99 F.3d 746, 751 (5th Cir.1996); and B., Inc. v. Miller Brewing Co., 663 F.2d 545 (5th Cir.1981). Furthermore, the federal removal statutes are to be construed strictly against removal and for remand. Eastus v. Blue Bell *885 Creameries, L.P., 97 F.3d 100, 106 (5th Cir.1996), citing Shamrock Oil & Gas Corp. v. Sheets, 313 U.S. 100, 108-09, 61 S.Ct. 868, 872, 85 L.Ed. 1214 (1941); Leffall v. Dallas Independent School Dist., 28 F.3d 521, 524 (5th Cir.1994), citing Brown v. Demco, Inc., 792 F.2d 478, 482 (5th Cir.1986) (removal statutes are to be strictly construed against removal).
In the instant case the defendant asks this court to refer only to the allegations of the plaintiff's complaint, since a plaintiff's state court pleading controls removability. Paxton v. Weaver, 553 F.2d 936, 938 (5th Cir.1977). According to the defendant, The Great Atlantic & Pacific Tea Company (hereinafter "A&P"), as the lessee pursuant to a lease with the plaintiff, is the sole party in interest to the plaintiff's state court lawsuit which seeks to cancel a lease and to take possession of the property in question. The defendant acknowledges that, while A&P leases the property in question from the plaintiff, it is the defendant R&M Foods that actually occupies the property and who would have to be evicted if the plaintiff prevails on the issue of the lease being cancelled. The defendant then submits that the plaintiff's complaint raises no claim under Mississippi law against R&M Foods, notwithstanding that the plaintiff's complaint seeks to repossess the property in question. This court does not agree.
The defendant, as the removing party, bears the burden of demonstrating that there has been a fraudulent joinder of R&M Foods. Laughlin v. Prudential Ins. Co., 882 F.2d 187, 190 (5th Cir.1989). This means that the defendant must show that there is no possibility that a claim under Mississippi law can be maintained against R&M Foods. Under Mississippi law, a landlord will not be precluded from recovering rent from a sublessee after the lessee has defaulted. See Shell Petroleum Corp. v. Yandell, 172 Miss. 55, 158 So. 787, 787 (1935) (where failure to notify sublessee of lessee's default did not prejudice sublessee with knowledge of the lessee's default). The Mississippi Supreme Court has held that "there is no specific formula or prescription whereby the rights of lessor and lessee can be scientifically determined. The facts, circumstances and relationship of the parties in the particular case must be evaluated in order to decide this frequently confounding question." Koch v. H & S Development Co., 249 Miss. 590, 623, 163 So.2d 710, 724 (Miss.1964). The Court also has held that where a lessee, in a lease requiring the lessor to furnish some benefit, sublet the premises, subject to the rights of the original lease, the sublessee becomes entitled to the benefits of the original lease. See Hairston v. Montgomery, 102 Miss. 364, 59 So. 793 (1912). And, where a party with an interest in real property was not included in litigation to determine the rights of all interested parties, the Mississippi Supreme Court stated that "[i]t is well settled that all persons needed for just adjudication should be joined as a party in the action...." See Aldridge v. Aldridge, 527 So.2d 96, 98 (Miss.1988).
In the instant case R&M Foods is in possession of the property in question. The plaintiff's complaint seeks to take possession of that property. Certainly, the rights of the defendant R&M Foods may be affected by the plaintiff's lawsuit, and R&M Foods clearly may be needed as a party in the case in order to reach a just adjudication. Therefore, this court finds that the defendant R&M Foods has not been named fraudulently as a defendant in this cause and complete diversity is not present. This court hereby remands this case to the Chancery Court of Pike County, Mississippi, in accordance with Title 28 U.S.C. § 1447(c) which allows remand for *886 lack of subject matter jurisdiction. Eastus v. Blue Bell Creameries, L.P., 97 F.3d 100, 103 (1996).
NOTES
[1] Title 28 U.S.C. § 1447(c) provides in pertinent part that "[a] motion to remand the case on the basis of any defect in removal procedure must be made within 30 days after the 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."
[2] Title 28 U.S.C. § 1332 states in pertinent part:
(a) The district courts shall have original jurisdiction of all civil actions where the matter in controversy exceeds the sum or value of $75,000 exclusive of interest and costs, and is between
(1) citizens of different States ....
[3] Title 28 U.S.C. § 1446(b) provides that "[t]he notice of removal of a civil action or proceeding shall be filed within thirty days after the 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 ... whichever period is shorter."
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191 F.Supp.2d 612 (2002)
Paul DORN, Plaintiff,
v.
John E. POTTER,[1] Post Master General, U.S. Postal Service (Allegheny Mid-Atlantic Areas Agency), Defendant.
Civil Action No. 00-448.
United States District Court, W.D. Pennsylvania.
February 28, 2002.
*613 *614 *615 Lois Glanby, McMurray, PA, for plaintiff.
Laura Schleich Irwin, United States Attorney's Office, Pittsburgh, PA, Jennifer S. Breslin, United States Postal Service, Office of Field Legal Services, Philadelphia, PA, for defendants.
MEMORANDUM
LANCASTER, District Judge.
This is an action in employment discrimination. Plaintiff, Paul Dorn, alleges that he was subjected to a hostile work environment and eventually discharged from his employment with the United States Postal Service because of his disability in violation of the Rehabilitation Act of 1973, 29 U.S.C. § 794 ("Rehabilitation Act"). Plaintiff seeks money damages.
Defendant has filed a motion for summary judgment, arguing, inter alia, that the undisputed material facts show that plaintiff was not disabled under the law.
For the reasons set forth below, defendant's motion will be granted.
I. BACKGROUND
Unless otherwise specifically indicated, the following material facts are undisputed.[2]
*616 A. Plaintiff's Alleged Disabilities
Plaintiff is twenty-nine years old. He contends that he suffers from three disabilities: a speech impediment, a learning disability, and a back injury he sustained the day defendant terminated his employment.
Plaintiff's speech impediment is a problem with pronunciation. Specifically, plaintiff does not roll his tongue correctly and does not pronounce the letters "S" and "R" correctly. Plaintiff contends that his speech impediment is obvious and that, as a result, people often have a difficult time understanding him.
Plaintiff cannot recall the last time he went to a doctor about his speech impediment. He thought it was probably seven or eight years ago when he saw an allergist. The last time plaintiff underwent speech therapy was approximately fifteen years ago. Plaintiff is not sure whether he has informed his current primary care physician about his speech impediment. When asked if he had any present plans to see any doctors about his speech problems, plaintiff responded that he might in the future. No doctor ever informed plaintiff of any restrictions or limitations due to his speech impediment.
Plaintiff is able to use a regular, unmodified telephone at home and at all of the jobs he has had. He can call people up on the telephone and have them understand him. Sometimes, people ask plaintiff to repeat things or say they cannot understand him. According to plaintiff, his speech impediment has only affected his ability to get telemarketing jobs; it hasn't affected his ability to get other jobs. Plaintiff also testified that his speech impediment has not affected any of his hobbies or his ability to run and maintain his household.
Plaintiff's alleged learning difficulties involve learning and written and oral comprehension. Plaintiff sometimes does not comprehend what people are saying to him and what takes some people minutes to understand may take plaintiff several hours to understand. Plaintiff could not identify a specific doctor that informed him of having a learning disability, and it has been at least five years since he has seen a doctor on this issue. Plaintiff's most recent testing for having a learning disability was about ten or fifteen years ago, possibly when he was in middle school. Plaintiff could not remember the name of the doctor who performed this testing. No doctor has ever limited plaintiff's activities due to his learning difficulties, nor has plaintiff ever been prescribed any medication or treatment for this problem. Plaintiff has no plans to go to a doctor about his learning problem.
Plaintiff testified at his deposition that other than paying bills (which his wife does), his learning difficulties do not affect his ability to run his household. Plaintiff now contends that due to his learning disability, he cannot balance a checkbook, complete the weekly grocery shopping, or remember to perform various tasks. His learning problem also has somewhat affected his hobby of drawing, but otherwise his hobbies are not affected.
Plaintiff contends that he suffered a back injury on August 13, 1998, when he was struck by a motorized cart at the postal facility where he worked for defendant. Plaintiff had no prior injuries to his back. Plaintiff had difficulty with just about everything for approximately six to eight months after his back injury, but now is able to do many things such as showering. Plaintiff also can walk about one mile, lift about 50-75 pounds, bench press 100 pounds, sit in a chair for approximately *617 two hours and stand for two hours without pain. Plaintiff contends that he cannot move heavy objects such as furniture or exercise to keep physically fit. He also claims to continue to experience back pain when, for example, the weather changes. In addition, plaintiff alleges that his ability to perform sexually, although improved, is not what it used to be prior to his back injury.
At the time of his first day of deposition testimony (August 30, 2001), plaintiff's typical day involved setting his alarm clock to get himself up in the morning, waking, showering, packing his own lunch, and taking the bus to work by himself. Plaintiff also performs odd jobs around the house such as remodeling his home, household repairs (e.g., plumbing and fixing the washing machine, shower, and dishwasher), some cleaning (e.g., dusting, sweeping, mopping the floor, vacuuming, and washing windows), and cooking. Plaintiff also performs outdoor chores such as mowing the lawn, shoveling the sidewalk, and performing outside maintenance.
Plaintiff has had a driver's license since he was nineteen years old. One of plaintiff's hobbies is taking long drives during which he likes to get lost intentionally and then find his way home. Plaintiff testified that his hobbies also have included weight-lifting, wrestling, football, drawing, slot machines, and computer games, although he contends he can no longer do things such as lift weights or exercise due to his back injury. Plaintiff also enjoys reading wrestling magazines, mysteries, and joke books. He stated that the reading material must be interesting because he gets bored very easily.
Plaintiff chose to leave high school without graduating because he got tired of other students picking on him because of his speech and learning problems and he wanted to get into the "real world" and earn money. Plaintiff studied for and passed the G.E.D. exam on his first attempt. Plaintiff could not recall having any special or additional instruction with regard to his speech impediment or learning problems when studying for the G.E.D. After earning his G.E.D. and getting bored with his then-current job, plaintiff applied on his own to the Community College of Allegheny County ("CCAC") and studied welding. Plaintiff did not complete the program due to financial difficulties. Plaintiff earned the highest score available in all his welding courses and did not have any special classes due to his speech or learning problems.
B. Plaintiff's Employment History
Prior to working for defendant, plaintiff held the following jobs: neighborhood handyman (i.e., cutting grass, handyman work, painting, fixing screen doors, fixing small appliances, and fixing furniture); dishwasher at various establishments; construction laborer; and valet at Children's Hospital. Plaintiff was laid off by Children's Hospital. Otherwise, he left each of his jobs voluntarily and was not fired from any of them. Plaintiff's feedback from employers has never indicated any major problems with plaintiff's work.
Plaintiff worked for defendant on two separate occasions as a casual employee. Casual employees are hired on a temporary basis to supplement the workforce during high volume and/or high vacation times (such as Christmas or the summer months). Casual employees are not union members and enjoy none of the benefits of union membership. Because casual employees supplement the regular workforce and are generally hired during high volume and/or high vacation times, regular attendance is an essential function of the job of a casual employee. Because they are a supplement to the regular work force, casual employees do not have a fixed *618 schedule. Rather, they are used on an "as needed" basis. Casual employees are hired to perform either mailhandler or clerk functions.
Plaintiff received a copy of the terms of casual employment, and he understood that his appointment as a casual employee was for a specific length of time. He also understood that he would have a supervisor and would be working as frequently as twelve hours a day, seven days a week. During orientation, defendant informed plaintiff that, as a casual employee, he was not entitled to any sick leave, paid vacation, or benefits. Plaintiff also understood that defendant, as the employer, was the one to set his hours. Plaintiff understood that it was important that he be regular in attendance and that if his attendance was not regular, his employment could be terminated.
On his medical examination and history form, plaintiff did not indicate that he had a speech impediment or that he was slow and had a learning problem. On the "General Information Sheet" he completed, he indicated that he did not have any medical problems that should be evaluated prior to his employment with defendant. When plaintiff went for his Postal Service medical examination, he told the physician that he "had a speech problem where people don't understand me." Plaintiff did not speak to the physician about being slow and having a learning problem. On the medical forms, the postal physician did not indicate any abnormalities, significant findings, limitations, or restrictions with respect to plaintiff.
Plaintiff had two appointments as a casual employee with defendant. Plaintiff's first casual appointment began November 7, 1997 and ended as a matter of course on January 2, 1998. Plaintiff was absent from work on five occasions during this first appointment.
In between his first and second casual appointments with defendant, plaintiff worked as a telephone solicitor with Reese Brothers, a company that raises money for different entities. Plaintiff's position involved calling people on the telephone, identifying himself, reading from a prepared script, and asking for a donation. All telephone operators at Reese Brothers, including plaintiff, were monitored for quality assurance. Plaintiff left Reese Brothers voluntarily to begin his second casual appointment with defendant.
Plaintiff's second casual appointment started on June 20, 1998, with a December 15, 1998 ending date. Plaintiff left the employ of defendant on July 25, 1998 and was rehired on August 1, 1998. At this time, his appointment was set to expire on December 31, 1998. Plaintiff's work performance during his second appointment was between good and excellent and there was no part of his job as a casual employee he could not perform.
During his second casual appointment, plaintiff was four hours late on July 3, 1998 and one-tenth of an hour late on July 21, 1998. He also called off on July 6, 7, 8, and 9, 1998 and called off for eight hours on July 10, 1998. All of these late arrivals and absences occurred before he left and was rehired on August 1, 1998. Neither his speech impediment nor his being slow and having a learning problem had anything to do with plaintiff's absences during his second appointment.
Plaintiff's speech impediment did not affect his work performance. Plaintiff maintains that he told people about being slow and having a learning disability by saying "you better give me a little clarification, because I'm not going to be able to comprehend it immediately." He had to ask for multiple instructions on some, but not all, of the tasks assigned to him. He also testified that his learning disability became *619 apparent on the job when he needed help "learning something over and over again." Plaintiff overcame these obstacles, however, and did not let his learning disability affect his job performance.
Beginning on August 1, 1998, plaintiff was assigned to "Tour 2" which began at 5:00 a.m. and ended at 5:00 p.m. Raymond Ninehouser was the casual coordinator for Tour 2, and Dan Pavasko was plaintiff's immediate supervisor. As casual coordinator, Mr. Ninehouser was responsible for monitoring casual employees' attendance and responding to other supervisors' concerns about such attendance. Mr. Ninehouser also was responsible for discharging casual employees, should he deem such discharge necessary.
Mr. Pavasko testified that he considered plaintiff to be a good, enthusiastic worker and that he never had any problem with plaintiff's work performance. Mr. Pavasko noticed that plaintiff had a speech impediment but testified that he never had any appreciable difficulty understanding plaintiff's speech. Mr. Pavasko also testified that he believed plaintiff was slightly slow in certain areas but picked up on some things rather quickly. Mr. Pavasko could not recall having any noticeable difficulty in conveying assignments and information to plaintiff or having concerns about plaintiff's ability to perform the tasks required of a casual employee. Mr. Pavasko stated that he would not have a problem with plaintiff returning to work for defendant if not for his absenteeism. Mr. Ninehouser stated that he cannot recall having any noticeable difficulty in understanding plaintiff's spoken words or in conveying assignments and information to plaintiff.
During plaintiff's second casual appointment, he overheard someone saying that he had a speech impediment, but he could not remember who said this or when it was said. Plaintiff also testified that others, whom he could not identify, made jokes about his speech impediment. Other than these comments, plaintiff could not recall any other comments made by anyone at the postal facility about his speech impediment.
Plaintiff maintains that one time when he asked Mr. Pavasko for additional help, Mr. Pavasko said to another person, whose name plaintiff could not recall, something along the lines of "that dude is retarded." Mr. Pavasko did not make this comment to plaintiff, but plaintiff believes it was directed to him because of the way Mr. Pavasko looked at plaintiff. Plaintiff also maintains that Mr. Pavasko said in front of others "watch out for [Mr. Dorn]; [Mr. Dorn] isn't up to speed," but plaintiff could not recall the date of this incident or the name of the person to whom the comment was made. Plaintiff further maintains that several other times he was teased about being slow and having a learning problem.
Defendant terminated plaintiff's employment on August 13, 1998. Defendant contends that plaintiff reported to work late that morning and, after reviewing his file, Mr. Ninehouser decided to discharge him for excessive absenteeism. Plaintiff contends that Mr. Pavasko made the decision to discharge him because he sustained a work-related back injury when he was struck by a motorized cart earlier that day.
From June, 1999 to August, 1999, plaintiff worked full time as a customer service representative for Echo Star, a satellite cable company that sells and services satellite dishes and provides programming for cable services. Plaintiff's job as a customer service representative involved talking to customers and potential customers on the telephone, taking as many as twenty calls a day, and entering data into a computer. The nature of these calls included sales calls, technical calls, billing calls, and programing calls.
*620 Plaintiff received pay raises and average reviews at Echo Star. When asked if anyone had complained about his work at Echo Star, Plaintiff stated that he received criticism one time because he swore and another time because he was mean to an installer.
In approximately August 2000, plaintiff began a part-time job at Wal-Mart in a position which involved assembly of toys and furniture (which required him to read, comprehend, and follow written instructions), stocking shelves, customer assistance, and whatever else was asked of him. During the time he worked at Echo Star, plaintiff worked sixteen to twenty hours at Wal-Mart and generally could have worked more if he wanted. When plaintiff voluntarily resigned his position at Echo Star, he became a full-time employee at Wal-Mart. As of February, 2002 plaintiff's job at Wal-Mart involved working more as a "floater," doing whatever needed to be done, including mixing paint for customers, completing simple paperwork regarding broken or stolen items, and assisting customers in locating items throughout the store. Plaintiff works overtime at Wal-Mart depending on whether he feels like working overtime and whether it is available.
II. STANDARD OF REVIEW
The court will grant summary judgment "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Fed.R.Civ.P. 56(c). A fact is "material" only if it might affect the outcome of the case under the governing substantive law. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). Factual disputes concerning issues that are irrelevant to the outcome of the case are, therefore, not considered. Id. Factual disputes must also be "genuine" in that the evidence presented must be such "that a reasonable jury could return a verdict for the nonmoving party." Id.
A non-moving party may not successfully oppose a summary judgment motion by resting upon mere allegations or denials contained in the pleadings, or by simply reiterating those allegations or denials in an affidavit. Lujan v. National Wildlife Fed'n, 497 U.S. 871, 888, 110 S.Ct. 3177, 111 L.Ed.2d 695 (1990). Rather, the non-moving party must offer specific evidence found in the record that contradicts the evidence presented by the movant and indicates that there remain relevant factual disputes that must be resolved at trial. See id. If the non-moving party does not respond in this manner, the court, when appropriate, shall grant summary judgment. Fed.R.Civ.P. 56(e).
With these concepts in mind, the court turns to the merits of defendant's motion.
III. DISCUSSION
Defendant asserts a number of bases in support of his motion for summary judgment. One of these grounds is that plaintiff does not have a disability as defined by the Rehabilitation Act. Because we agree with defendant that plaintiff is not disabled, and, therefore, is not protected by the Rehabilitation Act, we need not address defendant's alternate arguments. Defendant's motion for summary judgment will be granted.
To show a violation of the Rehabilitation Act, a plaintiff must first establish a prima facie case of discrimination. See, e.g., McDonnell Douglas Corp. v. Green, 411 U.S. 792, 802, 93 S.Ct. 1817, 36 L.Ed.2d 668 (1973); Taylor v. Phoenixville Sch. Dist., 184 F.3d 296, 306 (3d Cir.1999); 29 U.S.C. § 791 et seq. To establish a prima facie case under a disparate treatment theory, a plaintiff must show:
*621 (1) that he has a disability;
(2) that he is otherwise qualified to perform the essential functions of the job, with or without reasonable accommodations by the employer; and
(3) that he nonetheless suffered an adverse employment action as a result of discrimination.
Shiring v. Runyon, 90 F.3d 827, 831 (3d Cir.1996). Here, plaintiff cannot establish the first prong of this test, that he has a disability within the meaning of the Rehabilitation Act.[3]
Under the Rehabilitation Act, an "individual with a disability" is any person who:
(i) has a physical or mental impairment which substantially limits one or more of such person's major life activities;
(ii) has a record of such an impairment; or
(iii) is regarded as having such an impairment.
29 U.S.C. § 705(20)(B).
In order to qualify as disabled under the first subsection of the definition of disability, a plaintiff must initially prove that he or she has a physical or mental impairment. Toyota Motor Mfg., Ky., Inc. v. Williams, 534 U.S. 184, 122 S.Ct. 681, 690, 151 L.Ed.2d 615 (2002).[4] Merely having an impairment, however, does not make one disabled for purposes of the law. Id. Rather, plaintiffs "also need to demonstrate that the impairment limits a major life activity." Id. The regulations promulgated pursuant to the Rehabilitation Act provide a list of examples of "major life activities," including: caring for one's self, performing manual tasks, walking, seeing, hearing, speaking, breathing, learning, and working. 45 C.F.R. § 84.3(j)(2)(ii). To prove disability, a plaintiff "must further show that the limitation on the major life activity is `substantia[l].'" Toyota Motor Mfg., Ky., Inc., 534 U.S. at 184, 122 S.Ct. at 690 (quoting 42 U.S.C. § 12102(A)) (alteration in original).
The word "substantial" in the phrase "substantially limits" "clearly precludes impairments that interfere in only a minor way with performance of [a major life activity] from qualifying as disabilities." Id. at 691; see also Albertson's, Inc. v. Kirkingburg, 527 U.S. 555, 565, 119 S.Ct. 2162, 144 L.Ed.2d 518 (1999) (explaining that a "mere difference" does not amount to a "significant restric[tion]" on a major life activity). Moreover, the phrase "major life activities" refers only "to those activities that are of central importance to daily life." Toyota Motor Mfg., Ky., Inc., 122 S.Ct. at 691. As the Supreme Court recently explained in Toyota Motor Manufacturing, Kentucky, Inc., congressional intent dictates that "these terms need to be interpreted strictly to create a demanding standard for qualifying as disabled." Id. at 691. Therefore, to be substantially limited in a major life activity:
*622 an individual must have an impairment that prevents or severely restricts the individual from doing activities that are of central importance to most people's daily lives. The impairment's impact must also be permanent or long-term.
Id. (citing 29 C.F.R. § 1630.2(j)(2)(ii)-(iii)).
Courts must determine whether an individual has a disability on a case-by-case basis. See id. at 692; Sutton v. United Air Lines, Inc., 527 U.S. 471, 483, 119 S.Ct. 2139, 144 L.Ed.2d 450 (1999). Thus,
[i]t is insufficient for individuals attempting to prove disability status under this test to merely submit evidence of a medical diagnosis of an impairment. Instead, [plaintiffs must] "prove a disability by offering evidence that the extent of the limitation [caused by their impairment] in terms of their own experience ... is substantial."
Toyota Motor Mfg., Ky., Inc., 122 S.Ct. at 691-92 (quoting Albertson's, Inc., 527 U.S. at 567, 119 S.Ct. 2162) (third and fourth alterations in original).
Here, plaintiff asserts that he suffers from three disabling conditions: a speech impediment; a learning disability; and a back injury that he suffered on his last day of employment with defendant. None of these conditions rises to the level of a "disability" under the law.
First, the record evidence establishes that plaintiff's speech impediment does not substantially limit any major life activity, including that of speaking. Most notably, plaintiff successfully held positions both before and after his employment with defendant that involved extensive use of speech over an unmodified telephone, including the position of telephone solicitor for Reese Brothers and customer service representative for Echo Star. Plaintiff also testified that he is able to use a regular, unmodified telephone at home. The court also notes that plaintiff was able to speak intelligibly throughout four days of deposition testimony. See Reeder v. Frank, 813 F.Supp. 773, 781 (D.Utah 1992) (rejecting plaintiff's claim that his speech impediment was a disability where, inter alia, plaintiff was able to speak intelligibly for approximately seven hours during his deposition), aff'd, 986 F.2d 1428, 1993 WL 34775 (10th Cir.1993). Moreover, plaintiff testified that his speech impediment has not affected any of his hobbies or his ability to run and maintain his household.
In addition, plaintiff testified that he has no present plans for treatment of his speech impediment and could not recall visiting a doctor for treatment of his speech impediment within the last eight years. Indeed, plaintiff could not recall receiving any treatment for his speech impediment other than speech therapy fifteen years ago. No physician ever informed plaintiff of any restrictions due to his speech impediment. Moreover, plaintiff did not inform defendant of his alleged speech impediment in his application papers even though he understood the importance of communication to the job. See Reeder, 813 F.Supp. at 781 (noting that plaintiff never officially declared his speech disorder when applying for employment with the Postal Service). He also maintains that his speech impediment did not affect his performance during his employment with defendant and that his performance was between good and excellent. The record evidence shows that defendant agrees with plaintiff's assessment of his job performance.
In short, the record evidence, including plaintiff's own testimony establishes that his speech impediment, even if an impairment, does not substantially limit any major life activities. Therefore, plaintiff's speech impediment is not a disability under the Rehabilitation Act.
*623 Likewise, plaintiff has failed to show that his alleged learning disability substantially limits a major life activity, including the activity of learning itself. For example, plaintiff's testimony regarding the breadth and depth of his hobbies (reading, small appliance repair, etc.) and the nature and successes of his employment demonstrates his lack of a substantially limiting impairment of any sort. Indeed, plaintiff has held a wide variety of jobs requiring detailed thought processes and his employment has never been terminated for performance reasons. With the exception of drawing, plaintiff's alleged learning disability also has not affected his hobbies.
Plaintiff's educational background also belies his contention that his alleged "life-long" learning disability substantially limits any major life activity. Significantly, plaintiff applied on his own and completed his G.E.D. (passing the exam on the first try) without any special assistance due to having a learning disability. Moreover, plaintiff applied on his own to Community College of Allegheny County where he received the highest grade possible in the welding classes he took. Again, plaintiff received no special assistance for having a learning disability.
Significantly, plaintiff cannot identify any specific doctor that has diagnosed him with this alleged learning disability and the last time he sought treatment was five years ago. He last sought testing for the problem ten to fifteen years ago (possibly in middle school) and could not recall the name of that doctor. No doctor ever informed plaintiff of any restrictions or limitations due to his alleged learning problems, and plaintiff has no plans to see a physician about his problem. Although medical evidence is not required to prove a disability in all cases,[5] the absence of medical evidence of an impairment is a factor cutting against a plaintiff's claim of disability. See Marinelli v. City of Erie, 216 F.3d 354, 360-61 (3d Cir.2000). The lack of medical evidence is especially damaging in this case given the other weaknesses in plaintiff's claim of disability as described above. See id. at 361.
Indeed, the only evidence plaintiff points to other than the unsupported, self-serving declarations of himself and his wife, is his transcripts from middle school and high school which he has attached as exhibits in support of his opposition to the instant motion. Even if proper evidence,[6] these records do not support a conclusion that plaintiff was substantially limited in any major life activity at the time of the alleged adverse employment actions at issue. See, e.g., Davidson v. Midelfort Clinic, Ltd., 133 F.3d 499, 508 (7th Cir.1998) (noting that plaintiff's evidence concerning her past difficulties in school was not evidence that her learning disability presently limited her capacity to learn). If anything, plaintiff's school records cut against his disability claim. For example, the records show that plaintiff passed all his classes in sixth grade, failed only one class in seventh and eighth grade, and passed four out of nine classes in ninth grade despite a significant number of absences and late arrivals each school year. Indeed, the records do nothing to prove that plaintiff's poor grades were the result of a learning disability as opposed to other factors such as his numerous absences from school.
*624 Aside from the activity of learning itself, plaintiff claims that his learning disability substantially impairs his ability to perform activities such as balancing a checkbook, doing the weekly grocery shopping, and remembering to perform various unspecified tasks. Even if true, however, these are not severe restrictions on plaintiff's major life activities within the meaning of the Rehabilitation Act. See, e.g., Toyota Motor Mfg., Ky., Inc., 122 S.Ct. at 694 (noting that the fact that plaintiff's medical conditions caused her to avoid sweeping, quit dancing, occasionally seek help dressing, and reduce how often she played with her children, gardened, or drove long distances did not amount to such severe restrictions in the activities that are of central importance to most people's daily lives that they establish a manual-task disability as a matter of law).
In short, plaintiff has failed to show any link between his school records and his alleged learning disability or to point to any other record evidence whatsoever supporting this disability claim. If anything, the record evidence shows that plaintiff's alleged learning difficulties have not substantially limited any major life activities. For these reasons, the court finds that plaintiff's alleged learning disability does not rise to the level of a legal disability within the meaning of the Rehabilitation Act.
Finally, plaintiff's back injury also does not qualify as a disability under the Rehabilitation Act. Most significantly, the record evidence establishes that plaintiff's back injury was temporary in nature and, therefore, does not constitute a covered disability as a matter of law. See Toyota Motor Mfg., Ky., Inc., 122 S.Ct. at 691. In particular, plaintiff testified that he suffered the back injury in a work-related accident on August 13, 1998 and that he suffered significant residual problems from that injury for approximately eight months. Plaintiff, however, further testified that he has returned to many of his normal activities. For example, plaintiff can shower, walk about one mile, lift about 50-75 pounds, bench press 100 pounds, sit in a chair for approximately two hours and stand for two hours without pain. Plaintiff also has worked full time since his back injury, including working two jobs at once and working overtime. Although plaintiff contends that he is unable to move heavy objects such as furniture or exercise to keep physically fit, and that his ability to perform sexually, although improved, is not what it used to be prior to his injury, these are not severe limitations on major life activities contemplated by the Rehabilitation Act.[7]
In short, plaintiff has not supplied any evidence indicating that his back injury was permanent in or that it substantially limits any major life activity. The mere *625 averments of plaintiff and his wife to the contrary are insufficient to survive defendant's motion for summary judgment.
Plaintiff alternatively argues that, even if he is not actually disabled, defendant regarded him as disabled in violation of the Rehabilitation Act. To prevail under a "regarded as" theory, however, plaintiff must demonstrate either that (1) despite having no impairment at all, defendant erroneously believes he has an impairment that substantially limits a major life activity or (2) he has a nonlimiting impairment that the employer mistakenly believes substantially limits a major life activity. See Tice v. Centre Area Trans. Auth., 247 F.3d 506, 514 (3d Cir.2001). In either case, it is not sufficient to show that defendant regarded plaintiff as having an impairment; rather, defendant must have regarded plaintiff as having a substantially limiting impairment. See Deane v. Pocono Med. Ctr., 142 F.3d 138, 143 (3d Cir.1998); Tice, 247 F.3d at 514.
Here, plaintiff has failed to meet this burden. With respect to plaintiff's speech impediment, plaintiff's supervisor, Mr. Pavasko, testified that, although he noticed a slight speech impediment, he did not experience any noticeable difficulty in understanding plaintiff's speech. Mr. Ninehouser also testified that he had no noticeable difficulty in understanding plaintiff's speech. Moreover, it is undisputed that defendant had no problems with plaintiff's work performance. Similarly, there is no evidence of record that defendant regarded plaintiff as having a substantially limiting learning disability. Consideration of plaintiff's allegation that co-workers made comments to him about his speech and about being slow does not change this conclusion. Even if true, these comments at most show that defendant regarded plaintiff as having an impairment. They in no way indicate that defendant viewed plaintiff as having an impairment that substantially limited a major life activity. See Kelly v. Drexel Univ., 94 F.3d 102, 109 (3d Cir.1996).
Finally, the undisputed facts establish that plaintiff did not regard plaintiff as having a disabling back injury at the time of the adverse employment actions at issue. Importantly, plaintiff admits that after sustaining the injury, he told Mr. Pavasko that he was not badly hurt. Plaintiff likewise does not contend that Mr. Ninehouser knew of his back injury. If anything, this evidence shows that defendant regarded plaintiff as not disabled.
IV. CONCLUSION
Plaintiff has failed to place on the record evidence by which a jury acting reasonably could conclude that he suffered from a disability within the meaning of the Rehabilitation Act. Defendant's motion for summary judgment is granted. The appropriate order follows.
ORDER
AND NOW, this 28th day of February, 2002, upon consideration of defendant's motion for summary judgment, IT IS HEREBY ORDERED that the motion is GRANTED. The Clerk of Courts is ordered to mark this case closed.
NOTES
[1] John E. Potter has succeeded William Henderson as Postmaster General and, therefore, is properly substituted as a defendant in this matter. See Fed.R.Civ.P. 25(d)(1).
[2] As a threshold matter, plaintiff argues that the court should not consider any of the transcript of plaintiff's deposition taken by defendant. This contention is without merit. First, plaintiff maintains that the length of his deposition exceeded the limits set forth in the Federal Rules of Civil Procedure. Plaintiff's counsel, however, never raised this issue at any time during the deposition itself and, therefore, this objection is waived. Second, plaintiff complains that he was "quite easily misled into misstating his testimony." This position ignores that fact that defendant provided plaintiff with the typical instructions at the beginning of the deposition, including an instruction that if he did not understand a question, he should so state. Plaintiff also ignores the role of his counsel at the deposition to object on the record or to take any other step permitted by the Federal Rules in order to protect and serve her client. Plaintiff points to no such objections in his opposition. Third, plaintiff argues that he was denied an "adequate opportunity to correct the transcripts." This contention is likewise without merit. Plaintiff made the choice not to purchase the transcript. Although plaintiff contends he could not afford to purchase the transcript, the court reporting service offered plaintiff ample alternatives to purchasing the transcript such as reviewing the transcript in the court reporter's offices. Interestingly, plaintiff was able to afford to have his counsel subsequently take his own deposition. The court also notes that plaintiff cites to the deposition testimony taken by defendant when he feels it supports his arguments. Plaintiff cannot have it both ways.
[3] Plaintiff also must show he had a disability to proceed under his hostile work environment theory. See Walton v. Mental Health Ass'n of Southeastern Pa., 168 F.3d 661, 667 (3d Cir.1999).
[4] Although Toyota Motor Manufacturing, Kentucky, Inc. was a case interpreting the Americans with Disabilities Act ("ADA"), "[t]he elements of a claim under § 504(a) of the Rehabilitation Act are very similar to the elements of a claim under the [ADA]." Donahue v. Consol. Rail Corp., 224 F.3d 226, 229 (3d Cir.2000); see also 29 U.S.C. § 794(d) ("The standards used to determine whether this section has been violated in a complaint alleging employment discrimination under this section shall be the standards applied under Title I of the Americans with Disabilities Act of 1990 (42 U.S.C. § 12111 et seq.) and the provisions of sections 501 through 504, and 510, of the Americans with Disabilities Act of 1990 (42 U.S.C. §§ 12201 to 12204 and 12210), as such sections relate to employment.").
[5] The necessity of medical testimony "turns on the extent to which the alleged impairment is within the comprehension of a jury that does not possess a command of medical or otherwise scientific knowledge." Marinelli v. City of Erie, 216 F.3d 354, 360 (3d Cir.2000).
[6] The government argues that plaintiff's school records do not comply with the requirements of Fed.R.Civ.P. 56(e) and, therefore, should not be considered in support of plaintiff's position.
[7] The only medical "evidence" of his back injury plaintiff submitted in support of his opposition to defendant's motion consists of two one-page hospital records. Even if proper under Fed.R.Civ.P. 56(e), these records do nothing to support plaintiff's position. Although the first record indicates plaintiff was diagnosed with a disc herniation, it in no way indicates whether or how this herniation impaired any of plaintiff's activities. Moreover, the record indicates that plaintiff's own physician questioned plaintiff's veracity. See Exhibit D to Plaintiff's Opposition to Defendant's Motion for Summary Judgment ("At this point his clinical symptoms is [sic] not clinically correlated. The patient claims to have numbness of left buttocks to the left lower leg but the herniation is on the right side so I don't know whether the patient is telling the truth or just has a secondary gain."). The second record simply reports the undisputed fact that plaintiff underwent a therapeutic lumbar epidural block in December, 1998. Again, the record nowhere discusses any limitations on plaintiff's activities caused by his back injury.
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893 F.2d 348
Iteldv.Centre Court Apartments*
NO. 89-8310
United States Court of Appeals,Eleventh Circuit.
DEC 08, 1989
1
Appeal From: N.D.Ga.
2
AFFIRMED.
*
Fed.R.App.P. 34(a); 11th Cir.R. 34-3
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Case: 15-11270 Document: 00513746829 Page: 1 Date Filed: 11/04/2016
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
United States Court of Appeals
No. 15-11270
Fifth Circuit
FILED
Summary Calendar November 4, 2016
Lyle W. Cayce
UNITED STATES OF AMERICA, Clerk
Plaintiff-Appellee
v.
ARTURO PACHECO,
Defendant-Appellant
Appeal from the United States District Court
for the Northern District of Texas
USDC No. 3:13-CR-157-1
Before OWEN, ELROD, and COSTA, Circuit Judges.
PER CURIAM: *
Arturo Pacheco, federal prisoner # 46263-177, moves for leave to proceed
in forma pauperis (IFP) on appeal from the district court’s denial of his 18
U.S.C. § 3582(c)(2) motion seeking a reduction of his sentence for possession of
a firearm by a felon and possession with intent to distribute a controlled
substance. Pacheco’s § 3582(c)(2) motion was based on Amendment 782 to the
Sentencing Guidelines, which modified the drug quantity table set out in
* Pursuant to 5TH CIR. R. 47.5, the court has determined that this opinion should not
be published and is not precedent except under the limited circumstances set forth in 5TH
CIR. R. 47.5.4.
Case: 15-11270 Document: 00513746829 Page: 2 Date Filed: 11/04/2016
No. 15-11270
U.S.S.G. § 2D1.1(c), lowering most drug-related base-offense levels by two
levels. The district court concluded that Pacheco was ineligible for the
reduction because his guidelines range was not based on the Guidelines
applicable to the drug offense but on the Guidelines applicable to the firearm
offense pursuant to the grouping provisions set forth in Chapter 3 of the
Sentencing Guidelines.
By moving to proceed IFP, Pacheco is challenging the district court’s
certification decision that his appeal was not taken in good faith because it is
frivolous. See Baugh v. Taylor, 117 F.3d 197, 202 (5th Cir. 1997). Section
3582(c)(2) permits the discretionary modification of a defendant’s sentence “in
the case of a defendant who has been sentenced to a term of imprisonment
based on a sentencing range that has subsequently been lowered by the
Sentencing Commission pursuant to 28 U.S.C. [§] 994(o),” as long as the
reduction is consistent with the applicable policy statements. § 3582(c)(2); see
United States v. Doublin, 572 F.3d 235, 237 (5th Cir. 2009). Because the
district court’s denial of Pacheco’s motion was based on its determination that
Pacheco was not eligible for a reduction, our review is de novo. Doublin,
572 F.3d at 237.
The sentencing range used to calculate Pacheco’s sentence was based on
the Guidelines applicable to Pacheco’s firearm offense, and not his drug
offense; thus, Pacheco’s sentence was not “based on a sentencing range that
has subsequently been lowered by the Sentencing Commission,” § 3582(c)(2),
and the district court did not have the authority to reduce Pacheco’s sentence.
See U.S.S.G. § 1B1.10, comment.(n.1(A)); Dillon v. United States, 560 U.S. 817,
826-27 (2010). Accordingly, this appeal does not present a nonfrivolous issue.
See Howard v. King, 707 F.2d 215, 220 (5th Cir. 1983). Pacheco’s motion for
2
Case: 15-11270 Document: 00513746829 Page: 3 Date Filed: 11/04/2016
No. 15-11270
leave to proceed IFP is therefore DENIED, and the appeal is DISMISSED as
frivolous. See Baugh, 117 F.3d at 202 & n.24; 5TH CIR. R. 42.2.
3
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25 Cal.App.4th 580 (1994)
30 Cal. Rptr. 575
In re RICHARD K. et al., Persons Coming Under the Juvenile Court Law.
TULARE COUNTY DEPARTMENT OF PUBLIC SOCIAL SERVICES, Plaintiff and Respondent,
v.
BRENDA K., Defendant and Appellant.
Docket No. F020483.
Court of Appeals of California, Fifth District.
June 1, 1994.
*582 COUNSEL
Gregory M. Chappel, under appointment by the Court of Appeal, for Defendant and Appellant.
Lita O'Neil Blatner, County Counsel, Teresa M. Saucedo and Roger Coffman, Deputy County Counsel, for Plaintiff and Respondent.
[Opinion certified for partial publication.[*]]
OPINION
MARTIN, Acting P.J.
Brenda K. appeals from juvenile court dispositional orders adjudging her minor children dependents and removing them from her custody. The mother's alcohol abuse and emotional problems are at the root of these proceedings. On appeal, she contends her problems have not adversely affected her children and therefore the juvenile court's findings and orders are unjustified. We will affirm.
On March 11, 1993, Tulare County Child Protective Services (CPS) detained 17-year-old Richard K.[1] and his 14-year-old sister Melissa K. In turn, the county's department of public social services (Department) petitioned the juvenile court to declare the two teenagers dependent children pursuant to Welfare and Institutions Code[2] section 300, subdivisions (b) (failure to protect), (c) (serious emotional damage), and (i) (cruelty).[3] Immediately prior to this intervention, both children were living with their mother; their father lived in Louisiana and never participated in these proceedings.
The mother did not appear at a jurisdiction hearing set for early April 1993. Consequently, the court took the mother's default and sustained the petition on all three grounds as to Richard and on section 300, subdivision (b) grounds as to Melissa. The court adjudged the children dependents and ordered reunification services.
In July of 1993, the mother moved for relief from her default. Following a hearing on the matter, the court granted the mother's motion and set the matter for a new adjudication hearing in mid-August.
The juvenile court conducted the new jurisdictional hearing over four days in August 1993. The Department submitted the matter on its preadjudication *583 social study, filed the previous March, which the court in turn admitted into evidence. The mother cross-examined the author of the report and offered testimony by her then-estranged husband who was the children's stepfather and by her daughter Melissa.
At the conclusion of the jurisdictional hearing, the juvenile court determined, under section 300, subdivision (b), the two minors had suffered, or there was a substantial risk they would suffer, serious physical harm or illness by the willful or negligent failure of the mother to provide them with adequate food, clothing, shelter, or medical treatment or by her inability to provide regular care for the children due to her substance abuse. Specifically, the court found: "Minors' mother abuses alcohol ... and suffers from emotional problems. [ ] Such abuse and problems periodically render her unable to properly care for the minors. Such inability includes but is not limited to on or about March 2nd, 1993, and on prior occasions, minors' mother and stepfather, Joe [R.] engaged in violent verbal confrontations in the presence of the minors. Minor Ricky has special needs and said alcohol abuse, emotional problems, and confrontations exacerbate the minor Ricky's problems." The court dismissed the balance of the amended petition and set the matter for disposition in late September.
In preparation for the dispositional hearing, the Department filed its report, recommending out-of-home placement for both children and extensive reunification services for them as well as their mother. The parties submitted the matter on the recommendation. The court adjudged the children dependents, placed them in the Department's custody and ordered the services recommended by the Department.
The mother filed a timely notice of appeal.
FACTS
Prior History
Ricky has been a client of the Central Valley Regional Center[4] (CVRC) since 1976, the year in which he was born. He lived with his mother until he was five at which time he was placed in a state-licensed community care facility for reasons undisclosed on this record. He remained in community care until 1989 when his mother took him home to live with her. However, *584 the family came to the attention of CPS in 1986 when the mother suddenly threatened to take Ricky to Washington State with her. It was discovered the mother suffered from a panic disorder and abused alcohol. Ricky was briefly detained; however, a dependency petition was dismissed in early 1987.
During his eight-year period of community care, Ricky sometimes exhibited difficult behaviors but never required psychotropic drugs. He could be managed with structure, consistency, and some basic behavior modification techniques. Following Ricky's return home, however, the mother sought medications to control his behavior.
Between 1989 and February 1993 there were a total of nine CPS referrals in connection with this family.[5] As set forth below, most were related to allegations of the mother's alcohol abuse. Many of these referrals resulted in the offering of services. However, until the fall of 1992, CPS stopped short, in each instance, of initiating dependency proceedings.
In 1989 and 1990 CPS received three referrals concerning the mother's drinking which raised questions about her ability to care for her children. Each of these cases was closed once it appeared the mother was capable of appropriate parenting. In August 1990, CPS received a referral after the mother had not returned home as scheduled from a trip to Las Vegas. The children's care provider had tired of caring for them. The children's aunt, however, took over for the caretaker.
Next, in February 1991, CPS received a referral that the mother had admitted she was an alcoholic and needed help. Home respite care was arranged through CVRC for Ricky and Melissa who stayed with the family's landlord. The mother was referred to several programs and warned if she did not take care of her drinking problem, juvenile court action could be taken.
In April 1992, CPS received yet another referral regarding the mother's alcoholism. Though the mother then denied a drinking problem, she did admit she had recently gone to jail for being drunk in public. While the referral included a report that the mother was verbally abusive to 13-year-old Melissa, both mother and daughter denied the charge. It appeared to the social worker that Melissa had assumed the role of mother in the family. The mother left her to care for Ricky at times although Melissa claimed she always knew how to reach her mother if necessary. CPS again closed the case.
*585 The following month CPS received a referral that the "mother was bipolar and appeared to be in the manic phase." Not only did she appear drunk, she apparently believed someone was going to shoot her. A social worker substantiated the referral. Shortly thereafter, the mother called CVRC to request someone come and pick up the children. She sounded paranoid and delusional at the time. The case was closed after Ricky was placed in respite care.
There was another referral in August 1992 when the mother went on vacation and left Melissa to take care of Ricky who was then on medication. A young adult neighbor, however, was watching the children at night.
Then, in late October 1992, CPS received yet another referral that the mother was drinking heavily and had struck Melissa and accused her of having sexual relationships. Melissa apparently wanted to be removed from the house at the time. It also appeared the mother had been locking Ricky in his room because he was hyperactive.
The children were detained and dependency proceedings initiated. For approximately the next three months, the children were in foster care. During that time period, Ricky was gradually weaned from the medications his mother had insisted he needed for her to control him. His behavior in foster care was described as stable and quite manageable. Melissa apparently did well in foster care too. In late January 1993, however, the juvenile court dismissed the petition.
Events Leading to Instant Petition
On March 2,[6] CPS received the following referral: "R.P. [reporting party] was called to this home due to violence of the mother. Whole house was trashed. Mom said that her ex-husband had done it. When the police arrived at the home at the house, the mom met them at the door with a gun in her hand. R.P. took Mom to Tulare District Hospital and had drug test done. Came back positive for cocaine and amphetamines. R.P. said that the mother has gone back home and her new husband is also there. His name is Joe [R.] They have been married for one month only."
According to Melissa, her mother and stepfather had been arguing during the two days preceding March 2. Sometime that afternoon, Brenda appeared nervous and worried that Joe R. would come home from work,[7] retrieve *586 some guns which he kept in the house, and harm her.[8] The mother who was very afraid of guns did not know where her husband kept his firearms. However, Joe had told Melissa where the guns were. Knowing this, Brenda instructed Melissa to "get the guns." The mother then purportedly called the police in order to turn the guns over to them. It was for this reason Brenda met the officers at the door with a handgun.[9]
The police had been called to the family home between five and ten times since January 1993. Melissa called the police on some of these occasions when her mother and stepfather fought.
Later on March 2, there was another referral. The mother called police for an ambulance because Ricky had cut his finger and needed medical attention.[10] When the ambulance arrived, Ricky was distraught and had to be wrestled to the ground. According to Melissa, Ricky was already upset because Brenda and Joe had been fighting. Then, when he saw the police, Ricky became more upset and tried to run away.
When the social worker interviewed Melissa on March 3, the teenager was very defensive of her mother and maintained everything was fine at home.
On March 5, 1993, Tulare police found Ricky wandering around downtown Tulare at 10:30 p.m. He had snuck out a window and left home. Ricky was extremely violent and his mother requested he be taken to the Renaissance Center, an adolescent facility at Clovis Community Hospital, because she was unable to control him. Ricky was admitted to the hospital facility as gravely disabled and a danger to others.
Ricky reported his mother and stepfather had been fighting all day[11] and his mother had threatened to hit him with a belt. In response, Ricky became upset, began to hit his mother and later left home. When Brenda later described the events of March 5 to the social worker, she reported Ricky had been hitting Melissa and her. Then, the mother allegedly had to restrain him.
According to Dr. Fox, the boy's psychiatrist, Ricky's emotional well-being and his behavior had begun to deteriorate following his return to his *587 mother's care in January. The doctor reported Ricky now was explosive and physically assaultive around issues dealing with his mother. Ricky had clearly stated to the Renaissance staff that he did not want to return home. If he did, they would just fight. He was afraid of both adults. Ricky also feared his stepfather would shoot him.
Based on this incident and the lengthy history of Brenda's inability to care for Ricky, Dr. Fox recommended Ricky's detention and placement in an appropriate CVRC home. He was placed with the same foster family who cared for him in late 1992 and early 1993. The foster mother later informed the social worker that when they arrived to pick up Ricky from the hospital, he ran and jumped into her husband's arms and wrapped his legs around him. On the way to the foster parents' home, Ricky "continued to mention that his mother was `drunk, drunk, drunk,' and that she still locked him in his room and tied him up. He stated that he did not like his mother when she drank."
DISCUSSION
I. Substantial Evidence to Support Juvenile Court's Exercise of Jurisdiction[*]
.... .... .... .... .... .... .... .
II. Removal Order
(1a) The mother next contends there was insufficient evidence to support the dispositional order removing the children from her custody. However, as discussed below, it appears from the record she has waived any objection to the juvenile court's dispositional orders. Thus, she may not be heard to claim insufficient proof.
In her dispositional report, the social worker proposed numerous findings and orders for the juvenile court to make. In relevant part, she recommended the court order Ricky and Melissa removed from the mother's physical custody based on a section 361, subdivision (b)(1) finding of a substantial danger to their physical health.
At the dispositional hearing, the court called the case and had the following discussion with counsel for the mother:
"THE COURT: ... On the [K.] matter, counsel are present with their clients. And we're here for disposition today. Are you ready?
*588 "MR. HAMILTON [counsel for the mother]: We're prepared, your Honor.
"THE COURT: Okay. And how did you want to proceed?
"MR. HAMILTON: I just had a one second here, and I think we'll submit it.
"THE COURT: All right.
"MR. HAMILTON: Your Honor, Number 12, a psychologist can't prescribe drugs.
"THE COURT: I'll take care of that. What else? We're here for disposition. Are you submitting on the recommendation?
"MR. HAMILTON: Yes. Yes, we are. A couple things that we want on the record at some point."[12] (Italics added.)
The court in turn adjudged Ricky and Melissa dependents, took custody from the mother and committed the children to the Department's custody for suitable placement.[13] Counsel for the mother did not attempt to introduce evidence at this hearing or offer any argument.
In common usage, the word "submit" has several definitions. (Webster's Third New Internat. Dict. (1986) p. 2277.) Among those are applications particularly relevant to judicial proceedings, i.e.: (a) to send or commit for consideration, study or decision; and (b) to present or make available for use or study. (Ibid.) For instance, after the parties present evidence and argue their respective positions, they will "submit" the matter, asking the court to rule without further argument. (People v. Terry (1970) 2 Cal.3d 362, 378 [85 Cal. Rptr. 409, 466 P.2d 961].) Litigants also "submit" or present evidence to the court. In dependency cases, for example, we find numerous references to a social worker's submitting a report and recommendations to a court. (In re Corienna G. (1989) 213 Cal. App.3d 73, 76 [261 Cal. Rptr. 462]; see also Cal. Rules of Court, rule 1455(a).)
(2) However, the primary definition of submit is to yield to, to surrender or to acquiesce. (Webster's Third New Internat. Dict., supra, p. 2277.) In this regard, it is not uncommon in dependency proceedings for a parent to "submit" on a social services report. (See, e.g., In re Tommy E. (1992) 7 *589 Cal. App.4th 1234, 1236-1237 [9 Cal. Rptr.2d 402]; Cal. Rules of Court, rule 1449(e).[14]) By submitting on a particular report or record, the parent agrees to the court's consideration of such information as the only evidence in the matter. Under such circumstances, the court will not consider any other evidence in deciding whether the allegations are true. (In re Tommy E., supra, 7 Cal. App.4th at p. 1238.)
Notwithstanding a submittal on a particular record, the court must nevertheless weigh evidence, make appropriate evidentiary findings and apply relevant law to determine whether the case has been proved. (In re Tommy E., supra, 7 Cal. App.4th at p. 1237.) In other words, the parent acquiesces as to the state of the evidence yet preserves the right to challenge it as insufficient to support a particular legal conclusion. (Id. at p. 1237.) Thus, the parent does not waive for appellate purposes his or her right to challenge the propriety of the court's orders.
(1b) In the present case, the mother's submittal amounted to acquiescence. Obviously, she was not the party presenting the social worker's recommendation to the court nor did she offer evidence and argue her position, in essence, asking the court to rule without further argument. However, the mother submitted on the recommendation, not on the report. We have found no authority which analyzes the legal consequence of a parent's submittal on a social worker's recommendation.
Nevertheless, the mother's submittal on the recommendation appears to distinguish this case from Tommy E. In our view, the mother's "submitting on the recommendation" constituted acquiescence in or yielding to the social worker's recommended findings and orders, as distinguished from mere submission on the report itself. This is considerably more than permitting the court to decide an issue on a limited and uncontested record, as was the case in Tommy E. The mother's submittal on the recommendation dispels any challenge to and, in essence, endorses the court's issuance of the recommended findings and orders.[15]
In other words, the mother was not disputing that the court should adjudge her children dependents, order them removed from her custody and provide a reunification plan. If, as occurred in this case, the court in turn makes the *590 recommended orders, the party who submits on the recommendation should not be heard to complain. (3) As a general rule, a party is precluded from urging on appeal any point not raised in the trial court. Any other rule would permit a party to play fast and loose with the administration of justice by deliberately standing by without making an objection of which he is aware. (In re Riva M. (1991) 235 Cal. App.3d 403, 411-412 [286 Cal. Rptr. 592].) (1c) Similarly, in this case, by submitting on the recommendation without introducing any evidence or offering any argument, the parent waived her right to contest the juvenile court's disposition since it coincided with the social worker's recommendation. He who consents to an act is not wronged by it. (Grunsky v. Field (1905) 1 Cal. App. 623, 626 [82 P. 979].)
III. Facts to Support a Reasonable Efforts Finding[*]
.... .... .... .... .... .... .... .
DISPOSITION
The judgment is affirmed.
Vartabedian, J., and Harris, J., concurred.
NOTES
[*] Pursuant to California Rules of Court, rules 976(b) and 976.1, this opinion is certified for publication with the exception of parts I and III.
[1] Richard K., also known as Ricky, has Down's syndrome.
[2] All statutory references are to the Welfare and Institutions Code.
[3] After filing an original petition on March 15, the Department filed an amended petition on March 30.
[4] Regional centers provide services for developmentally disabled persons to enable them to approximate the pattern of everyday living of nondisabled persons of the same age and to lead more independent and productive lives in the community. (Association for Retarded Citizens v. Dept. of Developmental Services (1985) 38 Cal.3d 384, 388 [211 Cal. Rptr. 758, 696 P.2d 150].)
[5] The mother contends in her reply brief that the court excluded evidence of her prior involvement with CPS. She is incorrect. The court deleted only one paragraph of the social worker's report, a paragraph pertaining to a January 1993 dismissal.
[6] Incidentally, this was Ricky's 17th birthday.
[7] Joe R. was a grade school teacher.
[8] There was no evidence that Joe R. had ever threatened Brenda with a gun. Nor was there any evidence of physical violence between the two before this time. Both Melissa and Joe R. expressly denied any such conduct.
[9] Melissa gave a different version of the March 2 events when she spoke with the social worker on the 3d. She claimed the incident was due to her stepfather "`wigging out.'" He "had gotten all his guns out and that her mother was just trying to get them away from him." When the police arrived, Joe R. had calmed down but her mother had not. She was so irrational the police would not even speak to her. Joe R. denied retrieving any guns or threatening anyone.
[10] It appears from the police report that Ricky had intentionally injured himself.
[11] Joe R. denied being home on the night Ricky ran away.
[12] As the reporter's transcript later reveals the "things" to which counsel referred related to certain terms in the reunification plan.
[13] In part I of this opinion we affirmed the lower court's removal order as to both minors.
[14] California Rules of Court, rule 1449(e) provides: "[At the jurisdictional hearing] [t]he parents or guardian may elect to admit the allegations of the petition, plead no contest, or submit the jurisdictional determination to the court based on the information provided to the court, and waive further jurisdictional hearing."
[15] In response to county counsel's argument of waiver, the mother does not argue her counsel misspoke or she did not intend to submit on the recommendation. Rather, she claims there is no merit to the argument because no pertinent authority is cited.
[*] See footnote, ante, page 580.
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272 F.Supp.2d 1053 (2003)
CASTAIC LAKE WATER AGENCY, et al., Plaintiffs,
v.
WHITTAKER CORP., et al., Defendants.
Whittaker Corp., Counter-Claimant,
v.
Castaic Lake Water Agency, et al., Counter-Defendants.
No. CV 00-12613 AHM.
United States District Court, C.D. California.
July 15, 2003.
*1054 *1055 *1056 Frederic A. Fudacz, Andrew J. Yamamoto, Alfred E. Smith, Nossaman Guthner Knox & Elliot, Scott D. Pinsky, Greenberg Glusker Fields Claman Machtinger & Kinsella, Los Angeles, CA, for Plaintiffs.
Peter Muthig, Christensen Miller Fink Jacobs Glaser Weil & Shapiro, Richard A. Dongell, Thomas F. Vandenburg, Radcliff Dongell & Lawrence, Nancy Sher Cohen, Reynold Lloyd Siemens, Heller Ehrman White & McAuliffe, Los Angeles, CA, Joseph J. Armao, Heller Ehrman White & McAuliffe, San Francisco, CA, Lawrence J. Hilton, William E. Halle, Steven B. Imhoof, Hewitt & O'Neil, Irvine, CA, for Defendants.
ORDER GRANTING IN PART AND DENYING IN PART PLAINTIFFS' MOTION FOR SUMMARY JUDGMENT; ORDER DENYING COUNTER-CLAIMANT WHITTAKER CORP.'S MOTION FOR SUMMARY JUDGMENT
MATZ, District Judge.
This matter is before the Court on two motions for summary judgment. Plaintiffs move for summary judgment on their nuisance claims and their claims for recovery and declaratory relief under the Comprehensive Environmental Response, Compensation and Liability Act ("CERCLA"), 42 U.S.C. § 9601 et seq. Defendant and Counterclaimant Whittaker Corporation ("Whittaker") moves for summary judgment on its counterclaims for declaratory relief under CERCLA and for contribution under both CERCLA and the California Hazardous Substance Account Act ("HSAA"), Cal. Health & Safety Code § 25300 et seq.
MOTION STANDARD
Federal Rule of Civil Procedure 56(c) provides for summary judgment when "the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." A fact is material if it could affect the outcome of the suit under the governing substantive law. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986).
"When the party moving for summary judgment would bear the burden of proof at trial, it must come forward with evidence which would entitle it to a directed verdict if the evidence went uncontroverted at trial. In such a case, the moving *1057 party has the initial burden of establishing the absence of a genuine issue of fact on each issue material to its case." C.A.R. Transportation Brokerage Co., Inc. v. Darden Restaurants, Inc., 213 F.3d 474, 480 (9th Cir.2000) (citations omitted).
When the non-moving party bears the burden of proving the claim or defense, the moving party can meet its burden by pointing out the absence of evidence from the non-moving party. The moving party need not disprove the other party's case. See Celotex Corp. v. Catrett, 477 U.S. 317, 325, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). Thus, "[s]ummary judgment for a defendant is appropriate when the plaintiff `fails to make a showing sufficient to establish the existence of an element essential to [its] case, and on which [it] will bear the burden of proof at trial.'" Cleveland v. Policy Management Sys. Corp., 526 U.S. 795, 805-06, 119 S.Ct. 1597, 143 L.Ed.2d 966 (1999) (citing Celotex, 477 U.S. at 322, 106 S.Ct. 2548).
When the moving party meets its burden, the "adverse party may not rest upon the mere allegations or denials of the adverse party's pleadings, but the adverse party's response, by affidavits or as otherwise provided in this rule, must set forth specific facts showing that there is a genuine issue for trial." Fed. R. Civ.P. 56(e). Summary judgment will be entered against the non-moving party if that party does not present such specific facts. Id. Only admissible evidence may be considered in deciding a motion for summary judgment. Id.; Beyene v. Coleman Sec. Serv., Inc., 854 F.2d 1179, 1181 (9th Cir. 1988).
"[I]n ruling on a motion for summary judgment, the nonmoving party's evidence `is to be believed, and all justifiable inferences are to be drawn in [that party's] favor.'" Hunt v. Cromartie, 526 U.S. 541, 552, 119 S.Ct. 1545, 143 L.Ed.2d 731 (1999) (quoting Anderson, 477 U.S. at 255, 106 S.Ct. 2505). But the non-moving party must come forward with more than "the mere existence of a scintilla of evidence." Anderson, 477 U.S. at 252, 106 S.Ct. 2505. Thus, "[w]here the record taken as a whole could not lead a rational trier of fact to find for the nonmoving party, there is no genuine issue for trial." Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986) (citation omitted).
PLAINTIFFS' MOTION FOR SUMMARY JUDGMENT
I. Introduction
This is a groundwater pollution case. Plaintiffs Newhall County Water District ("Newhall"), Santa Clarita Water Co. ("Santa Clarita") and Valencia Water Co. ("Valencia") contend that four of their water wells have been contaminated by perchlorate. The Newhall, Santa Clarita and Valencia water service areas and allegedly contaminated wells are found within the boundaries of Plaintiff Castaic Lake Water Agency ("Castaic" or "the Agency").
Plaintiffs believe the perchlorate at issue in this case originated at a nearby property, the Whittaker-Bermite site, and traveled in a spreading plume to contaminate the Newhall, Santa Clarita and Valencia wells. Defendants Whittaker and Santa Clarita L.L.C. ("SCLLC") are the past and present owners of the the Whittaker-Bermite site, and Plaintiffs contend that Defendant Remediation Financial, Inc. ("RFI") currently operates the site.
The complaint alleges eleven causes of action for: recovery and declaratory relief under CERCLA, contribution under CERCLA, negligence and negligence per se, nuisance and public nuisance, trespass, recovery under the California Hazardous Substance Account Act ("HSAA"), Cal. Health & Safety Code § 25300 et seq., and declaratory relief pursuant to the Declaratory Judgment Act, 28 U.S.C. §§ 2201 & *1058 2202. Plaintiffs also allege that Whittaker is strictly liable for damages incurred as a result of its ultrahazardous manufacturing activities.
Plaintiffs now move for summary judgment on their CERCLA and nuisance claims.
II. The Parties
Newhall is a public agency organized and existing under the laws of California. August 26, 2002 Statement of Genuine Issues ("August 26 SGI") ¶ 55. See Cal. Water Code § 30000 et seq. (County Water District Law). Newhall provides water to customers living in the Santa Clarita Valley. Decl. of Kenneth J. Petersen ¶ 2. One of Newhall's wells, NC-11, allegedly has been contaminated by perchlorate. Id. ¶ 3.
Santa Clarita is a not-for-profit corporation that provides water to thousands of residential customers. August 26 SGI ¶ 60; Decl. of William J. Manetta ¶ 2.[1] Two of Santa Clarita's wells, Saugus-1 and Saugus-2, allegedly have been contaminated by perchlorate. Manetta Decl. ¶ 3.
Valencia is a California corporation that also provides water to thousands of residential customers. August 26 SGI ¶ 64; Decl. of Robert J. DiPrimio ¶ 2. One of Valencia's wells, VWC-157, allegedly has been contaminated by perchlorate. DiPrimio Decl. ¶ 3.[2]
Castaic is a public agency created and governed by the Castaic Lake Water Agency Law, Cal. Water Code App. § 103-1 et seq. See August 26 SGI ¶ 52. See also Klajic v. Castaic Lake Water Agency, 90 Cal.App.4th 987, 991, 109 Cal.Rptr.2d 454 (2001). The Castaic Lake Water Agency Law provides that the Agency "may acquire water and water rights ... and provide, sell, and deliver that water at wholesale only, for municipal, industrial, domestic, and other purposes ...." Cal. Water Code App. § 103-15.
Defendant Whittaker is a Delaware corporation doing business within this judicial district. August 26 SGI ¶ 45. Whittaker owned the allegedly contaminated Whittaker-Bermite site from 1967 to January 1999. Id. ¶ 46.
SCLLC is a Delaware limited liability company. Id. ¶ 43. SCLLC purchased the Whittaker-Bermite site in 1999 and is its current owner. Id. ¶ 44.
RFI is an Arizona corporation and the sole managing member of SCLLC. Id. ¶¶ 48-49.
III. Analysis
A. Plaintiffs' CERCLA Claims
Plaintiffs' complaint alleges CERCLA claims for cost recovery, 42 U.S.C. § 9607(a), contribution, 42 U.S.C. § 9607(a) and § 9613(f), and declaratory relief, 42 U.S.C. § 9613(g). Plaintiffs seek to recover their already incurred costs of response and to allocate responsibility for future response costs.
*1059 The prima facie elements of all three CERCLA claims are the same. City of Portland v. Boeing Co., 179 F.Supp.2d 1190, 1199 (D.Or.2001) (elements of CERCLA cost recovery and contribution claims the same). See also In re Dant & Russell, Inc., 951 F.2d 246, 249-50 (9th Cir.1991) (declaratory relief for future costs available once plaintiff has incurred at least some recoverable response costs).
In order to recover their response costs, Plaintiffs must establish that:
(1) perchlorate is a hazardous substance;
(2) there has been a release of perchlorate at Defendants' facility;
(3) the release or threatened release caused the Plaintiffs to incur necessary response costs consistent with the National Contingency Plan ("NCP");[3] and
(4) Defendants are within one of four classes of persons subject to CERCLA's liability provisions.
See Carson Harbor Village Ltd. v. Unocal Corp., 270 F.3d 863, 870-71 (9th Cir. 2001) (listing same requirements but classifying them as only four different elements); Dedham Water Co. v. Cumberland Farms Dairy, Inc., 889 F.2d 1146, 1150 (1st Cir.1989) (en banc).
1. Is Perchlorate a Hazardous Substance?
"CERCLA defines `hazardous substance' by reference to substances listed under various other federal statutes." Cose v. Getty Oil Co., 4 F.3d 700, 704 (9th Cir.1993); 42 U.S.C. § 9601(14). Plaintiffs contend that perchlorate (ClO4) qualifies as a CERCLA hazardous substances because it is "hazardous waste[s]" under the Solid Waste Disposal Act, 42 U.S.C. § 6901 et seq., as amended by the Resource Conservation and Recovery Act ("RCRA"). See 42 U.S.C. § 9601(14)(C) (including Solid Waste Disposal Act hazardous wastes within CERCLA's definition of "hazardous substance").[4]
A "hazardous waste" is:
a solid waste, or combination of solid wastes, which because of its quantity, concentration, or physical, chemical, or infectious characteristics may
(A) cause, or significantly contribute to an increase in mortality or an increase in serious irreversible, or incapacitating reversible, illness; or
(B) pose a substantial present or potential hazard to human health or the environment when improperly treated, stored, transported, or disposed of, or otherwise managed.
42 U.S.C. § 6903(5).
The Solid Waste Disposal Act's implementing regulations categorize hazardous wastes as either "listed" hazardous wastes or "characteristic" hazardous wastes. 40 C.F.R. § 261.3(a). See also United States *1060 v. Hansen, 262 F.3d 1217, 1241 (11th Cir. 2001). "Characteristic" hazardous wastes are those wastes that are ignitable, corrosive, reactive or toxic, as those terms are defined in 40 C.F.R. §§ 261.21-261.24. See 40 C.F.R. §§ 261.3(a)(2)(i) and 261.20(a).
Plaintiffs claim, and Defendants do not dispute, that perchlorate meets the Solid Waste Disposal Act's definition of "solid waste." 42 U.S.C. § 6903(27) (solid waste is "discarded material, including solid, liquid, semisolid, or contained gaseous material resulting from industrial, commercial, mining, and agricultural operations"); 40 C.F.R. § 261.2 (solid waste is any "discarded material" for example material that has been "disposed of" or "burned or incinerated"). The declaration of Bradley Peach, who formerly worked at the Whittaker-Bermite site, supports Plaintiffs' claim. Peach states that perchlorate was disposed of as waste at the Whittaker-Bermite site, including in burn pits. Decl. of Bradley D. Peach (attached as Exh. R to the July 9, 2002 Decl. of Byron P. Gee) ¶ 5.
Plaintiffs also proffer evidence sufficient to establish that perchlorate is a hazardous solid waste because it is ignitable. A solid waste exhibits the ignitability characteristic if it is an "oxidizer" as defined in 49 C.F.R. 173.127.[5] Section 173.127 defines "ozidizer" quite generally as any "material that may, generally by yielding oxygen, cause or enhance the combustion of other materials."
Plaintiffs' expert E. John List explains that "perchlorate is a strong oxidizing agent" that stores "significant potential chemical energy." Expert Rep. of E. John List (attached to Plaintiffs' July 25, 2002 Notice of Errata) at 2 [hereinafter "List Rep."]. For this reason, ammonium perchlorate and potassium perchlorate are used in the manufacture of fireworks, explosives and rocket propellants. Id. See also Expert Rep. of Franklin J. Agardy (lodged by Whittaker on July 29, 2002) at 3 (perchlorate used to manufacture explosives and solid propellants such as rocket fuels).
In addition, the Court takes judicial notice of two Environmental Protection Agency ("EPA") draft reports regarding perchlorate that were circulated in January 2002 and December 1998; both reports describe perchlorate as an "oxidizing anion."[6] EPA, Perchlorate Environmental Contamination: Toxicological Review and Risk Characterization (January 16, 2002) (attached as Exh. A to Plaintiffs' July 9, 2002 Request for Judicial Notice) at 8; EPA, Perchlorate Environmental Contamination: Toxicological Review and Risk Characterization Based on Emerging Information (December 31, 1998) (attached as Exh. B to Plaintiffs' July 9, 2002 Request for Judicial Notice) at 1-1. See also Oregon Ass'n of Homes for the Aging, Inc. v. Oregon, 5 F.3d 1239, 1243 n. 2 (9th Cir.1993) (court may take judicial notice of records and reports of administrative *1061 agencies); Reynolds v. Bucks, 833 F.Supp. 518, 520 n. 5 (E.D.Pa.1993) (taking judicial notice of EPA draft report finding that environmental tobacco smoke is a cause of lung cancer). Although these are draft reports circulated for peer review, the section relevant here describing the chemical properties of perchlorate was included in the 1998 draft, which has already been subject to public comment, and was not changed in the 2002 version of the report.
2. Did a Release of Perchlorate Occur at Defendants' Facility?
In order to establish that the Whittaker-Bermite site is a facility within the meaning of CERCLA, Plaintiffs must provide evidence that it is a "site or area where a hazardous substance has been deposited, stored, disposed of, or placed, or otherwise come to be located." 42 U.S.C. § 9601(9). In order to establish that a release of perchlorate occurred at the site, Plaintiffs must provide evidence that perchlorate was spilled, leaked, pumped, poured, emitted, emptied, discharged, injected or disposed into the environment, or that it escaped or leached into the environment. 42 U.S.C. § 9601(22) (defining "release").
The Whittaker-Bermite site is a 996-acre property located at 22116 West Soledad Canyon Road in the City of Santa Clarita. August 26 SGI ¶ 1. Munitions and explosives were manufactured at the site from at least 1934 to 1987. Id. ¶ 2. Plaintiffs offer evidence sufficient to establish both that the site is a "facility" as that term is defined in CERCLA and that perchlorate was released at the site. First, Bradley Peach declares that during his employment at the Whittaker-Bermite facility perchlorate was regularly delivered to the site, waste containing perchlorate was disposed of in burn pits, and perchlorate chemicals and perchlorate containing waste periodically spilled onto the ground at the site.[7] Peach Decl. ¶¶ 3-7. Second, tests conducted at the site reveal the existence of perchlorate. See, e.g., Expert Rep. of David Keith Todd (attached as Exh. 2 to Plaintiffs' July 25, 2002 Notice of Errata) at 26 (summarizing on-site soil tests for perchlorate) [hereinafter "Todd Rep."]; List Rep. at App. 1; Acton Mickelson Environmental, Inc., Draft Remedial Investigation Report (January 1997) (attached as Exh. A to the July 9, 2002 Gee Decl.) at 6-138 (reporting perchlorate found in site soil sample).[8]See also U.S. *1062 Army Corps of Engineers Remedial Investigation Technical Mem. No. 1 Attachment B (monitoring well test results showing detection of perchlorate on the Whittaker-Bermite site) (proffered by both Plaintiffs, June 5, 2003 Gee Decl. Exh. A, and by Defendants, May 27, 2003 Decl. of Brian T. Kelleher, and relied on by both Plaintiffs' experts, see, e.g., June 5, 2003 List Decl. ¶ 5, and by Defendants' expert N. Thomas Sheahan, May 27, 2003 Sheahan Decl. ¶ 3).
3. Did the Release of Perchlorate at the Whittaker-Bermite Site Cause Plaintiffs to Incur Response Costs?
To prove this element of their prima facie case, Plaintiffs must proffer evidence sufficient to establish that a release or threatened release from the Whittaker-Bermite site caused them to incur response costs.
(a) Have Plaintiffs incurred response costs?
CERCLA does not define the term "response cost." However, "response" is defined to mean "remove, removal, remedy, and remedial action" and all "enforcement activities related thereto." 42 U.S.C. § 9601(25). The terms "remove" and "removal" are in turn defined to include "cleanup or removal" and "actions as may be necessary to monitor, assess, and evaluate the release or threat of release," as well as "disposal of removed material" and "such other actions as may be necessary to prevent, minimize, or mitigate damage to the public health or welfare or to the environment." 42 U.S.C. § 9601(23). The terms "remedy" or "remedial action" mean "those actions consistent with permanent remedy taken instead of or in addition to removal actions." 42 U.S.C. § 9601(24). *1063 Preventive monitoring and provision of alternative water supplies are listed in the statute as examples of removal and remedial actions. 42 U.S.C. § 9601(23), § 9601(24).
In order to establish that they have incurred some response costs, Plaintiffs offer the declarations of David Kimbrough (Castaic's Water Quality and Laboratory Supervisor), Kenneth J. Petersen (Newhall's General Manager), William J. Manetta (Santa Clarita's President), and Robert J. DiPrimio (Valencia's President).[9]
Kimbrough declares that Castaic supplements local Santa Clarita groundwater resources with water imported through the State Water Project. Kimbrough Decl. ¶ 2. Castaic provides such water at wholesale prices to water retailers including Newhall, Santa Clarita and Valencia within the agency's boundaries. Id. ¶ 2. See also Cal. Water Code App. § 103-15 (listing powers of agency); id. § 103-29.5 (providing for allocation of the agency's water supplies among area purveyors); id. § 103-4.8 (defining "purveyor" to mean those retail water distributors with facilities connected to the agency's water transmission system as of April 15, 1986). Kimbrough declares that Castaic has already spent "$300,000 in engineering and consulting fees to study the perchlorate release and devise a clean-up plan for the perchlorate problem." Kimbrough Decl. ¶ 4. Castaic is also the local agency sponsor of an Army Corps of Engineers study of contamination at the Whittaker-Bermite site, although it is unclear what expenditures (if any) this sponsorship entails. Decl. of Lynn M. Takaichi (Castaic's Agency Engineer) (attached to Plaintiffs' Aug. 12, 2002 Reply) ¶¶ 2-5.
Petersen, Manetta and DiPrimio each declare that their respective companies retail purveyors within Castaic's boundaries tested their wells for perchlorate contamination in 1997 at the request of California's Department of Health Services. Petersen Decl. ¶ 3; Manetta Decl. ¶ 3; DiPrimio Decl. ¶ 3. After detecting perchlorate, Newhall, Santa Clarita and Valencia took their contaminated wells out of service. Petersen Decl. ¶ 5; Manetta Decl. ¶ 5; DiPrimio Decl. ¶ 5. Peterson, Manetta and DiPrimio each declare that their respective companies have since spent substantial sums on additional sampling, as well as consulting fees and alternative water supplies. Petersen Decl. ¶ 6 (Newhall has spent $200,000);[10] Manetta Decl. ¶ 6 (Santa Clarita has spent $1,500,- *1064 000);[11] DiPrimio Decl. ¶ 6 (Valencia has spent $50,000).[12] Petersen, Manetta and DiPrimio each declare that these costs have been incurred as a "direct result of [the] perchlorate contamination." Petersen Decl. ¶ 6; Manetta Decl. ¶ 8; DiPrimio ¶ 6.
The costs Plaintiffs have incurred qualify as removal or remedial costs because CERCLA's definitions of those terms include actions "necessary to monitor, assess, and evaluate a release or threat of release" and "provision of alternative water supplies." 42 U.S.C. § 9601(23), (24). Plaintiffs have thus presented sufficient evidence to establish that they have incurred CERCLA response costs as a result of the perchlorate contamination detected in the Newhall, Santa Clarita and Valencia wells.
(b) Were Plaintiffs' response costs "caused" by Defendants' releases?
Much of Defendants' opposition is directed to an argument that Plaintiffs have failed to satisfy CERCLA's causation requirement. Analysis of this argument requires consideration of (i) causation principles applied in two-site water migration cases, (ii) the geography of the Whittaker-Bermite site and surrounding area, and (iii) the specific causation-related evidence submitted on this motion.
i. Causation principles
This is a "two-site" CERCLA case. Plaintiffs claim that contaminant at one *1065 location the Whittaker-Bermite site has migrated to reach a different location Plaintiffs' wells.[13] The issue of causation in two-site cases is a difficult one, and the Court has reviewed numerous cases in an attempt to determine the appropriate causation standard to be applied here. The Court has found Westfarm Associates Limited Partnership v. Washington Suburban Sanitary Comm'n, 66 F.3d 669 (4th Cir.1995), United States v. Alcan Aluminum Corp., 964 F.2d 252 (3d Cir.1992), Artesian Water Co. v. New Castle County, 659 F.Supp. 1269 (D.Del.1987), aff'd on other grounds 851 F.2d 643 (3d Cir.1988), and United States v. Bliss, 667 F.Supp. 1298 (E.D.Mo.1987), to be the most instructive.
In Westfarm, a case cited by Defendants themselves, Westfarm Associates Limited Partnership ("Westfarm"), a Maryland real estate developer, discovered that groundwater beneath its property was contaminated with perchloroethylene ("PCE"). 66 F.3d at 673. After conducting an investigation, Westfarm concluded that the PCE originated with the International Fabricare Institute ("IFI"), a neighboring landowner and dry cleaner trade association, and had leaked onto Westfarm's property through cracks in the sewer system leading from IFI. Id. Westfarm inspected the sewer system itself and detected several flaws. Id. at 674. Westfarm also found PCE in the sewer leading from IFI. Id.
Westfarm sued IFI under CERCLA and also sued the Washington Suburban Sanitary Commission ("WSSC"), the local sewer system operator. The district court granted summary judgment in Westfarm's favor on its CERCLA claim, and WSSC appealed. WSSC argued that summary judgment should not have been granted because WSSC's expert testimony created a genuine issue of material fact as to causation. Id. at 681-82 The Fourth Circuit emphatically rejected this argument and explained that WSSC fundamentally misunderstood the CERCLA plaintiff's causation burden:
Contrary to the rule followed in most areas of the law, the burden of proof as to causation in a CERCLA case lies with the defendant. The plaintiff must prove only that contaminants which were once in the custody of the defendant could have travelled onto the plaintiff's land, and that subsequent contaminants (chemically similar to the contaminants once existing in defendant's custody) on the plaintiff's land caused the plaintiff to incur cleanup costs. The plaintiff need not produce any evidence that the contaminants did flow onto its land from the defendant's land. Rather, once plaintiff has proven a prima facie case, the burden of proof falls on the defendant to disprove causation.
Id. at 681 (emphasis added) (citations omitted).
WSSC's expert opined that "current evidence [did] not substantiate the WSSC as a source of PCE contamination to the underlying aquifer." Id. at 681. Nevertheless, applying the burden-shifting scheme explained above, the Fourth Circuit held that WSSC failed to create a genuine issue. Because the WSSC's expert testimony indicated only that Westfarm might not be able to prove causation not that WSSC could disprove causation it was insufficient to deny summary judgment. In other words, "[b]ecause the burden lay on WSSC to disprove that it was a source of PCE, the fact that the evidence on summary judgment produced a genuine dispute as to whether the evidence proved WSSC to be a source was not material, and could not serve as a basis to deny *1066 summary judgment to Westfarm." Id. at 682. See also Alcan, 964 F.2d at 264-66 (plaintiffs in a "multi-generator" CERCLA case cannot be required to trace the cause of the response costs to each responsible party); Artesian Water, 659 F.Supp. at 1281-82 (defense expert's opinion that "it [could not] be stated to any reasonable degree of probability" that toxic wastes came from defendant's site, and defendant's identification of another potential source, were insufficient to create a genuine issue because plaintiff did not bear the burden of "fingerprint[ing]" any particular PRP's waste); Bliss, 667 F.Supp. at 1311 ("[D]efendants, not the plaintiff, [bore] the burden of showing that the hazardous substances at the site came solely from a third party.")
Although Westfarm, Alcan, Artesian and Bliss involve a variety of factual scenarios, they all stand for a common causation principle: in a two-site CERCLA case, the plaintiff meets its burden on summary judgment if it (a) identifies contaminant at its site, (b) identifies the same (or perhaps a chemically similar) contaminant at the defendant's site, and (c) provides evidence of a plausible migration pathway by which the contaminant could have traveled from the defendant's facility to the plaintiff's site.[14] If the plaintiff meets this burden, the defendant must then proffer evidence sufficient to create a genuine issue of fact as to its ability to disprove causation.
The Court finds this analysis persuasive and applicable to the facts of this case. The Westfarm burden-shifting approach is in keeping with CERCLA's broad remedial purpose, see generally Hanford Downwinders Coalition, Inc. v. Dowdle, 71 F.3d 1469, 1481 (9th Cir.1995), and is consistent with the "minimum causal nexus" most courts require under CERCLA. See, e.g., United States v. Monsanto, 858 F.2d 160, 170 n. 17 (4th Cir.1988). See also Artesian Water, 659 F.Supp. at 1282 (requiring plaintiffs to "fingerprint" individual defendant's waste would allow PRPs "to avoid financial responsibility for the cleanup.").[15]
ii. The setting
The Whittaker-Bermite site is a 996-acre property located in the Santa Clarita Valley. August 26 SGI ¶ 1. The Santa Clara River runs west of the site, and water in the river flows north. See May 13, 2002 Expert Rep. of Grant L. Ohland [hereinafter "Ohland Rep."] Fig. 1. Plaintiffs' four wells lie directly west and northwest of the Whittaker-Bermite site, roughly along the Santa Clara River. Id.
Of Plaintiffs' four wells, NC-11 is the furthest south. It is located between the Santa Clara River and the southwest corner of the Whittaker-Bermite site; the well is closer to the river than it is to the *1067 site. Saugus-2 and then Saugus-1 are further north. Id. Saugus-2 is directly west of the northwest corner of the Whittaker-Bermite site, and the well is (like NC-11) in between the site and the Santa Clara River. Id. Saugus-1 is north and west of the site's northwest corner, and it is just on the west side of the river. Id. VWC-157 is north and west of the Saugus wells and of the Whittaker-Bermite site. VWC-157 is also west of the river further west, in fact, than is Saugus-1. Id.
iii. Plaintiffs have met their causation burden
Applying the principles set out above, the Court finds that Plaintiffs have proffered evidence sufficient to meet their burden as to causation. Perchlorate has been detected in the Newhall, Santa Clarita and Valencia wells. See Ohland Rep. Table 1; Todd Rep. at 12.[16] Perchlorate also has been detected at the Whittaker-Bermite site. See n. 8 supra and accompanying text.
As to migration pathways, Plaintiffs' and Defendants' experts generally agree that perchlorate might travel to Plaintiffs' wells via surface water, the Alluvial Aquifer or the Saugus Formation.[17]Compare Ohland Rep. at 24-28 with Todd Rep. at 33-34. For purposes of this motion, the Court need only focus on surface water as a plausible migration pathway.
Plaintiffs' hydrogeology experts, Drs. List and Todd, opine that the perchlorate detected in surface water runoff from areas in the southwest corner of Whittaker-Bermite site travels through canyons located in the southwestern section of the site and enters the South Fork of the Santa Clara River upstream of the Plaintiffs' four wells. List Rep. at 7; Todd Rep. at 33-34. Although Plaintiffs' wells draw from the underlying Saugus formation, Dr. Todd opines (based on perchlorate detection in groundwater on the Whittaker-Bermite site) that perchlorate traveling in surface water infiltrates both the Alluvial Aquifer and underlying Saugus formation making surface water a "viable migration pathway[]" to Plaintiffs' wells. Todd Rep. at 33. See also List Rep. at 7. Dr. List also opines, based on tests conducted near the site's northern border, that such infiltration down from surface water "is likely to be significant wherever surface runoff has occurred." List Rep. at 7. Finally, Dr. Todd explains that perchlorate, which is denser than water, will sink by gravity downward through the water column. Todd Rep. at 32.
This expert evidence is sufficient to establish that transport through surface water entering the Santa Clara River upstream of Plaintiffs' wells, combined with subsequent infiltration through the Alluvial Aquifer and Saugus Formation near Plaintiffs' wells, is a plausible migration pathway for perchlorate to travel from the Whittaker-Bermite site to the wells.
In opposition, Defendants rely primarily on the expert testimony of Grant L. Ohland. Ohland, however, agrees with many of Plaintiffs' experts' conclusions regarding surface water (and subsequent downward migration into underlying aquifers) as a potential migration pathway to Plaintiffs' wells. For example, Ohland agrees that surface water is a potential pathway; he, too, cites data showing perchlorate in surface water run-off from the southwest portion of the Whittaker-Bermite site; he agrees that this surface water run-off travels to the South Fork of the Santa Clara River upstream of Plaintiffs' wells; he *1068 agrees that surface water run-off has "the potential to transport perchlorate considerable distances in short periods of time"; and he agrees that surface water recharges the underground aquifers from which Plaintiffs' wells draw. Ohland Rep. at 24, 41-42.
To the extent Ohland disputes Plaintiffs' contentions about this migration pathway, his conclusions are insufficient to create a genuine issue:
1. Ohland opines that perchlorate in the amounts recently detected in surface water run-off from the Whittaker-Bermite site would not result in the "concentrations reported in the Plaintiffs' wells." Ohland Rep. at 41-42. See also May 27, 2003 Expert Rep. of N. Thomas Sheahan at 7 (opining that perchlorate migrating in groundwater from the northwest corner of the Whittaker-Bermite site could not have caused the concentration levels reported in Saugus-1 and Saugus-2).[18] But Plaintiffs need not prove that all the perchlorate in their wells comes from the Whittaker-Bermite site in order for Defendants to be liable either jointly and severally or in contribution for their own equitable share. See Fireman's Fund Ins. Co. v. City of Lodi, 302 F.3d 928, 945 (9th Cir.2002) (defendant in cost recovery action under CERCLA § 107 may be held jointly and severally liable for entire cost of clean-up even though it only contributed a fraction of the contamination; defendant in CERCLA contribution action will be liable for its own equitable share).
2. Ohland also opines that several other nearby facilities "likely released perchlorate to the environment." Ohland Rep. at 45. See also February 10, 2003 Supplemental Ohland Rep. at 8 (discharges from nearby wastewater treatment plant are a "potential source" of perchlorate in Plaintiffs' wells). However, the relevance of this opinion to Defendants' ability to disprove causation is fatally undermined by Ohland's ultimate conclusion namely, that it is not possible, based on currently available data to "determine the source of perchlorate reported in Plaintiffs' wells" or to determine which of the potential migration pathways from alternative sources conveyed perchlorate to Plaintiffs' wells. Ohland Rep. at 39, 45. See Westfarm, 66 F.3d at 682 (expert testimony that "[c]urrent evidence [did] not substantiate [defendant] as a source of PCE contamination" insufficient to create a genuine issue of material fact).
In sum, Ohland's expert opinion comes down to this: (1) perchlorate might have migrated from the Whittaker-Bermite site to Plaintiffs' wells via surface water and subsequent infiltration, but surface water migration alone likely could not cause all of the contamination in Plaintiffs' wells and (2) other nearby facilities might have released perchlorate in the direction of Plaintiffs' wells, but it is impossible to determine sources based on available data. Because neither of these opinions indicates that Defendants can disprove that the Whittaker-Bermite site was a cause of perchlorate contamination in Plaintiffs' wells, Defendants have failed to create a genuine issue of material fact that would preclude summary judgment for the Plaintiffs.
4. Are Defendants within the Classes of Persons Liable under CERCLA?
This question is easily answered as to two of the Defendants SCLLC and Whittaker:
*1069 SCLLC is the current owner of the Whittaker-Bermite site. August 26 SGI ¶ 44. This is sufficient under CERCLA, which imposes liability on the current owner of a facility. 42 U.S.C. § 9607(1).
Whittaker owned and operated the site from 1967 to January, 1999. August SGI ¶ 46. As a former owner, Whittaker is liable if it owned the site "at the time of disposal of any hazardous substance." 42 U.S.C. § 9607(2). "CERCLA defines `disposal' for purposes of § 9607(a) with reference to the definition of `disposal' in RCRA, see 42 U.S.C. § 9601(29), which in turn defines `disposal' as follows:
The term `disposal' means the discharge, deposit, injection, dumping, spilling, leaking, or placing of any solid waste or hazardous waste into or on any land or water so that such solid waste or hazardous waste or any constituent thereof may enter the environment or be emitted into the air or discharged into any waters, including ground waters."
Carson Harbor Village, Ltd. v. Unocal Corp., 270 F.3d 863, 875 (9th Cir.2001) (quoting RCRA, 42 U.S.C. § 6903(3)).
The Peach declaration establishes that Whittaker owned the site when a disposal of perchlorate occurred. As recounted above, Peach declares that during his employment at the Whittaker-Bermite facility perchlorate was regularly delivered to the site, waste containing perchlorate was disposed of in burn pits, and perchlorate chemicals and perchlorate containing waste periodically spilled onto the ground at the site. Peach Decl. ¶¶ 3-7.
The liability of Defendant RFI presents more difficult questions. Plaintiffs contend that Defendant RFI is liable as the current operator of the Whittaker-Bermite site. RFI is the sole managing member of SCLLC, the present owner of the site, and Plaintiffs rely on the operator theory of liability elaborated in United States v. Bestfoods, 524 U.S. 51, 67-73, 118 S.Ct. 1876, 141 L.Ed.2d 43 (1998), to argue that RFI is liable. In opposition, RFI directs the Court's attention to a motion for summary judgment it filed on this very issue and to the evidence filed in support of that motion. However, RFI later withdrew its summary judgment motion after the Court directed the parties to consider carefully each side's respective Fed.R.Civ.P. 56(f) requests; Plaintiffs had opposed RFI's motion at least in part based on Rule 56(f). For that reason, the Court believes it would be inappropriate to rule on the issue of RFI's liability at this time. It would not be fair to grant judgment against RFI when the withdrawal of RFI's motion (at the Court's own suggestion) has deprived it of any defense.
Thus, Plaintiffs' motion is denied as to RFI without prejudice to Plaintiffs' or RFI's moving again for summary judgment on this issue at a later date.
5. Summary of Ruling and Request for Additional Discovery
For the foregoing reasons, Plaintiffs are entitled to summary adjudication in their favor on the following issue: Are Defendants Whittaker and SCLLC liable to Plaintiffs for those response costs Plaintiffs have incurred that are later determined to have been necessary and consistent with the NCP?[19] The answer is: yes.
Defendants' request for additional time to conduct discovery, Fed.R.Civ.P. 56(f), is DENIED. In his declaration, Matthew Clark Bures states that Defendants seek additional information regarding two monitoring wells, MW-1 and MW-2, and the *1070 Stadium Well. May 12, 2003 Decl. of Matthew Clark Bures Decl. ¶ 8. But the Court has not considered any of Plaintiffs' claims as to perchlorate contamination in the Stadium Well in ruling on these motions, and defense expert Ohland already has offered his opinion that the detection of perchlorate at MW-2 supports Defendants' case. See February 10, 2003 Supplemental Expert Rep. of Grant L. Ohland at 7-8. Defendants have not explained how the additional data they seek is "essential" to resisting Plaintiffs' motion. State of California v. Campbell, 138 F.3d 772, 780 (9th Cir.1998).
Bures also declares that Defendants seek additional data regarding the Army Corps of Engineers study of contamination in the Santa Clara Valley. Bures Decl. ¶ 9. But Defendants obtained the Army Corps' Technical Memorandum No. 1 after filing the Bures declaration, and the Court has considered Sheahan's recently filed opinion regarding that Memorandum in ruling on this motion.
B. Plaintiffs' Public Nuisance Claim
A nuisance affecting "an entire community or neighborhood, or any considerable number of persons" is a public nuisance. Cal. Civ.Code § 3480. Polluted groundwater is a public nuisance under California law, State of California v. Campbell, 138 F.3d 772, 780 (9th Cir.1998), and in this case, numerous tests have demonstrated that perchlorate is present in the groundwater underneath the Whittaker-Bermite site. See, e.g., Figure 1 attached to May 27, 2003 Sheahan Rep. Thus, the only questions remaining as to Plaintiffs' public nuisance claims are (1) whether Plaintiffs are parties authorized to sue for abatement of a public nuisance and (2) whether Plaintiffs' claims are barred by the applicable statute of limitations.
1. Who May Bring a Public Nuisance Claim?
Actions to abate a public nuisance may be maintained either by a public body authorized by law or by a private party who has been specially injured by the nuisance. Cal. Civ.Code § 3493, § 3494. When an authorized public agency sues to abate a public nuisance, no statute of limitations applies. Cal. Civ.Code § 3490. However, a private party's suit for public nuisance is subject to the three-year statute of limitations in Cal.Code Civ. Proc 338(b). Mangini v. Aerojet-General Corp., 230 Cal. App.3d 1125, 1142-43, 281 Cal.Rptr. 827 (1991) [hereinafter "Mangini I"].
(a) Authorized public bodies
Plaintiffs contend that Newhall and Castaic are public bodies authorized by law to maintain claims for public nuisance. Newhall is a water district established under California's County Water District Law, Cal. Water Code § 30000, and Castaic is a water agency created pursuant to its own enabling act, the Castaic Lake Water Agency Act, Cal. Water Code App. § 103-1 et seq. Newhall and Castaic both have the power to sue and be sued, and Newhall in particular has the power to institute "actions and proceedings to prevent interference with or diminution of the ... natural subterranean supply of waters which may [b]e used or be useful for any purpose of the district." Cal. Water Code § 31082.
In a very recent case, however, the California Court of Appeal held that only public bodies explicitly authorized to abate a public nuisance may do so. Lamont Storm Water District v. Pavich, 78 Cal. App.4th 1081, 93 Cal.Rptr.2d 288 (2000). The plaintiff in Lamont, a storm water district created pursuant to the Storm Water District Act of 1909, Cal. Water Code App. § 13-1 et seq., had the power to sue and be sued and to "do any and all other acts and things necessary or required for *1071 the protection of the lands in said district from damage from storm waters and from waters of any innavigable stream, watercourse, canyon or wash ...." 78 Cal. App.4th at 1084, 93 Cal.Rptr.2d 288.
But the appellate court found this seemingly expansive language not to be dispositive, explaining that "when the Legislature has intended to grant the power to abate a nuisance, it has done so specifically and in clear terms." Id. For example, § 731 of the California Civil Procedure Code specifically gives county district attorneys and city attorneys the authority to abate a public nuisance. And § 2060 of the California Health and Safety Code gives Mosquito Abatement and Vector Control Districts the authority to abate public nuisances. Noting the absence of any similar provision in the Storm Water District Act, the Lamont court held that the plaintiff district could not maintain a public nuisance action. 78 Cal.App.4th at 1086, 93 Cal.Rptr.2d 288.
Under California's statutory scheme and precedent, Lamont is supportable. No court has reached an opposite conclusion or rejected it. This Court is bound by decisions of California's intermediate appellate courts absent "convincing evidence" that the California Supreme Court would decide the issue differently. In re Watts, 298 F.3d 1077, 1082 (9th Cir.2002). Thus, guided by Lamont, the Court concludes that Newhall and Castaic are not public bodies specifically authorized to abate a public nuisance.
(b) Specially injured parties
Private plaintiffs like Santa Clarita and Valencia may have standing to bring a public nuisance action if they have been specially injured by the nuisance. Cal. Civ.Code § 3494. In this case, both Santa Clarita and Valencia have proffered evidence that they sampled their wells near the Whittaker-Bermite site for perchlorate at the request of the California Department of Health Services. DiPrimio Decl. ¶ 2; Manetta Decl. ¶ 3. This type of monitoring qualifies as a special injury sufficient to establish these Plaintiffs' standing to sue. See Mangini I, 230 Cal.App.3d at 1137-38, 281 Cal.Rptr. 827.
2. Statute of Limitations
A three-year statute of limitations applies to Santa Clarita's and Valencia's public nuisance claims. Mangini I, 230 Cal. App.3d at 1142, 281 Cal.Rptr. 827. The effect of the statute on Plaintiffs' claims depends on whether the nuisance they allege is "permanent" or "continuing":
In general, a permanent nuisance is considered to be a permanent injury to property for which damages are assessed once and for all, while a continuing nuisance is considered to be a series of successive injuries for which the plaintiff must bring successive actions. ... With respect to a permanent nuisance, the statute of limitations begins to run on the creation of the nuisance and bars all claims after its passage, while each repetition of a continuing nuisance is considered a separate wrong which commences a new period in which to bring an action for recovery based upon the new injury.
Beck Development Co. v. Southern Pacific Transportation Co., 44 Cal.App.4th 1160, 1216-17, 52 Cal.Rptr.2d 518 (1996).
The nuisance Plaintiffs complain of in this case is the perchlorate contamination on the Whittaker-Bermite site. Plaintiffs contend that perchlorate was released at the site as a result of the explosives manufacturing process. Plaintiffs themselves offer evidence that active operations at the site ceased in 1987. See Exh. A to July 9, 2002 Gee Decl. at 26 ("The Whittaker-Bermite facility is a former munitions and explosives manufacturing site that was in *1072 operation from 1934 until 1987."). See also August 26 SGI ¶ 2, ¶ 3. Plaintiffs thereafter learned of contamination in their wells, in the Spring of 1997 admittedly more than three years before they filed this complaint. See July 29, 2002 SGI (filed in opposition to Defendants' Motion for Summary Judgment on Plaintiffs' Fourth, Sixth, Seventh and Eighth Claims for Relief) ¶ 7.[20] Given these facts, Plaintiffs' nuisance claims are barred if contamination at the Whittaker-Bermite site is viewed as a permanent nuisance. See Mangini I, 230 Cal.App.3d at 1145 n. 13, 281 Cal.Rptr. 827 (plaintiffs' claims barred if for permanent nuisance where defendant used toxic substances including ammonium perchlorate on property from 1960 to 1970, plaintiffs had notice of contamination in 1984, and plaintiffs filed suit in 1988).
Plaintiffs may still be entitled to summary judgment, however, if the Whittaker-Bermite contamination is viewed as a continuing nuisance. In Mangini v. Aerojet-General Corp., 12 Cal.4th 1087, 1097, 51 Cal.Rptr.2d 272, 912 P.2d 1220 (1996) [hereinafter Mangini II], the California Supreme Court, adopting the lower appellate court's opinion, explained that the "crucial test of the permanency of a trespass or nuisance is whether the trespass or nuisance can be discontinued or abated."
Plaintiffs have proffered no evidence of abatability in support of their summary judgment motion.[21] Because Plaintiffs briefed this issue in opposition to Defendants' now-withdrawn statute of limitations motion, however, the Court also has reviewed the evidence Plaintiffs submitted on that motion. For example, Plaintiffs point to the deposition of Robert J. DiPrimio as support for their continuing nuisance claim. DiPrimio did testify during deposition about a potential $36 million treatment program for water drawn from Plaintiffs' wells, DiPrimio Dep. (attached as Exh. B to the Yamamoto Decl. filed in opposition to Defendants' statute of limitations motion) at 150:12-151:9, but there is no evidence that this treatment facility would abate the actual nuisance namely, the underground contamination emanating from the Whittaker-Bermite site. Mr. Manetta also testified that there is "technology to abate the problem in the groundwater off the site," Manetta Dep. (attached as Exh. C to the Yamamoto Decl.) at 235:12-23, but the California Supreme Court has rejected the contention that "mere technological feasibility proves abatability." Mangini II, 12 Cal.4th at 1099, 51 Cal.Rptr.2d 272, 912 P.2d 1220 (adopting opinion of California Court of Appeal).
3. Summary of Ruling
Plaintiffs are not entitled to summary judgment on their public nuisance claims, and because the same statute of limitations analysis also applies to Plaintiffs' private nuisance claims, see Beck, supra (private *1073 nuisance claim), Plaintiffs' motion is denied as to those claims as well.
WHITTAKER'S MOTION FOR SUMMARY JUDGMENT ON ITS COUNTERCLAIMS
Each of the Defendants has counterclaimed against each of the Plaintiffs for a declaratory judgment under § 107(a) and for contribution under CERCLA §§ 107(a) and 113(f). Whittaker now moves for summary judgment on its counterclaim against the Plaintiffs/Counter-Defendants [hereinafter "Counter-Defendants"] for contribution.
I. Elements of Whittaker's Prima Facie Case
In order to succeed on its contribution claims, Whittaker must establish that (1) perchlorate is a hazardous substance;[22] (2) there has been a release of perchlorate at Counter-Defendants' facilities; (3) the release caused Whittaker to incur necessary response costs consistent with the NCP; and (4) Counter-Defendants are proper CERCLA defendants.[23]See California v. Campbell, 319 F.3d 1161, 1165 (9th Cir.2003); Bedford Affiliates v. Sills, 156 F.3d 416, 427 (2d Cir.1998). Whittaker must support its motion with evidence that would entitle it to a directed verdict on these elements. C.A.R. Transportation Brokerage Co., Inc. v. Darden Restaurants, Inc., 213 F.3d 474, 480 (9th Cir. 2000) (citations omitted).
In the briefs filed on Whittaker's motion, Counter-Defendants only dispute the second element listed above; they contend that their sites are not "facilities."
A. Are NC-11, Saugus-1, Saugus-2 and VWC-157 CERCLA Facilities?
Whittaker contends that the wells owned by Counter-Defendants Newhall, Santa Clarita and Valencia are CERCLA facilities. The statute's definition of the term "facility" explicitly includes wells, 42 U.S.C. § 9601(9), and this plain language analysis would appear to resolve the issue. Nonetheless, Counter-Defendants contend that their wells are covered by the limited exception to the definition of facility for "any consumer product in consumer use or any vessel." Id. As support for this position, Counter-Defendants rely almost entirely on Vernon Village, Inc. v. Gottier, 755 F.Supp. 1142 (D.Conn.1990) (Cabranes, J.).
The plaintiff in Vernon Village was a resident of a trailer park that bordered a polluted industrial site. 755 F.Supp. at 1145. The trailer park, the High Manor Mobile Home Park ("High Manor Park"), owned and operated a system of wells and pipes used to supply drinking water to High Manor Park residents. Id. Chromium from the neighboring industrial site, the Hillside Industrial Park ("Hillside"), traveled downgradient and contaminated High Manor's wells. Id. The plaintiff brought suit against, and eventually reached a settlement with, Precision Plating Corp. ("Precision") the company located at Hillside that had actually been the source of the groundwater contamination. Id. at 1145-46. The plaintiff then brought suit against the company that owned High Manor Park (and the company's president) for failing to monitor the Park's water supply. Id. at 1146.
The district court granted summary judgment in the defendants' favor on plaintiff's CERCLA claim. Although the court *1074 noted that the defendants' wells appeared at first to fall squarely within CERCLA's definition of facility, the court ultimately concluded that the drinking water provided to plaintiff from the wells was a "consumer product in consumer use," and that the defendants could not be liable for contaminants contained in such a product. Id. at 1151.
This Court is not bound by district court opinions in another circuit, and the Court finds the analysis in Vernon Village unpersuasive. First, the Vernon Village court focused exclusively on the water within the defendants' wells, not on the wells themselves. See 42 U.S.C. § 9601(9) ("facility" defined to include wells). This distinction made some sense in the context of the Vernon Village plaintiff's case because her suit was based on contamination in water that was actually delivered to her home as a consumer product through the defendants' well and pipe system. Id. at 1149. But the same distinction does not make sense here. This case is not brought by parties who actually receive Counter-Defendants' water as a consumer product; unlike the contaminated water that sparked the Vernon Village suit, here the water is not a product currently made available to consumers for their use.
The Vernon Village holding also presents a conceptual difficulty. As a practical matter, CERCLA cases involving wells claimed to be facilities will likely always, or almost always, actually be about the water drawn from those wells. The inclusion of "well" within CERCLA's definition of "facility" would have little meaning if well water were always considered entirely separately. Indeed, several of the terms included in the definition of facility for example, "pipe," "pit," "pond," "lagoon," "ditch" and "landfill" would be stripped of significance if a similar hypertechnical analysis were applied to them.
In addition, Vernon Village rests on a weak precedential foundation. The court's analysis drew quite heavily on a Fifth Circuit case, Dayton Indep. Sch. Dist. v. U.S. Mineral Prods. Co., 906 F.2d 1059 (5th Cir.1990). Dayton held that asbestos manufacturers and suppliers could not be liable for costs incurred in removing asbestos from school buildings on the theory that they had "arranged for [asbestos] disposal or treatment." 906 F.2d at 1064 (quoting 42 U.S.C. § 9607(a)). The Fifth Circuit reasoned that the defendants' acts which amounted to the installation of asbestos in school buildings could not be considered "disposal" of asbestos. Id. The court also went on to express doubt whether any CERCLA "facility" was involved in the case, explaining that CERCLA was not intended to target "legitimate manufacturers or sellers of useful products." Id. at 1065.[24]
In the years since Vernon Village, the Fifth Circuit has reviewed its broad language in Dayton and has limited the holding of that case to its specific facts. See Uniroyal Chemical Co., Inc. v. Deltech Corp., 160 F.3d 238 (5th Cir.1998). In Uniroyal, the Fifth Circuit first rejected an argument, based on language in Dayton, *1075 that CERCLA applies only to inactive or abandoned hazardous waste sites.[25]Id. at 248-49 (rejecting contrary holdings in several district court cases, including Vernon Village). As to CERCLA's consumer product exception, Uniroyal next explained that Dayton depended almost entirely on the "dispos[al]" requirement in § 9607(a)(3) a requirement not found in the section of the statute, § 9607(a)(1), on which Whittaker's claims are based. Id. at 251-52. And because Dayton's commentary on the consumer product exception was dicta not supported by any specific citation to case law or legislative history, the Fifth Circuit has now limited Dayton's holding to the very specific issue addressed in that case the claimed right of recovery in asbestos removal cases. Id. at 252 n. 16. Given this limitation, Dayton cannot provide sound support for the holding in Vernon Village (or for Counter-Defendants' position here).[26]
Finally, Vernon Village is unpersuasive because the Vernon Village court appears to have been influenced in its analysis of the definition of "facility" by the relative blamelessness of the defendants in that case. Indeed, the court explained its reasoning as follows:
Despite the apparent plausibility of plaintiff's argument that defendants own and operate a "facility" after all, they do own wells, pipes and equipment for supplying water to the residents of the park CERCLA is simply not the appropriate legal instrument with which to challenge the conduct of the defendants in this case. Defendants were as much "victims" of the contamination of the soil and groundwater at the Hillside Industrial Park as was the plaintiff. They have in no way caused or contributed to the release of the hazardous substances into the drinking water supply.
755 F.Supp. at 1151 (footnote omitted).
In this case, too, Counter-Defendants argue that they are essentially blameless. But that argument applies to Counter-Defendants' "innocent landowner" defense. It is within the context of that statutorily-provided defense not with respect to the otherwise clear definition of "facility" that Counter-Defendants' innocence argument finds its proper home.[27]
Counter-Defendants also cite City of Portland v. Boeing, 179 F.Supp.2d 1190, 1201 (D.Or.2001) as support for their position.[28] The defendant-polluters in that case argued that the plaintiffs were themselves *1076 PRPs because they owned contaminated wells. The court rejected that argument because the defendants provided no evidence that the plaintiffs' well contamination caused defendants to incur response costs an element essential to CERCLA liability. Id. Thus, City of Portland turned on the response cost element of CERCLA's prima facie case an element this Court will consider below not simply on the fact that the plaintiffs were passive well owners.
Counter-Defendants argue more generally that they cannot be liable under CERCLA because their wells are not "abandoned and inactive hazardous waste disposal sites." Mem. at 3. Counter-Defendants contend that achieving the cleanup of such sites was CERCLA's only aim. But Counter-Defendants' reliance on an isolated quotation from the legislative history is unpersuasive in light of the enacted statute's broad definition of facility. Moreover, those appellate courts to have considered Counter-Defendants' argument have rejected it. See Uniroyal, 160 F.3d at 248-49, Axel Johnson, Inc. v. Carroll Carolina Oil Co., Inc., 191 F.3d 409, 419 (4th Cir.1999).
In sum, the Court concludes that NC-11, VWC-157, Saugus-1 and Saugus-2 fall within CERCLA's definition of "facility."
B. Is the "Valley's Groundwater" a Facility?
CERCLA's definition of "facility" includes any "site or area where a hazardous substance has ... come to be located." 42 U.S.C. § 9601(9). In its motion papers, Whittaker argues vaguely and without analysis or case citation that the "Valley's groundwater" is a "facility." Although Counter-Defendants do not specifically take issue with this argument, the Court rejects it. Groundwater is neither a "site" nor an "area," at least as those terms are commonly understood. See Webster's Third New International Dictionary (defining "site" as "the original or fixed position of a thing," "the local position of a building, town, monument or similar work ...," etc.; defining "area" as "a level or relatively level piece of unoccupied or unused ground" or "a definitely bounded piece of ground set aside for a specific use or purpose"). Nor has Whittaker identified with any specificity the boundaries of this suggested "facility." Although the definition of "facility" is broad, Whittaker's unsupported assertion that the "Valley's groundwater" can be understood as a facility stretches the definition beyond reason and defies common sense.
C. Was there a Release or Threatened Release of a Hazardous Substance?
CERCLA defines release as "any spilling, leaking, pumping, pouring, emitting, emptying, discharging, injecting, escaping, leaching, dumping, or disposing into the environment." 42 U.S.C. § 9601(22). In this case, Counter-Defendants themselves contend that perchlorate has spread from other locations to contaminate the water in their wells. Indeed, as discussed above, perchlorate has been detected at the Newhall, Santa Clarita and Valencia wells.
Given these facts, the question before this Court is whether the passive migration of contaminant from another source into Counter-Defendants' wells constitutes a release at the wells.[29] The Court concludes that it does.
*1077 As noted above, CERCLA's definition of "release" includes the term "leaching."[30] Both the Second and Third Circuits have recognized that because the term "leaching" is "commonly used to describe passive migration," ABB Industrial Systems, Inc. v. Prime Technology, Inc., 120 F.3d 351, 358 (2d Cir.1997), the inclusion of "leaching" within CERCLA's definition of "release" indicates that passive migration constitutes a "release." Id.; United States v. CDMG Realty Co., 96 F.3d 706 (3d Cir. 1996). In CDMG Realty, the Third Circuit emphasized the term "leaching" in explaining the differences between CERCLA's definitions of "release" and "disposal":
Most importantly, the definition of "release" includes the term "leaching," which is not mentioned in the definition of "disposal." "Leaching" is "the process or an instance of separating the soluble components from some material by percolation." [citation omitted]. Leaching of contaminants from rain and groundwater movement is a principal cause of contaminant movement in landfills, [citation omitted], and is the predominant cause of groundwater contamination from landfills, [citation omitted]. The word "leaching" is commonly used in the environmental context to describe this migration of contaminants. See, e.g., Steven Ferrey, The Toxic Time Bomb: Municipal Liability for the Cleanup of Hazardous Waste, 57 Geo. Wash. L.Rev. 197, 207 n. 34 (1988) ("Leachate is liquid or water soluble contaminated substances that migrate away from the point source of contamination in groundwater or surface water, often influenced by rain and normal water table activities. Such a phe-nomenon is described as `leaching' of contaminants."). Congress's use of the term "leaching" in the definition of "release" demonstrates that it was aware of the concept of passive migration ... and that it knew how to explicitly refer to that concept.
CDMG Realty, 96 F.3d at 715 (footnote containing additional citations omitted).
The Ninth Circuit has never decided whether CERCLA's definition of "release" including the term "leaching" covers contaminant migration. In Carson Harbor Village, Ltd. v. Unocal Corp., 270 F.3d 863, 878-79 (9th Cir.2001), the Ninth Circuit held that passive migration does not constitute a "disposal" under CERCLA, but in reaching that conclusion the court specifically noted that the definition of "disposal," unlike "release," does not include the term "leaching." Id. at 878 ("[W]e can conclude that `release' is broader than `disposal,' because the definition of `release' includes `disposing' (also, it includes `passive' terms such as `leaching' and `escaping,' which are not included in the definition of `disposal')."). The appellate court also suggested that the inclusion of "leaching" in the definition of "release" may encompass passive migration, although that issue was not before the court: "If we try to characterize ... passive soil migration in plain English, a number of words come to mind, including gradual `spreading,' `migration,' `seeping,' `oozing,' and possibly `leaching.'" Id. at 879.
In light of the persuasive analyses of the term "leaching" in ABB Industrial Systems and CDMG Realty, the Court concludes that "leaching" includes the passive migration of contaminant and that, as a result, a "release" within the meaning of 42 U.S.C. § 9601(22) has occurred at Counter-Defendants' wells.
*1078 D. Did Whittaker Incur Response Costs?
Whittaker contends that it has incurred recoverable costs in response to Counter-Defendants' well contamination because it has "undertaken an extensive and exhaustive search for other PRPs who may be responsible for some of the contamination detected in [the] wells." July 29 SGI ¶ 18.[31] As evidentiary support for this contention, Whittaker points to the expert report of G. Richard Rees. Rees is a hydrogeologist hired by Whittaker as a consultant. As part of his work for Whittaker, Rees conducted a search for "businesses that may have used perchlorate in the vicinity of [Plaintiffs'] wells." May 13, 2002 Expert Rep. of G. Richard Rees at 3.
In Key Tronic Corp. v. United States, 511 U.S. 809, 114 S.Ct. 1960, 128 L.Ed.2d 797 (1994), the Supreme Court considered whether attorneys' fees may appropriately be recovered as a CERCLA response cost. Although Key Tronic is not directly on point here because Whittaker has (at least so far) not identified attorneys' fees as response costs, the Supreme Court's analysis in Key Tronic is relevant because it also involved consideration of PRP search costs. Key Tronic held that CERCLA plaintiffs cannot recover attorneys' fees incurred in exclusively litigation-related matters but that costs (including attorneys' fees) incurred in connection with a search for other PRPs may be recovered. 511 U.S. at 819-21, 114 S.Ct. 1960. The Supreme Court explained its result by noting that a search for PRPs serves CERCLA's statutory purpose because it leads to the identification of responsible parties and thereby speeds and encourages complete clean-ups.[32]Id.
Recent cases considering the recoverability of retained consultants' PRP search costs have cited Key Tronic as support for the proposition that such costs are recoverable even if they serve not only a statutory purpose, but a litigation-related purpose as well. See Sealy Connecticut, Inc. v. Litton Industries, Inc., 93 F.Supp.2d 177, 190-91 (D.Conn.2000); In re Combustion, Inc., 968 F.Supp. 1112, 1114 (W.D.La. 1996); U.S. v. Atlas Minerals and Chemicals, Inc., 1995 WL 510304, *105-107 (E.D.Pa.1995). In other words, the fact that Whittaker likely hired consultants to search for PRPs in the hope that it might one day sue those PRPs for contribution does not preclude Whittaker's recovery of its search costs. Although the Court will determine the precise amount of Whittaker's recoverable response costs at a later stage, the Court finds that under Key Tronic Whittaker has presented evidence sufficient to establish that it has incurred some response costs "closely tied to the actual cleanup." Key Tronic, 511 U.S. at 820, 114 S.Ct. 1960.
E. Are Counter-Defendants Proper CERCLA Defendants?
This question is easily answered with respect to Newhall, Santa Clarita and Valencia. They are all current owners of the contaminated wells discussed above and thus fall within 42 U.S.C. § 9601(a)(1). *1079 July 29, 2002 Statement of Genuine Issues [hereinafter "July 29 SGI"] ¶ 10.
Castaic's status is much less clear. Whittaker does not contend that Castaic owns any of the contaminated well-facilities. Instead, Whittaker cites the Supreme Court's decision in United States v. Bestfoods, 524 U.S. 51, 118 S.Ct. 1876, 141 L.Ed.2d 43 (1998), which addressed the direct and derivative liability of parent companies as "operator[s]." Castaic is the sole owner of Plaintiff Santa Clarita, July 29 SGI ¶ 12, and Whittaker contends that Castaic is liable as an operator.
In Bestfoods, the Supreme Court first explained that a corporate parent can be derivatively liable if the corporate veil may be pierced under traditional corporate law principles. 524 U.S. at 63-64, 118 S.Ct. 1876. Whittaker makes no veil-piercing argument, however, so this portion of the Bestfoods opinion is of little relevance here.
Bestfoods also explained that a corporate parent may be liable if it operates its subsidiary's facility that is, if it directs the workings of, manages or conducts the affairs of the facility. Id. at 66-67, 118 S.Ct. 1876. The mere fact that Castaic is Santa Clarita's sole owner is insufficient to satisfy this test. See id. According to Whittaker, however, Castaic may be held liable because it
has been intimately involved in the management of drinking water supplies in the Valley, including acting on environmental and regulatory matters that were undertaken on its own behalf. [Castaic]'s laboratory has served as the water quality laboratory for most of the water purveyors in the Santa Clarita Valley. [Castaic] has had extensive meetings with DHS related to what DHS would approve in the form of treatment mechanics for perchlorate. Castaic works very closely with the local water purveyors, and is engaged in an urban water management plan.
Although this account of Castaic's activities is undisputed, July 29 SGI ¶ 13, it does not constitute evidence that Castaic manages, directs or conducts the operations of Santa Clarita's facilities its wells. See Bestfoods, 524 U.S. at 68, 118 S.Ct. 1876 (key question is whether the parent company "operates the facility"). Perhaps Whittaker's argument here is a counterpart to its contention that the "Valley's groundwater" is a CERCLA facility, but the Court has already rejected that theory.[33]
Because Whittaker fails to provide any basis for holding Castaic liable, its motion as to Castaic must be denied. However, the Court will go on to consider the remaining elements of Whittaker's claims against Newhall, Santa Clarita and Valencia.
F. The Innocent Landowner Defense
Counter-Defendants contend that they are eligible for CERCLA's innocent landowner defense. In order to qualify as innocent landowners, Counter-Defendants must prove (1) that the release or threat of release of hazardous substances was caused solely by the acts of a third party, (2) that the third party was not an employee or agent of the Counter-Defendants, and (3) that the Counter-Defendants exercised due care with respect to perchlorate *1080 and took precautions against foreseeable third-party acts or omissions. 42 U.S.C. § 9607. See also Servco Pacific Inc. v. Dods, 193 F.Supp.2d 1183, 1197 (D.Hawai'i 2002). This defense is construed narrowly to further CERCLA's remedial purpose. Lincoln Properties, Ltd. v. Higgins, 823 F.Supp. 1528, 1539 (E.D.Cal.1992).
Counter-Defendants would bear the burden of proving this affirmative defense at trial, and they must come forward with evidence sufficient to create a genuine issue of material fact as to the innocent landowner defense. See Digital Control Inc. v. McLaughlin Manufacturing Co., Inc., 248 F.Supp.2d 1015, 1017 (W.D.Wash. 2003) (where non-moving party would bear the burden of proof at trial on an affirmative defense, that party must present evidence establishing a genuine issue of material fact).
1. Caused Solely By Third Parties Who Are Not Employees or Agents
The Court concludes that Counter-Defendants have presented evidence sufficient to create a genuine issue as to whether the perchlorate releases at or from their wells were caused solely by third-party acts. Dustan Campbell, Newhall's Superintendent, William J. Manetta, Santa Clarita's President, and Robert J. DiPrimio, Valencia's President, declare that Newhall, Santa Clarita and Valencia have not used, disposed of, or arranged for the disposal of perchlorate. Campbell Decl. ¶¶ 7-8; Manetta Decl. ¶¶ 7-8; DiPrimio Decl. ¶¶ 7-8.[34] They also declare that no employees or agents of the Plaintiffs caused the release of perchlorate and that the Plaintiffs do not have any contractual relationship with Whittaker. Campbell Decl. ¶ 9; Manetta Decl. ¶ 9; DiPrimio Decl. ¶ 9.[35]
Whittaker does offer some evidence that pumping at Counter-Defendants' wells may have helped draw perchlorate toward the wells, and that the structure of the Valencia and Newhall wells may have allowed perchlorate entering the wells close to surface level to travel down through the wells to the lower-level Saugus formation. Specifically, Whittaker's expert N. Thomas Sheahan opines:
(1) that pumping from Plaintiffs' wells likely caused an "increased vertical flow" of groundwater down from the Alluvial Aquifer into the Saugus Formation, Sheahan Rep. (attached as Exh. C. to the July 10, 2002 Vandenburg Decl.) at 35;
(2) that pumping from Plaintiffs' wells likely "induc[ed] lateral flow" in the Saugus Formation toward the wells, id. at 35-36; and
(3) that in the Valencia and Newhall wells, the "Saugus formation is hydraulically connected, by the perforated zones and/or gravel packs in [the] wells, to the overlying alluvial aquifer." Id. at 19.
*1081 As to point (3), Sheahan opines that the Newhall well in particular could act as a conduit for contamination traveling down within the well itself from the alluvial aquifer to the Saugus formation. Id. at 22.
Plaintiffs respond by pointing to evidence that:
(1) the Alluvial Aquifer naturally recharges the Saugus, even without any well pumping, see July 29 SGI ¶ 2, Ohland Rep. at 25 ("Groundwater in the Alluvial aquifer is ... a source or recharge to the underlying Saugus Formation.");
(2) the natural flow of groundwater carries contaminant from the Whittaker-Bermite site to Plaintiffs' wells, see List Rep. at 8, Figures 11, 12 ("[D]ata show unequivocally that the general direction of flow of groundwater is to the northwest ...."), Todd Rep. at 8 ("[G]roundwater flow in the Saugus Formation in the vicinity of the Site is to the northwest."); and
(3) any transfer through the wells themselves would be quite minor or insignificant compared to the natural recharge. Dep. of Dennis Williams (attached as Exh. H to the July 29, 2002 Gee Decl.) at ¶¶ 18:6-27:15.
Judge Levi considered facts quite similar to these in Lincoln Properties, supra, a case cited by Whittaker itself. In Lincoln Properties case, the owner of shopping center from which pollutants had been released sued to recover response costs from San Joaquin County. 823 F.Supp. at 1532. The shopping center owner, Lincoln Properties, Ltd. ("Lincoln"), claimed that the County was partly responsible because the contaminants discharged from the shopping center had leaked from the County's wells and sewer lines. Id. Although Judge Levi agreed with Lincoln that there had been releases from the County's facilities, id. at 1535-39, he held that the County successfully established its status as an innocent landowner. Id. at 1539-44. See also Fireman's Fund Ins. Co. v. City of Lodi, 302 F.3d 928, 946 (9th Cir.2002) (citing Lincoln Properties and noting, in dicta, that "it is doubtful whether [a defendant] may be considered a PRP merely as a result of operating [a] municipal sewer system").
In considering the requirement in 42 U.S.C. § 9607 that to qualify as an innocent landowner the releases had to be caused solely by the acts of third parties, Judge Levi rejected a rule that would have made the defense unavailable to the County simply because the County wells and sewers might have been the site of quite minimal releases. The Court finds Judge Levi's reasoning in support of this conclusion persuasive and provides a rather lengthy quotation here:
The phrase "caused solely by" is ambiguous, particularly when read in context of the entire section.... [T]he concept of causation is a subtle one in the law and has different meanings in different contexts. One could read the provision strictly such that virtually any evidence of a release from a defendant's facility would preclude assertion of the third party defense, since the release in such case would not be caused "entirely" by third parties. However, this construction, which is similar to "but for" causation in tort law, would eliminate the [innocent landowner] defense. The defense is provided to one who is already liable for a release. If the fact of a release amounts to causation then the defense is a nullity. Moreover, the provision contemplates that the defendant claiming the defense "exercised due care with respect to the hazardous substance concerned" and "took precautions." These aspects of the defense make little sense if causation is interpreted so literally as to forbid any contact with the *1082 hazardous substance which may have permitted or facilitated a release.
Id. at 1540. After considering several different interpretations of the Clean Water Act's third-party defense, the defense on which CERCLA's innocent landowner provision was based, Judge Levi adopted the following standard:
[T]he court holds that "caused solely by," as used in CERCLA, incorporates the concept of proximate or legal cause. If the defendant's release was not foreseeable, and if its conduct including acts as well as omissions was "so indirect and insubstantial" in the chain of events leading to the release, then the defendant's conduct was not the proximate cause of the release and the third party defense may be available.
Id. at 1540-42.
Several district courts have adopted the causation standard announced in Lincoln Properties. See Advanced Technology Corp. v. Eliskim, Inc., 96 F.Supp.2d 715, 718 (N.D.Ohio 2000); United States v. Meyer, 120 F.Supp.2d 635, 640 (W.D.Mich. 1999); United States v. Iron Mountain Mines, Inc., 987 F.Supp. 1263, 1274 (E.D.Cal.1997). At least one court has instead adopted a "but for" causation standard. United States v. Poly-Carb, Inc., 951 F.Supp. 1518, 1530-31 (D.Nev.1996). And one court appears to have adopted a combination of both. G.J. Leasing Co., Inc. v. Union Electric Co., 854 F.Supp. 539, 567 (S.D.Ill.1994).
No matter which of these standards is applied here, the Court finds that Counter-Defendants have at least created a genuine issue of material fact as to sole causation. Specifically, Counter-Defendants' evidence that neither they nor their agents nor employees used perchlorate supports an inference that any release of perchlorate at the wells was not foreseeable to Plaintiffs. And Counter-Defendants' expert evidence that the effect of pumping from the wells was insignificant compared to the natural flow of contaminant supports an inference either that Counter-Defendants were not a "but for" cause of the releases or that their acts were "so indirect and insubstantial in the chain of events leading to the release" that the innocent landowner defense still should be available to them. Lincoln Properties, 823 F.Supp. at 1542 (internal quotation marks omitted).
2. Due Care and Precautions against Foreseeable Acts
The due care and precautions requirements lend themselves to a combined analysis. For example, the Second Circuit has explained that the precautions requirement "demands that the defendant shall have taken adequate precautions against actions by the third party that would lead to a release of hazardous waste." State of New York v. Lashins Arcade Co., 91 F.3d 353, 360 (2d Cir.1996). Similarly, Counter-Defendants can prove that they exercised due care if they "took all precautions with respect to the particular waste that a similarly situated reasonable and prudent person would have taken in light of all relevant facts and circumstances." Id. at 361 (2d Cir.1996) (quoting H.R.Rep. No. 1016, 96th Cong., 2d Sess., pt. 1, at 34 (1984)). See also Iron Mountain Mines, 987 F.Supp. at 1276 (adopting Lashins Arcade standard). Such precautions would include "those steps necessary to protect the public from a health or environmental threat." Lashins Arcade, 91 F.3d at 361 (quotation marks and citation omitted). Whether Counter-Defendants exercised due care is a determination that must be made "in light of all relevant facts and circumstances," 42 U.S.C. § 9607(b)(3), and participation in the development of remedial plans is evidence of due care. City of Emeryville v. Elementis Pigments, Inc., 2001 WL 964230, *9 (N.D.Cal.2001).
*1083 In this case, Counter-Defendants offer evidence that they: (1) tested their wells for perchlorate contamination, (2) ceased operation of the perchlorate contaminated wells in the drinking system, (3) notified local government bodies of their decision to removal the wells from service, (4) participated in numerous meetings about the Santa Clarita Valley's perchlorate problem with state agencies and citizen groups, (5) participated in meetings with the Army Corps of Engineers regarding the Corps' plans to study and characterize the area's perchlorate pollution problem, and (6) filed this lawsuit to obtain capital necessary for removing the perchlorate pollution. Campbell Decl. ¶¶ 2-6 (for Newhall); Manetta Decl. ¶¶ 2-6 (for Santa Clarita); DiPrimio Decl. ¶¶ 2-6 (for Valencia).[36] Counter-Defendants also offer evidence that their wells were designed and installed in accordance with applicable construction standards at the time, including pollution prevention standards. Decl. of Dennis E. Williams ¶ 3, ¶ 6, ¶ 10, ¶ 13.[37] Finally, Counter-Defendants offer evidence that even experts were not aware of perchlorate as a potential contaminant hazard until after the last of Counter-Defendants' wells was sited in 1988. See Goodrich Dep. (attached as Exh. 0 to July 29, 2002 Gee Decl.) at 46:7-9 (Question: "When you did the studies for these other contaminants [prior to 1997], primarily [volatile organic compounds], why didn't you undertake a study of potential sources of perchlorate contamination?" Answer: "We did not know whether perchlorate was it wasn't on our radar screen."); Ohland Dep. (attached as Exh. P to July 29, 2002 Gee Decl.) at 154:10-14 (Question: "Was perchlorate contamination even considered a problem in 1986 or '88 for groundwater supplies, to your knowledge? ..." Answer: "Not to my knowledge.").[38]
Whittaker contends that Counter-Defendants should have done more. For example, Whittaker faults Counter-Defendants for not exercising due care with respect to perchlorate before anyone (even Whittaker's experts) knew perchlorate to be a problem. Reply at 9 ("Plaintiffs cite to their conduct in 1997 and later, but completely fail to present any evidence as to their conduct prior to discovery of perchlorate in their wells."). But Whittaker cites to no authority for such a requirement, and even recognizes in its own reply papers that "an innocent landowner is incapable of exercising due care with respect to a particular hazardous substances if the likely presence of that substance is unknown." Reply at 10. Whittaker's expert, James A. Goodrich,[39] opines that Counter- *1084 Defendants failed to exercise due care during the 1980s and 1990s because they did not develop "programs to manage their groundwater resources." Goodrich Rep. at 3. Goodrich does not explain, however, what such programs would entail or how they would even be related to the problem or potential problem of perchlorate contamination. See id.
Goodrich also opines that Counter-Defendants should have done more than simply take their wells out of service after discovering contamination. Goodrich states that other water agencies have taken "an active role in understanding and mitigating their groundwater resources problems." Id. at 14. Although Counter-Defendants do not provide evidence that they have begun to destroy their wells, cf. Lincoln Properties, 823 F.Supp. at 1544 (defendant took steps to destroy its wells "in a manner intended to prevent the possible flow of contamination through those wells"), they do proffer evidence that they have taken an "active role" in understanding and remediating the perchlorate problem. See Campbell Decl. ¶¶ 2-6; Manetta Decl. ¶¶ 2-6; and DiPrimio Decl. ¶¶ 2-6. For example, Counter-Defendants notified local authorities of the perchlorate problem, participated in meetings related to the Army Corps of Engineers study, and filed this lawsuit. This evidence is at least sufficient to survive Whittaker's motion for summary judgment.
Whittaker cites Westfarm Associates Limited Partnership v. Washington Suburban Sanitary Comm'n, 66 F.3d 669 (4th Cir.1995), as support for its position, but Westfarm actually does little to help Whittaker's case. The Fourth Circuit did hold in Westfarm that "CERCLA does not sanction willful and negligent blindness," but this statement has little relevance here. 66 F.3d at 683 (internal quotation marks and citation omitted). The defendant sanitary commission attempting to assert an innocent landowner defense in Westfarm knew that the contaminant PCE was being discharged into its sewer system, knew that its regulations actually allowed for such discharge, and knew that its sewers were cracked. Id. at 682-83. Yet the commission took none of the steps it could have taken to improve the situation it did not mend its sewer pipes or even change its regulations to ban PCE dumping. Id. at 683.
The commission in Westfarm may well have been, as the Fourth Circuit held, willfully and negligently blind. But the evidence submitted by these Counter-Defendants supports a permissible inference that they were not. There is no evidence that Counter-Defendants expressly permitted contaminant releases as the Westfarm commission did. Instead, Counter-Defendants have proffered evidence that they took steps to protect the public their drinking water customers from contamination, and in light of all the facts and circumstances, they have at least created a genuine issue as to their innocent landowner defense.[40]
CONCLUSION
For the foregoing reasons, Plaintiffs' Motion for Summary Judgment is GRANTED in part and DENIED in part. It is DENIED as to Plaintiffs' nuisance claims and Plaintiff's CERCLA claims against RFI. It is GRANTED as to Plaintiffs' CERCLA claims against Whittaker *1085 and SCLLC in the following respect: Whittaker and SCLLC are liable for Plaintiffs' necessary and NCP consistent response costs.
Defendant Whittaker's Motion for Summary Judgment is DENIED. Whittaker has failed to establish that Castaic is within the classes of CERCLA liable parties, and Newhall, Valencia and Santa Clarita have proffered evidence sufficient to create a genuine issue on their innocent landowner defense.
The result reached on Whittaker's motion means that the exact nature of Plaintiffs' status as PRPs, and of Plaintiffs' claims against Defendants, remains unresolved. If Plaintiffs are themselves PRPs, then they will have CERCLA claims against Defendants only for contribution, and this Court will consider various equitable factors in allocating response costs. See Pinal Creek Group v. Newmont Mining Corp., 118 F.3d 1298, 1301 (9th Cir. 1997) (claim by one PRP against another is for contribution); 42 U.S.C. § 9613(f)(1) (court should consider appropriate equitable factors in allocating costs). If, on the other hand, Plaintiffs establish at trial that they cannot be liable, then Whittaker and SCLLC will be jointly and severally liable unless they can prove that the harm they caused is divisible. Carson Harbor, 270 F.3d at 871.
IT IS SO ORDERED.
NOTES
[1] Plaintiffs have also submitted a Manetta Declaration in opposition to the summary judgment motion filed by Defendant and Counter-Claimant Whittaker. All references to declarations in this part of the Court's order are to declarations filed in support of or in opposition to Plaintiffs' summary judgment motion.
When the Court refers to a declaration or document by date, the date used is the date on which the document was filed or lodged with the Court.
[2] After Plaintiffs filed this case, they discovered that an additional well, the Stadium Well, also is contaminated with perchlorate. The parties have not fully briefed the issue of Defendants' liability for Stadium Well contamination, nor have they completed expert discovery. The Court will not rule on any issues presented by the alleged Stadium Well contamination in this order.
[3] The Court earlier bifurcated this action into liability and damage phases. Perhaps for this reason, the parties have not proffered evidence regarding the precise amount and types of costs incurred, and they have not yet fully briefed the issues of cost necessity and NCP consistency.
Although necessity and consistency with the NCP are elements of a CERCLA plaintiff's prima facie case, the Court believes it appropriate to leave these issues for resolution at a later date based on a complete record.
Thus, the order issued today is limited to a determination of liability for those response costs, if any, that will later be held necessary and NCP consistent.
[4] The inclusion of RCRA hazardous wastes within the CERCLA definition of "hazardous substance" is subject to a limited exception not applicable here. See 42 U.S.C. § 9601(14)(C); Louisiana-Pacific Inc. v. Asarco Inc., 24 F.3d 1565, 1572 (9th Cir.1994) (discussing exception).
[5] The C.F.R. provision governing ignitability actually refers to the definition of "oxidizer" contained in 49 C.F.R. § 173.151 (as opposed to § 173.127), but no definition of "oxidizer" is contained within that section of the Code. Apparently the definition of "oxidizer" originally found in § 173.151 was moved to section § 173.127 as part of a comprehensive amendment to the Department of Transportation's Hazardous Materials Regulations, 49 C.F.R. parts 171-180. See 55 Fed.Reg. 52402-01 (Dec. 21, 1990). See also 49 Fed. Reg. 23290-01 (June 5, 1984) (referring to the definition of "oxidizer" then contained in § 173.151: "An oxidizer for the purpose of this subchapter is a substance such as a chlorate, permanganate, inorganic peroxide, or a nitrate, that yields oxygen readily to stimulate the combustion of organic matter.").
[6] The Court overrules Defendants' authentication objection. See Fed.R.Evid. 902(5) (publications purporting to be issued by a public authority are self-authenticating).
[7] Peach was employed at the Whittaker-Bermite facility from 1978 to 1984. He worked primarily in inventory-related activities and his job responsibilities "included receiving, storing and transporting raw materials and transporting and storing waste materials, including waste containing perchlorate." Peach also sometimes worked as the "fire-watch" at the site's waste burn pits. Peach Decl. ¶ 1.
The Court denied Defendants' earlier motion to exclude the Peach declaration but allowed Defendants to depose Peach, which they did on November 21, 2002. Defendants now object that certain statements in the Peach declaration are speculative and lack foundation, and Defendants cite portions of the November 21 Peach deposition as support for their objection.
The cited deposition testimony is not relevant to, and therefore does not undermine, Peach's statements regarding disposal at burn pits or perchlorate spilling. Peach's deposition testimony does call into question the specific numerical estimates regarding perchlorate deliveries that Peach included in his original declaration, but the cited deposition testimony actually supports the more general proposition that Peach has personal knowledge of at least some perchlorate deliveries to the Whittaker-Bermite site. See Peach Dep. (attached as Exh. 8 to the May 12, 2003 Decl. of Matthew Clark Bures) at 132:6-133:23.
[8] Defendants object that this evidence is inadmissible. Defendants first object that the Acton Mickelson environmental report attached as Exh. A to the Gee Declaration has not been properly authenticated. Fed.R.Evid. 901. While it is true that Mr. Gee (an attorney for Plaintiffs) cannot authenticate the report, Defendant SCLLC produced the document itself in response to Plaintiffs' discovery requests. Gee Decl. ¶¶ 2-3. See Maljack Productions, Inc. v. GoodTimes Home Video Corp. (9th Cir. 1996), 81 F.3d 881, 889 n. 12 (document authenticated when produced by defendant in discovery); Snyder v. Whittaker Corp., 839 F.2d 1085, 1089 (5th Cir.1988) (same). Cf. also Orr v. Bank of America, NT & SA, 285 F.3d 764, 776 & n. 20 (9th Cir.2002) (citing Maljack and Snyder). And although originally the report was prepared for Whittaker, not SCLLC, Whittaker is a party to this proceeding, Whittaker does not contend that the document is other than what it purports to be, and all Defendants (including Whittaker) actually cite the report in their SGI. See July 29 SGI ¶ 21 (reiterating authenticity objection but also citing the report as evidence). Cf. Maljack, 81 F.3d at 889 n. 12 (relying on, inter alia, fact that objecting party did not actually dispute authenticity of the admitted document); Snyder, 839 F.2d at 1089 (same). The Court finds this "sufficient to support a finding that the matter in question is what its proponent claims." Fed.R.Evid. 901(a).
Defendants also object that the Acton Mickelson report is inadmissible as hearsay and that the cited portions of the Todd and List reports contain inadmissible hearsay. But SCLLC, which produced the report, admitted that it qualifies as a business record within the meaning of Fed.R.Evid. 803(6) by failing timely to respond to Plaintiffs' Request for Admissions. See Gee Decl. (attached as Tab M to Plaintiffs' Response to Defendants' Compendium of [Evidentiary] Objections) ¶¶ 1-4 & Exh. B. See also Fed.R.Civ.P. 36(a) Advisory Committee Notes (1970 Amend.) (requests for admission may address mixed questions of law and fact); Marchand v. Mercy Medical Ctr., et. al., 22 F.3d 933, 937 n. 4 (9th Cir. 1994) (treating as proper a request for admission asking Defendant to admit that the treatment provided to Plaintiff "failed to comply with the applicable standard of care"). As to the Todd and List reports: Experts are permitted to rely on hearsay in forming their opinions, and the test data Todd and List relied on is therefore admissible because it was part of the basis for their expert opinions that perchlorate released at the Whittaker-Bermite site migrated to Plaintiffs' wells. See Carson Harbor Village, Ltd. v. Unocal Corp., 270 F.3d 863, 873-74 (9th Cir.2001) (en banc).
For these reasons, Defendants objections are overruled.
[9] Defendants object to these declarations as lacking foundation. In fact, Defendants raise lack of foundation objections to nearly every declaration Plaintiffs have filed.
The Court has only considered those objections relevant to evidence cited in this order, but it appears to the Court that many of Defendants' foundation objections including those made to the Kimbrough, Petersen, Manetta, and DiPrimio declarations lack merit. Although the Court applauds zealous advocacy, it deplores the numbing repetition of plainly non-meritorious (indeed, frivolous) evidentiary objections.
As to these specific declarations, each of the witnesses identifies his relevant position of authority with the Plaintiff entities, and each states that he has personal knowledge of the facts set forth in his declaration. These statements are sufficient, and neither Fed.R.Evid. 602 nor United States v. Shumway, 199 F.3d 1093, 1104 (9th Cir.1999) suggests otherwise.
[10] Defendants contend that Newhall does not need to purchase alternative water supplies because its remaining non-contaminated wells meet Newhall's demand. See August 26 SGI ¶ 59. Defendants also contend that it is actually cheaper for Newhall to purchase substitute water from Castaic than to produce water itself Id. Defendants cite to portions of the deposition of Dustan Campbell, Newhall's Superintendent, as support for these arguments. Id.
The Court has reviewed the Campbell deposition, taken on March 5, 2002. Campbell testified that as of the date of his deposition, Newhall did have an adequate water supply. Campbell Dep. (attached as Exh. E to the July 29 Decl. Thomas F. Vandenburg) at 105:1-5 (Question: "Does [Newhall] have the capacity from the wells that are currently active to meet its demand today?" Answer: "Today, yes, it does."). Campbell also testified that beginning in August, 2001, Newhall could purchase water at the same cost, or even more cheaply, than producing water itself. Id. at 105:10-106:25.
But neither of these deposition excerpts undermines Newhall's cost estimate to the extent it is based on the provision of alternative water supplies. Campbell's testimony does not address Newhall's need for alternative water supplies before or after March, 2002, and it does not suggest that purchasing water from Castaic was cheaper for Newhall at all relevant times prior to August, 2001. In this regard, it is noteworthy that perchlorate was first detected in a Newhall well in 1997. Petersen Decl. ¶ 3.
[11] Although Santa Clarita claims that some of this $1,500,000 has been spent on alternative water supplies, Robert McDougal, Santa Clarita's Operations Manager, testified during deposition that since shutting down its contaminated wells, Saugus-1 and Saugus-2, Santa Clarita has still had water supplies adequate to meet its needs. McDougal Dep. (attached as Exh. G to the July 29, 2002 Vandenburg Decl.) at 135:7-137:24. (Plaintiffs' counsel objected to this line of questioning during the McDougal deposition as argumentative and vague. The Court hereby overrules those objections.)
This testimony does create a genuine issue as to whether Santa Clarita has actually spent any money on alternative water supplies. McDougal's testimony does not, however, create a genuine issue sufficient to defeat Santa Clarita's summary judgment motion. At this stage in the case, and consistent with the Court's bifurcation order, Plaintiffs have not submitted itemized cost statements, and Santa Clarita identifies two other bases for the $1,500,000 figure consulting and sampling fees. Defendants present no evidence that Santa Clarita has not incurred consulting and sampling costs.
[12] DiPrimio testified that as of the date of his deposition, March 29, 2002, Valencia could meet demand with water pumped from Valencia's own wells. DiPrimio Dep. (attached as Exh. F to the July 29, 2002 Vandenburg Decl.) at 85:10-15. In other words, as of March 29, 2002, Valencia did not need to purchase alternative water supplies to meet demand.
DiPrimio's testimony does not, however, create a genuine issue sufficient to deny summary judgment. DiPrimio did not discuss pre-March 2002 water supplies during his deposition, nor did he undermine Valencia's claim to have incurred costs for sampling and consulting fees.
[13] Actually, Plaintiffs' wells are in several different locations, making this more of a "several-site" case. But the principles applicable to two-site cases are applicable here.
[14] In Alcan, the plausible migration pathway was an undisputed release of thousands of gallons of water from the contaminated site into the Susquehanna River. 964 F.2d at 256. The plausible pathway in Artesian Water was underground migration. 659 F.Supp. at 1281. In Bliss, the United States offered evidence that waste from a large storage site had been transported to, and sprayed at, another site; although the defendants argued that their waste may not have been so transported, the Court held that the government's evidence of a plausible route was sufficient. 667 F.Supp. at 1309-11.
[15] For these same reasons, the Court finds unpersuasive, and declines to adopt, the stricter causation requirement suggested by the Sixth Circuit's holding in Kalamazoo River Study Group v. Rockwell Int'l Corp., 171 F.3d 1065, 1072 (6th Cir.1999) (plaintiff's expert's affidavit, which created a genuine issue only as to the "possibility" that contaminant migrated from the defendant's site, insufficient on summary judgment because plaintiff bore "the burden of proof to show that [defendant] did contribute to [contaminant] ..., not that it is possible that it might have contributed ...."). See also United States v. Dico, 136 F.3d 572, 578 (8th Cir.1998).
[16] Defendants evidentiary objections to the admissibility of this data contained in both Plaintiffs' and Defendants' expert reports are overruled. See supra note 8.
[17] The Alluvial Aquifer and underlying Saugus Formation are the two principal aquifers in the Upper Santa Clara River Valley. Ohland Rep. at 11.
[18] Defendants' Ex Parte Application for leave to file the supplemental Sheahan declaration and report is GRANTED, and the Court has considered Sheahan's supplemental opinions in ruling on these motions.
[19] As discussed in the Conclusion below, this order does not decide whether Plaintiffs' CERCLA claims are actually for cost recovery under 42 U.S.C. § 9607(a) or for contribution under 42 U.S.C. § 9607(a) and § 9613(f).
[20] This SGI was filed in opposition to a defense motion that has since been withdrawn, but the Court takes judicial notice of this undisputed fact.
[21] Although abatability might be viewed as an element of Defendants' statute of limitations affirmative defense, those California courts that have addressed the issue have viewed the continuing (i.e. abatable) nature of a nuisance as an element of the plaintiff's case. Beck Development Co., 44 Cal.App.4th at 1217, 52 Cal.Rptr.2d 518 ("A plaintiff cannot simply allege that a nuisance is continuing in order to avoid the bar of the statute of limitations, but must present evidence that under the circumstances the nuisance may properly be considered continuing rather than permanent."); Mangini II, 12 Cal.4th at 1096-97, 51 Cal.Rptr.2d 272, 912 P.2d 1220 (noting that the lower court had treated abatability as an element of the plaintiff's case but declining to decide proper burden of proof). Plaintiffs themselves have pled abatability as an element of their nuisance claims. Compl. ¶ 59, ¶ 66.
[22] This element of Whittaker's prima facie case need not be considered in detail here because the analysis found above at pages 7 through 9 is applicable to Whittaker's motion.
[23] The Court will not address necessity and consistency with the NCP in this order for the reasons discussed at note 3, supra.
[24] In full, the Dayton court's analysis was as follows:
It is clear that Congress did not intend CERCLA to target legitimate manufacturers or sellers of useful products. Rather, taken in context, the provision reflects Congress' desire to hold liable those who would attempt to dispose of hazardous wastes or substances under various deceptive guises in order to escape liability for their disposal.
The legislative history reinforces [the] argument that Congress intended to provide recovery only for releases or threatened releases from inactive and abandoned waste sites, not releases from useful consumer products in the structure of buildings.
Id. at 1065-66, 51 Cal.Rptr.2d 272, 912 P.2d 1220 (footnote omitted).
[25] The Court finds it disturbing that Counter-Defendants quote extensively from Dayton in their Memorandum (albeit by way of an indirect quotation through Vernon Village) without mentioning the Fifth Circuit's later consideration of that case in Uniroyal.
[26] The same is true for the Ninth Circuit's leading asbestos removal case, 3550 Stevens Creek Assoc. v. Barclays Bank of California, 915 F.2d 1355 (9th Cir.1990), which reached a result similar to that reached by the Fifth Circuit in Dayton. In 3550 Stevens Creek, the Ninth Circuit held that use of asbestos in building construction could not be considered "disposal" within the meaning of 42 U.S.C. § 9607(a)(2), which establishes PRP liability for past owners or operates who owned the facility in question at the time of waste disposal. 915 F.2d at 1362. 3550 Stevens Creek is of even less help to Counter-Defendants than Dayton might have been (at least pre-Uniroyal) because it nowhere addressed the consumer product exception.
[27] Moreover, once liability is determined, the Court will apply principles of equity to allocate costs among PRPs. Counter-Defendants' claimed blamelessness would be relevant at that stage if Counter-Defendants ultimately are held to be PRPs. See Cadillac Fairview/California Inc. v. Dow Chemical Co., 299 F.3d 1019, 1025 (9th Cir.2002) (district courts will consider equitable factors in allocating costs among PRPs).
[28] At oral argument, counsel for Counter-Defendants relied on one additional case, Reading Co. v. City of Philadelphia, 823 F.Supp. 1218 (E.D.Pa.1993). Reading is of no aid to Counter-Defendants. The Reading court held the consumer product exception inapplicable in that case and, in fact, explained that the exception was intended to protect "individual consumers." 823 F.Supp. at 1233 (emphasis added).
[29] Elsewhere in its papers Whittaker also contends that perchlorate might have leaked through Plaintiffs' wells from one groundwater level to another, but Whittaker does not advance this theory as an example of a "release."
[30] Webster's Third New International Dictionary defines "leaching" as "the process or an instance of separate the soluble components from some material by percolation." "Leachate" is defined as "the liquid that has percolated through soil or other medium."
[31] Counter-Defendants do not dispute that Whittaker has undertaken such a search. Instead, they argue that the search was unnecessary because Defendant Santa Clarita already had done much of the work. This argument goes to the necessity of Whittaker's response costs and will be considered later, when the Court addresses necessity and NCP consistency.
[32] These same principles are inapplicable to litigation-related expert fees that are not directed toward identifying new PRPs. In Calabrese v. McHugh, 170 F.Supp.2d 243, 267-68 (D.Conn.2001), for example, the district court held that expert fees were not recoverable when they were directed toward providing additional support for claims against already-identified PRPs.
[33] Even if the Court did consider Valley groundwater a "facility," the Court could not agree with Whittaker that Castaic's actions relevant to Valley water quality mean that Castaic "operate[s]" the groundwater. Merely to state such a contention is to reveal its absurdity. Whittaker's argument would make anyone who works to assure water quality e.g., a federal agency that acts to force responsible parties to clean up a site liable as an "operator."
[34] These three declarations are attached to Counter-Defendants' July 29, 2002 opposition.
[35] Whittaker objects to these declarations on hearsay grounds because Campbell, Manetta and DiPrimio make these statements based on "personal knowledge and ... inquiry of other management personnel" working at Newhall, Santa Clarita and Valencia. Campbell Decl. ¶¶ 7-9, Manetta Decl. ¶¶ 7-9, DiPrimio Decl. ¶¶ 7-9. The Court agrees that these declarants cannot introduce others' hearsay statements through their own declarations. Fed. R.Evid. 801. But the Court finds that under Fed.R.Evid. 807, the declarants' additional reliance on their own personal knowledge, and the familiarity with the Counter-Defendants' records and practices that their upper-level management positions necessarily entail, provide admissible evidentiary support for the declarants' statements that is sufficient to create a genuine issue of material fact.
[36] Whittaker's evidentiary objections to the cited portions of these declarations are OVERRULED. The declarants' upper-level management positions and their statements that they have personal knowledge of these facts provide sufficient foundation.
[37] Whittaker's evidentiary objections to the cited portions of the Williams declaration are OVERRULED.
[38] The objection to this question in the Ohland Deposition as vague and speculative is OVERRULED.
[39] Goodrich holds a Bachelor of Science degree in Geology and an interdisciplinary Master of Science degree in Engineering Geology and Water Resources Engineering. He is currently an independent water resources and environmental consultant specializing in water resources management and strategic planning, groundwater recharge systems, conjunctive use planning, aquifer storage and recovery (ASR) systems, and seawater intrusion management. From 1987 to 1992, Goodrich was the Director of Basin Management for the Orange County Water District, and in 1992, he became executive director of the San Gabriel Basin Water Quality Authority. Expert Rep. of James A. Goodrich (attached as Exh. F to the July 10, 2002 Vandenburg Decl.) at 1.
[40] This conclusion also defeats Whittaker's motion for summary judgment on its HSAA claim. As both parties agree, HSAA "create[s] a scheme that is identical to CERCLA with respect to who is liable." City of Emeryville v. Elementis Pigments, Inc., 2001 WL 964230, *11 (N.D.Cal.2001). See also Goe Engineering Co., Inc. v. Physicians Formula Cosmetics, Inc., 1997 WL 889278, *23 (C.D.Cal.1997).
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26 Cal.App.4th 1695 (1994)
32 Cal. Rptr.2d 188
THE PEOPLE, Plaintiff and Respondent,
v.
RONALD FLOURNOY, Defendant and Appellant.
Docket No. F019551.
Court of Appeals of California, Fifth District.
July 22, 1994.
*1696 COUNSEL
Phillip I. Bronson, under appointment by the Court of Appeal, for Defendant and Appellant.
Daniel E. Lungren, Attorney General, George Williamson, Chief Assistant Attorney General, Robert R. Anderson, Assistant Attorney General, Shirley A. Nelson and Derald E. Granberg, Deputy Attorneys General, for Plaintiff and Respondent.
[Opinion certified for partial publication.[*]]
OPINION
DIBIASO, Acting P.J.
PROCEDURAL HISTORY
On November 24, 1992, an amended information was filed in Madera County Superior Court, charging appellant Ronald Flournoy with forcible *1697 rape (Pen. Code,[1] § 261, subd. (a)(2)). The amended information contained enhancement allegations concerning convictions previously suffered by Flournoy in Madera County Superior Court case Nos. 5150 and 5931. With regard to case No. 5150, it was alleged that on or about May 26, 1981 (later amended by interlineation to Aug. 21, 1981), Flournoy was convicted of attempted rape, thereby suffering a serious felony conviction (§ 667, subd. (a)), for which Flournoy served a prison term (§ 667.5, subd. (b)). With regard to case No. 5931, it was alleged that on or about March 1, 1984, Flournoy was convicted of burglary of an inhabited residence, thereby suffering a serious felony conviction (§ 667, subd. (a)); and was also convicted of rape, thereby suffering a serious felony conviction (§ 667, subd. (a)) and a conviction for an enumerated sex offense (§ 667.6, subd. (a)), for which Flournoy served a prison term (§ 667.5, subd. (b)).
Following a court trial, Flournoy was found guilty as charged and all special allegations were found to be true. His motion for a new trial was denied, and he was sentenced to 30 years in prison. The sentence consisted of the upper eight-year term for the current offense; plus consecutive terms of five years (§ 667, subd. (a)) and one year (§ 667.5, subd. (b)) for the 1981 attempted rape conviction (case No. 5150); five years (§ 667, subd. (a)) for the 1984 burglary conviction (case No. 5931); and five years (§ 667, subd. (a)), five years (§ 667.6, subd. (a)), and one year (§ 667.5, subd. (b)) for the 1984 rape conviction (case No. 5931).
For the reasons expressed in the published portion of this opinion, we will order stricken the five-year enhancement imposed pursuant to section 667.6, subdivision (a) for the 1984 rape conviction in case No. 5931. For the reasons expressed in the unpublished portions of this opinion, we will order stricken the five-year enhancement imposed pursuant to section 667, subdivision (a) for the 1984 burglary conviction in case No. 5931, as well as both one-year enhancements imposed pursuant to section 667.5, subdivision (b).
DISCUSSION
I. Imposition of Section 667, Subdivision (a) and Section 667.6, Subdivision (a) Enhancements for the 1984 Rape Conviction.
Section 654 provides in part: "An act or omission which is made punishable in different ways by different provisions of this code may be punished under either of such provisions, but in no case can it be punished under more than one;...." Flournoy contends the trial court violated this rule by imposing two 5-year enhancements, one pursuant to subdivision (a) of section 667 and the other pursuant to subdivision (a) of section 667.6, for his *1698 1984 rape conviction in case No. 5931. The People respond that the single prior conviction lawfully supports both enhancements. While acknowledging a conflict in appellate decisions concerning the subject, the People urge us to follow those cases which have taken the position that section 654 does not apply to enhancements.[2]
Section 667.6 was enacted by the Legislature in 1979 in order to increase, in certain circumstances, the punishment for persons convicted of serious sex offenses. (People v. Siko (1988) 45 Cal.3d 820, 822 [248 Cal. Rptr. 110, 755 P.2d 294].) Subdivision (a) of section 667.6 states in pertinent part: "Any person who is found guilty of violating paragraph (2) ... of subdivision (a) of Section 261, ... who has been convicted previously of any of those offenses shall receive a five-year enhancement for each of those prior convictions provided that no enhancement shall be imposed under this subdivision for any conviction occurring prior to a period of 10 years in which the person remained free of both prison custody and the commission of an offense which results in a felony conviction."
The 1982 initiative measure known as Proposition 8 added section 667 to the Penal Code and article I, section 28, subdivision (f) to the California Constitution.[3] The electorate's intent in enacting these provisions was to increase sentences for recidivist offenders. (People v. Jones (1993) 5 Cal.4th 1142, 1147 [22 Cal. Rptr.2d 753, 857 P.2d 1163].) Section 667 provides a sentence enhancement for those persons who repeatedly commit serious felonies.[4] To the extent material, subdivision (a) of section 667 states: "In compliance with subdivision (b) of Section 1385, any person convicted of a serious felony who previously has been convicted of a serious felony in this state ... shall receive, in addition to the sentence imposed by the court for *1699 the present offense, a five-year enhancement for each such prior conviction on charges brought and tried separately. The terms of the present offense and each enhancement shall run consecutively."
In People v. Jones (1993) 12 Cal. App.4th 1106 [16 Cal. Rptr.2d 60], Division Four of the Second District Court of Appeal held that enhancement terms could not be imposed under both section 667, subdivision (a) and section 667.6, subdivision (a). The court explained: "Sections 667, subdivision (a) and 667.6, subdivision (a) each provide for the imposition of an additional five-year term of imprisonment for a recidivist who has sustained a denominated felony conviction after having been previously convicted of the same or another denominated felony in the past. The difference between the sections is that the offenses subject to the provisions of section 667, subdivision (a) include rape ... among a more general listing of `serious felonies' and section 667.6, subdivision (a) includes rape ... among other listed serious felony sex offenses.... Nothing in either of these statutes or in their legislative histories suggests that the Legislature intended that both enhancement terms be applied where, as here, a single conviction ... qualifies for an enhancement under both sections. Given the overlap between the two statutes noted above, we are loathe to conclude that the Legislature had such distinct, differing policies in mind in enacting them that it intended both to apply to a single conviction which contained two or more qualifying counts." (People v. Jones, supra, 12 Cal. App.4th at pp. 1115-1116, fn. omitted.)
(1) Unlike the Court of Appeal in Jones, we will not decide what effect, if any, section 654 has upon the two statutes in question. Instead, in accord with the Supreme Court's decision in People v. Jones, supra, 5 Cal.4th 1142, we resolve on different grounds the question whether the trial court correctly imposed both enhancements.
In Jones, the trial court imposed separate terms under section 667, subdivision (a) and section 667.5, subdivision (b) for the same prior conviction.[5] (People v. Jones, supra, 5 Cal.4th at p. 1145.) The Supreme Court held this was improper and ordered the one-year enhancement under section 667.5, subdivision (b) to be stricken. (Jones, supra, at p. 1153.)
*1700 The court first reiterated its determination in People v. Prather (1990) 50 Cal.3d 428 [267 Cal. Rptr. 605, 787 P.2d 1012] that section 667.5, subdivision (b) "`merely provides a special sentence enhancement for that particular subset of "prior felony convictions" that were deemed serious enough ... to warrant actual imprisonment....'" (People v. Jones, supra, 5 Cal.4th at p. 1148; see People v. Prather, supra, 50 Cal.3d at p. 440.) It then concluded that section 667, subdivision (a) and section 667.5, subdivision (b) apply to the same set of facts, that is, the underlying prior felony conviction. (Jones, supra, at p. 1149.)
The court next decided that the electorate did not intend the two enhancements to be cumulatively imposed. (People v. Jones, supra, 5 Cal.4th at pp. 1149-1150.) The court read subdivision (b) of section 667 to mean that "when multiple statutory enhancement provisions are available for the same prior offense, one of which is a section 667 enhancement, the greatest enhancement, but only that one, will apply."[6] (5 Cal.4th at p. 1150.) In the court's estimation, any other construction of the statute would lead to peculiar results. For example, most prior "violent" felonies under section 667.5 will also constitute "serious" felonies under section 667, subdivision (a). Thus, imposition of enhancement terms under both statutes would transform five-year enhancements into eight-year enhancements in most cases. The court reasoned that if the drafters of section 667 had intended to create such eight-year terms, they could have done so by repealing section 667.5 and providing for longer enhancements in section 667. (Jones, supra, at p. 1150.)
In addition, the court pointed out that although the Legislature had amended sections 667 and 667.5 since passage of Proposition 8, it had not chosen to specify a cumulative term of imprisonment in either statute. On the other hand, subdivisions (a) and (b) of section 667.9 require imposition of a specified enhancement "in addition to the sentence provided under Section 667." The court concluded: "The Legislature's use of sentencing language cumulative to section 667 in section 667.9 and its omission of such language in section 667.5 show an intent not to require enhancements under both sections 667 and 667.5." (People v. Jones, supra, 5 Cal.4th at pp. 1150-1151, fn. 2.)
The Supreme Court's analysis in Jones is germane and decisive in the instant case. First, section 667.6, subdivision (a) applies to a set of facts *1701 included within the ambit of section 667. (See People v. Jones, supra, 5 Cal.4th at pp. 1148-1149; People v. Jones, supra, 12 Cal. App.4th at pp. 1115-1116.) The triggering event under section 667.6, subdivision (a) is the defendant's "prior conviction" of one of those certain sexual felonies the Legislature has found egregious enough to warrant the prescribed additional punishment. As with subdivision (b) of section 667.5, then, section 667.6, subdivision (a) must "necessarily" be a "lesser category" of the "prior felony convictions" covered by the "broad mandate" of article I, section 28, subdivision (f) of the California Constitution. (People v. Prather, supra, 50 Cal.3d at p. 440; see also People v. Jones, supra, 5 Cal.4th at pp. 1148-1149.)
Second, in enacting section 667 when section 667.6 was already law, the voters undoubtedly did not intend the two enhancements to be cumulative. Nothing in the language of either statute carries a contrary suggestion. (People v. Jones, supra, 12 Cal. App.4th at p. 1116.) Most, if not all, of the offenses listed in subdivision (a) of section 667.6 qualify as "serious" felonies under section 667.[7] Imposition of terms under both statutes would transform a five-year enhancement into a ten-year enhancement in many cases. If the drafters of section 667 had wanted this result, they could have achieved it by "repealing [section 667.6] and providing for the longer enhancement in section 667." (People v. Jones, supra, 5 Cal.4th at p. 1150.)
Finally, although the Legislature has amended section 667.6 a number of times since section 667 was enacted, it has "never chosen to specify a cumulative term of imprisonment as it did with section 667.9." (People v. Jones, supra, 5 Cal.4th at p. 1151, fn. 2.) The Legislature's use of the phrase "in addition to the sentence provided under Section 667" in section 667.9, and the omission of such language from section 667.6, subdivision (a), reflects "an intent not to require enhancements under both sections 667 and [667.6, subdivision (a)]." (Jones, supra, at p. 1151, fn. 2.)
*1702 Because this is a case where "multiple statutory enhancement provisions are available for the same prior offense, one of which is a section 667 enhancement," only one may be imposed. (People v. Jones, supra, 5 Cal.4th at p. 1150.) Section 1385, subdivision (b) prohibits the striking of "any prior conviction of a serious felony for purposes of enhancement of a sentence under Section 667." Accordingly, we will order that the section 667.6, subdivision (a) enhancement be stricken. (See People v. Jones, supra, 5 Cal.4th at p. 1153; People v. Jones, supra, 12 Cal. App.4th at p. 1117.)
II., III.[*]
.... .... .... .... .... .... .... .
DISPOSITION
The following are stricken from the judgment:
1. The five-year enhancement imposed pursuant to section 667.6, subdivision (a) for the 1984 rape conviction in case No. 5931;
2. The five-year enhancement imposed pursuant to section 667, subdivision (a) for the 1984 burglary conviction in case No. 5931;
3. The one-year enhancement imposed pursuant to section 667.5, subdivision (b) for the 1981 attempted rape conviction in case No. 5150; and
4. The one-year enhancement imposed pursuant to section 667.5, subdivision (b) for the 1984 rape conviction in case No. 5931.
The superior court is directed to prepare an amended abstract of judgment and transmit it to all appropriate authorities. In all other respects, the judgment is affirmed.
Vartabedian, J., and Cornell, J.,[] concurred.
NOTES
[*] Pursuant to California Rules of Court, rules 976(b) and 976.1, this opinion is certified for publication with the exception of parts II and III.
[1] All statutory references are to the Penal Code.
[2] Cases which have decided section 654 is not applicable to enhancements include People v. Rodriguez (1988) 206 Cal. App.3d 517, 519 [253 Cal. Rptr. 633]; People v. Parrish (1985) 170 Cal. App.3d 336, 344 [217 Cal. Rptr. 700] (section 654 "generally" does not apply); People v. Le (1984) 154 Cal. App.3d 1, 12, fn. 11 [200 Cal. Rptr. 839]; People v. Stiltner (1982) 132 Cal. App.3d 216, 229 [182 Cal. Rptr. 790]; and People v. Boerner (1981) 120 Cal. App.3d 506, 511 [174 Cal. Rptr. 629].
Cases which have said section 654 is applicable to enhancements include People v. Price (1992) 4 Cal. App.4th 1272, 1277 [6 Cal. Rptr.2d 263]; People v. Mixon (1990) 225 Cal. App.3d 1471, 1487 [275 Cal. Rptr. 817]; People v. Vaughn (1989) 209 Cal. App.3d 398, 400 [257 Cal. Rptr. 229] (section 654 applies "in appropriate cases"); People v. Dobson (1988) 205 Cal. App.3d 496, 501 [252 Cal. Rptr. 423] ("now well-accepted" that section 654 applies); People v. Hopkins (1985) 167 Cal. App.3d 110, 117 [212 Cal. Rptr. 888]; and People v. Carter (1983) 144 Cal. App.3d 534, 543 [193 Cal. Rptr. 193].
[3] As relevant to the instant case, California Constitution, article I, section 28, subdivision (f) states: "Any prior felony conviction ... shall subsequently be used without limitation for purposes of ... enhancement of sentence in any criminal proceeding."
[4] Rape constitutes a "serious felony" within the meaning of the statute. (§§ 667, subd. (d), 1192.7, subd. (c)(3).)
[5] Section 667.5 generally provides for enhancement of prison terms for new offenses based on prior prison terms. If the new offense is a violent felony (as specified in subd. (c) of the statute), a three-year consecutive term is mandated for each prior prison term served by the defendant where the prior conviction also involved a violent felony. However, "no additional term shall be imposed ... for any prison term served prior to a period of 10 years in which the defendant remained free of both prison custody and the commission of an offense which results in a felony conviction." (§ 667.5, subd. (a).) For other felony offenses for which a prison sentence is imposed, a one-year consecutive term is mandated for each prior separate prison term served for any felony, "provided that no additional term shall be imposed ... for any prison term served prior to a period of five years in which the defendant remained free of both prison custody and the commission of an offense which results in a felony conviction." (§ 667.5, subd. (b).)
[6] Section 667, subdivision (b) provides: "This section shall not be applied when the punishment imposed under other provisions of law would result in a longer term of imprisonment. There is no requirement of prior incarceration or commitment for this section to apply."
[7] At the time Flournoy committed the present offense, section 667.6, subdivision (a) applied to "[a]ny person who is found guilty of violating subdivision (2) or (3) of Section 261, Section 264.1, subdivision (b) of Section 288, Section 288.5, Section 289, or of committing sodomy or oral copulation in violation of Section 286 or 288a by force, violence, duress, menace, or fear of immediate and unlawful bodily injury on the victim or another person...."
At all times pertinent, subdivision (d) of section 667 has defined "serious felony" by reference to the serious felonies listed in subdivision (c) of section 1192.7. At the time of the present offense, these included rape; sodomy "by force, violence, duress, menace, threat of great bodily injury, or fear of immediate and unlawful bodily injury on the victim or another person"; oral copulation "by force, violence, duress, menace, threat of great bodily injury, or fear of immediate and unlawful bodily injury on the victim or another person"; lewd or lascivious act on a child under 14 years of age; and "any violation of subdivision (a) of Section 289 where the act is accomplished against the victim's will by force, violence, duress, menace, or fear of immediate and unlawful bodily injury on the victim or another person...." (§ 1192.7, subd. (c)(3)-(6) & subd. (c)(25).)
[*] See footnote, ante, page 1695.
[] Judge of the Merced Superior Court sitting under assignment by the Chairperson of the Judicial Council.
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538 U.S. 1049
HARDYv.UNITED STATES.
No. 02-10139.
Supreme Court of United States.
May 19, 2003.
1
CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE EIGHTH CIRCUIT.
2
C. A. 8th Cir. Certiorari denied.
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951 F.2d 347
Glasscock (William Earl), Reich (Charles A.), Starkey (GaryN., Lina R.), Geisler (Gus Sr., Lena), Lane (Malvin R.,Nancy S.), Gonzalez (Carlos G., Delia S.), Smith (WilliamE., Sandra), Phillips (James W., Barbara E.), Ghent (Roy B.,Lois T.), Marsh (Charles, Leeta Fay)v.Armstrong Cork Co., Celotex Corp.
NO. 90-4095
United States Court of Appeals,Fifth Circuit.
Dec 02, 1991
E.D.Tex., 946 F.2d 1085
1
DENIALS OF REHEARING EN BANC.
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291 S.W.2d 214 (1956)
In the Matter of the Trust Under the Last WILL and Testament of Andrew JACKSON, Deceased.
No. 7488.
Springfield Court of Appeals. Missouri.
May 17, 1956.
*217 Esco V. Kell, West Plains, for appellant.
H. D. Green, Green & Green, Robert E. Hogan, Hogan & Hogan, West Plains, for respondent.
*218 RUARK, Judge.
This is an appeal from an order overruling appellant's motion to vacate a previous order of the circuit court appointing a substitute testamentary trustee.
Does this court have jurisdiction? Appellant has challenged such both on the ground that title to real estate is involved and that the amount in dispute exceeds $7,500.
As to whether title to real estate is involved in the constitutional sense: It is not in dispute that under the will here involved the legal title goes to trustees to hold for the use and benefit of certain beneficiaries. For so long as proper under the will, the bare legal title will remain in those persons who are lawfully appointed by the court to administer the trust, whether they be the appellant, respondent or other persons. There is no dispute as to this. The essence of the question here is not as to the flow and lodging of the title, but as to whether a certain person shall be one of the cotrustees. Under our Supreme Court decisions the judgment sought or rendered must be such as will directly determine title in some manner or degree adversely to one of the litigants. It is not enough that the judgment, when carried into execution, will affect the title. The title itself must be the matter about which there is a contest. It must not only be in issue, but it must be directly in issue. The judgment must adjudicate a title controversy.[1] Thus it is held that a suit to enjoin trustees in reference to the handling of real estate on the ground that they were not the properly elected trustees vested jurisdiction in the court of appeals, because "since the only dispute is as to who are the trustees of the church, the plaintiffs or the intervenors, the title to the property of the church is not only not involved but will not be affected by any judgment responsive to the issues presented." Clevenger v. McAfee, Mo.Sup., 165 S.W.2d 411; see State ex rel. and to use of Northside Church of God v. Church of God, Mo.Sup., 243 S.W.2d 308.
As to whether the amount in dispute exceeds $7,500: The pleadings and exhibits show (or contend) there is real and personal property in the estate to the extent of more than $40,000. But the test again is not the amount which may be affected, but the amount actually involved in the suit. This is not a suit for money award but one which concerns only the authority to handle (not to beneficially own) that amount. The Supreme Court is of limited appellate jurisdiction, and such jurisdiction must affirmatively appear in the record. The mere chance or speculation that the jurisdictional amount may exceed $7,500 is not enough.[2] The test is the value in money of that which will be gained or lost by either of the parties as a result of the litigation.[3] In arriving at such value it is held that the amount actually involved in a suit to appoint or remove an executor is not the value of the estate, but the value of the commissions which will be received (or lost) by the occupant of that position.[4] In this case there is nothing in the pleadings or the record which claims or indicates with fair certainty that the fees or commissions involved will exceed $7500.
*219 For the foregoing reasons we retain jurisdiction.
Is the appeal too late? Respondent has moved to dismiss because of such contention. The motion to set aside the appointment was overruled on June 28, 1955. On July 8, 1955, appellant filed a motion for new trial, which motion was overruled on August 23, 1955, and notice of appeal was given seven days thereafter. Section 512.020 RSMo 1949, V.A.M.S., Laws of 1943, sec. 126, p. 353, provides for appeal from any order granting a new trial, from certain designated orders and interlocutory judgments which determine the rights of the parties, from any final judgment, or from any special order after final judgment in the cause. 42 V.A.M.S. Supreme Court Rule 3.24 provides that the filing of motion for new trial postpones the finality of judgment until ruled upon or ninety days have expired, but concludes with the sentence, "When an appeal is taken from any order specified in Section 126, it shall be taken within ten days after such order is entered." Respondent argues that the motion to vacate a judgment is a special order after final judgment; and as the Supreme Court by its rule gave postponement of finality as to judgments generally, so hath it taken it away as to orders after judgment. The question in a nutshell is whether or not the filing of a motion for new trial postponed the finality, as a judgment, of the order overruling the motion to vacate.
As a theoretical proposition we accord respondent's motion and suggestions in support thereof considerable respect. But we are drawn to the conclusion that the order overruling the motion to set aside the judgment is in itself a judgment which is intended to receive the grace of postponement of finality by motion for new trial under Rule 3.24.
In Seabaugh's Dependents v. Garver Lumber Mfg. Co., 355 Mo. 1153, 200 S.W. 2d 55, the court, in a per curiam opinion, at loc. cit. 63 attempted to remove the uncertainty in regard to the effect of motions for new trial. It said, 200 S.W.2d loc. cit. 64:
"(T)here can be no doubt that a motion for a new trial is an authorized motion in any kind of case, and has the same effect to postpone the finality of the judgment in any case, because under the new code it performs not only all of its former functions as a motion for new trial but also those of all former record proper motions as well." (Our emphasis.)
and again:
"Undoubtedly this was the purpose of the new code, and Rule 3.24 construing it, in order to avoid the confusing situation prevailing under the old procedure, which caused parties to lose rights of appeal because a motion for new trial had the effect to postpone the finality of the judgment in some types of cases while such a motion had no function or effect at all in others."
In re Franz' Estate, 359 Mo. 362, 221 S.W. 2d 739, loc. cit. 740, it is pointed out that a motion for new trial in a record proper case is simply a motion which permits the court to reconsider its decision.[5]
It is true that a motion for new trial (although sometimes filed[6]) is not necessary to preserve the error in an order overruling a motion to set aside a judgment for irregularity patent on the face of the record;[7] whereas it would appear that the motion for new trial is necessary to preserve the error on the overruling of a motion in the nature of writ of error coram nobis because such involves evidence *220 dehors the record.[8] And it is true that rulings on motions to vacate for irregularity, both patent on the face of the record and in the nature of coram nobis, have sometimes been designated "`special order after final judgment'";[9] yet a motion to vacate makes a direct attack upon the judgment and is an independent proceeding, instituted by motion instead of a petition. Such motion takes the place of a petition and becomes a pleading from which the issues are gauged.[10] Thus the proceeding assumes the dignity of a separate lawsuit, and denial of the motion constitutes a final judgment in itself.[11] To this extent it is distinguishable from those after-judgment orders which are only adjunct to the case which has been determined or which seek to aid or impede the enforcement of a judgment rather than attack its very existence.[12] Since the proceeding has become a "case" and the motion for new trial is now an authorized motion in any kind of case we are of the opinion that the finality of the judgment was postponed and the appeal was in time. The motion to dismiss is overruled.
Andrew Jackson, of West Plains, Missouri, left a will wherein, after making certain specific bequests, he gave the remainder of his estate, both real and personal, to William Rudolph Luna and A. W. Landis as trustees (with full management powers), to pay the income unto William Rudolph Luna (his ex-son-in-law) and Irene Lummis (his adopted daughter), share and share alike, said payments to continue through the lives of the beneficiaries; upon death of the survivor the trust to terminate and the whole of the corpus to Charles and Mary Frances Jackson, a nephew and niece. The trustees were required to give bond and make annual settlement with the circuit court. In event the trustee Luna should die or disqualify, then trustee Landis would continue as sole trustee; but in event trustee Landis should die or disqualify, a trustee should be appointed by the circuit court. Landis and Luna were likewise named as executors. A codicil revoked a specific devise to the daughter, Irene. A later codicil provided for cancellation of benefits to said daughter in event she should contest the will. Said will and codicil were admitted to probate on March 4, 1952, and Landis and Luna qualified as executors and proceeded to administer the estate.
On May 1, 1953, Irene Lummis, one of the beneficiaries, filed in the circuit court her "petition for appointment of successor trustee and to require trustee to give bond." Such motion recited the fact that Landis had notified movant he was no longer acting as trustee, called attention to the requirement in respect to bond, and concluded with a prayer for the appointment of a successor to trustee Landis, and that the trustees be ordered to give bond and be removed in event of failure so to do. On May 14, 1953, trustee Luna filed answer to this motion wherein he alleged that Landis had not yet resigned but was still discharging the duties of trustee, and concluded with a statement that "unless it is the desire of A. W. Landis, trustee aforesaid, to resign or otherwise disqualify, then William Rudolph Luna states that there is no reason for the petition of Irene Lummis and the persons named as trustees in the Article Fifth of said last will and testament will continue to discharge their duties under said trust." The answer further stated that the trustees had given bond *221 (such is not indicated by the record) and the answer concluded with a prayer to dismiss the Irene Lummis petition "unless A. W. Landis, trustee as aforesaid, shall resign," in which event the prayer was for the appointment of a successor trustee. The next record shown is the withdrawal of Robert E. Hogan as attorney for the petitioner, Irene Lummis. This was on September 10, 1953. Thereafter the proceeding passed several terms and nothing was done until March 11, 1955.
On that day Mr. Landis filed with the court a document entitled "refusal to act as trustee," which recited that the administration had been completed, that the trustees (Luna and Landis) had not qualified or entered on their duties as such, nor received any assets belonging to said estate as such trustees; that he, Landis, declined and refused to qualify as trustee and suggested the appointment of a successor as provided in the will. In view of the dispute as to whether this document was a "resignation" or "renunciation," we will refer to it as the "withdrawal." On the same day the court made the order which is under attack. It is as follows:
"Now on this 11th day of March, 1955, same being the 14th day of the regular January Term, 1955, of this Court this cause being taken up, A. W. Landis files his Refusal to act as Trustee under the Last Will and Testament of Andrew Jackson, deceased, and Ralph Lummis of West Plains is by the Court appointed as Trustee to serve as such Trustee in lieu of or in place vacated by the resignation of A. W. Landis, an Attorney of West Plains, Missouri."
Court was then adjourned until April 6, on which date Ralph Lummis, the newly appointed trustee, filed and secured the court's approval of a bond in the sum of $50,000 (such bond is not in the record, but it seems apparent that this was in reality an administrator's bond).
On April 17, 1955, the appellant Luna (who it will be recalled is both trustee and beneficiary) opened the controversy with which we are now concerned by filing a motion to set aside the order of March 11, 1955, appointing Ralph Lummis as successor cotrustee. This motion recited as grounds that both the resignation of Landis and the appointment of the successor, Lummis, were made without notice to him, Luna. It alleged that the Irene Lummis motion for such appointment of successor trustee had passed from term to term, that it had been once set for October 25, 1954, and once for February 9, 1955, but no further action had been taken until the order of March 11, 1955; that he, Luna, was not afforded any opportunity to present evidence showing why Ralph Lummis should not be appointed. The motion then set forth various reasons why, in the opinion of Luna, Lummis was not a proper person to be appointed. After that time there followed various motions, including one by Ralph Lummis to require Landis and Luna "as individuals and as administrators of the estate of Andrew Jackson" to make surrender settlement. The record shows that Lummis was permitted to withdraw his administrator's bond and that both Luna and Lummis gave their separate bonds as trustee, which bonds were approved.
On June 28, 1955, and while the motion to vacate the appointment was pending, came A. W. Landis and filed in the circuit court a petition for order to deliver over assets. It recited in substance that administration had been completed and requested order of the court directing delivery of assets to the trustees. Presented along with the motion was an unsigned copy of "amended final settlement" of the two executors bearing date April , 1955, and a copy of the petition to the probate court for order of distribution. On the same day a hearing was held on appellant's motion to vacate the appointment of Lummis. From the appellant's evidence it would appear that neither he nor his attorney had notice, written or otherwise, of any proposed order appointing a successor trustee on March 11, nor did they have notice of the time when Landis would present *222 his withdrawal. It does appear that Mr. Landis had, on several occasions, informally discussed both with the appellant and the court the fact that he intended at some time to withdraw as trustee, and that the court had requested Landis to hold off his final withdrawal because "something might be worked out," but it does not appear that either appellant or his attorney had notice, formal or otherwise, as to the time when such withdrawal would actually be filed or of any date when the court would consider and pass on the same. Mr. Landis testified that he did not give appellant's attorney notice of the time when he would file a withdrawal and that as he recalled it he handed the document to the court or clerk during the trial of some case. Luna was not present as he recalled. Appellant testified that he never learned of the appointment until three or four weeks after it was made. At this point the court remarked, "Couple of hours, wasn't it? I discussed it with your attorney and you were sitting in the courtroom." Both appellant and his counsel disputed this fact and informed the court that the incident to which he referred occurred not on the day the appointment was made, but on the day the bond was given (April 6). At the conclusion of the colloquy the court made the remark that he "could be mistaken," and we are left with the following conclusion, i. e., that the record is devoid of any process or notice of application to resign (if it was a resignation) given to Luna or to the remaindermen beneficiaries under the will; that Luna and his attorney were informed that a resignation (or refusal) by Landis would probably be filed but had no notice as to the time when it would be filed or when the court would act upon it, and therefore had no opportunity to be heard in respect thereto.
Appellant has designated his motion one based on irregularities patent on the face of the record, such as is recognized and extended in time by section 511.250 RSMo 1949, V.A.M.S. The irregularities contemplated by such a motion must appear on the face of the record proceedings antecedent to the judgment. But we are inclined to believe that appellant's motion must necessarily take also the attributes of a writ of error coram nobis, which has for its purpose the proof of a fact by evidence dehors the record, which fact so proved must be one which entered into the very makeup of the judgment sought to be overruled and which fact, had it been established, would have prevented the entry of the judgment.[13] Both such prongs of attack can be made in the same motion.[14] We take the motion as a direct attack upon the judgment which permitted the resignation and appointed a successor trustee. Therefore it is not necessary, in order to sustain such motion, that the judgment complained of be found void, but only to find that there was an irregularity whereby the rights of the parties may have been denied because of some failure to adhere to the established rules or mode of proceeding in the orderly administration of justice.[15]
Were those interested in the trust estate, by reason of such interest solely, entitled to notice of the appointment of a substitute trustee? A testator may appoint the person of his choice as trustee. Such person takes under authority of the will and without necessity of notice to or permission from anyone, and not by reason of appointment or confirmation of court. In fact, the action of the court in attempting to "appoint" the designated *223 trustee is a nullity.[16] But the rule is different in respect to a successor trustee. Secs. 456.190 and 456.200 RSMo 1949, V.A. M.S., providing for appointment of successors, are not applicable to testamentary trusts.[17] The appointment of a successor presupposes that a vacancy exists. A trustee who has once entered upon his duties cannot resign except in accordance with the terms of the will, or with the consent of all persons interested beneficially or legally, or by order of court after due notice of the application to resign. Riggs v. Moise, 344 Mo. 177, 128 S.W.2d 632, and authorities cited at loc. cit. 635, 636.[18]
Thus far the parties are in substantial agreement. But respondent's position is that Mr. Landis had never accepted and consented to nor entered upon his duties as trustee, had not assumed charge or control of the real estate, and therefore the appointment of Lummis was not to fill a "vacancy" created by resignation, but was instead an initial appointment in accordance with the terms of the will and the refusal of the nominated trustee to act thereunder.[19] Appellant on the other hand contends that Mr. Landis had accepted the appointment made under the will by reason of the collection of numerous rentals from the real estate, such being acts which indicated acceptance of the trust.[20]
Acceptance of a testamentary trusteeship will be found from the acts performed by the person to be charged with such; and dealing with a part of the property which would be proper only if he were trustee constitutes an acceptance.[21] It is well settled that the offices of executor and trustee do not merge, although they may be conferred upon and the powers of such offices be exercised by the same person;[22] although in trusts of this character, absent an intention to the contrary appearing in the will, the trust begins immediately and does not await the conclusion of the administration, even though the assets may not be immediately available for use.[23] But bequests of personalty go into the hands of the executor and do not become subject to any control by the trustee until there has been a legal separation of the funds. Until such separation the acts done in respect thereto are in the capacity of executor and not as trustee.[24] However, it is different as to realty, for, absent the power conferred in the will or order of probate court, sections 462.280, 462.290, 463.150 et seq. RSMo 1949, V.A. M.S., the title as well as the power of control over realty goes directly to the heirs or devisees, in this case the trustees, and the executors have no concern with it.[25] This being the case, if Landis and Luna *224 took charge of the real estate and collected rents, without order of probate court giving them such authority, they necessarily did so not in the capacity of executors, but in the proper exercise of their duties as trustees.
The questions therefore are (a) did Landis and Luna take charge of the real estate and (b) if so was such by authority of probate court order (and therefore in capacity of executors) or without court order and therefore in the capacity of trustees. We find nothing in the testimony in reference to the handling of the real estate by Landis, or Landis with Luna, prior to March 11, 1955, the date of the order here attacked. We do find in the transcript, accompanying the "petition for order to deliver over assets" which was filed by Landis as executor with the circuit clerk (no order for filing, or that it be made a part of the record, being shown), the unsigned copy of what the petition states is the "amended final settlement" of the two executors, by which settlement the executors charge themselves with some real estate rentals received and take credit for the payment of taxes for several years. The "petition to deliver over" prays for what amounts to an order of distribution to the "duly appointed and acting trustees." We are of the opinion that such petition and copy of settlement never became a part of the record in this case. Certainly it did not belong in the proceeding, for the power to make settlement and order distribution by the executors is vested exclusively in the probate court, and the circuit court has no power to function in that respect.[26] Such document, if it was a document, had no more meaning or effect in the files of the circuit court (at least without an order of the court permitting it to be filed or making it of record) than an application for a marriage license. Be that as it may, it certainly was not a part of the record "antecedent to the judgment rendered" on March 11, 1955, as required on motion to vacate for irregularities patent. True, it might have been put in evidence in support of the motion coram nobis, but it was never offered, received or considered in evidence. We do not know whether the circuit judge even saw it prior to his ruling on the motion, and we may not consider it now.
But, irrespective of the foregoing, we are still not informed whether the collection of rentals and payment of taxes, if such occurred, was by Landis and Luna as executors or as trustees, for the reason that the record is silent as to whether there was any probate court order authorizing such. It seems to us that, where the irregularity does not appear upon the face of the record in a court of general jurisdiction whose judgment is attacked, the burden should be upon that person who attacks the regularity of such judgment to produce and show those facts which prove that such irregularity exists, for, absent a showing to the contrary, the existence of a matter necessary to confer jurisdiction will be presumed to have been determined favorably to the jurisdiction when the judgment was rendered.[27]
Was appellant entitled to notice as a party to the proceeding then being carried on in the court? Irene Lummis had filed a petition for the appointment of a successor trustee. Luna had filed answer denying that such vacancy existed. The case had ceased to be ex parte and the parties were adversaries. Whether an appointment could or should be made under the state of affairs which existed was a matter in controversy involving difficult questions of fact and law.
*225 It is fundamental to our common-law sense of justice and fair play and it is also embedded in our constitutions that a litigant party shall have opportunity to be heard on matters which affect his interests.[28] "In our system of jurisprudence reasonable notice to a litigant (when there exists even the possibility of action adverse to his interests) is deemed to be of the essence of fairness and justice. Reasonable notice to parties whose interests are at stake in a contemplated order is a prerequisite to the lawful exercise of the court's power. Opportunity for a litigant to present his views as to the matters instantly before the court which may affect his rights is the very foundation stone of our procedure. The requirement of notice can result in no hardship. Nor is it restrictive of the trial court's freedom of action in the exercise of its judicial discretion." Albert J. Hoppe, Inc., v. St. Louis Public Service Co., Mo.Sup., 235 S.W.2d 347, loc. cit. 350. "It is a cardinal principle, that whenever a party's rights are to be affected by a summary proceeding, or motion in court, that party should be notified, in order that he may appear for his own protection." George v. Middough, 62 Mo. 549, loc. cit. 551. See also section 506.060 RSMo 1949, V.A.M.S. Luna had interests which were affected both as beneficiary and as trustee in protecting the estate for all of the beneficiaries and the remaindermen. He, as a party to the proceeding then pending, was entitled to present his evidence and offer his views on the matter, both as to the validity of the resignation and, we think, (after the parties were once in court on the question) on the question of the unsuitability of the person proposed to be appointed as successor. If he was entitled to be heard he was entitled to notice, unless he is charged with having had notice. The majority of decisions on this question of notice have been made in determining the validity of an after-judgment order. It is generally said that such after-judgment orders are an exception because, during the progress of a cause, a lawyer is charged with the duty and presumed to know what is going on in his case; whereas after the cause is terminated he is not charged with further vigilance in that respect.[29] But the exception points up the reason for the rule itself, that a party or his lawyer must be vigilant to follow the progress of the proceeding in which he is involved. When the lack of knowledge of a proposed order arises because of circumstances against which vigilance could not protect, the rule itself must fail. Thus in Bindley v. Metropolitan Life Ins. Co., 358 Mo. 31, 213 S.W.2d 387, where a case on the "Hold Docket" was dismissed without notice or hearing; and thus in Mandel v. Bethe, Mo.App., 170 S.W.2d 87, in a case which had been on appeal from the justice court for ten years, but was not on the trial or dismissal docket; and thus in In re Waters' Estate, Mo.App., 153 S.W.2d 774, where attorney fees were allowed without notice.
This case was not set for hearing. It had been passed from term to term from May 1, 1953, to March 11, 1955, when the order complained of was entered. It had become a sleeping dog, and a fair measure of vigilance did not require that appellant's attorney sit constantly in the courtroom in order that he might be present when the dog was kicked. It would have worked no hardship to have notified Luna's attorney of the filing of the withdrawal as trustee and the appointment of a successor. And we think it is apparent that the failure to notify him arose simply from oversight, probably because there had been so many informal discussions concerning the matter that both Mr. Landis and the circuit judge more or less took appellant's knowledge for granted. Nevertheless we believe that he, as a party to the proceedings and having an interest in the matter, was entitled to such notice so that he might have opportunity to present his evidence, also his recommendations, *226 for whatever consideration the court cared to give them.
Respondent in his very able and persuasive brief contends that appellant is estopped because in his answer, after denying that a vacancy existed and praying for dismissal of the petition for appointment of a successor trustee, he prayed that in event Landis resigned a suitable person be appointed in his stead. We do not view this prayer as binding the appellant to agree that any procedure used to effect the withdrawal of Landis would be a valid one, or that such could be accomplished without notice to the pleader, so that he could not at that time question the validity of such resignation or the propriety of the appointment made thereafter.
Was the error harmful? A settlor can appoint almost anyone he chooses, but a court, in appointing a successor trustee, must exercise his discretion subject to clearly defined rules. It is said that the court will have regard for (1) the intention of the settlor; (2) the interests and wishes of the various beneficiaries ; and (3) whether the appointment will promote or impede the proper administration of the trust.[30] The wishes of the beneficiaries are an important factor to be heard and considered, although the court is not bound to follow them.[31] And, although it is not uncommon for the settlor to do so, the court will not ordinarily appoint one having a beneficial interest,[32] nor one who is closely associated or a near relative of one of the beneficiaries.[33] In In re Hawke's Will, 222 App. Div. 643, 228 N.Y.S. 165, it was held improper to appoint a stepmother. At vol. 1, sec. 277, p. 480, Perry on Trusts, it is stated that some courts say they will not appoint a husband of the beneficiary because difficulties frequently grow out of that relation.
The wishes of the remaining trustee should also be given consideration,[34] although we agree with respondent that the remaining trustee may not name the successor (either by insisting upon the appointment of one certain person or unreasonably objecting to others who may be suggested).
In Selleck v. Hawley, 331 Mo. 1038, 56 S.W.2d 387, loc. cit. 397, the court adopts the statement from 39 Cyc., p. 263, wherein it is said, "`(W)here inharmonious or unfriendly relations exist between the trustees, or between them and the cestui que trust, there may be sufficient reason for removal.'"
In In re Estate of Beckwith v. Cooper, 258 Ill.App. 411, 416, the court said, "As a general rule, where an appointment of a particular person will engender ill feeling between trustees, or between trustees and cestui que trustents, so as to prevent beneficial cooperation in the administration of the trust, the appointment of that person should not be made."
The will of Andrew Jackson did not expressly exclude the husband of Irene from appointment. But the testator indicated some fear or suspicion that she would make trouble after the will was offered for probate and attempted to protect against that contingency. When the will was made she and her present husband were then married and living together. Again adverting to the Selleck case, Judge Westhues paid respect to the testator's intention by remarking, 56 S.W.2d loc. cit. 396, "The testator had the opportunity but did not name his own son, Henry L. King, a beneficiary under the will, as a trustee." (Our emphasis.)
*227 On the hearing on the motion it was shown that at one time, after Mr. Landis had indicated his intention to withdraw, but prior to the date of such withdrawal, the appellant had suggested for appointment and had present in court at the time of such suggestion other persons who were willing to serve as successor trustee. We gather from the remarks of the court that one of such persons was a banker and another of them was an insurance man. To the reception of such evidence the respondent objected, and was sustained, on the ground that "Mr. Landis hadn't resigned at that time and the place wasn't open" (a position definitely inconsistent with that now taken by respondent before this court).
It would appear that the court has considered the wishes of one beneficiary, if not in opposition to the intention of the testator, certainly with nothing indicated in the will that the testator considered such appointment either welcome or desirable; that the person so appointed is the husband of one of the beneficiaries; that such appointment is against the wishes of the other beneficiary and trustee, who is the ex-husband of the wife of the trustee so appointed; that such appointment was made after such cotrustee had suggested the appointment of various disinterested persons; and under such circumstances it is not likely to "promote the proper administration of the trust" nor the preservation of the corpus for the remaindermen,[35] who are not represented here. We believe it would have been better to appoint a disinterested person as trustee.
We apprehend that the rules which limit the discretion of the chancellor must of necessity be flexible and bend to meet the situation at hand, and that it is sometimes either unwise or impossible to attempt to follow the wishes of all those interested, or any of those interested; and a situation may arise, and could possibly arise in this case, where the court might find it necessary to appoint a person undesirable under the general pronouncements which have been made, simply because the parties are unable to suggest, or the court is unable to find, any disinterested person able and willing and who in the opinion of the chancellor is desirable.
For the foregoing reasons the order of March 11, 1955, appointing a trustee is set aside and the case is remanded for further proceeding consistent with this opinion.
McDOWELL, P. J., concurs.
STONE, J., not sitting.
NOTES
[1] Nettleton Bank v. McGaughey's Estate, 318 Mo. 948, 2 S.W.2d 771; Oehler v. Philpott, Mo.Sup., 253 S.W.2d 179; Pursley v. Pursley, Mo.Sup., 213 S.W.2d 291; Mack v. Mack, Mo.Sup., 281 S.W.2d 872; First National Bank of Kansas City v. Schaake, 355 Mo. 1196, 200 S.W.2d 326.
[2] Cotton v. Iowa Mutual Liability Ins. Co., 363 Mo. 400, 251 S.W.2d 246; State ex rel. Burcham v. Drainage Dist. No. 25, Mo.Sup., 271 S.W.2d 525; State ex rel. State Highway Commission v. Schade, Mo.Sup., 265 S.W.2d 383.
[3] Aufderheide v. Polar Wave Ice & Fuel Co., 319 Mo. 337, 4 S.W.2d 776, 783; Jackson v. Merz, 358 Mo. 1212, 219 S.W. 2d 320; Cooper v. School Dist. of Kansas City, 362 Mo. 49, 239 S.W.2d 509.
[4] In re Wilson's Estate, 320 Mo. 975, 8 S.W.2d 973; In re Christian Brinkop Real Estate Co., Mo.App., 215 S.W.2d 70; see Menzi v. White, 360 Mo. 319, 228 S. W.2d 700, 17 A.L.R.2d 796; see Simmons v. Friday, 359 Mo. 812, 224 S.W.2d 90.
[5] See also Carr, Missouri Civil Procedure, sec. 859, p. 44.
[6] Harrison v. Slaton, Mo.Sup., 49 S.W.2d 31, 34; see Cross v. Greenaway, 347 Mo. 1103, 152 S.W.2d 43, 44.
[7] Scott v. Rees, 300 Mo. 123, 253 S.W. 998; Cannon v. Nikles, 235 Mo.App. 1094, 151 S.W.2d 472; Arndt v. Arndt, 177 Mo.App. 420, 163 S.W. 282, and cases cited; Hemm v. Juede, 153 Mo.App. 259, 133 S.W. 620.
[8] Simms v. Thompson, 291 Mo. 493, 236 S.W. 876.
[9] Mandel v. Bethe, Mo.App., 170 S.W.2d 87, 89; Audsley v. Hale, 303 Mo. 451, 261 S.W. 117; State ex rel. Potter v. Riley, 219 Mo. 667, 118 S.W. 647, 656.
[10] Precision Metal Workers v. Northside Mercantile Co., 218 Mo.App. 544, 280 S.W. 82, and cases cited; Audsley v. Hale, 261 S.W. 117, supra; Simms v. Thompson, 236 S.W. 876, supra.
[11] State v. Hurst, Mo.Sup., 280 S.W.2d 115; Scott v. Crider, 217 Mo.App. 1, 272 S.W. 1010; Scott v. Rees, 300 Mo. 123, 253 S.W. 998.
[12] See Lilly v. Menke, 92 Mo.App. 354; City of Caruthersville v. Cantrell, Mo. App., 241 S.W.2d 790; Olson v. Olson, Mo.App., 184 S.W.2d 768, 771; Simms v. Thompson, 236 S.W. 876, supra.
[13] State ex rel. Potter v. Riley, 219 Mo. 667, 118 S.W. 647; Cross v. Gould, 131 Mo.App. 585, 110 S.W. 672; Simms v. Thompson, 291 Mo. 493, 236 S.W. 876; Wooten v. Friedberg, 355 Mo. 756, 198 S.W.2d 1, loc. cit. 7.
[14] Crabtree v. Aetna Life Ins. Co., 341 Mo. 1173, 111 S.W.2d 103; Casper v. Lee, 362 Mo. 927, 245 S.W.2d 132; Murray v. United Zinc Smelting Corp., Mo.Sup., 263 S.W.2d 351.
[15] Carr v. Carr, Mo.Sup., 253 S.W.2d 191, and cases cited at loc. cit. 194; Casper v. Lee, 362 Mo. 927, 245 S.W.2d 132, loc. cit. 138.
[16] In re Beauchamp's Estate, Mo.App., 184 S.W.2d 729; Riggs v. Moise, 344 Mo. 177, 128 S.W.2d 632, 634, 635; Williams v. Hund, 302 Mo. 451, 258 S.W. 703; Baker v. Dale, D.C.W.D.Mo., 123 F. Supp. 364.
[17] Hitch v. Stonebraker's Estate, 125 Mo. 128, 28 S.W. 443; Brandon v. Carter, 119 Mo. 572, 24 S.W. 1035.
[18] In re Parker's Trust Estate, 228 Mo. App. 400, 67 S.W.2d 114, has been sometimes cited as authority to the contrary, but see Professor Overstreet's dissertation and compilation of authority, 13 M.L.R. (1948), p. 257, et seq.
[19] See Brandon v. Carter, 119 Mo. 572, 24 S.W. 1035; Oxley Stave Co. v. Butler County, 121 Mo. 614, 26 S.W. 367, 373; 76 A.L.R., page 1385 et seq.
[20] It is not contended that the trustees had made any effort to pay any of the income over to the beneficiaries.
[21] Restatement of the Law of Trusts, vol. 1, sec. 6, p. 23; Bogert, Trusts and Trustees, vol. 1A, sec. 150, p. 58; Scott on Trusts, vol. 1, sec. 6, pp. 50-52; Roberts v. Moseley, 51 Mo. 282.
[22] In re Schield's Estate, Mo.Sup., 250 S.W.2d 151; West v. Bailey, 196 Mo. 517, 94 S.W. 273; State ex rel. Richards v. Fidelity & Casualty Co., Mo.App., 82 S.W.2d 123.
[23] Estey v. Commerce Trust Co., 333 Mo. 977, 64 S.W.2d 608; Bolles v. Boatmen's National Bank of St. Louis, 363 Mo. 949, 255 S.W.2d 725.
[24] Selleck v. Hawley, 331 Mo. 1038, 56 S.W.2d 387; In re Schield's Estate, Mo. Sup., 250 S.W.2d 151; In re Beauchamp's Estate, Mo.App., 184 S.W.2d 729.
[25] In re Bartels' Estate, 238 Mo.App. 715, 187 S.W.2d 348; Thorp v. Miller, 137 Mo. 231, 38 S.W. 929; Bolles v. Boatmen's National Bank of St. Louis, 255 S.W.2d 725, supra; Baker v. Dale, D.C. W.D.Mo., 123 F.Supp. 364.
[26] Section 481.020 RSMo 1949, V.A.M.S.; Smith v. St. Louis Union Trust Co., 340 Mo. 979, 104 S.W.2d 341; Hax v. O'Donnell, 234 Mo.App. 636, 117 S.W.2d 667; In re Beauchamp's Estate, Mo.App., 184 S.W.2d 729.
[27] Gill v. Sovereign Camp, W.O.W., 209 Mo.App. 63, 236 S.W. 1073; Theener v. Kurn, Mo.App., 132 S.W.2d 707; Steinbaum v. Wallace, 237 Mo.App. 841, 176 S.W.2d 683, and cases reviewed; Baker v. Baker, Mo.App., 274 S.W.2d 322, 327, and cases cited.
[28] Merrill on Notice, vol. 1, sec. 523, p. 519, sec. 531, p. 535; Wade on the Law of Notice, sec. 1171, p. 592; 60 C.J.S., Motions and Orders, § 15, p. 15.
[29] Dougherty v. Manhattan Rubber Mfg. Co., 325 Mo. 656, 29 S.W.2d 126; 66 C.J.S., Notice, § 12, p. 648; cases cited in Baker v. Baker, Mo.App., 274 S.W.2d 322, loc. cit. 325.
[30] Restatement of the Law of Trusts, sec. 108, p. 284; 90 C.J.S., Trusts, § 217 e, pp. 160, 161; Perry on Trusts, vol. 1, sec. 39, p. 29; Stone v. Baldwin, 347 Ill.App. 128, 106 N.E.2d 379, 385.
[31] In re Jones Estate, 236 Iowa 563, 19 N.W.2d 611.
[32] Selleck v. Hawley, 331 Mo. 1038, 56 S.W.2d 387.
[33] Scott on Trusts, vol. 1, sec. 108.2, pp. 568, 569; Bogert, Trusts and Trustees, vol. 3, sec. 532, pp. 339, 340; Perry on Trusts, vol. 1, sec. 297, p. 505.
[34] See 90 C.J.S., Trusts, § 217 e, p. 161.
[35] See In re McCaskey's Estate, 293 Pa. 497, 143 A. 209.
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FILED
NOT FOR PUBLICATION
OCT 25 2017
UNITED STATES COURT OF APPEALS MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS
FOR THE NINTH CIRCUIT
INGRID JUNITA THEODOREIS, No. 14-72614
Petitioner, Agency No. A097-854-100
v.
MEMORANDUM*
JEFFERSON B. SESSIONS III, Attorney
General,
Respondent.
On Petition for Review of an Order of the
Board of Immigration Appeals
Submitted October 5, 2017**
Pasadena, California
Before: GRABER, MURGUIA, and CHRISTEN, Circuit Judges.
Petitioner Ingrid Junita Theodoreis, a native and citizen of Indonesia,
challenges a final order of removal. Petitioner seeks relief premised on her
Christian religion and Chinese ethnicity. The Board of Immigration Appeals
("BIA") concluded that Petitioner, though credible, failed to carry her burden of
*
This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
**
The panel unanimously concludes that this case is suitable for
decision without oral argument. Fed. R. App. P. 34(a)(2).
proof under the Immigration and Nationality Act ("INA"). We have jurisdiction
under 8 U.S.C. § 1252. Reviewing for substantial evidence, Sanjaa v. Sessions,
863 F.3d 1161, 1164 (9th Cir. 2017), we deny the petition.
1. Substantial evidence supports the BIA’s determination that the harm
suffered by Petitioner (name-calling, rock-throwing, and arson and looting of her
family’s house) did not rise to the level of past persecution as contemplated by the
INA. Substantial evidence also supports the determination that Petitioner failed to
establish a connection between the tragic murder of her brother and any targeting
that she experienced. Accordingly, the BIA permissibly denied the claim for
asylum.
2. With respect to withholding of removal, substantial evidence supports the
BIA’s determination that, although Petitioner subjectively fears persecution in the
future on account of her religion or ethnicity, her fear is not objectively well-
founded. For example, her remaining family members have continued to live in
Indonesia without harm or harassment for 15 years, and recent reports of country
conditions confirm improvements in Indonesia for ethnic Chinese and Christians.
Even assuming that Petitioner is a member of a disfavored group, see Halim v.
Holder, 590 F.3d 971, 979 (9th Cir. 2009), she has not demonstrated an
individualized risk of harm.
2
3. Petitioner has waived any challenge to the denial of Convention Against
Torture relief by failing to include any argument on this issue in her opening brief.
See Mendoza v. Block, 27 F.3d 1357, 1363 (9th Cir. 1994) (stating waiver
principle).
Petition DENIED.
3
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9 F.3d 1552
NOTICE: Ninth Circuit Rule 36-3 provides that dispositions other than opinions or orders designated for publication are not precedential and should not be cited except when relevant under the doctrines of law of the case, res judicata, or collateral estoppel.LEONE MANUFACTURING COMPANY, Plaintiff-Appellant,v.Richard A. Canatella, Appellant,v.SUPERIOR COURT OF SAN MATEO, CALIFORNIA, et al., Defendant-Appellee.TOPPER DISTRIBUTING COMPANY, Topper Frosty USA, Inc.; AldoG. Cinquini, Plaintiff-Appellant,v.CLERK OF COURT, Superior Court for County of San Mateo;Sheriff of San Mateo Peter Mirosnkoff and Donald Leed;Thomas J. Donohoe, Terri Donohoe; James Donohoe; ElizabethDonohoe; Inez N. Feller; David M. McKim; Carr McClellanIngersoll Thompson & Horn; Edward Tredinnick; Phelan StuooSorensen & McQuaid and Richard Schmidt; Jeffrey C. Wurms,Reidun Stromsheim and Stokes Welch Stromsheim & Olrich,Defendants-Appellees.
Nos. 92-16931, 92-16935, 92-17094.
United States Court of Appeals, Ninth Circuit.
Argued and Submitted Oct. 6, 1993.Decided Oct. 28, 1993.
Before: FERGUSON, THOMPSON and O'SCANNLAIN, Circuit Judges.
1
MEMORANDUM*
2
The relevant California statutes are constitutional. All of the appellants' claims are either time-barred, barred by principles of res judicata and collateral estoppel, or are insufficient to state constitutional claims under section 42 U.S.C. § 1983 or Bivens v. Unknown Named Agents of Federal Bureau of Narcotics, 403 U.S. 388 (1971). The district court did not err in dismissing all claims against all defendants, nor did it err in imposing sanctions against appellants Leone Manufacturing Company, Richard A. Canatella, Topper Distributing Company, Topper Frosty USA, Inc., and Aldo G. Cinquini.
3
These appeals are frivolous. The appellees are awarded their attorney fees on appeal pursuant to Federal Rule of Appellate Procedure 38 in an amount to be determined by the district court, together with their costs on appeal. These fees and costs on appeal are assessed, jointly and severally, against Leone Manufacturing Company, Richard A. Canatella, Topper Distributing Company, Topper Frosty USA, Inc., and Aldo G. Cinquini. In the event an appeal should be taken from the district court's award of attorney fees for this frivolous appeal, any appeal from that award shall be heard by the present panel of Judges Ferguson, Thompson, and O'Scannlain.
4
AFFIRMED. REMANDED to the district court for its determination of the amount of attorney fees to be awarded to the appellees pursuant to Fed.R.App.P. 38.
*
This disposition is not appropriate for publication and may not be cited to or by the courts of this circuit except as provided by 9th Cir.R. 36-3
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550 F.3d 224 (2008)
Alejandro LINARES HUARCAYA, Petitioner,
v.
Michael B. MUKASEY, Attorney General, Respondent.
Docket No. 08-0253-ag.
United States Court of Appeals, Second Circuit.
Argued: October 29, 2008.
Decided: December 12, 2008.
*225 Ramiro Alcazar, Meriden, Connecticut.
Ethan B. Kanter, Senior Litigation Counsel (Michael P. Lindemann, Assistant Director, Office of Immigration Litigation, on the brief) for Gregory G. Katsas, Assistant Attorney General, Civil Division, Department of Justice, Washington, D.C.
Before: WALKER, B.D. PARKER, AND RAGGI, Circuit Judges.
PER CURIAM:
Petitioner Alejandro Linares Huarcaya, a native and citizen of Peru, seeks review of a decision of the Board of Immigration Appeals ("BIA") upholding the denial of his application for adjustment of status. In re Huarcaya, No. A 79 078 179, 2007 WL 4707389 (B.I.A. Dec. 17, 2007). We affirm the BIA's decision and deny review of the petition.
*226 BACKGROUND
In 1994, Congress amended 8 U.S.C. § 1255(i) to allow aliens who entered the United States without inspection and met certain specifications to adjust their status upon the payment of a penalty fee. Initially, to be eligible for adjustment under § 1255(i), aliens were required to prove that they had a visa petition or labor certification filed on their behalf on or before January 14, 1998. In 2000, however, Congress temporarily extended that deadline to April 30, 2001. Pub.L. No. 106-554, 114 Stat. 2763 (codified as amended at 8 U.S.C. § 1255 (2000)).
The United States Department of Justice promulgated regulations to govern who can be "grandfathered" under 8 U.S.C. § 1255(i). See 8 C.F.R. § 1245.10. In addition to meeting the deadline, an alien must show that the relevant labor or marriage-visa petition filed on her behalf was "approvable when filed." 8 C.F.R. § 1245.10(a). According to the regulations, "approvable when filed"
means that, as of the date of the filing of the qualifying immigrant visa petition under section 204 of the Act or qualifying application for labor certification, the qualifying petition or application was properly filed, meritorious in fact, and non-frivolous ("frivolous" being defined herein as patently without substance). This determination will be made based on the circumstances that existed at the time the qualifying petition or application was filed. A visa petition that was properly filed on or before April 30, 2001, and was approvable when filed, but was later withdrawn, denied, or revoked due to circumstances that have arisen after the time of filing, will preserve the alien beneficiary's grandfathered status if the alien is otherwise eligible to file an application for adjustment of status under section 245(i) of the Act.
8 C.F.R. § 1245.10(a)(3) (emphasis added). Therefore, to be eligible for adjustment, an alien must show that the relevant petition was (1) properly filed (2) meritorious in fact and (3) non-frivolous.
Turning to the case at hand, the record reflects that while Huarcaya was living in Peru, he rented an apartment from a family that had a daughter named Ruth. Although Huarcaya fathered several children by two different women in Peru, he testified that he dated Ruth in Peru for approximately eight years. In 1998, Ruth left Peru for the United States and became a legal permanent resident. Huarcaya came to the United States without inspection in 2000, purportedly to join her. They were married on March 31, 2000, and within a month, Ruth filed an I-130 visa petition for Huarcaya.
The marriage was short-lived, and Ruth and Huarcaya were divorced on March 4, 2002. Ruth's I-130 was denied on March 8, 2004. Shortly after his divorce was finalized, Huarcaya married his second wife, Lucy, an American citizen. Lucy also filed an I-130 on his behalf. Unlike Ruth's, Lucy's I-130 was approved, and Huarcaya filed an I-485 to seek adjustment of status. The United States Citizenship and Immigration Services ("CIS") denied the application. In its denial letter, the CIS explained that at the time of Huarcaya's I-485 interview, the CIS had requested evidence concerning the bona fide nature of Huarcaya's marriage to Ruth and in response, Huarcaya only submitted photos. Further, noting the approximate one-year duration of his marriage to Ruth, the CIS concluded that Huarcaya failed to meet his burden of proving that Ruth's I-130 petition was approvable when filed.
After an immigration hearing in which he sought review of the CIS's determination, and during which Huarcaya and Ruth *227 testified, the Immigration Judge ("IJ") found that Huarcaya had "not met the burden of proof to show that [Ruth's application for Huarcaya] was approvable when filed," and ordered him removed.
Between the time the IJ rendered his decision in April, 2006 and Huarcaya's case was decided by the BIA, the BIA considered the meaning of 8 C.F.R. § 1245.10(a)(3) as a "matter of first impression." In re Riero, 24 I. & N. Dec. 267, 268 (B.I.A. Aug. 15, 2007). Riero presented a similar fact pattern an alien divorced his first wife, who had filed a marriage-based petition for him before the cut-off date. The question then became whether his first wife's petition was "approvable when filed" such that Riero could be grandfathered under 8 U.S.C. § 1255(i).
In Riero, the BIA found that "in order for a visa petition to be `approvable when filed' in this context, there must be a showing that the marriage on which it is based was bona fide." Id. "It is not enough to show merely that a marriage existed," the BIA elaborated. Rather, "in order to be `meritorious in fact,' the visa petition must be based on a genuine marriage in which the parties intended to share a life as husband and wife, not a marriage of convenience designed solely to confer an immigration benefit on one of the parties." Id. This interpretation "is confirmed by the explanation of the `approvable when filed' standard in the Federal Register, which provides as an example that a visa petition is not approvable when filed if it `is fraudulent or if the named beneficiary did not have, at the time of the filing, the appropriate family relationship or employment relationship that would support the issuance of an immigrant visa.'" Id. at 268-69. According to the BIA, "[i]n the marriage context, a `fraudulent' visa petition would include one where the marriage was not entered into in good faith." Id. at 269. Determining that Riero's first marriage did not meet this standard, the BIA affirmed.
In the case before us, the BIA affirmed the IJ's decision, citing Riero.[1]In re Huarcaya, No. A 79 078 179, 2007 WL 4707389 (B.I.A. Dec. 17, 2007). The BIA adopted the IJ's conclusion that "there was no documentary evidence to support [Huarcaya's] claim that his first marriage was bona fide at the time of inception." Id. "Although it may be true that the respondent and his former wife had few joint documents or finances because they lived with the ex-wife's mother in the mother's house," the BIA wrote, "the respondent's former wife lacked key information about the respondent, his 6 children left behind in Peru, and the respondent's financial commitment to these children...." Id. Further, "there were also inconsistencies between their testimonies including what type of employment the respondent had in Peru, and how old the former wife was when she met the respondent." Id. The BIA denied relief and this petition for review followed.
DISCUSSION
On appeal, Huarcaya raises two claims. First, he argues that the BIA's construction of 8 U.S.C. § 1255(i) is not entitled to deference. Second, he argues that the term "meritorious in fact" is unconstitutionally vague.
I. Administrative Law Claim
Huarcaya's claim under Chevron is that 8 C.F.R. § 1245.10(a)(3) is invalid. See *228 Chevron, U.S.A., Inc. v. Natural Resources Def. Council, Inc., 467 U.S. 837, 844, 104 S.Ct. 2778, 81 L.Ed.2d 694 (1984). Specifically, Huarcaya argues that the BIA's interpretation of the regulation which requires that the petition be both "meritorious in fact" and "non-frivolous" to be "approvable when filed" renders "non-frivolous" impermissibly redundant. Under Huarcaya's analysis of the regulation, the only permissible interpretation of "meritorious in fact" and "non-frivolous" is not, as the BIA asserts, that the alien show that the petition was based on a bona fide marriage; rather, he argues that the petition must only establish a prima facie case for eligibility. Only this reading, Huarcaya contends, would give content to both the terms "non-frivolous" and "meritorious in fact," as opposed to rendering the term "non-frivolous" completely superfluous. The government, in response, argues that this argument simply identifies an ambiguity in the terms and does not undermine the reasonableness of the BIA's interpretation of the regulation.
We first must determine whether and what kind of deference applies to Huarcaya's claim. Huarcaya argues that Chevron applies. Chevron contemplates a two-step inquiry. At step one, we must determine "whether Congress has directly spoken to the precise question at issue" and "unambiguously expressed [its] intent." Id. at 842-43, 104 S.Ct. 2778. If the statute is silent or ambiguous, we must move to the second step and determine whether the agency's construction is reasonable. Id. at 843, 104 S.Ct. 2778. If the interpretation is reasonable, we must accept it. Id. at 844, 104 S.Ct. 2778.
Because the statute does not speak directly to this question, we can proceed to step two. Leaving aside for the moment the particular language of the regulation, the BIA's view articulated in Riero, requiring a bona fide marriage, is a permissible interpretation of the requirements of 8 U.S.C. § 1255(i). This interpretation is reasonable in light of the statutory framework Congress constructed. To be admissible to the United States on the basis of marriage to a United States citizen, an applicant must establish that the qualifying marriage was "not entered into for the purpose of procuring an alien's admission as an immigrant." 8 U.S.C. § 1186a(d)(1)(A)(i)(III). In the related context of a marriage-based visa petition, the BIA has required a petitioner to establish a "bona fide marital relationship" and a "valid marriage from its inception." See Matter of Phillis, 15 I. & N. Dec. 385, 387 (B.I.A. July 7, 1975); Matter of Laureano, 19 I. & N. Dec. 1, 1 (B.I.A. Dec. 12, 1983). Requiring the visa petition to be "approvable when filed" and "meritorious in fact" is consistent with these principles.
Although the regulations merit Chevron deference, Chevron is not necessary to resolve this appeal. In arguing for Chevron deference, Huarcaya conflates the issue of whether the agency has legitimately interpreted a congressional statute with whether the BIA has legitimately interpreted its own regulations. By focusing exclusively on the BIA's reading of "meritorious in fact" and "non-frivolous" in 8 C.F.R. § 1245.10(a)(3), Huarcaya is challenging the BIA's interpretation of its own regulations, not the agency's interpretation of the statute.[2] Therefore, Auer deference, and not Chevron, applies here. Auer *229 v. Robbins, 519 U.S. 452, 117 S.Ct. 905, 137 L.Ed.2d 79 (1997). As we have stated in the past, "Chevron deference is the deference afforded to an agency's interpretation of a statute it is charged with administering.... Auer deference is the deference we afford to an agency's interpretation of its own regulations." Edwards v. INS, 393 F.3d 299, 308 n. 11 (2d Cir.2004) (citation omitted).
Auer requires that an "agency's interpretations [of its own regulations] are... entitled to deference and are `controlling unless plainly erroneous or inconsistent with the regulation.'" Llanos-Fernandez v. Mukasey, 535 F.3d 79, 82 (2d Cir.2008) (quoting Auer, 519 U.S. at 461, 117 S.Ct. 905). See also Bah v. Mukasey, 529 F.3d 99, 110-11 (2d Cir.2008) ("[W]e give `substantial deference' to BIA decisions interpreting immigration regulations..., unless an interpretation is `plainly erroneous or inconsistent with the regulation.'") (citations omitted). It is "axiomatic that the [agency's] interpretation need not be the best or most natural one by grammatical or other standards.... Rather, the [agency's] view need be only reasonable to warrant deference." Pauley v. BethEnergy Mines, Inc., 501 U.S. 680, 702, 111 S.Ct. 2524, 115 L.Ed.2d 604 (1991); see also Wangchuck v. Dep't of Homeland Sec., 448 F.3d 524, 528 (2d Cir.2006) ("We review [the BIA's] interpretations of [its] immigration regulations with `substantial deference'....").
Auer deference, like Chevron deference, "is warranted only when the language of the regulation is ambiguous." Christensen v. Harris County, 529 U.S. 576, 588, 120 S.Ct. 1655, 146 L.Ed.2d 621 (2000). It is clear that "approvable when filed" is ambiguous; we previously said as much in Butt v. Gonzales, a case we decided addressing this regulation. 500 F.3d 130, 135 (2d Cir.2007) ("The meaning of `approvable when filed' is ambiguous...."). Indeed, "approvable when filed" could have several different meanings, including that the persons were actually married; that the persons submitted materials showing that they were actually married; that the petition facially met each requirement; or that the petition was non-fraudulent. Moreover, given the fact that "meritorious in fact" and "non-frivolous" the terms the regulations use to define "approvable when filed" are somewhat redundant, we find the regulation to be ambiguous. See id. (recognizing potential redundancies in the language "meritorious in fact" and "non-frivolous").
A recognition of the potential for redundancy in the BIA's interpretation does not, on its own, however, render the BIA's interpretation plainly erroneous or inconsistent with the regulation. Under well-settled principles of statutory construction, language should be read to give effect to each of its terms. Although Huarcaya's interpretation may give more content to "non-frivolous," this interpretation still does not entirely reconcile "meritorious in fact" and "non-frivolous," given that "meritorious in fact" on its own still connotes a requirement of legitimacy beyond a prima facie showing. If in this case the agency had promulgated regulations that rendered a statutory term redundant, Huarcaya's argument might carry some weight. Yet we are not here to select what a party contends is the "better" interpretation; we are constrained to accept an agency's interpretation that is not plainly erroneous. As the Supreme Court stated in Auer, "[t]here is ... no reason to suspect that the interpretation does not reflect the agency's fair and considered judgment." Auer, 519 U.S. at 462, 117 S.Ct. 905.
Further, it is unclear whether the statutory principle not to render a term redundant even applies to deference to an agency *230 regulation. In Auer, the petitioners argued that the Secretary of Labor's interpretation of its regulation "contravenes the rule that FLSA exemptions are to be narrowly construed against employers and are to be withheld except as to persons plainly and unmistakably within their terms and spirit." Auer, 519 U.S. at 462, 117 S.Ct. 905 (internal quotation marks and alteration omitted). The Court rejected the application of this rule to the Secretary. Justice Scalia wrote that the rule is one "governing judicial interpretation of statutes and regulations, not a limitation on the Secretary's power to resolve ambiguities in his own regulations." Id. at 462, 117 S.Ct. 905. The Court concluded that "[a] rule requiring the Secretary to construe his own regulations narrowly would make little sense, since he is free to write the regulations as broadly as he wishes, subject only to the limits imposed by the statute." Id. at 462-63, 117 S.Ct. 905. A similar argument could be made regarding the BIA's interpretation of its regulations.
At any rate, the BIA's interpretation is particularly reasonable given that we have allowed the BIA to interpret its regulations in light of a statute, even when the plain language of a regulation might suggest different interpretations. In Joaquin-Porras v. Gonzales, 435 F.3d 172 (2d Cir.2006), for example, we reviewed a claim that an immigration judge's decision contradicted the plain language of the applicable regulation, to which we ascribed deference. Although we noted that the "plain-language argument seems plausible," we concluded that "read in the context of other immigration statutes and decisions, the IJ's conclusion when applying the statute was reasonable, despite the fact that he seemed to disregard the words of the applicable regulation." Id. at 179. See also Singh v. Mukasey, 536 F.3d 149, 154 (2d Cir.2008) ("We have recognized the BIA's authority to construe regulations in light of statutes, even when their plain text seems to conflict. In this case, too, the BIA has permissibly construed the regulation so as to harmonize it with the statute. The BIA did not violate our mandate in doing so." (citation omitted)). The BIA's interpretation is consistent with Congress's intent to require aliens petitioning for adjustment under marriage-based visas to prove that their marriages are legitimate, and consequently merits deference.
For all these reasons, we conclude that the BIA's interpretation of "meritorious in fact" in Riero and the case at hand is permissible. As the First Circuit explained in adopting the same interpretation, albeit before the BIA's pronouncement in Riero, requiring a showing of a bona fide marriage is consistent with the "history of the statute's grandfather clause" which was "aimed to protect those who had legitimate visa applications on file before the more restrictive amendment came into force," rather than giving applicants a "second bite at the apple." Echevarria v. Keisler, 505 F.3d 16, 19-20 (1st Cir.2007) (emphasis added).
II. Void for Vagueness Claim
Huarcaya also claims that both the statute and the regulation violate due process because they are "void for vagueness" as applied to him, arguing that the phrase "meritorious in fact" is undefined and does not appear to have any well-known meaning. Huarcaya's ability to maintain a void-for-vagueness challenge to a civil regulation that provides immigration benefits is not clear. See generally Arriaga v. Mukasey, 521 F.3d 219, 222-23 (2d Cir.2008) ("The `void for vagueness' doctrine is chiefly applied to criminal legislation. Laws with civil consequences receive less exacting vagueness scrutiny."). We need not resolve that issue, nor need we address the government's claim that Huarcaya does *231 not have a due process interest in adjustment of status, because Huarcaya has failed to establish that the provision is vague as applied to him.
"When the challenge is vagueness `as applied,' there is a two-part test: a court must first determine whether the statute gives the person of ordinary intelligence a reasonable opportunity to know what is prohibited and then consider whether the law provides explicit standards for those who apply it." United States v. Nadi, 996 F.2d 548, 549 (2d Cir. 1993) (internal quotation marks and alterations omitted); see also Farrell v. Burke, 449 F.3d 470, 486 (2d Cir.2006). Although "meritorious in fact" is not a specifically defined term, Huarcaya did not lack notice as to what was required. The CIS told Huarcaya that he needed to submit more documentation to supplement his first wife's I-130, and that pictures alone were not enough. Moreover, Huarcaya knew already from the application his second wife successfully submitted and copiously documented for her I-130 petition what he needed to show to prove his marriage. As for the second prong, we agree with the government that marriage-based visa eligibility has always meant that a petitioner had to demonstrate that his marriage was bona fide. Given the guidance supplied by Riero and immigration judges' familiarity with determining the validity of marriage-based petitions, no real threat of arbitrary enforcement is presented. We therefore find that the regulation is not void for vagueness.
CONCLUSION
For the foregoing reasons, we deny review.
NOTES
[1] Because the BIA issued an opinion in this case that, in part, tracked the reasoning of the IJ, we review the BIA's decision as it supplements that of the IJ. See Dong Gao v. BIA, 482 F.3d 122, 125 (2d Cir.2007).
[2] This confusion is illustrated by Huarcaya's statement that "[i]t is inexplicable that the [sic] Congress would specifically require that an application be `non-frivolous' and `meritorious in fact' if it thought the terms were equivalent." (Petr.'s Br. 12). Congress, of course, did not promulgate these regulations; the Department of Justice did.
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268 F.2d 805
FIDELITY TRUST COMPANYv.AMERICAN SURETY COMPANY OF NEW YORK and HARTFORD ACCIDENT AND INDEMNITY COMPANY, Appellants.
No. 12874.
United States Court of Appeals Third Circuit.
Argued June 1, 1959.
Decided June 23, 1959.
James M. McCandless, Pittsburgh, Pa., for appellants.
J. Murray Egan, Pittsburgh, Pa. (Weller, Wicks & Wallace, Pittsburgh, Pa., on the brief), for appellee.
Before GOODRICH, KALODNER and HASTIE, Circuit Judges.
GOODRICH, Circuit Judge.
1
This is a suit by the plaintiff bank against two surety companies which had issued to the plaintiff a "Bankers Blanket Bond." The plaintiff won in the district court following a carefully considered opinion by the trial judge. D.C.W.D.Pa. 1959, 174 F.Supp. 630. The surety companies appeal.
2
The case presents no contested issue of fact. The amount of loss by the plaintiff was agreed upon and the sole question is that of determining the effect of a clause in the bond which will be set out presently.
3
The plaintiff bank made a series of loans to a concern called Re-Ly-On Products Company. Each loan was evidenced by a promissory note signed by the president or vice-president of the company. Each loan was secured by a written assignment of accounts receivable also signed by the president or vice-president of the company.1 Each of the accounts receivable was evidenced by a duplicate invoice on the regular form of Re-Ly-On Products Company. The invoice purported to show the sale of goods by Re-Ly-On to a customer. Some of these invoices represented a transaction which had in fact taken place. As to others the purported transaction had not taken place and the bank was left without the security which it would have had if the transaction had been what it was represented to be. The bank having failed to get its money sued the sureties for the loss involved in the fraudulent transactions.
4
The bond itself contains a great many words and covers a great many subjects. The part we are concerned with is under the heading "The Losses Covered By This Bond Are As Follows:" Paragraph (E) is the one involved.2 The critical words are: "Any loss * * * on * * * any securities * * * or other written instruments which prove to have been counterfeited or forged as to the signature. * * *" Were these invoices which bore no signature counterfeit?
5
This is the real question in the case. The plaintiff argues both that they were counterfeit and that the forgery provision is applicable. He cites authority and raises an interesting question. But we are not going to decide the forgery point because it seems clear to us that the plaintiff's recovery can be bottomed on the provision protecting loss from counterfeiting.
6
Both sides seem to agree that this is a question of Pennsylvania law. It may be but nothing has been shown us to establish that proposition. The bank is a Pittsburgh bank. The surety companies are corporations of New York and Connecticut respectively. Where the bond was issued we do not know. We gather that the transaction out of which the loss occurred took place in Pennsylvania. So we assume Pennsylvania law governs. Black & Yates, Inc. v. Mahoghany Ass'n, Inc., 3 Cir., 1942, 129 F. 2d 227, 233, 148 A.L.R. 841; Mann v. Salsberg, 1901, 17 Pa.Super. 280.
7
But we have had no citation of any Pennsylvania authority which is helpful on the point involved in the case and must, therefore, fashion our decision from the materials at hand as best we can.
8
Argument for the surety companies urges the point that the word "or" between the word "counterfeited" and the word "forged" indicates the use of different terms to express the same thing. That means, necessarily, that the word "counterfeited" could just as well be left out for it adds nothing to the term "forged."
9
We do not think this is the best construction of the instrument. The form was offered as a contract by large professional surety companies who certainly know what they are doing. We cannot think that it has not been very carefully drafted or that the draftsman put in words to mean nothing. Furthermore, this language is that of the promisor who is doing professional business for a consideration. The bond contained in the record is a printed form submitted by the surety company. If there is doubt about the meaning of language under those circumstances, it is not to be resolved in favor of the one who chose the words and as a business transaction issued the bond to another.3 Its very term "Blanket Bond" indicates that its coverage is to be wide and it is not unfair to interpret the document in this fashion.
10
The plaintiff's argument provides us with an ingenious diagram to show the type of loss which, under its construction, the bond protects against. It argues as follows:
11
"Plaintiff is protected against loss from its having acted upon
12
`written instruments which prove to have been counterfeited
13
or forged as to the signature of any maker, drawer, issuer, endorser, assignor, lessee, transfer agent or registrar, acceptor, surety or guarantor or as to the signature of any person signing in any other capacity,
14
or raised
15
or otherwise altered
16
or lost
17
or stolen * * *'"
18
We think that this is a more apt reading of the language than that shown in the argument of the defendant.
19
Both sides have referred us to many dictionary definitions of "counterfeit." Dictionary definitions are useful, of course. But in a business transaction we think that the use of the words is to be taken in accordance with common business usage as much as possible. We think that common usage would indicate that counterfeit is something that purports to be something that it is not. And that is just what these spurious invoices were. They looked all right even as to details but they were not what they seemed to be.
20
The judgment of the district court will be affirmed.
Notes:
1
The signatures on the notes and the assignments were genuine
2
The full wording is as follows:
"(E) Any loss through the Insured's having, in good faith and in the course of business, whether for its own account or for the account of others, in any representative, fiduciary, agency or any other capacity, either gratuitously or otherwise, purchased or otherwise acquired, accepted or received, or sold or delivered, or given any value, extended any credit or assumed any liability, on the faith of, or otherwise acted upon any securities, documents or other written instruments which prove to have been counterfeited or forged as to the signature of any maker, drawer, issuer, endorser, assignor, lessee, transfer agent or registrar, acceptor, surety or guarantor or as to the signature of any person signing in any other capacity, or raised or otherwise altered or lost or stolen, or through the Insured's having, in good faith and in the course of business, guaranteed in writing or witnessed any signatures, whether for valuable consideration or not and whether or not such guaranteeing or witnessing is ultra vires the Insured, upon any transfers, assignments, bills of sale, powers of attorney, guarantees, endorsements or other documents upon or in connection with any securities, obligations or other written instruments and which pass or purport to pass title to such securities, obligations or other written instruments; Excluding, However, any loss through Forgery or Alteration of, on or in any checks, drafts, acceptances, withdrawal orders or receipts for the withdrawal of funds or Property, certificates of deposit, letters of credit, warrants, money orders or orders upon public treasuries; and excluding, further, any loss specified in subdivisions (1) and (2) of Insuring Clause (D) as printed in this bond, whether or not any amount of insurance is applicable under this bond to Insuring Clause (D).
"Mechanically reproduced facsimile signatures are treated the same as handwritten signatures."
3
See Reid v. Sovereign Camp, W.O.W., 1941, 340 Pa. 400, 17 A.2d 890; Housing Authority of City of Pittsburgh v. Sanctis Const., Inc., 1945, 158 Pa.Super. 71, 43 A.2d 581. Restatement, Contracts § 236(d) (1932)
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04/06/2020
IN THE SUPREME COURT OF TENNESSEE
AT NASHVILLE
February 11, 2020 Session
IN RE: CUMBERLAND BAIL BONDING
Appeal by Permission from the Court of Criminal Appeals
Circuit Court for Van Buren County
No. 88CC1-2008-CV-1383 Larry B. Stanley, Jr., Judge
___________________________________
No. M2017-02172-SC-R11-CD
____________________________________
We granted this appeal to determine whether a trial court may suspend a bonding
company for violating a local rule of court requiring an agent of the bonding company to
be present at court appearances of defendants for whom the bonding company serves as
surety. We conclude that the local rule does not conflict with state statutes and is not
arbitrary, capricious, or unreasonable, and that the trial court did not err by suspending
the bonding company for violating the local rule. Accordingly, the judgment of the Court
of Criminal Appeals is reversed, and the judgment of the trial court is reinstated.
Tenn. R. App. P. 11 Appeal by Permission; Judgment of the Court of Criminal
Appeals Reversed and Trial Court’s Judgment Reinstated
CORNELIA A. CLARK, J., delivered the opinion of the Court, in which JEFFREY S. BIVINS,
C.J., and SHARON G. LEE, HOLLY KIRBY, and ROGER A. PAGE, JJ., joined.
Herbert H. Slatery III, Attorney General and Reporter; Andrée Sophia Blumstein,
Solicitor General; Zachary T. Hinkle, Deputy Attorney General; and Lisa Zavogiannis,
District Attorney General, for the appellant, State of Tennessee.
William A. Lockhart, Manchester, Tennessee, for the appellee, Cumberland Bail
Bonding.
OPINION
I. Factual and Procedural Background
The facts of this appeal are straightforward and undisputed. Cumberland Bail
Bonding (“Cumberland”) served as surety for two defendants in the 31st Judicial District
of Tennessee, which includes Van Buren County. Rule 26.05(B) of the Local Rules of
the 31st Judicial District states: “A bonding company shall notify the defendant/principal
of each court appearance. An agent of the bonding company shall be present for the
defendant’s court appearance.”1 The defendants for whom Cumberland served as surety
failed to appear on September 25, 2017, before the Circuit Court for Van Buren County.
Cumberland also failed to have an agent present at that court appearance as Local Rule
26.05(B) required. As a result, by an order filed on September 26, 2017, the circuit court
concluded that Cumberland had violated Local Rule 26.05(B) and suspended
Cumberland from “writing any additional bonds” pending a hearing.2
Cumberland filed a motion for reinstatement,3 and the circuit court held a hearing
on October 11, 2017. By an order filed on October 23, 2017, the circuit court denied
Cumberland’s motion for reinstatement and ruled that Cumberland “shall remain
suspended in Van Buren County.”4
1
As of November 1, 2018, this text now appears in Rule 27.05(B) of the Local Rules of the 31st
Judicial District.
2
Another local rule of the 31st Judicial District—Local Rule 26.08(B)(3)—authorized the circuit
court to “take appropriate disciplinary action” including suspension for a bonding agent’s “fail[ure] to
comply with any local rules.” This text now appears in Local Rule 27.08(B)(3).
3
Cumberland’s motion for reinstatement is not in the record on appeal, nor does the record
contain a transcript of the hearing on the motion. The record does contain, however, the circuit court’s
orders, and these orders recite the facts necessary to resolve the issues on appeal.
4
Counsel for Cumberland stated during oral argument in response to questioning from this Court
that Cumberland was reinstated in March 2018, although the reinstatement order is not in the record on
appeal. We agree with counsel for the parties that Cumberland’s reinstatement does not moot this appeal
because the issue presented falls within an exception to the mootness doctrine—capable of repetition but
evading review. State v. Rodgers, 235 S.W.3d 92, 97 (Tenn. 2007) (citation omitted) (“A court may
review the merits of an appeal . . . when the appeal involves issues capable of repetition yet evading
review.”). We also note that Cumberland’s initial 2008 “Petition for Approval of Bonding Company to
Write Bonds” pertained to the 31st Judicial District, which includes both Warren and Van Buren
Counties. The record on appeal does not include the order granting Cumberland’s petition, and neither
party to this appeal has raised any issue regarding Cumberland’s ability to write bonds in Warren County.
-2-
Cumberland appealed the trial court’s decision to the Court of Criminal Appeals.
Cumberland conceded that it violated Local Rule 26.05(B), but it asserted that the local
rule is inconsistent with Tennessee statutes and is arbitrary and capricious. In re
Cumberland Bail Bonding, No. M2017-02172-CCA-R3-CD, 2019 WL 1076887, at *1
(Tenn. Crim. App. Mar. 7, 2019), perm. app. granted (Tenn. Aug. 16, 2019). The Court
of Criminal Appeals acknowledged that trial courts have “inherent power” and “wide
discretion” to regulate bonding companies and bail bondsmen and stated that a trial
court’s regulation of a bail bonding company should not be overturned “absent a showing
that [the regulation is] arbitrary, capricious, or illegal.” Id. at *2 (citations omitted)
(internal quotation marks omitted). The Court of Criminal Appeals upheld the first part
of Local Rule 26.05(B) requiring a bonding company to give notice to a defendant of an
upcoming court appearance, describing it as “sound,” but the intermediate appellate court
ruled that the second part of Rule 26.05(B)—the part requiring an agent of the bonding
company to attend all court appearances—is “arbitrary, capricious, and illegal.” Id. As
the basis for this conclusion, the intermediate appellate court described the agent
attendance requirement as “redundant,” commenting that it is “not apparent why the
bonding company’s presence [at the court appearance] should also be required” since it
“would have presumably notified the defendant” of the court appearance. Id.
The State then applied to this Court for permission to appeal pursuant to
Tennessee Rule of Appellate Procedure 11. We granted the State’s application.
II. Standard of Review
Cumberland concedes that it violated Local Rule 26.05(B) and argues only that the
local rule is invalid and unenforceable because it is inconsistent with statutes and is
arbitrary and capricious. These arguments present questions of law which we review de
novo. See State v. Dycus, 456 S.W.3d 918, 924 (Tenn. 2015) (citations omitted) (stating
that de novo review applies to issues of statutory interpretation); Thomas v. Oldfield, 279
S.W.3d 259, 261 (Tenn. 2009) (citation omitted) (stating that interpretation of the
Tennessee Rules of Civil Procedure is a question of law to which de novo review
applies).
III. Analysis
Tennessee Supreme Court Rule 18 requires trial courts to adopt written uniform
local rules of procedure addressing certain subjects and additionally provides that “[e]ach
judicial district may also adopt other uniform rules not inconsistent with the statutory
law, the Rules of the Supreme Court, the Rules of Appellate Procedure, the Rules of Civil
Procedure, the Rules of Criminal Procedure, the Rules of Juvenile Procedure, and the
Rules of Evidence.” Tenn. Sup. Ct. R. 18(a); see also Tenn. Code Ann. § 16-3-407
(2009) (stating that trial courts in Tennessee are authorized “[to] adopt additional or
-3-
supplementary rules of practice and procedure not inconsistent with or in conflict with
the rules prescribed by the supreme court”). “[A]ny local rule that is inconsistent with a
statute or a procedural rule promulgated by the Supreme Court shall be invalid.” Tenn.
Sup. Ct. R. 18(c). See, e.g., Glisson v. Mohon Int’l, Inc./Campbell Ray, 185 S.W.3d 348,
354–55 (Tenn. 2006) (holding a local rule invalid because it was contrary to a Tennessee
Rule of Civil Procedure); State v. Thomas, 813 S.W.2d 395, 397 (Tenn. 1991) (holding a
local rule unenforceable because it contravened Tennessee Supreme Court Rule 8). Our
first task then is to determine whether Local Rule 26.05(B) contravenes a statute, as
Cumberland argues.
Tennessee Code Annotated section 40-11-125 provides:
(a) In addition to the requirements of part 3 of this chapter regulating
professional bondsmen, approval of a professional bondsman or other
surety may be withheld, withdrawn or suspended by any court if, after
investigation, it appears that a bondsman:
(1) Has been guilty of violating any of the laws of this state
relating to bail bonds;
(2) Has a final judgment of forfeiture entered against the
bondsman which remains unsatisfied;
(3) Is guilty of professional misconduct as described in § 40-
11-126; or
(4) If applying for approval as a professional bondsman, has
been convicted in any state of the United States of two (2) or
more misdemeanors which are equivalent to Tennessee Class
A or Class B misdemeanors; provided, however, that the
misdemeanor convictions shall have occurred within five (5)
years of the date the application for approval is filed.
(b) Any court withholding, withdrawing or suspending a bondsman
or other surety under this section shall notify the bondsman in writing of
the action taken, accompanied by a copy of the charges resulting in the
court’s action. If, within twenty (20) days after notice, the bail bondsman
or surety files a written answer denying the charges or setting forth
extenuating circumstances, the court shall call a hearing within a reasonable
time for the purpose of taking testimony and evidence on any issues of fact
made by the charges and answer. The court shall give notice to the bail
bondsman, or to the insurer represented by the bondsman, of the time and
-4-
place of the hearing. The parties shall have the right to produce witnesses,
and to appear personally with or without representation by counsel. If,
upon a hearing, the court determines that the bail bondsman is guilty as
alleged in the charges, the court shall thereupon withhold, withdraw or
suspend the bondsman from the approved list, or suspend the bondsman for
a definite period of time to be fixed in the order of suspension.
(c) The clerk of the court and the sheriff of the county shall be
notified of the action of the court and the offending bondsman stricken
from the approved list.
(d) Any applicant for approval whose application has been denied,
withheld, suspended or revoked shall have the right of appeal to the next
highest court having criminal jurisdiction, and the appeal shall be heard de
novo.
Tenn. Code Ann. § 40-11-125 (2018). Cumberland argues that Local Rule 26.05(B) is
inconsistent with this statute because it adds a basis for suspension—failure to attend all
court appearances—that this statute does not include. Cumberland says the statutory
grounds for suspension expressed in section 40-11-125(a) are exclusive. As a result,
Cumberland asserts that trial courts lack inherent authority to promulgate local rules, like
Local Rule 26.05(B), that provide other grounds for suspension of bondsmen. The State
replies that section 40-11-125(a) is not exclusive but is rather supplementary to the
inherent authority of trial courts to regulate bonding companies by adopting local rules,
such as Local Rule 26.05(B). We agree with the State.
First, Local Rule 26.05(B) does not conflict with any statute. No statute requires
or dispenses with a bondsman’s presence at court appearances. The subject simply is not
addressed in a statute.
Second, Tennessee Code Annotated section 40-11-125 does not establish
exclusive grounds for suspension of bondsmen. This statute was enacted as part of the
Release from Custody and Bail Reform Act of 1978 (“the 1978 Act”). See Act of
February 15, 1978, ch. 506, § 38, 1978 Tenn. Pub. Acts 18. Section 40-11-125 has been
amended once since its enactment and that amendment has no relevance to the issue in
this appeal. See Act of April 16, 2013, ch. 169, § 1, 2013 Tenn. Pub. Acts 407. In
another portion of the 1978 Act, the General Assembly has declared its intent that
Tennessee Code Annotated sections 40-11-101 to 40-11-144 “shall be supplemental to
the laws providing for and regulating professional bail bondsmen, who may continue to
secure the bail bonds provided in §§ 40-11-101 — 40-11-144, but only as provided in §
40-11-122, and consistently with all other laws and regulations pertaining to those laws.”
Tenn. Code Ann. § 40-11-103(a) (2018) (emphasis added). This declared intent has
-5-
remained unchanged since the statute’s enactment in 1978. Thus, based on the General
Assembly’s expressed declaration of intent, we conclude that section 40-11-125 is
supplemental to other laws providing for and regulating professional bail bondsmen and
does not establish exclusive grounds for suspension.5 We therefore reject Cumberland’s
argument that Local Rule 26.05(B) is invalid because it conflicts with section 40-11-125.
It follows, therefore, that we also reject Cumberland’s related argument that
section 40-11-125 divests trial courts of inherent authority to regulate bonding
companies. To the contrary, we read the General Assembly’s declaration that section 40-
11-125 is supplemental to existing laws and regulations pertaining to bail bondsman as
embracing this Court’s decision in Taylor v. Waddey, 334 S.W.2d 733 (Tenn. 1960),
which held that trial courts have “inherent power” to adopt “reasonable regulations”
governing bondsmen who appear before them, id. at 736, and that this inherent power
exists “beyond and regardless of any statute on the question,” id. at 737. In Taylor, the
judges of the Davidson County General Sessions Court suspended a bondsman and his
company from writing bonds in Davidson County. Id. at 734. When the appeal arrived
in this Court, the record did not include any information about the bondsman’s
misconduct. Id. at 734–35. It showed only that the circuit court had overturned the
suspension because the bondsman had complied with all relevant statutes. Id.
This Court reversed the circuit court’s decision and held that courts have inherent
authority to regulate bondsmen appearing before them and may suspend bondsmen for
violating local rules even if bondsmen have complied with statutory requirements. Id. at
736. The Taylor Court stated that, in exercising their inherent authority, trial courts may
adopt “reasonable regulations” and “requirements” governing bondsmen. Id. “So long as
these regulations . . . are not capricious, arbitrary or solely without basis of right, then
these acts may be properly supervised by the court in its ministerial capacity as here.” Id.
Although the Taylor decision preceded the 1978 Act, the Court reasoned that, by enacting
statutes relating to bondsmen, the General Assembly had not “attempt[ed] to take away
the inherent right of the court[s] to properly administer [their] affairs” nor had it intended
“to interfere with the courts and tell them what their inherent powers are and are not.”
Id.; cf. In re Indem. Ins. Co. of N. Am., 594 S.W.2d 705, 707–08 (Tenn. 1980) (holding
that courts could inquire into the solvency of an insurance company acting as bondsman
that was in good standing with the Commissioner of Insurance and that had complied
with relevant statutes). Rather, said the Taylor Court, statutes merely address what a
bondsman must do “in such and such an instance” and do not, “by any stretch of the
5
On the other hand, unlike section 40-11-125, statutes do provide the exclusive method of
enforcing the forfeiture of bail bonds. See In re Rader Bonding Co., 592 S.W.3d 852, 859–60 (Tenn.
2019) (discussing the statutes that apply to the forfeiture of bail bonds).
-6-
imagination[,] attempt to cover the whole field of what is necessary for a bondsman
before he is allowed to make bonds in various courts.” Taylor, 334 S.W.2d at 736.
We agree and hold that, rather than abrogating the Taylor holding as Cumberland
contends, the General Assembly embraced it by expressly declaring from 1978 to the
present that Sections 40-11-101 through 40-11-144 are supplemental to existing law.
Indeed, this Court has often recited the rule that the General Assembly is presumed to
know the “state of the law” when enacting legislation, including “the manner in which
the courts have construed the statutes it has enacted.” Lee Med., Inc. v. Beecher, 312
S.W.3d 515, 527 (Tenn. 2010) (citations omitted); see also Carter v. Bell, 279 S.W.3d
560, 564 (Tenn. 2009) (“We must presume that the General Assembly is aware of
prior . . . decisions of the courts when enacting legislation.” (citing Ki v. State, 78 S.W.3d
876, 879 (Tenn. 2002)). Had the General Assembly intended to abrogate Taylor and
remove the inherent authority of trial courts to regulate bondsmen, the General Assembly
easily could have declared section 40-11-125 to be exclusive rather than supplementary
to existing law. See Cooper v. Logistics Insight Corp., 395 S.W.3d 632, 639 (Tenn.
2013) (“[W]e have long adhered to the rule that when a prior decision has addressed the
construction and operation of a statute, the principle of stare decisis will apply unless the
General Assembly acts to change the statute.” (citation omitted)); Heirs of Ellis v. Estate
of Ellis, 71 S.W.3d 705, 712 (Tenn. 2002) (“Without some clear indication to the
contrary, we simply will not presume that the [L]egislature intended to change the
common law by implication.” (citation omitted)). Not only did the General Assembly
declare that section 40-11-125 is supplementary to existing law, it also implicitly
recognized that trial courts have inherent authority to regulate bondsmen by conferring
upon courts of record the responsibility of preparing a list of professional bondsmen who
are “approved and qualified as solvent.” Tenn. Code Ann. § 40-11-124(a) (2018); see
also id. § 40-11-405 (“Nothing in [part 4 of chapter 11, which was adopted in 1996,] shall
be construed as altering or infringing upon the right of the trial judge to approve
bondsmen who are licensed under this part. An appeal from a trial judge’s failure to
approve a licensed bondsman shall be taken as provided by law.” (emphasis added)).
We therefore conclude that Rule 26.05(B) does not conflict with section 40-11-
125 or any statute and that section 40-11-125 is supplemental to other laws and did not
abrogate Taylor, which recognized the inherent authority of trial courts to regulate
bondsmen.
Our next and final task, therefore, is to determine whether Rule 26.05(B) is, in the
words of Taylor, a “reasonable regulation” or “capricious, arbitrary or solely without
basis of right.” 334 S.W.2d at 736. If it is the former, then Cumberland’s suspension
-7-
must stand, as Cumberland has conceded that it violated Local Rule 26.05(B).6 If it is the
latter, then Rule 26.05(B) and Cumberland’s suspension for violating it are invalid. We
agree with the State that Cumberland has failed to show that Local Rule 26.05(B) is
arbitrary, capricious, or unreasonable.
As we have noted in the administrative law context, “[t]he ‘arbitrary or capricious’
standard is a limited scope of review[.]” StarLink Logistics Inc. v. ACC, LLC, 494
S.W.3d 659, 669–70 (Tenn. 2016). “In its broadest sense, the arbitrary and capricious
standard requires the reviewing court to determine whether there has been a clear error in
judgment.” Hughes v. New Life Dev. Corp., 387 S.W.3d 453, 479 (Tenn. 2012)
(citing Jackson Mobilphone Co. v. Tenn. Pub. Serv. Comm’n, 876 S.W.2d 106, 110–11
(Tenn. Ct. App. 1993)). We have described the “illegal, arbitrary and capricious”
standard as synonymous with the rational basis test that courts apply when reviewing
legislative functions of administrative bodies. McCallen v. City of Memphis, 786
S.W.2d 633, 641 (Tenn. 1990). We also have declared that under the rational basis test,
legislative action should be deemed valid “‘if any possible reason can be conceived to
justify it.’” Fallin v. Knox Cnty. Bd. of Comm’rs, 656 S.W.2d 338, 342 (Tenn. 1983)
(quoting State ex rel. SCA Chem. Waste Servs., Inc. v. Konigsberg, 636 S.W.2d 430, 437
(Tenn. 1982)). More recently, we have stated that when “‘there is room for two opinions,
a decision is not arbitrary or capricious if it is made honestly and upon due consideration,
even though [a reviewing court] think[s] a different conclusion might have been
reached.’” StarLink Logistics Inc., 494 S.W.3d at 670 (alterations in original) (quoting
Bowers v. Pollution Control Hearings Bd., 13 P.3d 1076, 1083 (Wash. Ct. App. 2000)).
Applying these principles, we conclude that Local Rule 26.05(B) is not arbitrary,
capricious, or unreasonable and that it easily survives rational basis scrutiny. As the State
points out, this local rule serves several conceivable purposes. For example, having an
agent of the bonding company present ensures that the trial court and the prosecution
receive all relevant information the bonding company has about a defendant who fails to
appear. If a bonding agent provides the trial court and the prosecution with a “reasonable
excuse” for the defendant’s failure to appear, then a meritless prosecution for failure to
appear can be avoided, as having a “reasonable excuse” for failing to appear “at the
specified time and place” is a defense to prosecution for failure to appear. Tenn. Code
Ann. § 39-16-609(b)(2) (Supp. 2019). Similarly, having the bonding agent present and
available to provide information about the defendant may conceivably conserve judicial
6
Cumberland has not raised in this appeal any challenge to the manner in which the trial court
applied Local Rule 26.05(B) or to the trial court’s failure to specify the duration of Cumberland’s
suspension in its orders. Cf. Tenn. Code Ann. § 40-11-125(b) (stating that when a court suspends a
bondsman under section 40-11-125(a) the suspension shall be “for a definite period of time to be fixed in
the order of suspension”). As previously noted, Cumberland was reinstated in March 2018.
-8-
resources, as a trial court need not enter a conditional judgment of forfeiture “where a
statement of a licensed physician is furnished to the court showing that” a defendant is
prevented from attending court “by some mental or physical disability, or where evidence
of the defendant’s incarceration is furnished to the court.” Tenn. Code Ann. § 40-11-
201(b) (2018).7
That a bonding agent will not always have information about why a defendant has
failed to appear does not, as Cumberland suggests, render Local Rule 26.05(B) arbitrary
or capricious. First, having a bonding agent present to advise the trial court that the
bonding company lacks information about the defendant’s whereabouts also conceivably
serves to facilitate charging decisions and to conserve judicial resources. Moreover,
under the deferential standard that guides our review, Cumberland must establish that no
rational basis supports Local Rule 26.05(B), and therefore, it should be deemed arbitrary,
capricious, and unreasonable. See McCallen, 786 S.W.2d at 641 (“[A] heavy burden of
proof rests upon the shoulders of the party who challenges the action.”). Where, as here,
a local rule serves multiple conceivable rational purposes, it will not be deemed arbitrary,
capricious, or unreasonable simply because it may not serve all these purposes perfectly
one hundred percent of the time. Were one hundred percent effectiveness the test, no
court rule would survive.
7
We note that similar local rules have been adopted by at least three other Tennessee judicial
districts. For example, in the 15th and 20th Judicial Districts, a bondsman must provide a representative
to appear “as requested” and “be readily available as needed by a court whenever a defendant fails to
appear at the call of the docket.” 15th Jud. Dist. R., App’x 7, R. of Practice for Bail Bonds 6(B); 20th Jud.
Dist. R. of Practice for Bail Bonds 6(E). Likewise, the 19th Judicial District requires a “professional bail
bonding company representative [to] be in the court building and [to] be readily available as needed by a
court whenever a defendant fails to appear at the call of the docket.” 19th Jud. Dist. Bail Bonding R. 7(c).
-9-
IV. Conclusion
For the reasons stated herein, we conclude that Local Rule 26.05(B) is valid and
enforceable. Therefore, we reverse the judgment of the Court of Criminal Appeals and
reinstate the judgment of the trial court. Costs of this appeal are taxed to Cumberland
Bonding Company, for which execution may issue if necessary.
_________________________________
CORNELIA A. CLARK, JUSTICE
- 10 -
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158 B.R. 828 (1993)
In re CONTINENTAL CAPITAL & CREDIT, INC., a California corporation, Debtor.
Charles W. DAFF, Trustee, Plaintiff,
v.
REGAL RECOVERY INC., a California corporation, Defendant.
Bankruptcy No. SA 89-01233JW, Adv. No. SA 92-01519JW.
United States Bankruptcy Court, C.D. California.
September 1, 1993.
D. Edward Hay, Rus, Miliband, Williams & Smith, Irvine, CA, for plaintiff, Charles W. Daff, Trustee.
Kevin Carey, Schall, Boudreau & Gore, San Diego, CA, for defendant, Regal Recovery, Inc.
MEMORANDUM OF DECISION
JOHN J. WILSON, Bankruptcy Judge.
I. Introduction
Chapter 7 Trustee, Charles W. Daff ("Trustee") filed an adversary complaint against Defendant, Regal Recovery Agency, Inc. ("Regal Recovery") seeking to avoid and recover $9,904.50 of alleged preferential transfers pursuant to 11 U.S.C. § 547. Regal Recovery filed a motion to dismiss, or in the alternative, for judgment on the pleadings. Regal Recovery contends that the statute of limitations contained in 11 U.S.C. § 546(a)(1) runs from the commencement of a Chapter 11 case regardless of whether the case is subsequently converted to a case under Chapter 7 and a permanent trustee is appointed.
II. Statement of Facts
Continental Capital & Credit filed a petition for relief under Chapter 11 of the Bankruptcy Code on March 2, 1989. The case was subsequently converted from Chapter 11 to Chapter 7 on May 2, 1990. On May 4, 1990 an interim Chapter 7 trustee was appointed. On July 3, 1990, at the first meeting of creditors held pursuant to 11 U.S.C. § 341(a), an election was held and Charles W. Daff was appointed as permanent trustee in place of the interim trustee.
On July 1, 1992, the Trustee filed an adversary complaint against Regal Recovery seeking to avoid and recover $9,904.50 of alleged preferential transfers pursuant to 11 U.S.C. § 547. On August 8, 1992 Regal Recovery filed their answer to the complaint. In the answer, Regal Recovery alleged as an affirmative defense that the Trustee's complaint was barred by the applicable statute of limitations, 11 U.S.C. § 546(a)(1) (1988).
On August 3, 1993 Regal Recovery filed a motion to dismiss for failure to state a claim or, in the alternative, for judgment on the pleadings. Regal Recovery's motion to dismiss is premised on the theory that the two year statute of limitations contained in 11 U.S.C. § 546(a)(1) runs from the commencement of a Chapter 11 case regardless of whether a trustee is later appointed. The Trustee, in its opposition, *829 contends that pursuant to 11 U.S.C. § 546(a)(1) a permanent trustee is provided a new two year period in which to file an avoidance action under § 547. At the hearing on the motion to dismiss held on August 26, 1993 this matter was taken under submission to determine one issue: When a Chapter 11 case is subsequently converted to a case under Chapter 7 of the Code, is a permanent Chapter 7 trustee provided a new two year period in which to file an avoidance action under § 547?
III. Discussion
The Code gives a debtor-in-possession nearly all the rights, powers and duties of a bankruptcy trustee. 11 U.S.C. § 1107(a) (1988). Included in these is the power to avoid and recover a preferential transfer pursuant to 11 U.S.C. § 547. Code § 546 provides in pertinent part:
(a) An action or proceeding under section 544, 545, 547, 548, or 553 of this title may not be commenced after the earlier of
(1) two years after the appointment of a trustee under section 702, 1104, 1163, 1302, or 1202 of this title . . .
11 U.S.C. § 546(a)(1) (1988) (emphasis added).
Code § 702 provides that the appointment of a trustee occurs by way of an election held at the meeting of creditors held pursuant to Code § 341(a). 11 U.S.C. § 702(a) (1988). The plain language of §§ 546 and 702 specifically provide a permanent trustee, elected pursuant to § 702, two years to file an avoidance action under § 547.
Notwithstanding the plain language of § 546(a)(1) Regal Recovery filed its motion to dismiss asserting that the limitations period should commence upon the filing of a bankruptcy petition. Regal Recovery contends that the statute of limitations period does not run anew if the case is later converted to a Chapter 7 case with a permanent trustee appointed. In support, Regal Recovery relies upon the cases of In re Softwaire Centre International, Inc., 994 F.2d 682 (9th Cir.1993) and Zilkha Energy Co. v. Leighton, 920 F.2d 1520 (10th Cir. 1990).
In Softwaire Centre the debtor filed a complaint more than two years after it filed its bankruptcy petition. The debtor argued that because it is a debtor-in-possession and no trustee had been appointed, § 546(a)(1) does not apply. The Ninth Circuit Court of Appeals held that in a Chapter 11 proceeding, the § 546(a)(1) statute of limitations period applied to a debtor-in-possession as the functional equivalent of a trustee. Accordingly, the debtor's action was time barred.
The court in Softwaire Centre based its decision on the holding in Zilkha. In Zilkha a successor to the Chapter 11 debtor-in-possession sought recovery of alleged overpayments of oil and gas royalties pursuant to 11 U.S.C. §§ 544 and 548. The court held that § 546(a)(1) applies to actions filed by a debtor-in-possession and the period of limitation begins to run from the date of the filing of the petition.
The facts in this case are clearly distinguishable. The Softwaire Centre and Zilkha cases were not converted from Chapter 11 to Chapter 7. The holdings of those cases merely extends the plain meaning of § 546(a)(1) to Chapter 11 debtors, the rationale being that § 546(a)(1), when read in light of § 1107(a) was intended to apply to a debtor-in-possession.
This Court's determinant is the plain language of § 546(a)(1) which must be enforced according to its literal terms. See Patterson v. Shumate, ___ U.S. ___, ___, 112 S.Ct. 2242, 2246, 119 L.Ed.2d 519 (1992); Union Bank v. Wolas, ___ U.S. ___, 112 S.Ct. 527, 116 L.Ed.2d 514 (1991); Toibb v. Radloff, ___ U.S. ___, 111 S.Ct. 2197, 115 L.Ed.2d 145 (1991); United States v. Ron Pair Enterprises, Inc., 489 U.S. 235, 241, 109 S.Ct. 1026, 1030, 103 L.Ed.2d 290 (1989). Plainly read, §§ 546(a)(1) and 702 specifically provide a permanent trustee, elected pursuant to § 702, two years to file an avoidance action under § 547. In this case, the 341(a) meeting of creditors was held on July 3, 1990 whereby Plaintiff, Charles W. Daff was elected as permanent trustee. As the Trustee's action was filed on July 1, 1992, it is not time barred by § 546(a)(1).
*830 IV. Conclusion
This Court's review of applicable law compels the conclusion that where a case filed under Chapter 11 is later converted to Chapter 7, the statute of limitations contained in 11 U.S.C. § 546(a)(1) runs from the date that a permanent Chapter 7 Trustee is appointed. This memorandum of decision contains this Court's findings of fact and conclusions of law. Counsel for the Trustee shall lodge and serve a proposed order consistent with this memorandum of decision.
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57 F.Supp.2d 355 (1999)
Mousa I. DABABNAH, Plaintiff,
v.
WEST VIRGINIA BOARD OF MEDICINE, et al., Defendants.
Civil Action No. 5:98-0639.
United States District Court, S.D. West Virginia.
July 9, 1999.
Mousa I. Dababnah, M.D., Beaver, WV, pro se.
John C. Yoder, Harpers Ferry, WV, for Mousa I. Dababnah, M.D.
Eric A. Collins, Michael W. Blake, Pullin, Knopf, Fowler & Flannagan, Beckley, WV, for West Virgina Board of Medicine, Ronald D. Walton, A. Paul Brooks, Jr., M.D., Sarjit Singh, M.D., Henry G. Taylor, M.D.
David F. Nelson, Schumacher, Francis, Stennett & Nelson, Charleston, WV, for Sharan B. Dababnah.
Geoffrey A. Haddad, Gerard R. Stowers, Bowles Rice McDavid Graff & Love, Charleston, WV, for Richard Gunnoe, Ziegler & Gunnoe.
Ancil G. Ramsey, Steptoe & Johnson, Charleston, WV, John M. Hedges, Byrne & Hedges, Morgantown, WV, for Robert A. Burside.
AMENDED ORDER
FABER, District Judge.
Pending before the court is defendant the Hon. Robert A. Burnside's motion to *356 certify this court's Order of May 11, 1999 for interlocutory appeal, and to stay proceedings pending appeal. Plaintiff filed a response, agreeing in part, with defendant Burnside's motion. Defendant Burnside asks this court to amend its May 11th Order to include a finding pursuant to 28 U.S.C. § 1292(b), and find "that such order involves a controlling question of law as to which there is substantial ground for difference of opinion and that an immediate appeal from the order may materially advance the ultimate termination of the litigation. ..." 28 U.S.C.A. § 1292(b) (West 1993).
The parties agree that this court's ruling on a narrow exception to the Rooker-Feldman doctrine is an appropriate issue for interlocutory appeal. Chief Judge Posner's ruling on the doctrine in Nesses v. Shepard, 68 F.3d 1003 (7th Cir.1995), relied on by this court, has not been addressed by the United States Court of Appeals for the Fourth Circuit, and application of the doctrine and any exceptions goes to the subject-matter jurisdiction of this court over claims against Judge Burnside. In addition, the parties contend that a stay of proceedings pending appeal would promote judicial economy and avoid waste of resources in the event that the court of appeals does not uphold this court's ruling. Therefore, the court agrees with the parties in this case and will GRANT defendant's motion to certify the Order of May 11, 1999 for interlocutory appeal on the issue of the Rooker-Feldman doctrine. In addition, a stay will be granted as outlined below.
The plaintiff contests the remainder of defendant Burnside's motion for an interlocutory appeal. Specifically, plaintiff objects to defendant's request that this court certify the Younger abstention issue. Defendant Burnside cites one case in support of the notion that abstention is a controlling question of law. See Polk v. Ellington, 309 F.Supp. 1349 (W.D.Tenn. 1970). The court notes that in its Order of May 11, 1999, there are similarities in the analysis under both the Rooker-Feldman exception and Younger abstention. Therefore, it would be appropriate and in keeping with concerns for judicial economy to certify the Younger abstention issue as well, and the court will GRANT defendant Burnside's motion on that issue.
Defendant Burnside further asks for an interlocutory appeal of this court's ruling that plaintiff has stated a claim under 42 U.S.C. § 1985(2). The court agrees with plaintiff that defendant's motion to dismiss plaintiff's § 1985 claim pursuant to Federal Rule of Civil Procedure 12(b)(6) is not in keeping with the purpose of 28 U.S.C. § 1292(b) and is, therefore, not an appropriate question for interlocutory appeal. The court will DENY defendant's motion on that issue.
Defendant Burnside further asks for a stay in proceedings until the Fourth Circuit declines to hear an interlocutory appeal or has decided the issues raised. This is a complex case with a number of facets. Because much of the discovery in this case is interrelated, a stay regarding discovery matters and the trial schedule for most of the counts in the complaint would be appropriate. Therefore, pursuant to 28 U.S.C. § 1292(b), upon application within ten (10) days of this Order by defendant Burnside for immediate appeal to the United States Court of Appeals for the Fourth Circuit, the court will STAY all discovery in this case. The case will proceed as scheduled with regard to motions filed pursuant to Federal Rule of Civil Procedure 12(b). In addition, this case shall proceed as set forth in the current scheduling order with regard to the first three counts of the second amended complaint which challenge the constitutionality of West Virginia's law on "Enforcement of Support Order Through Action Against License", W.Va.Code §§ 48A-5A-1 to 48A-5A-6 (1998), and the federal Personal Responsibility and Work Opportunity Reconciliation Act of 1996, Pub.L. 104-193, 110 Stat. 2105, because these issues are unrelated *357 to those certified for interlocutory appeal and involve no discovery.
For the reasons stated above, the court ORDERS that the Order of May 11, 1999, be AMENDED to CERTIFY the Rooker-Feldman doctrine and Younger abstention issues for interlocutory appeal pursuant to 28 U.S.C. § 1292(b). If application for appeal is made within ten (10) days of entry of this Order, all discovery shall be STAYED, and this case shall proceed only with respect to motions pursuant to Federal Rule of Civil Procedure 12(b) and the First, Second and Third causes of action in the second amended complaint. Defendant Burnside is directed to notify all counsel of record and Magistrate Judge Mary S. Feinberg if such application is made.
The Clerk is directed to send copies of this Order to counsel of record.
IT IS SO ORDERED.
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346 F.Supp.2d 340 (2004)
LOBSTERS, INC., et al., Plaintiffs,
v.
Donald EVANS, Secretary of Commerce, et al., Defendants.
No. CIV.A.03-11434-NMG.
United States District Court, D. Massachusetts.
November 29, 2004.
*341 Jeffrey T. Angley, Phillips & Angley, Boston, MA, for Lobsters, Inc., Lawrence M. Yacubian, Plaintiffs.
Anton P. Giedt, United States Attorney's Office, Boston, MA, for United States of America, Charles Juliand, Donald Evans, Defendants.
MEMORANDUM & ORDER
GORTON, District Judge.
This case arises from an administrative decision rendered by the National Marine Fishery Service ("NMFS"), a division of the National Oceanic and Atmospheric Administration ("NOAA" or "the Agency") of the Department of Commerce, which assessed penalties against plaintiffs for fishing in a closed area and making a false statement to a United States Coast Guard ("USCG") officer. Plaintiffs claim that the $250,000 fine and revocation of their fishing permits was arbitrary, capricious, unsupported by substantial evidence and contrary to law. This Court has jurisdiction pursuant to the Administrative Procedure Act, 5 U.S.C. § 702 ("APA").
I. Background
Plaintiff Lobsters, Inc. is the owner of the F/V Independence, a 95-foot eastern rig scalloper. Plaintiff Yacubian is the President and sole stockholder of Lobsters, Inc. and Captain of the F/V Independence. The Independence held a fulltime, limited access Atlantic sea scallop permit until the permit sanction assessed in the administrative action preceding this case became effective.
In 1998, NOAA implemented a Northeast Vessel Monitoring System ("VMS") to track and transmit vessel positions. NOAA approved Boatracs, Inc. ("Boatracs") as the sole VMS vendor. Effective May 15, 1998, all limited access Atlantic sea scallop permit holders were required to install a Boatracs unit aboard their vessels so as to allow NOAA to monitor the location of the vessels. Boatracs does not develop or maintain a tracking system but is the exclusive domestic distributor for marine applications of OmniTracs, a satellite-based communications and tracking system manufactured by Qualcomm. Qualcomm calculates vessel positions and sends the information to Boatracs. Thus, all vessel position data transmitted from Boatracs to NMFS comes from Qualcomm. Boatracs claims that its system is accurate to within 300 meters 95% of the time.
On December 4, 1998, the Independence, Yacubian and five crew members began a *342 fishing trip. The vessel was equipped with a Boatracs Mobile Communications Terminal. From December 6 to December 11, 1998, NMFS observed, through Boatracs, that the Independence had entered Closed Area II more than 44 times. Closed Area II is an area in the Gulf of Maine which has been designated as a closed area, for the purpose of preventing the collapse of the principal groundfish stocks of cod, haddock and yellowtail flounder, by a Fishery Management Plan prepared by a fishery management council established under the Magnuson-Stevens Act, 16 U.S.C. § 1811, and approved by NMFS.
Over a four-hour period from December 10 to December 11, 1998, the USCG Cutter Wrangell ("Wrangell"), using its Digital Global Positioning System ("GPS"), radar and gyrocompass, observed that the Independence moved in and out of Closed Area II several times. USCG officers noted that the Independence had moved inside Closed Area II at courses and speeds consistent with what they believed to be a vessel in the act of fishing. On December 11, at 0051 hours local time, from about 10.7 nautical miles away, Wrangell personnel fixed the position of the Independence at approximately 0.95 nautical miles inside the boundary of Closed Area II.
At approximately 0207 hours on December 11, 1998, a boarding party from Wrangell led by LTJG Timothy Brown ("Brown") boarded the Independence. Brown told Yacubian that it was a routine boarding and asked Yacubian how many scallops were on the deck. Yacubian responded that he thought he had 4 to 5 bushels per side. Brown also asked how many pounds of scallops were in the vessel's hold. Yacubian replied that there were approximately 2,500 pounds, although there was no scale on board. The USCG boarding party subsequently estimated that there were at least 17 bushels of scallops per side on deck and approximately 4,300 pounds of scallops in the hold. Brown inquired as to the Independence being in Closed Area II and Yacubian denied that the vessel had entered the area, advising him to check with Boatracs to get information regarding where the vessel had been. The USCG then escorted the Independence to New Bedford, Massachusetts, and seized her catch.
On June 14, 2000, Charles R. Juliand, NOAA's general counsel, issued a Notice of Violation and Assessment ("NOVA") to plaintiffs, charging them with violating the Magnuson-Stevens Act, 16 U.S.C. § 1857(1)(A) and regulations promulgated thereunder, 50 C.F.R. 648.14(a)(39) (prohibiting entering Closed Area II), 648.81(b)(1) (defining Closed Area II) and 600.725® (prohibiting the making of false statements). The NOVA contained three counts, alleging that: 1) plaintiffs entered approximately 1.36 nautical miles into Closed Area II at 2321 hours local time on December 8, 1998, 2) plaintiffs entered, by approximately 0.65 nautical miles, within Closed Area II at 0051 hours local time on December 11, 1998, and 3) Yacubian made false statements to Brown on December 11, 1998. In the NOVA, NOAA assessed against plaintiffs a $250,000 civil monetary penalty, $110,000 for each Closed Area II violation and $30,000 for the false statement. NOAA further issued a Notice of Permit Sanction ("NOPS"), permanently revoking the federal fishing vessel permit of the F/V Independence and the federal vessel operator permit of Yacubian.
Plaintiffs requested a hearing on the matter before an Administrative Law Judge ("ALJ"). The hearing was held from June 19 through June 22, 2001, before Coast Guard ALJ Edwin Bladen ("the Hearing"). In his December 5, 2001 Initial Decision and corresponding order, ALJ Bladen sustained the NOVA and, although *343 considering sanctions de novo by consent of the parties, assessed the same total monetary and permit sanctions as had the NOAA. Plaintiffs sought discretionary review pursuant to 15 C.F.R. § 904.273 and on July 2, 2003, the discretionary appeal was denied, thereby rendering the Initial Decision a final agency action.
On August 1, 2003, Plaintiffs commenced this action. They allege that the Agency's decision was arbitrary, capricious, an abuse of discretion and not supported by substantial evidence, all in violation of the APA. Pending before the Court is plaintiffs' summary judgment motion which asks the Court to vacate the Agency's findings of liability and assessment of civil penalties and permit sanctions and to remand the matter to the Agency for a de novo assessment of civil penalties. Defendants have filed a cross-motion for summary judgment which is also before the Court.
II. Analysis
A. Standard of Review of Administrative Proceedings
The scope of this Court's review of the evidence is limited to the administrative record that was before the agency at the time the decisions were made. 5 U.S.C. § 706; Citizens to Preserve Overton Park, Inc. v. Volpe, 401 U.S. 402, 91 S.Ct. 814, 28 L.Ed.2d 136 (1971); Camp v. Pitts, 411 U.S. 138, 142, 93 S.Ct. 1241, 36 L.Ed.2d 106 (1973). Under the APA, courts reviewing final agency action must hold unlawful and set aside agency action and conclusions found to be "arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with the law." 5 U.S.C. § 706(2)(A).
The Agency's findings of fact underlying the civil penalty imposed will be set aside if not supported by substantial evidence in the record. 16 U.S.C. § 1858(b); 5 U.S.C. 706(2). Substantial evidence means "such relevant evidence as a reasonable mind might accept as adequate to support a conclusion." Consolidated Edison Co. of New York v. NLRB, 305 U.S. 197, 217, 59 S.Ct. 206, 83 L.Ed. 126 (1938). It is "more than a mere scintilla." Id. Further, the substantiality of the evidence must take into account the "record in its entirety," including "whatever in the record fairly detracts from its weight." Universal Camera v. NLRB, 340 U.S. 474, 488, 71 S.Ct. 456, 95 L.Ed. 456 (1951). The substantial evidence standard, however, "certainly does not approach the preponderance-of-the-evidence standard normally found in civil cases." Bath Iron Works Corp. v. United States Dep't of Labor, 336 F.3d 51 (1st Cir.2003). It is, after all, the prerogative of the ALJ to
draw inferences and make credibility assessments, and [courts] may not disturb his judgment and the [agency's] endorsement of it so long as the findings are adequately anchored in the record.
Id.
With respect to questions of law other than an agency's interpretation of a statute it administers, courts review the determination of the agency de novo. Id. at 55; 5 U.S.C. § 706 ("the reviewing court shall decide all relevant questions of law"). However, courts owe "substantial deference to an agency's interpretation of its own regulations." Thomas Jefferson Univ. v. Shalala, 512 U.S. 504, 512, 114 S.Ct. 2381,129 L.Ed.2d 405 (1994).
B. Summary Judgment Standard
The role of summary judgment is "to pierce the pleadings and to assess the proof in order to see whether there is a genuine need for trial." Mesnick v. General Elec. Co., 950 F.2d 816, 822 (1st Cir.1991) *344 (quoting Garside v. Osco Drug, Inc., 895 F.2d 46, 50 (1st Cir.1990)). The burden is upon the moving party to show, based upon the pleadings, discovery and affidavits, "that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Fed.R.Civ.P. 56(c).
A fact is material if it "might affect the outcome of the suit under the governing law." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). "Factual disputes that are irrelevant or unnecessary will not be counted." Id. A genuine issue of material fact exists where the evidence with respect to the material fact in dispute "is such that a reasonable jury could return a verdict for the nonmoving party." Id.
Once the moving party has satisfied its burden, the burden shifts to the non-moving party to set forth specific facts showing that there is a genuine, triable issue. Celotex Corp. v. Catrett, 477 U.S. 317, 324, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). The Court must view the entire record in the light most hospitable to the non-moving party and indulge all reasonable inferences in that party's favor. O'Connor v. Steeves, 994 F.2d 905, 907 (1st Cir.1993). If, after viewing the record in the nonmoving party's favor, the Court determines that no genuine issue of material fact exists and the moving party is entitled to judgment as a matter of law, summary judgment is appropriate.
C. Incursions into Closed Area II
1. Applicability and Application of Daubert Considerations
The ALJ found, based largely on evidence provided by the Boatracs system, that the Independence had entered Closed Area II. Plaintiffs argue that such evidence should not have been admitted at the Hearing because the Agency had not demonstrated that the evidence met the Daubert standard for reliability.
In Daubert, the Supreme Court held that Rule 702 of the Federal Rules of Evidence imposes upon the trial court a gatekeeper obligation in order to "ensure that any and all scientific testimony or evidence admitted is not only relevant, but reliable." Daubert v. Merrell Dow Pharmaceuticals, 509 U.S. 579, 113 S.Ct. 2786, 125 L.Ed.2d 469 (1993). The judge's gatekeeping function was later extended to apply to all expert testimony. Kumho Tire Co., Ltd. v. Carmichael, 526 U.S. 137, 119 S.Ct. 1167, 143 L.Ed.2d 238 (1999). Daubert and its progeny interpret the Federal Rules of Evidence, however, and the federal rules of evidence do not apply to NOAA hearings. 15 C.F.R. § 904.251(b). Therefore, strictly speaking, the rule of Daubert does not apply to proceedings before NOAA. Nonetheless, "the spirit of Daubert" does apply to administrative proceedings because "`[j]unk science' has no more place in administrative proceedings than in judicial ones." Niam v. Ashcroft, 354 F.3d 652, 660 (7th Cir.2004).
The rules governing evidence at NOAA hearings provide that
All evidence that is relevant, material, reliable, and probative, and not unduly repetitious or cumulative, is admissible at the hearing. Formal rules of evidence do not necessarily apply to the proceedings, and hearsay evidence is not inadmissible as such.
15 C.F.R. § 904.251(b). The reliability requirement of this Regulation, therefore, adopts the "spirit of Daubert" as the standard to be used in connection with administrative hearings.
On June 19 and 20, 2001, ALJ Bladen held a Daubert hearing to determine the reliability and relevance of the expert testimony *345 regarding Boatracs and to rule on its admissibility at trial. Before that hearing he stated that the "relevant issue is whether the Boatracs vessel tracking system is reliable technology which can accurately determine a vessel's geographic location." At the Daubert hearing, he heard from two qualified witnesses for the Agency and one qualified witness for plaintiffs and ruled that he was persuaded that Boatracs was reliable for reporting position data accurately 95% of the time within 300 meters of the actual position. He therefore allowed Boatracs evidence to be introduced at the Hearing.
Although plaintiffs introduced testimony at the Daubert hearing tending to show the unreliability of Boatracs, the record clearly demonstrates that the ALJ's conclusion that Boatracs was reliable was supported by substantial evidence. Thus, it was proper to admit Boatracs evidence at the Hearing.
The Initial Decision stated that "the Daubert factors may be used, not to exclude evidence, but to determine the reliability of expert testimony." This Court disagrees with that formulation of the applicabilty of the principles of Daubert to administrative hearings. The Daubert factors can, in fact, be used to exclude evidence from an administrative hearing if the ALJ finds the evidence to be unreliable; their function is not limited, as the ALJ in his Initial Decision suggested, to bearing upon the weight afforded to the evidence once admitted. Nonetheless, such an error was harmless because there was substantial evidence on which the ALJ could have based his statement in the record that he found Boatracs to be reliable and thus evidence based on Boatracs was properly admitted at the Hearing.
2. Substantial Evidence of Incursions
The record as a whole, including the Boatracs evidence, which was properly admitted, contains substantial evidence from which the ALJ and the Agency could have determined, by a preponderance of the evidence, that the Independence did enter Closed Area II on December 8 and 11, 1998. Although the Court notes plaintiffs' arguments which attempt to discredit the evidence relied upon by the ALJ, plaintiffs have not convinced this Court that the record is bereft of substantial evidence of the violations. This Court, therefore, declines to overturn the Agency's finding that plaintiffs entered Closed Area II and thereby violated the Magnuson-Stevens Act as alleged in Counts I and II of the NOVA.
D. False Statements
Plaintiffs allege that there was insufficient evidence from which the ALJ could conclude that Yacubian made a false statement to Brown on December 11, 1998. The regulations promulgated pursuant to the Magnuson-Stevens Act provide that it is unlawful to
[m]ake any false statement.. .to an authorized officer concerning the taking, catching, harvesting, landing, purchase, sale, offer of sale, possession, transport, import, export, or transfer of any fish, or attempts to do any of the above.
50 C.F.R. § 600.725®.
According to the USCG Offense Investigation Report prepared by Brown, after Brown boarded the fishing vessel, he asked Yacubian how many scallops he had on deck. Yacubian "stated that he thought he had four or five bushels per side." Brown then asked how many scallops Yacubian were in the hold and "he stated approximately 2500 lbs." The Agency reported that there were, in fact, approximately 17 bushels of scallops per side and more than 4,300 pounds of scallops in the hold and argued that, therefore, Yabubian's *346 statements to Brown were false. Plaintiffs argue that Yacubian's answers were only estimates, as evidenced by his use of the words "thought" and "approximately" and because there was no scale on board, and that they were not, therefore, false statements. Plaintiffs further argue that Yacubian had no intent to deceive Brown and that violation of 50 C.F.R. § 600.725(i) requires an intent to deceive.
The ALJ viewed plaintiffs' arguments as posing two questions: "First, can an estimate be a false statement? Second, does 50 C.F.R. § 600.725® require proof of intent to deceive?" He answered the former question in the affirmative, using a twopart analysis. The ALJ noted that the dictionary definition of "estimate" is "the expression of an opinion of value" and that an expression is obviously a "statement." He then noted that the dictionary definition of "false" is "not genuine or true" and stated:
Here, the estimates were not objectively true. They weren't even close. In truth, the number of bushels of scallops on deck per side was 17. The hold held, in truth, 4300 pounds of scallops. The ALJ then held that the regulation does not require proof of intent to deceive and concluded that Brown had, therefore, made a false statement in violation of 50 C.F.R. § 600.725(i).
The ALJ's logic would suffice if Yacubian had said "there are four or five bushels" but does not if the statement was "I think there are four or five bushels." When considering the falsity of a statement of opinion, the party alleging falsity need not prove that the fact underlying the opinion is untrue but rather that the statement of opinion is untrue. Thus, the plain language of the regulation requires that the prosecuting Agency prove that Yacubian did not subjectively believe that the estimates he gave were accurate. The Agency did not allege that Yacubian did not believe his estimates to be true and the record does not contain substantial evidence suggesting that Yabubian intentionally understated the quantity of scallops on deck. The ALJ's determination that Yacubian made a false statement regarding the quantity of scallops on deck, therefore, cannot stand. See Rodowicz v. Massachusetts Mutual Life Ins. Co., 192 F.3d 162, 175 (1st Cir.1999) (holding that it is too much of "a stretch" to treat statements of expectation, estimate, opinion or judgment as statements of fact and that such statements are not actionable as misrepresentations).
Yacubian's allegedly false statement that there were "approximately 2500 lbs." of scallops in the hold is a closer case because it was not expressly couched as an opinion with the prefatory words "I think." However, it would be arbitrary for the distinction between false statements and non-actionable statements of opinion to rest on such minutiae of diction when the underlying message conveyed is clear. The Independence did not have a scale on board. Yacubian testified that he ordinarily measured the quantity of scallops by bag, not by weight, so he was not used to estimating quantity in terms of weight, and Brown testified at the Hearing that he understood Yacubian's statement to be an approximation. "A representation is one of opinion if it expresses only.. .the belief of the maker, without certainty, as to the existence of the fact." Id., quoting Restatement (Second) of Torts § 538A (1977) (omission in original). As with the other allegedly false statement, the Agency did not allege, and the record does not contain substantial information to support a charge, that Yacubian intentionally underestimated the quantity of scallops in the hold. Yacubian's statement regarding the weight of scallops in the hold was one of *347 estimation or opinion only and cannot be considered a false statement.
Because the record does not contain substantial evidence to support the ALJ's finding, by a preponderance of the evidence, that Yacubian made false statements to Brown on December 11, 1998, as alleged in Count III, the Agency's finding of liability under Count III will be vacated. It is, therefore, unnecessary for this Court to address plaintiffs' argument that the ALJ erred in holding that a violation of 50 C.F.R. § 600.725(i) does not require proof of the intent to deceive.
E. Penalty
1. Factors
Plaintiffs contend that the penalties imposed by the Agency were arbitrary and capricious. This Court is compelled to set aside such penalties if they are found to be arbitrary, capricious or an abuse of discretion, 5 U.S.C. 706(2)(A), or if they are not supported by substantial evidence, 16 U.S.C. § 1858(b).
In assessing monetary civil penalties, the ALJ is required, by statute and regulation, to take into account a list of enumerated factors, including
the nature, circumstances, extent, and gravity of the prohibited acts committed and, with respect to the violator, the degree of culpability, any history of prior offenses, and such other matters as justice may require... [and] may also consider any information provided by the violator relating to the ability of the violator to pay.
16 U.S.C.A. § 1858(a); see also 15 C.F.R. § 904.108(a). In determining whether permit revocation is appropriate, the ALJ must consider
the nature, circumstances, extent and gravity of the prohibited acts for which the sanction is imposed; and.. .the degree of culpability, any history of prior offenses, and such other matters as justice may require.
16 U.S.C. § 1858(g).
ALJ Bladen recognized the requirements of these provisions and he considered all of the required factors when assessing the penalty. The decision stated that he found that plaintiffs' entries into Closed Area II were intentional, numerous and quite successful, judging by the amount of the catch.
2. History of Violations
The ALJ also considered plaintiffs' history of violations. He listed five prior offenses, dating from 1989 to 1998, and stated that in the time he had been an ALJ this was "the most number of prior violations presented to me in any case I have ever heard" and, together with the three counts in the instant case, demonstrated "a history of lack of respect for the law and regulations governing the fishing industry."
Plaintiffs argue that the 1998 violation should not have been considered because it culminated in a settlement agreement in which NOAA explicitly agreed that the violation would not be considered as a prior offense for subsequent violations. This Court agrees. Defendants point to a case stating that settlement agreements with some exculpatory language may qualify as a final order against an employer. Modern Continental Constr. Co. v. OSHA, 305 F.3d 43, 52 (1st Cir.2002). The exculpatory language in that case, however, provided that the settlement language may be used for certain, limited purposes. Id. The exculpatory language in the settlement agreement at issue in this case sets forth no permissive uses and, accordingly, the 1998 violation should not have been considered as a prior violation.
*348 Plaintiffs also contend that the ALJ should not have considered offenses from 1989 and 1991 because they occurred more than five years prior to the offense then under consideration. A May 10, 1995 memorandum from Michele Kuruc, NOAA Assistant General Counsel for Enforcement and Litigation, states that
for purposes of considering prior violations, it is NOAA's practice to include only those final administrative decisions within the period of time going back 5 years before the date of violation of the subsequent offense.
Plaintiffs attached a copy of that memorandum to their memorandum in support of their motion for summary judgment; it was not, however, contained in the administrative record presented to this Court.
Defendants suggest that the Court should disregard the memorandum as an "extra-record exhibit." This Court rejects defendants' suggestion that an agency can avoid its own policies merely by disregarding them and failing to include them with the record it presents to the reviewing court. It would be nonsensical for a reviewing court to ignore an agency's expressed policy when reviewing a case in which the agency's policy is a relevant issue. The rationale for limiting judicial review to the record is to preclude a reviewing court from considering information that was not before the agency at the time it rendered its decision. If the ALJ was aware of the policy regarding excluding prior offenses that occurred more than five years prior to the offense under consideration (which is presumed), this Court's consideration of the policy does not offend the general rule against considering information not contained in the record. If the ALJ was aware of the policy but disregarded it, his action was arbitrary and capricious.
It is, of course, significant that the subject 1995 memorandum does not purport to contain factual information regarding the offenses at issue. Rather, its relevance is limited to the policies of NOAA that have existed since before the events giving rise to this case occurred. Requiring agency policies to be set forth in the record would be akin to requiring that every statute, regulation and judicial decision on which a party seeks to rely be reproduced in the record. This is clearly not the point of limiting review to the administrative record. Furthermore, defendants acknowledge that the agency has a "five year `look back' period" and do not dispute the accuracy of the document referred to.
3. Agency Policy
Plaintiffs argue that the ALJ's penalty assessment violated Agency policy in two respects: 1) it was based upon prior offenses that occurred more than five years prior to the offenses then under consideration in violation of Agency policy against considering such offenses, and 2) it disregarded penalty ranges as set forth by NOAA and documented in an exhibit contained in the administrative record. Defendants respond that the ALJ is not bound to follow internal agency guidelines or memoranda.
It is settled law that an agency ordinarily must follow its own policies and procedures and may depart therefrom only with reasoned explanation. See United States ex rel. Accardi v. Shaughnessy, 347 U.S. 260, 74 S.Ct. 499, 98 L.Ed. 681 (1954); I.N.S. v. Yang, 519 U.S. 26, 32, 117 S.Ct. 350, 136 L.Ed.2d 288 (1996) ("Though the agency's discretion is' unfettered at the outset, if it announces and followsby rule or by settled course of adjudicationa general policy by which its exercise of discretion will be governed, an irrational *349 departure from that policy (as opposed to an avowed alteration of it) could constitute action that must be overturned as `arbitrary, capricious, [or] an abuse of discretion'.") (alteration in original); Ramaprakash v. F.A.A., 346 F.3d 1121, 1124 (D.C.Cir.2003) ("agency action is arbitrary and capricious if it departs from agency precedent without explanation"). When the Agency accepted the ALJ's Initial Decision, the decision became a final Agency action and, thus, a decision of the Agency.
Lovgren v. Byrne, 787 F.2d 857 (3d Cir. 1986) is the only case cited by the Agency for the proposition that the ALJ need not follow NOAA guidelines and memoranda but the opinion in that case is not on point. There, the Third Circuit Court of Appeals held that the ALJ did not abuse his discretion by imposing a greater penalty than the agency had sought but it did not address whether an ALJ was bound to follow agency policies when imposing penalties. Id. at 867.
The ALJ abused his discretion by considering violations by plaintiffs that occurred more than five years before the violations then under consideration without providing any reasoned explanation for departure from Agency policy. If the ALJ disregarded penalty ranges set forth in an internal memorandum promulgated by NOAA, as alleged by plaintiffs, this, too, was an abuse of discretion.[1]
ORDER
Based upon the foregoing:
1. Plaintiffs' motion for summary judgment (Docket No. 13) is ALLOWED, in part, and DENIED, in part. The finding of liability under Counts I and II is sustained and the finding of liability under Count III is vacated. The civil penalties and permit sanctions assessed against plaintiffs are vacated.
2. Defendants' motion for summary judgment (Docket No. 15) is ALLOWED, in part, and DENIED, in part.
3. This case is REMANDED to NOAA for de novo reconsideration of civil penalties and permit sanctions. NOAA is directed to assess an appropriate penalty for plaintiffs based on their violations of Count I and II and, when considering plaintiffs' history of prior offenses, should recognize only two prior offenses, a) the March 19, 1994 landing of Atlantic sea scallops and b) the April 10, 1994 failure to comply with scallop average meat count, or, in the alternative, should explain its departure from the Agency's five year "look back" policy. Moreover, the penalty assessed by NOAA should comport with relevant Agency precedent and guidelines or the Agency should explain its reasons for departure therefrom.
So ordered.
NOTES
[1] In any event, considering the nature of the offenses and all other relevant circumstances, the severity of the monetary penalty and the permanent revocation of plaintiffs' fishing permits are deemed excessive in this particular case.
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614 F.2d 1197
103 L.R.R.M. (BNA) 3042, 88 Lab.Cas. P 11,968
HAWAIIAN TELEPHONE CO., etc., Plaintiff-Appellee,andHawaii Employers Council et al., Plaintiffs-Intervenors,v.STATE OF HAWAII DEPT. OF LABOR & INDUSTRIAL RELATIONS etal., Defendants,International Brotherhood of Electrical Workers, AFL-CIO,Local 1357, etc. et al., Defendants-Intervenorsand Appellants.HAWAIIAN TELEPHONE CO., etc., Plaintiff-Appellee,andHawaii Employers Council et al., Plaintiff-Intervenors,v.STATE OF HAWAII DEPT. OF LABOR & INDUSTRIAL RELATIONS etal., Defendants- Appellants,andInternational Brotherhood of Electrical Workers, AFL-CIO,Local 1357, etc. et al., Intervenors-Defendants.
Nos. 76-1584, 76-2056.
United States Court of Appeals, Ninth Circuit.
Argued and Submitted Nov. 14, 1979.Decided March 10, 1980.
Jared H. Jossem, Honolulu, Hawaii, for Hawaiian Tel. Co.; Jared H. Jossem and Raymond Torkildson, on brief.
Laurence M. Cohen and Jeffrey S. Goldman, Chicago, Ill., on brief, for Hawaii Employers Council.
Frank K. L. Yap, Jr., Honolulu, Hawaii, for State of Hawaii Dept. of Labor; Wayne Minami, Atty. Gen., on brief.
Marsha S. Berzon, San Francisco, Cal., for International Brotherhood of Electrical Workers; Edward H. Nakamura, Honolulu, Hawaii, J. Albert Woll and Laurence Gold, Washington, D.C., on brief.
Appeal from the United States District Court for the District of Hawaii.
Before WRIGHT and GOODWIN, Circuit Judges, and MURRAY*, District Judge.
PER CURIAM:
1
The Hawaii Department of Labor appeals a judgment which struck down, on federal preemption grounds, a state statute1 compelling employers under certain conditions to finance strikes against themselves. The Hawaii law permits strikers to collect unemployment compensation if their strike does not substantially curtail2 the productive operations of their employer.
2
In 1974, a number of Hawaiian Telephone Company employees went on strike. When the strike ended the Hawaii Department of Labor began an inquiry to determine whether the strike had "substantially curtailed" the Company's productive operations. If the strike had not done so, the Department would have had to order retroactive employment benefits paid to the Company's striking employees. The Company under the statute would then have had to replenish the state employment compensation fund in an amount equal to the distributions to the strikers. Prior to completion of the departmental inquiry, however, the Company sought an injunction in the district court to bar the Hawaii Department of Labor from continuing with its investigation. The Company alleged that Congress, in enacting the National Labor Relations Act, had preempted state laws permitting strikers to collect unemployment benefits. The district court agreed, and declared Hawaii's law void.
3
The wisdom or even the fairness of Hawaii's economic legislation is not before us. We do not pass upon its merits. The only issue before us is federal preemption: specifically, whether our determination of the question of federal preemption in this case is controlled by the Supreme Court's summary dismissal of the appeal in Kimbell v. Employment Security Commission, 429 U.S. 804, 97 S.Ct. 36, 50 L.Ed.2d 64 (1976).
4
Denial of certiorari imports nothing about the merits of a case. "Summary disposition of an appeal, however, either by affirmance or by dismissal for want of a substantial federal question is a disposition on the merits." C. A. Wright, Handbook of the Law of Federal Courts 551 (3d edition 1976). Although a summary affirmance is "an affirmance of the judgment only . . . (and) not necessarily (of) the reasoning by which it was reached(,) . . . (s)ummary affirmances and dismissals for want of a substantial federal question without doubt reject the specific challenges presented in the statement of jurisdiction . . ." Mandel v. Bradley, 432 U.S. 173, 176, 97 S.Ct. 2238, 2240, 53 L.Ed.2d 199 (1977). Consequently, they "prevent lower courts from coming to opposite conclusions on the precise issues presented and necessarily decided." Id. See also Hicks v. Miranda, 422 U.S. 332, 344-345, 95 S.Ct. 2281, 2289-2290, 45 L.Ed.2d 223 (1975); In re Northwest Homes of Chehalis, Inc., 526 F.2d 505, 506 (9th Cir. 1975), cert. denied sub nom. Hansen v. Weyerhaeuser Co., 425 U.S. 907, 96 S.Ct. 1501, 47 L.Ed.2d 758 (1976).
5
The Hawaii statute alleged to be preempted (and the interpretation given that statute) is identical to the New Mexico statute against which the same claim was raised in Kimbell v. Employment Security Commission, supra.3 Both statutes were challenged in their respective states by employers on grounds of federal preemption. The courts of first instance in Hawaii and New Mexico found that the National Labor Relations Act indeed had preempted these state laws providing for compensation to strikers at company expense. Hawaiian Telephone Co. v. Hawaii Department of Labor, 405 F.Supp. 275 (D.Haw.1976); Kimbell, Inc. v. Employment Security Commission, (Dist.Ct. of N.M., Bernalillo County). The Hawaii appellants appealed to this court. The New Mexico appeal went to the New Mexico Supreme Court, which reversed by a summary order. Kimbell, Inc. v. Employment Security Commission, No. 10323 (unreported order of the New Mexico Supreme Court, Dec. 29, 1975).4 On appeal to the United States Supreme Court, the jurisdictional statement put the question:
6
". . . Does the grant of unemployment compensation benefits to strikers by the state of New Mexico contravene the Supremacy Clause of Article VI of the Constitution of the United States by disrupting the operation of federal labor policy requiring state neutrality in the collective bargaining process?"
7
See 44 U.S.L.W. 3612. The Supreme Court dismissed the appeal for want of a substantial federal question. Kimbell v. Employment Security Commission, 429 U.S. 804, 97 S.Ct. 36, 50 L.Ed.2d 64 (1976).
8
Following this sequence of events, the Third Circuit in Super Tire Engineering Co. v. McCorkle, 550 F.2d 903, 905-908 (3d Cir.) cert. denied 434 U.S. 827, 98 S.Ct. 106, 54 L.Ed.2d 86 (1977), concluded that Kimbell was a binding precedent controlling the case before it. In Super Tire the Third Circuit was confronted with a New Jersey statute allowing welfare benefits for strikers. The employers of the strikers had challenged the statute as inconsistent with and therefore precluded by federal labor policy. The court dismissed their claim with these words:
9
". . . (T)he (United States) Supreme Court has already determined the issue before us and we are bound by its determination. The Court (in Kimbell) determined that no substantial federal question was presented by a claim that state unemployment compensation to strikers is contrary to federal labor policy. Logically subsumed in that ultimate determination is a rejection of the substantive contention that federal labor policy precludes such compensation." 550 F.2d at 908.
10
The Second Circuit, however, in New York Telephone v. New York Department of Labor, 566 F.2d 388 (2d Cir. 1977), aff'd, 440 U.S. 519, 99 S.Ct. 1328, 59 L.Ed.2d 553 (1979), determined that Kimbell was not a binding precedent in the case before it. 566 F.2d at 391 n. 2.5 In New York Telephone the Second Circuit was faced with a New York statute allowing unemployment compensation to strikers, and a challenge to that law by the employers of the strikers on grounds of preemption.
11
The challenged New York law differed from the New Mexico law in that New York paid compensation to strikers even if their strike completely closed their employer's operations. The statute in Kimbell had permitted payment of unemployment benefits to strikers only if the strike caused something less than a total closure of the employer's business.
12
Unlike the New York law before the Second Circuit, the Hawaii statute challenged here is identical to the New Mexico statute. Because it is, we follow Kimbell. In doing so we do not determine the maximum scope of Kimbell 's precedential effect: whether, for instance, we would find Kimbell controlling in circumstances like those in Super Tire. All we decide is that Kimbell must be followed here. If Kimbell is not controlling in a situation like this one, where the two state laws are identical, Kimbell, for practical purposes, would have no force as precedent.
13
In New York Telephone Co. v. New York Department of Labor, 440 U.S. 519, 99 S.Ct. 1328, 59 L.Ed.2d 553 (1979), the Supreme Court held that federal labor law did not preempt the New York statute. Although no opinion of the Court commanded a majority of the justices, six justices agreed on the central point in issue Congress, in enacting the Social Security Act, intended to tolerate New York's law allowing unemployment compensation to strikers. As a result, there is nothing in the Supreme Court's opinion derogating from the reasoning which underlies Kimbell. The vitality of Kimbell 's precedential force therefore remains unimpaired. The New York Telephone plurality opinion in fact took note of the court's Kimbell holding in a footnote. 440 U.S. 519, 534, 99 S.Ct. 1328, 1338 n. 24, 59 L.Ed.2d 553 n. 246.
14
The Supreme Court in Kimbell held that New Mexico was free to assert its own policy in the compensation of striking employees. In New York Telephone, the same court held that New York was equally free to do so.7 We must conclude that Hawaii also has the power to carry forward its own policy in this field.
15
Reversed.
*
The Honorable William D. Murray, Senior United States District Judge for the District of Montana
1
Haw.Rev.Stat. § 383-30 (1978 Code) Disqualification for Benefits. "An individual shall be disqualified for benefits:
"(4) Labor dispute. For any week with respect to which it is found that his unemployment is due to a stoppage of work which exists because of a labor dispute at the factory, establishment or other premises at which he is or was last employed; . . ."
2
The Hawaii Supreme Court has interpreted the phrase "stoppage of work" to mean a "substantial curtailment" of the employer's productive operations. Meadow Gold Dairies v. Wiig, 50 Haw. 225, 437 P.2d 317 (1968)
3
The New Mexico statute provided that an applicant for unemployment compensation would be disqualified from receiving benefits "for any week with respect to which . . . his unemployment is due to a stoppage of work which exists because of a labor dispute at the factory, establishment, or other premises at which he is or was last employed . . ." 1975 N.M.Laws Ch. 351, § 1 (codified at N.M.Stat.Ann. § 59-9-5(d) (Supp.1975); current version at N.M.Stat.Ann. 51-1-7(D) (1979). The New Mexico Supreme Court had interpreted the phrase "stoppage of work" to mean a "substantial curtailment" of the employer's productive operations. Albuquerque-Phoenix Express v. Employment Security Commission, 88 N.M. 596, 544 P.2d 1161 (1975). (Note: a 1979 amendment eliminated the work stoppage language from this code provision.)
4
The substance of the challenge is unaffected by the fact that in Hawaii a federal court adjudicated the federal preemption issue, while in New Mexico a state court adjudicated the issue
5
Note 2, 566 F.2d at 391, contains a clerical error. The New Mexico Supreme Court's Kimbell decision did not reverse Albuquerque-Phoenix Express, Inc. v. Employment Security Commission, 88 N.M. 596, 544 P.2d 1161 (1975). Rather, the court relied on the latter case in reversing the judgment of the lower state court in Kimbell
6
The footnote reads:
". . . It is true that only Rhode Island has a statutory provision like New York's that allows strikers to receive benefits after a waiting period of several weeks. See Grinnell Corp. v. Hackett, 475 F.2d 449, 457-459 (CA1 1973). But most States provide benefits to striking employees who have been replaced by nonstriking employees, and many States, pursuant to the so-called 'American rule,' allow strikers to collect benefits so long as their activities have not substantially curtailed the productive operations of their employer. See Hawaiian Telephone Co. v. Hawaii Dept. of Labor and Industrial Relations, 405 F.Supp. 275, 287-288 (D.Haw.1976), cert. denied, 435 U.S. 943, 98 S.Ct. 1522, 55 L.Ed.2d 539. For example, in Kimbell, Inc. v. Employment Security Commission, 429 U.S. 804, 97 S.Ct. 36, 50 L.Ed.2d 64, this Court dismissed for want of a substantial federal question an appeal from the Supreme Court of New Mexico which had held that a retroactive post-strike award of unemployment benefits to strikers under the 'American rule' was not pre-empted by federal labor law."
7
In addition, it should be noted that New York's statute is arguably less consistent with federal labor policy than is Hawaii's. (The Supreme Court's plurality in New York Telephone even seemed to imply this when it recognized that "unlike" states such as New Mexico and Hawaii, New York had "concluded that the community interest in the security of persons directly affected by a strike outweighs the interest in avoiding any impact on a particular labor dispute." 440 U.S. 519, 534, 99 S.Ct. 1328, 1338, 59 L.Ed.2d 553.) The New York law permits unemployment compensation to strikers even if their strike completely closes an employer's business. The Hawaii law, on the other hand, allows unemployment benefits to strikers only if their strike causes less than a substantial curtailment of the employer's work
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767 F.2d 911
Grahamv.Holland
85-6198
United States Court of Appeals,Fourth Circuit.
7/2/85
1
N.D.W.Va.
CPC DENIED-DISMISSED
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556 S.W.2d 598 (1977)
Clinton B. FAWCETT, Appellant,
v.
Charlie BELLAH, Appellee.
No. 1179.
Court of Civil Appeals of Texas, Corpus Christi.
September 22, 1977.
*599 C. W. Mann, Corpus Christi, for appellant.
Pedro P. Garcia, Corpus Christi, for appellee.
OPINION
NYE, Chief Justice.
This is a contract case. Plaintiff, Charlie Bellah, brought suit against the Defendant, Clinton B. Fawcett, to recover his architect's fees for the preparation of plans for the construction of a commercial laundry establishment. Trial was to a jury. In response to the special issues submitted and answered, the trial court entered judgment for the Plaintiff. From this judgment, Defendant has perfected his appeal to this Court.
Plaintiff is a licensed architect and engineer. In October of 1972 a Mr. Robert Evers, who is in the laundry equipment business, introduced the parties, Plaintiff and Defendant, to each other. The purpose of the meeting was to arrange for the designing by the Plaintiff architect and the building by Defendant Fawcett of a laundromat on some property owned by the Defendant. At this meeting the litigants discussed the building, the costs and the architect's fee. The record indicates that the Plaintiff left with the Defendant a from type contract that set out in detail the architectural fees Plaintiff would be charging for his services. Later that same month the Defendant contacted the Plaintiff and requested that he go ahead and prepare the plans for the building. Based on this conversation the Plaintiff prepared the plans and performed the other services that he promised to perform which were set out in the form contract. There was no formal written contract, however, executed by the parties.
*600 After the plans had been completed, the Plaintiff submitted his bill for his services. When the Defendant failed to pay the Plaintiff for the services rendered, Plaintiff filed an affidavit of lien against the Defendant's property and brought the present lawsuit seeking to recover his architectural fees in the amount of $4,260.00, plus interest and attorney's fees. The Defendant filed a general denial and a cross-action in which he stated that he "was not bound under any contract to pay the cross-defendant (plaintiff Bellah) for his plans and specifications unless the building was constructed" and that he sought damages in the amount of $50,000.00 for the filing of the above described lien which he alleged was a cloud on the title to his land. He also sought to have the purported lien extinguished.
The case was tried primarily on the theory that the Plaintiff's architectural fees were contingent upon the Defendant being able to obtain 100% financing for the construction of the building and that since he did not obtain such financing he did not owe the Plaintiff anything; therefore, the Plaintiff wrongfully placed a lien and cloud upon the title to his property for which he sought relief.
The case was submitted to the jury on the following special issues:
"SPECIAL ISSUE NO. 1
Do you find from a preponderance of the evidence that Plaintiff and Defendant had reached an agreement whereby Plaintiff was to prepare plans and specifications for the construction of a building proposed to be erected at the corner of Doddridge Street and South Staples Street?
Answer `Yes' or `No.' ANSWER: Yes
If you have answered Special Issue No. 1 `Yes,' then answer Special Issue No. 2; otherwise, do not answer Special Issue No. 2.
SPECIAL ISSUE NO. 2
Do you find from a preponderance of the evidence that Plaintiff had completed his architectural duties up to the time of the actual construction of the proposed building?
Answer `Yes' or `No.' ANSWER: Yes
If you have answered Special Issue No. 2 `Yes,' then answer Special Issue No. 3; otherwise, do not answer Special Issue No. 3.
SPECIAL ISSUE NO. 3
What sum of money, if any, if paid now, would reasonably compensate the Plaintiff for his services actually performed?
Answer in dollars and cents, if any. ANSWER: $4,260.00
SPECIAL ISSUE NO. 4
What sum of money, if any, if paid now, would reasonably compensate the Plaintiff's attorney in the trial of this case. In arriving at this figure, you shall consider the amount of time spent by Plaintiff's attorney in the preparation of this lawsuit and the actual trial itself.
Answer in dollars and cents, if any. ANSWER: $1,800.00"
Special Issue Nos. 5 and 6 concerned attorney's fees on appeal which the jury answered zero.
Special Issue No. 7: "Do you find from a preponderance of the evidence that securing 100% construction financing was a condition precedent to the agreement, if any, between the parties?" ("condition precedent" was then defined by the court). The jury answered "No." The jury then found that the Plaintiff filed an affidavit of lien knowing that the lien was invalid at the time it was filed (Special Issue No. 8), but that the Plaintiff did not file such a lien with malice (Special Issue No. 9). Special Issue No. 10 was conditional and not answered. The jury, in Special Issue No. 11, was then asked to find that the Plaintiff, although knowing that the lien was invalid, refused to release it at the request of the Defendant. The jury answered "No." Special Issue No. 12, a conditional issue, was not answered. Next the jury was asked to find that the Plaintiff's refusal to release the lien caused the Defendant to lose a sale on the property. Again the jury answered "No." Special Issue No. 14 was a conditional *601 issue and not answered. In Special Issue No. 15, the jury found that the Defendant failed to exercise reasonable efforts to minimize the damages, if any, suffered by him.
Based on the answers to all of these issues, the trial court entered judgment awarding the Plaintiff $4,260.00, attorney's fees in the amount of $1,800.00, plus interest and costs.
Defendant's first point of error complains of the action of the trial court in overruling Defendant's objection to Special Issue No. 1 set out above. Defendant's objection was that Special Issue No. 1 was not a controlling issue to any cause of action in the case. The Defendant argues as part of his multifarious objection to the court's charge that the issue, if answered yes by the jury, would at best constitute only a gratuitous promise by Plaintiff with no consideration forthcoming from the Defendant. This point of error is overruled.
The Plaintiff's pleadings stated "that on or about November 1, 1972, Plaintiff entered into a contract with Defendant wherein Plaintiff agreed to prepare plans and specifications for the construction of a building ..." The pleadings go on to state that the plans and specifications were completed and delivered to the Defendant; that the Defendant approved and accepted the plans and specifications and has retained them; that the Plaintiff billed the Defendant for the amount of the work performed; and that the Defendant failed and refused to pay. It is clear from Plaintiff's pleadings and the evidence in the record that the Plaintiff had an express agreement to prepare the plans and specifications and that the Defendant agreed to pay the Plaintiff for his services. There was no exception to Plaintiff's pleadings. Although the Defendant testified that the Plaintiff's work was contingent on his securing 100% financing, the jury apparently chose not to believe him.
The first issue was in substantially correct form. If the Plaintiff were to prove up a valid contract, this would have been a proper first issue of a series of issues going to Plaintiff's case in the main. Defendant's objection did not point out distinctly the grounds that he now argues here on appeal. Defendant's objection to the court's charge that the trial court failed to submit a controlling fact issue does not warrant reversal for this reason above. Unless he specifically sets out a proper complaint and objects specifically thereto so that the trial court may correct the error, if there be one, the objection may be overruled as being too general. See Western Hills Hotel, Inc. v. Ferracci, 299 S.W.2d 335 (Tex.Civ.App. Fort Worth, writ dism'd by agr.).
The Defendant's contention that the issue is not a controlling fact issue to any cause of action pled by the Plaintiff actually raises the same questions and arguments that Defendant asserts in his third point of error in which he complains of special issue number three and in which he acknowledges in his brief to be his main contention on appeal. This main contention here on appeal is that Plaintiff pled and tendered evidence only on an express contract and therefore was not entitled to these issues which inquire into the existence, vel non, of an implied contract or recovery in quantum meruit.
The Plaintiff admits that his recovery is based on an express contract and argues that these issues prove up such fact. Where an express contract covers the subject matter of a lawsuit, there can be no implied contract or recovery in quantum meruit. Freeman v. Carroll, 499 S.W.2d 668 (Tex.Civ.App.Tyler 1973, writ ref'd n.r.e.).
The question before us then, and the one raised in Defendant's first four points of error, is, whether or not the pleadings, the evidence, and issues will support the judgment in Plaintiff's favor. Although Special Issue No. 1 inquires as to whether or not the parties reached a specific agreement, it does not specifically inquire as to the existence of consideration. This was not error. Special Issue No. 3, although misworded slightly, is really an inquiry to the jury as to the amount of the consideration that the parties undeniably agreed upon. The third issue probably *602 should have read: "What sum of money, if any, was agreed upon by the parties as compensation of the Plaintiff's architectural work." However, Defendant's objection to Special Issue No. 3 did not address itself to this complaint. If this issue as submitted was improperly worded, it was harmless error because the Defendant has not demonstrated on appeal that such error caused or probably caused the rendition improper judgment. Rule 434, T.R.C.P. The amount of money due for the services rendered was virtually undisputed. The main damage question was whether or not any money was due Plaintiff.
In any event, the trial court must have impliedly found consideration in the jury's specific findings that Plaintiff and Defendant had entered into an agreement whereby the Plaintiff was to prepare the plans and specifications for the Defendant and that the Plaintiff had completed such duties. Under Rule 279, T.R.C.P., an omitted issue can be deemed to be found where it is necessary to support a judgment. Dee v. Parish, 160 Tex. 171, 327 S.W.2d 449 (1959); Utay v. Urbish, 433 S.W.2d 905 (Tex.Civ.App.Dallas 1968, writ ref'd n.r. e.); Gillen v. Stevens, 330 S.W.2d 253 (Tex. Civ.App.Waco 1959, writ ref'd n.r.e.). As Professor Hodges states in his treatise on special issues "... `an omitted issue' is a single issue of the kind which might properly be submitted to the jury as one, and only one, of the special issues submitted to the jury. It does not by itself constitute a ground of recovery or defense." G. Hodges, Special Issue Submission in Texas, 196 (1959). Omitted issues, that constitute only a part of a complete and independent ground of recovery, are deemed found in support of judgment, if they are supported by evidence. Reliable Life Insurance Company v. Torres, 509 S.W.2d 409 (Tex.Civ. App.Austin 1974, writ ref'd n.r.e.). In this case, no proper objection was made to the absence of a correctly worded issue on consideration, and therefore a finding of consideration is deemed.
As was stated earlier herein, the Plaintiff did not specifically plead for a recovery in quantum meruit nor was his proof based on this theory. His recovery was based on an express contract and the issues were sufficient to support a recovery on this basis. Rule 279, T.R.C.P., provides that where the trial court has fairly submitted the controlling issues raised by the pleadings and evidence, the case shall not be reversed because of the failure to submit other and various phases or different shades of the same issues. Although the courts have held that an issue must be tendered in substantially correct form, this requirement does not mean that the issue must be absolutely correct. Call of Houston, Inc. v. Mulvey, 343 S.W.2d 522 (Tex. Civ.App.Houston 1961, no writ); Modica v. Howard, 161 S.W.2d 1093 (Tex.Civ.App. Beaumont 1942, no writ). Defendant's first four points of error are overruled.
In his final point of error Defendant complains of the action of the trial court in not limiting Special Issue No. 3 to services actually performed by Plaintiff alone. The basis of Defendant's complaint is that the issue as worded, allowed the jury to consider work done by Plaintiff's employees along with the work done by Plaintiff himself. In support of his position the Defendant relies on Van Zandt v. Fort Worth Press, 359 S.W.2d 893 (Tex.Sup.1962) and Tenneco Oil Co. v. Padre Drilling Co., 453 S.W.2d 814 (Tex.Sup.1970). Both of these cases originally construed Article 2226 (attorney's fees) to restrict recovery for personal services to those services actually performed. Whatever analogy the Defendant now seeks between these cases and the case at Bar was destroyed by the 1971 amendment to Article 2226 which deleted the reference to personal services and authorized a recovery merely for services rendered. Today services under Article 2226 may include work done by one's employees and/or his equipment. Mathews Construction Company, Inc. v. Jasper Housing Construction Co., 528 S.W.2d 323 (Tex.Civ.App. Beaumont 1975, writ ref'd n.r.e.). See Clark Advertising Agency, Inc. v. Tice, 490 F.2d 834 (5th Cir. 1974); Howard v. French-Brown Floors Co., 542 S.W.2d 709 (Tex.Civ. *603 App.Dallas 1976, no writ). The testimony concerning the services performed by Plaintiff shows that all the work done by Plaintiff for Defendant was done by the Plaintiff himself, his employees or others at Plaintiff's request and that the Plaintiff paid for those services. Clearly he was entitled to recover these services as part of his fee. We see no relationship to Defendant's objection to Special Issue No. 3 and the attorney's fee, Article 2226. Defendant's fifth point of error is overruled.
The judgment of the trial court is affirmed.
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Gonzales v. State
COURT OF APPEALS
SECOND DISTRICT OF TEXAS
FORT WORTH
NO. 2-03-467-CR
LUCIANO ARMANDO GONZALES, II APPELLANT
V.
THE STATE OF TEXAS STATE
------------
FROM THE 367TH DISTRICT COURT OF DENTON COUNTY
------------
MEMORANDUM OPINION
(footnote: 1)
------------
Luciano Armando Gonzales, II appeals from his conviction for possession of less than one gram of a controlled substance. In six issues, appellant contends that the trial court improperly denied his pretrial motion to suppress evidence because both the seizure of his vehicle and the inventory search that followed violated the federal and state constitutions and article 38.23 of the code of criminal procedure. This complaint is forfeited because, when the State offered the evidence at trial, appellant’s counsel stated, “We reviewed [the evidence] and have no objection.”
(footnote: 2)
Accordingly, we overrule appellant’s issues and affirm the trial court’s judgment.
PER CURIAM
PANEL F: CAYCE, C.J.; LIVINGSTON and DAUPHINOT, JJ.
DO NOT PUBLISH
Tex. R. App. P.
47.2(b)
DELIVERED: December 23, 2004
FOOTNOTES
1:See
Tex. R. App. P.
47.4.
2:See Tucker v. State,
990 S.W.2d 261, 263 n.11 (Tex. Crim. App. 1999)
(stating that pretrial motion to suppress does not preserve error when defendant affirmatively asserts during trial that he has “no objection” to admission of complained of evidence).
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12 So.3d 181 (2007)
GEORGE FRANKLIN DICKINSON, AS CO-TRUSTEE AND INDIVIDUALLY
v.
ESTATE OF FRANCIS DICKINSON THOMPSON, BASIL WEBSTER THOMPSON, ET AL.
No. 2060796.
Court of Civil Appeals of Alabama.
June 12, 2007.
Decision of the Alabama Court of Civil Appeal Without Published Opinion. Transferred to Sup. Ct. for lack of subject-matter jurisdiction.
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} |
210 S.W.3d 28 (2005)
LAKE VIEW SCHOOL DISTRICT NO. 25 OF PHILLIPS COUNTY, ARKANSAS, et al., Appellant,
v.
Governor Mike HUCKABEE, et al., Appellee.
No. 01-836.
Supreme Court of Arkansas.
June 9, 2005.
Sharpe, Beavers, Cline & Wright, by: Brad Beavers, Forrest City, for appellant, Barton-Lexa School District, successor in interest to Lake View School District; and amicus curiae, Forrest City School District.
Friday, Eldredge & Clark, by: Christopher J. Heller, Little Rock, for appellant, Little Rock School District.
Matthews, Campbell, Rhoads, McClure, Thompson & Fryauf, P.A., by: David R. Matthews, Rogers, for appellant, Rogers School District.
Mike Beebe, Att'y Gen., by: Tim Gauger, Sr. Ass't Att'y Gen., and Mark Hagemeire, Ass't Att'y Gen., Little Rock, for appellee, Governor Mike Huckabee.
Wilson Law Firm, P.A., by: E. Dion Wilson, Helena, for amici curiae, Earle School District and Helena-West Helena School District.
Sharon Street, for amici curiae, DeQueen School District, et al.
Barrett & Deacon, by: D.P. Marshall, for amici curiae, Arkansas State Chamber of Commerce and Associated Industries of Arkansas, Inc.
*29 MOTIONS TO RECALL MANDATE AND REAPPOINT MASTERS
ROBERT L. BROWN, Justice.
On May 5, 2005, this court issued a per curiam order setting the various motions to recall the mandate and reappoint the masters for oral argument. Forty-nine school districts were represented as either movants for the recall of the mandate or movants for intervention or as amici curiae. We asked that the parties focus their attention on these issues in rebriefing and at oral argument:
(1) this court's jurisdiction to hear the instant motions;
(2) whether the General Assembly at its 2005 regular session retreated from its prior actions to comply with this court's directives in Lake View Sch. Dist. No. 25 v. Huckabee, 351 Ark. 31, 91 S.W.3d 472 (2002), particularly with respect to the General Assembly's actions or inactions in relation to Act 57 and Act 108 of the Second Extraordinary Session of 2003;
(3) whether the foundation-funding levels for the next biennium assure a continual level of adequate funding for Arkansas students; and
(4) whether the General Assembly's commitment to facilities funding meets the adequacy criterion.
Oral argument was then held on May 19, 2005.
We first conclude that this court has jurisdiction to recall its mandate and appoint masters to make findings of fact. See Lake View Sch. Dist. No. 25 v. Huckabee, 355 Ark. 617, 142 S.W.3d 643 (2004) (per curiam). See also Ark. Const. amend. 80, § 2(E).
We further made it radiantly clear in our supplemental opinion handed down on June 18, 2004, that although we were releasing jurisdiction of the case, we reserved the right to exercise our power at any time to assure that a constitutional system of education would be attained:
The resolve of this court is clear. We will not waver in our commitment to the goal of an adequate and substantially equal education for all Arkansas students; nor will we waver from the constitutional requirement that our State is to "ever maintain a general, suitable, and efficient system of free public schools[.]" Make no mistake, this court will exercise the power and authority of the judiciary at any time to assure that the students of our State will not fall short of the goal set forth by this court. We will assure its attainment.
Lake View Sch. Dist. No. 25 v. Huckabee, 358 Ark. 137, 161, 189 S.W.3d 1, 17 (2004) (emphasis added).
The allegations made by the movants in this case are of the most serious kind. The core assertions are that the General Assembly reneged on its legislative commitments and failed to comply with the landmark legislation passed during the Second Extraordinary Session in 2004. We are quick to add that we do not have adequate facts before this court to determine whether this is so. We merely underscore the seriousness of the allegations, but we further emphasize that they are only allegations.
The response of the State of Arkansas, both in its briefs and at oral argument, is first to deny any backtracking on the part of the General Assembly, but, secondly, to urge that even if there has been backtracking, a new case must be filed in circuit court, and litigation must begin anew. We are disinclined to agree with the State. This court's determination that Arkansas' public school funding system does not pass constitutional muster dates back twenty-two years. See DuPree v. Alma Sch. Dist. *30 No. 30, 279 Ark. 340, 651 S.W.2d 90 (1983). Resolution of the issue has moved at glacier speed. There is no question in our minds that our failure to address the issues raised in the current motions with dispatch by using experienced Masters will only occasion additional delay. This we cannot sanction.
In our opinion handed down on June 18, 2004, we wrote about the laudable steps taken by the General Assembly to chart a constitutional course. This court is committed to assuring that that course remains fixed and true.
We, therefore, recall our mandate in this case forthwith and reappoint Bradley D. Jesson, former Chief Justice of the Arkansas Supreme Court, and David Newbern, a former Justice of the Arkansas Supreme Court. The Masters shall have the same powers and authority as set forth in Lake View Sch. Dist. No. 25 v. Huckabee, 356 Ark. 1, 144 S.W.3d 741 (2004) (per curiam). The Masters are authorized to examine and evaluate the issues listed in this opinion, but also any other issue they deem relevant to constitutional compliance.
We direct that the Masters furnish this court with their report on or before September 1, 2005, unless the Masters request additional time.
GLAZE, CORBIN, and DICKEY, JJ., concur.
HANNAH, C.J., GUNTER, J., and Special Justice CAROL DALBY, dissent.
IMBER, J., not participating.
TOM GLAZE, Associate Justice, concurring.
I agree wholeheartedly with the court's decision to recall the mandate and reappoint the Masters; however, I write separately to address the separation-of-powers issues raised in the dissenting opinions. The separation-of-powers doctrine is set forth in Ark. Const. art. 4, §§ 1 and 2, as follows:
§ 1. Departments of government.
The powers of the government of the State of Arkansas shall be divided into three distinct departments, each of them to be confined to a separate body of magistracy, to-wit: Those which are legislative to one, those which are executive to another, and those which are judicial to another.
§ 2. Separation of departments.
No person, or collection of persons, being one of these departments, shall exercise any power belonging to either of the others, except in the instances hereinafter expressly directed or permitted.
This court has recognized that judicial review of legislative action is not undertaken de novo by a trial court because that would be judicial legislating and violative of the separation-of-powers doctrine contained in Ark. Const. art. 4, § 2. City of Lowell v. M & N Mobile Home Park, Inc., 323 Ark. 332, 916 S.W.2d 95 (1996); Johnson v. Sunray Serv., Inc., 306 Ark. 497, 816 S.W.2d 582 (1991); Wenderoth v. City of Ft. Smith, 251 Ark. 342, 472 S.W.2d 74 (1971).
However, in the 2002 Lake View decision, we rejected an argument that this court has "no role in examining school funding in light of the Arkansas Constitution." In that opinion, this court wrote as follows:
This court's refusal to review school funding under our state constitution would be a complete abrogation of our judicial responsibility and would work a severe disservice to the people of this state. We refuse to close our eyes or turn a deaf ear to claims of a dereliction of duty in the field of education.
*31 Lake View School Dist. No. 25 v. Huckabee, 351 Ark. 31, 91 S.W.3d 472 (2002).
The court continued by noting that early on, this court announced that "[t]he people of the State, in the rightful exercise of their sovereign powers, ordained and established the constitution; and the only duty devolved upon this court is to expound and interpret it." Id. at 54, 91 S.W.3d 472 (quoting State v. Floyd, 9 Ark. 302, 315 (1849)). We then quoted extensively from the Supreme Court of Kentucky, explicitly adopting the following language:
[W]e must address a point made by the appellants with respect to our authority to enter this fray and to "stick our judicial noses" into what is argued to be strictly the General Assembly's business.
* * * * * *
. . . [In this case] we are asked-based solely on the evidence in the record before us-if the present system of common schools in Kentucky is "efficient" in the constitutional sense. It is our sworn duty, to decide such questions when they are before us by applying the constitution. The duty of the judiciary in Kentucky was so determined when the citizens of Kentucky enacted the social compact called the Constitution and in it provided for the existence of a third equal branch of government, the judiciary.
* * * * * *
To avoid deciding the case because of "legislative discretion," "legislative function," etc., would be a denigration of our own constitutional duty. To allow the General Assembly (or, in point of fact, the Executive) to decide whether its actions are constitutional is literally unthinkable.
* * * * * *
The judiciary has the ultimate power, and the duty, to apply, interpret, define, and construe all words, phrases, sentences and sections of the Kentucky Constitution as necessitated by the controversies before it. It is solely the function of the judiciary to so do. This duty must be exercised even when such action services as a check on the activities of another branch of government or when the court's view of the constitution is contrary to that of other branches, or even that of the public.
Lake View, 351 Ark. at 54-55, 91 S.W.3d 472 (emphasis added) (quoting Rose v. Council for Better Education, Inc., 790 S.W.2d 186, 208-10 (Ky.1989))
How cynical it would be for the court to don such a sweeping mantle, and then cast it aside at this juncture. If it were "not this court's role" to interject itself into this particular fray, then we should never have done so in the first place. We accepted the role when we recalled our mandate in February of 2004, and for the dissenting justices to call upon us to reject it now, for fear of being viewed as an inappropriate "watchdog" is the height of hypocrisy. While it is certain that we cannot control the actions of the legislative branch, see Wells v. Purcell, 267 Ark. 456, 592 S.W.2d 100 (1979), it nevertheless remains clear that the doctrine of separation of powers does not prevent the judicial branch from passing on the validity of legislative acts. See Riviere v. Wells, 270 Ark. 206, 604 S.W.2d 560 (1980). When, as here, we have taken upon ourselves the daunting task of ensuring compliance with our constitutional mandate for a "general, suitable, and efficient system of free public schools," see Ark. Const. art. 14, § 1, we should not shrug off that extraordinary calling because we are suddenly afraid of how our actions might be perceived, or for some unfounded "separation of powers" *32 concerns. In sum, if this court does not take all necessary steps to ensure that the General Assembly had complied with the clear terms of our Lake View ruling, who will? No one else has done so for twenty-two years, and it is incumbent that we do so now!
CORBIN and DICKEY, JJ., joins this concurring opinion.
DONALD L. CORBIN, Associate Justice, concurring.
I hesitate to write separately because I wholeheartedly agree with the majority's position in this matter. Unfortunately, I cannot sit back and allow the dissenters to label me as some kind of "super-legislature." Simply put, the dissenters do not agree with the majority's decision to reappoint the Masters to investigate the very serious allegations raised by a number of school districts of this State, so they attempt to cloud the real issues at hand by raising the specter that this court is creating a constitutional crisis by usurping the role of the General Assembly. This is simply not the case.
By reappointing the Masters, the majority is fulfilling its duty to oversee the constitutionality of the State's educational system. At this time, this court has no way of knowing whether the legislation enacted puts the State's educational system on the road to constitutionality. The Masters will be in a position to take evidence to determine if there is any truth to the accusations. I believe that many in the General Assembly have worked diligently to improve our system of education, but just because some action has been taken does not mean that this court should assume that all is well and summarily dismiss the petitions now pending. Reappointing the Masters is not tantamount to legislating.
I do not believe that the majority has any designs to tell the legislative branch how to manage specific educational programs or that it must enact any specific legislation regarding education. We are in accord that it is the duty of the legislative branch to develop policy as it relates to our system of education. However, this court has decreed that the General Assembly must provide the children of this State with an adequate and substantially equal education. If we were to ignore the allegations that have now been raised before this court, we would be shirking our duties to the citizens of this State. The dissent makes much ado about the fact that the members of the General Assembly have been elected by the people of this State to represent their interests; well, the members of this court have also been elected by the citizens of Arkansas and one of our duties as jurists is to ensure that the laws governing the people of this State are constitutional.
It would certainly be easier for this court to rule that we have no jurisdiction and that any new challenge must again be filed in the circuit court, but to do so would send a signal that our resolve to ensure a constitutional educational system was less than strong. Moreover, requiring the filing of a new lawsuit would result in yet another prolonged delay to a critical issue that has been pending before this court for twenty-two years. Such a result is unacceptable.
GLAZE and DICKEY, JJ., join in this concurrence.
BETTY C. DICKEY, Associate Justice, concurring.
When this court released jurisdiction on June 18, 2004, and the mandate issued, the decision was predicated upon the General Assembly's continuing the ambitious course it had set of an "adequate and *33 substantially equal education" for all Arkansas students. We are now asked to decide whether there has been a retreat or abandonment of the goals of the 2003 legislative session, specifically with respect to Acts 57 and 108, and specifically in the areas of foundation and facilities funding. We do not have adequate information to determine whether the allegations various school districts have made are valid. And our duty to the children of Arkansas requires that we delay no longer the inquiry of whether we are continuing to move forward toward a "general, suitable, and efficient" system of free, public schools. With great reluctance, we make the decision to again recall the mandate for an unprecedented second time, and appoint special masters, because twenty-two years is time enough to achieve compliance with our Constitution. We cannot wait for other cases to wend their way through the system, while hoping that successive legislative sessions don't "go wobbly" in their resolve to put the educational needs of the children first. This is truly a process that is "not for the short-winded."
It is hoped that the special masters, in reviewing whether there is compliance with Lake View decisions and recent legislation, will soon be able to determine whether there is sufficient funding, whether those funds are being used efficiently, and whether funds earmarked for education are being diverted to other programs.
For these reasons, I concur with the majority.
GLAZE and CORBIN, JJ., join.
JIM HANNAH, Chief Justice, dissenting.
I respectfully dissent. I am sure that it is the depth of concern over the perpetual struggle to provide appropriate public schools that has obscured the majority's understanding and resulted in this usurpation by seizing power to act where there is no power to act. The majority is clearly confused, as is demonstrated by the following statement in the majority opinion:
We further made it radiantly clear in our supplemental opinion handed down on June 18, 2004, that although we were releasing jurisdiction of the case, we reserved the right to exercise our power at any time to assure that a constitutional system of education would be attained. . . .
It is a misperception that the issue of the constitutionality of the public schools in Arkansas has been pending for twenty-two years. No case on the constitutionality of the public schools has been pending before this court for twenty-two years.
While I understand and share the desire to assure that a constitutional system of public education is attained, the desire to see that the legislature does so is hardly a basis of jurisdiction. Neither does a fair warning that the court may act give rise to jurisdiction. Yet the majority asserts that it has jurisdiction, giving a meaning to the word jurisdiction heretofore unknown. I am confused, although I am reminded of Alice and Humpty Dumpty in Through the Looking Glass. In conversation with Alice, Humpty Dumpty stated, "There's glory for you." Alice was confused by the use of the word "glory."
"I don't know what you mean by `glory,'" Alice said.
Humpty Dumpty smiled contemptuously. "Of course you don'ttill I tell you. I meant `there's a nice knock down argument for you!'"
"But `glory' doesn't mean `a nice knock down argument for you,'" Alice objected.
"When I use a word," Humpty Dumpty said, in rather a scornful tone, "it *34 means just what I choose it to mean-neither more nor less."
"The question is," said Alice, "whether you can make the words mean so many different things."
"The question is," said Humpty Dumpty, "which is to be masterthat's all"
Lewis Carroll, The Complete Illustrated Lewis Carroll 196 (New York: Gallery Books, 1991). It appears that this court is assuming jurisdiction just because we choose to say we can.
"Jurisdiction is the power of the court to hear and determine the subject matter in controversy between the parties." Pederson v. Stracener, 354 Ark. 716, 719, 128 S.W.3d 818 (2003). According to Rogers School District No. 30, the controversy in this case is apparently a failure by the State to "follow this court's directives and their failure to honor their commitment previously given this Court" to provide a constitutional public school system. It is clear that this court has no authority to issue orders to the legislature. So what is this case now, an original action in this court for breach of promise?
It certainly appears that the school districts and the State are arguing over whether the school system enacted in the last legislative session meets constitutional requirements, but there is no justiciable controversy on that issue before this court. Our jurisdiction arises from Lake View Sch. District No. 25 v. Huckabee, 351 Ark. 31, 91 S.W.3d 472 (2002)(Lake View III), where the majority stated that the case was "an appeal from a final order of the Pulaski County Circuit Court entered May 25, 2001, which concluded that the current school-funding system is unconstitutional. . . ." Lake View III, 351 Ark. at 42, 91 S.W.3d 472. This court further stated, "We affirm the trial court's order regarding the unconstitutionality of the public school-funding system but reverse its finding relative to excess debt service. . . ." Id. Thus, the issue of a future school system enacted by the General Assembly in the last legislative session was not the subject of the case in Lake View III and further has never been the subject of litigation in the circuit court. A mandate may not be recalled to examine an issue that was not the subject of the prior litigation. In re Kunkle, 398 F.3d 683 (5th Cir.2005).
In short, there is no jurisdiction in this case. With the exception of the contempt power and certain listed writs, this court has appellate jurisdiction only. Bynum v. Savage, 312 Ark. 137, 847 S.W.2d 705 (1993). There is no appellate jurisdiction in this case because there is no order from a lower court to review in this case, which is what appellate courts do. Ward Sch. Bus Mfg., Inc. v. Fowler, 261 Ark. 100, 547 S.W.2d 394 (1977). Original jurisdiction is jurisdiction to decide a matter in the first instance. Wooley v. State Farm Fire and Cas. Ins. Co., 893 So.2d 746 (La.2005). The majority is appointing special masters to decide in the first instance whether the legislature has "attained" a "constitutional system of education." This court lacks original jurisdiction to undertake such a determination.
Yet here we are discussing recalling the mandate to allow this court to review whether the legislature did what this court never ordered it to do and what this court never had the authority to order it to do. Besides, just based on simple logic, how does recall of a mandate affirming a decision by the circuit court that the then-existing school system is unconstitutional allow this court to examine the question of the constitutionality of a subsequently enacted school system? Focusing too long on the majority's analysis of its authority to act in this case may result in cramping of the cerebral cortex.
*35 In any event, there is no reason to recall the mandate regarding the constitutionality of the legislative enactments from the last legislative session regarding schools because they are presumed constitutional. In Bush v. Martineau, 174 Ark. 214, 295 S.W. 9 (1927), this court cited cases dating to 1836 showing that an act of the legislature is presumed constitutional. The law remains the same today. Davis v. Parham, 362 Ark. 352, 208 S.W.3d 162 (2005). Until someone challenges the new school system in circuit court and obtains a ruling of the circuit court that the system is unconstitutional, then the system is constitutional.
Justice Glaze's concurring opinion states that "[i]f it were `not this court's role' to interject itself into this particular fray, then we should not have done so in the first place." The concurring opinion argues that to retreat from the "fray" is to engage in the "height of hypocrisy." From my first involvement in this case, I have opposed this court's attempts to direct the General Assembly and stated in my concurrence to Lake View Sch. Dist. No. 25 v. Huckabee, 351 Ark. 31, 91 S.W.3d 472 (2002) (Lake View III), that the role of this court is to determine whether acts of the General Assembly concerning the public school system are constitutional and not to direct the General Assembly as to what legislation to enact. I restated my concerns about encroaching upon the constitutional duties of the General Assembly in my concurring opinion in Lake View Sch. Dist No. 25 v. Huckabee, 358 Ark. 137, 189 S.W.3d 1 (2004). If we interjected ourselves into this "fray" in error, then any position other than dissent to this court's actions in this opinion would only be to perpetuate error.
What brings us to the brink of abandoning the doctrine of separation of powers is not hard to understand. When we begin our analysis correctly, it is not difficult to continue down the right path. However, once we err, it can be very difficult to get back on the right path. It is beyond dispute in Arkansas that the responsibility for the creation, organization and regulation of the public schools system is within the exclusive province of the legislature. Loyd v. Knight, 288 Ark. 474, 706 S.W.2d 393 (1986); Heber Springs Sch. Dist. v. West Side Sch. Dist., 269 Ark. 148, 599 S.W.2d 371 (1980); Wallace Sch. Dist. v. County Bd. of Educ., 214 Ark. 436, 439, 216 S.W.2d 790 (1949). The Arkansas Constitution vests in the General Assembly the duty and authority to establish, maintain, and support a public school system. Barker v. Frank, 327 Ark. 589, 939 S.W.2d 837 (1997); East Poinsett County Sch. Dist. No. 14 v. Massey, 315 Ark. 163, 866 S.W.2d 369 (1993); Saline County Educ. Bd. v. Hot Spring Educ. Bd., 270 Ark. 136, 603 S.W.2d 413 (1980). See also, Lemaire v. Henderson, 174 Ark. 936, 298 S.W. 327 (1927). In 1934, this court stated:
It has been too often held, as now to be a matter of debate, that the Legislature is clothed by the Constitution with plenary power over the management and operation of the public schools. It is for the Legislature to declare policy with reference to the schools, and, however much this court might doubt the wisdom of the policy declared, it has no power to alter it.
Wheelis v. Franks, 189 Ark. 373, 377, 72 S.W.2d 231 (1934). That the legislature has plenary power over the public schools means that it has full power. Beard v. Albritton, 182 Ark. 538, 31 S.W.2d 959 (1930). "We do not even imply that we have the authority to dictate to the General Assembly. . . ." Wells v. Riviere, 269 Ark. 156, 169, 599 S.W.2d 375 (1980). Yet off we go now asserting that we ordered *36 studies and very specific actions by the legislature.
I must also note another argued basis for jurisdiction. The majority in Lake View III stated that "[t]he people of this State unquestionably wanted all departments of state government to be responsible for providing a general, suitable and efficient system of public education to the children of this state." Lake View III, 351 Ark. at 53, 91 S.W.3d 472. It is not clear what this means. This assertion provides no basis for jurisdiction. Perhaps the statement was only intended to announce a noble sentiment; however, it resulted in the petitioners arguing at the last oral argument that there was a distinct form of jurisdiction in school cases allowing this court to direct the General Assembly with respect to establishment of the public schools. There is no such jurisdiction. Our jurisdiction is appellate with the noted very limited exceptions.
Further, this constitutes a blending of the powers of the legislative and judicial branches of government, and this court has specifically rejected the notion of a "blending" of powers in favor of a strict separation of powers. We have stated "Our system, providing as it does for distinct separation of departments, did not in its inception contemplate a blending of authority; and overlapping must not be permitted now at the command of expediency or in response to the nod of convenience." Spradlin v. Arkansas Ethics Comm'n, 314 Ark. 108, 115, 858 S.W.2d 684 (1993)(quoting Oates v. Rogers, 201 Ark. 335, 346, 144 S.W.2d 457 (1940)). In Lake View III, a stay of one year was mistakenly granted to avoid a nonexistent problem of litigation arising from continued operation of a public school system declared unconstitutional by this court. Somehow, in a metamorphosis that would make even Franz Kafka's head spin, the stay miraculously transformed itself from a stay to prohibit litigation regarding the unconstitutional school system to a stay and order that the legislature enact a constitutional school system by January 4, 2004. How could such a stay and order ever be squared with the law that the legislature has plenary power over the creation, organization and regulation of the public schools? See Loyd, supra.
There is no jurisdiction to recall the mandate. There is no jurisdiction on any basis for this court to consider the school system enacted by the General Assembly in the last legislative session, and, further, the recall is in violation of the separation-of-powers doctrine. The action of the majority in recalling the mandate is nothing more than a usurpation of the legislative function in utter disregard for the separation-of-powers doctrine that has protected our representative form of government over many generations. This court has now set precedent that it stands as the ever vigilant monitor of the public schools, and as this case proves, every two years we will again be asked to review the school system. Such a review is an exercise of original jurisdiction that this court is not granted by our constitution. Section 6 of Amendment 80 provides, "Circuit Courts are established as the trial courts of original jurisdiction of all justiciable matters not otherwise assigned pursuant to this Constitution." I wonder why we have trial courts if this court has now decided to try cases.
I dissent because we have no jurisdiction to recall the mandate and no jurisdiction to review the school system enacted in the last legislative session. Neither cries of frustration, nor cries that efficiency demands our action, nor even unfounded cries that the General Assembly will "cut and run" should tempt us to abandon our *37 form of government and make this court a superlegislature.
GUNTER, J. and Special Justice CAROL DALBY join this dissent.
JIM GUNTER, Associate Justice, dissenting.
I respectfully dissent. This court has no jurisdiction. The jurisdiction of the Arkansas Supreme Court arises solely from Amendment 80 to the Arkansas Constitution. Amendment 80 states that
(D) The Supreme Court shall have:
(1) Statewide appellate jurisdiction;
(2) Original jurisdiction to issue writs of quo warranto to all persons holding judicial office, and to officers of political corporations when the question involved is the legal existence of such corporations;
(3) Original jurisdiction to answer questions of state law certified by a court of the United States, which may be exercised pursuant to Supreme Court rule;
(4) Original jurisdiction to determine sufficiency of state initiative and referendum petitions and proposed constitutional amendments; and
(5) Only such other original jurisdiction as provided by this Constitution.
(E) The Supreme Court shall have power to issue and determine any and all writs necessary in aid of its jurisdiction and to delegate to its several justices the power to issue such writs.
Ark. Const. Amend 80, § 2.
The majority's reliance on our decision in Lake View Sch. Dist. No. 25 v. Huckabee, 355 Ark. 617, 142 S.W.3d 643 (2004), Lake View Sch. Dist. No. 25 v. Huckabee, 358 Ark. 137, 189 S.W.3d 1 (2004), and Amendment 80, section 2(E) of the Arkansas Constitution is misplaced. The majority quotes the following language in our decision in Lake View handed down on June 18, 2004, in order to justify its power to accept this case:
We will not waver in our commitment to the goal of an adequate and substantially equal education for all Arkansas students; nor will we waver from the constitutional requirement that our State is to "ever maintain a general, suitable, and efficient system of free public schools[.]" Make no mistake, this court will exercise the power and authority of the judiciary at any time to assure that the students of our State will not fall short of the goal set forth by this court.
Lake View Sch. Dist. No. 25 v. Huckabee, 358 Ark. 137, 161, 189 S.W.3d 1, 17 (2004).
Jurisdiction is the power of the court to hear and determine the subject matter in controversy between the parties. Conner v. Simes, 355 Ark. 422, 139 S.W.3d 476 (2003). We have a duty to determine if we have jurisdiction over a case, and if we do not, we cannot make any determinations with regard to the matter. Terry v. Lock, 343 Ark. 452, 458, 37 S.W.3d 202, 204 (2001). This court's "power and authority" to hear a case comes from the Arkansas Constitution, specifically Amendment 80, section 2. The majority points to Ark. Const. Amend 80, § 2(E) as the basis for our jurisdiction in this case. Section 2(E) states that "[t]he Supreme Court shall have power to issue and determine any and all writs necessary in aid of its jurisdiction and to delegate to its several justices the power to issue such writs." This section assumes that the court already has jurisdiction. A court cannot issue a writ "in aid of its jurisdiction" when it has no jurisdiction in the first place. The majority has cited nothing more than our statement in Lake View that we "will exercise the power and authority of the judiciary" as its basis for this jurisdiction. Our saying that it is so does not necessarily make *38 it so, regardless of how laudable our motives.
Moreover, in spite of the collective frustration of this court, the legislature, the governor, and the citizens of this state, the citizens of Arkansas have not given this court the job of establishing, maintaining, or operating the public-school system. The act of the majority decision in recalling the Lake View mandate, once again, expresses the court's distrust of the legislature, which has been given that job. Article 14, Section 1 of the Arkansas Constitution states that
the State shall ever maintain a general, suitable and efficient system of free public schools and shall adopt all suitable means to secure to the people the advantages and opportunities of education. The specific intention of this amendment is to authorize that in addition to existing constitutional or statutory provisions[,] the General Assembly and/or public school districts may spend public funds for the education of persons over twenty-one (21) years of age and under six (6) years of age, as may be provided by law, and no other interpretation shall be given to it.
Ark. Const. Art. 14, § 1 (as amended by Const. Amend. 53).
We have long recognized that this provision vests "in the legislature the duty and authority to make provisions for the establishment, maintenance and support of a common school system in our state." Saline Cty. Bd. of Educ. v. Hot Spring Cty. Bd. of Educ., 270 Ark. 136, 603 S.W.2d 413 (1980); Wheelis v. Franks, 189 Ark. 373, 72 S.W.2d 231 (1934). While our jurisdiction to decide cases and controversies before us gives us the power to declare the school system and laws of the legislature unconstitutional in the appropriate case, it does not give us the power to legislate. That power belongs to the legislature. See Barker v. Frank, 327 Ark. 589, 939 S.W.2d 837 (1997); Saline Cty Bd. of Educ., supra. The citizens of this state elected each of us to serve as justices, not legislators. Nor does it gives us the power to act as a court of original jurisdiction and find facts. We have original jurisdiction in certain well-defined situations. See Ark. Const. Amend 80, § 2(D)(2), (3), (4), and (5). This is not one of them.
The government of Arkansas has been delegated by the people to three separate departments: the Legislative Department, the Executive Department, and the Judicial Department. See Ark. Const. Art. 4. Each department has been granted certain powers, and "[n]o person or collection of persons, being of one of these departments, shall exercise any power belonging to either of the others, except in the instances hereinafter expressly directed or permitted." Ark. Const. Art. 4, § 2. Had the people wanted this court to run the school system and to disregard the legislature's efforts, there would have been plain language to that effect in our constitution. There is not; so the majority relies on its own creation of authority to act. By our repeated recall of the mandate, we have announced our authority and intent to review each session of the legislature in sweeping fashion. Our action may be interpreted as bullying the legislature to spend more on an area of government that we favor most for the moment. Every legislative session benefits some educational groups or districts and disadvantages others. While we may receive accolades from those who benefit from our decision, it is not this court's role to make these decisions, whether directly or indirectly. The majority is setting this court up to perform a perpetual review of the State's educational policy. In addition to being outside of our power and authority, this solution is simply unworkable.
*39 We have been insensitive to the people of Arkansas by casting shadows on their selected representatives in the General Assembly. We have assumed the position of grading the financial decisions of the body charged with running the entire state on a limited budget. If that were not enough, we have decided to evaluate these decisions before the General Assembly's solution has even been placed into action.
In my opinion, instead of building more power for the court, we should exercise judicial restraint. We should leave the power in the hands of the people. We should leave education in the hands of the legislature. We should demonstrate that we respect the power of the people to entrust decisions to their elected representatives, thereby allowing government by the people and for the people. We should adhere to the fundamental system of government established in our constitution, which relies on three distinct and separate branches. We should limit the exercise of our power to the Judicial Department.[1]
HANNAH, C.J., and CAROL DALBY, Special Justice, join this dissent.
CAROL DALBY, Special Justice, dissenting.
I respectfully dissent. There are two issues which preclude this court from recalling its mandate and appointing masters to review the work of our elected legislature. The first is jurisdiction, and the second is separation of powers.
There is not a person involved in this case who wants to see another generation of Arkansas school children grow up, graduate, and we as a state fail to provide them with the education and tools they will need to compete and thrive in an ever increasing competitive and global market. It is inconceivable that any Arkansan would want our children to lag further and further behind because of an inability to provide a general, suitable, and efficient education. This is the very reason it is so enticing to heed the siren's song and reenter this case; however, the very laws and rules of this court to which we must adhere should restrain the call for judicial activism.
I have no doubt that had the legislature ignored Lake View School District No 25 v. Huckabee, et al., 351 Ark. 3l, 91 S.W.3d 472 (2002) (Lake View III) and/or Lake View School District No 25 v. Huckabee, et al., 358 Ark. 137, 189 S.W.3d 1 (2004), and refused to enact a new system for funding public schools, this court would have jurisdiction. This court made it abundantly clear in its June 18, 2004, opinion that:
We will not waiver in our commitment to the goal of an adequate and substantially equal education for all Arkansas students; nor will we waiver from the constitutional requirement that our State is to "ever maintain a general, suitable, and efficient system of free public schools." Make no mistake, this court will exercise the power and authority of the judiciary at any time to assure that the students of our state will not fall short of the goal set forth by this court.
The legislature acted. The various parties may disagree with what was done, but the proper challenges to the recent changes and reforms to education in Arkansas must first be heard in the circuit court. The jurisdiction of this court is appellate only with noted exceptions. Ark. Const. amend. 80. There is no appellate jurisdiction in this case because there is no *40 order from a lower court to review. Ward Sch. Bus Mfg., Inc. v. Fowler, 261 Ark. 100, 547 S.W.2d 394 (1977).
The second issue which precludes this court from re-entering this case is the time honored bedrock of our form of government and that is separation of powers. Our government is separated into three departments: the legislative department, the executive department, and the judicial department. Ark. Const. art. 4, § 1. Further, Article 4, § 2 of our constitution provides:
No person or collection of persons, being of one of these departments, shall exercise any power belonging to either of the others, except in the instances hereinafter expressly directed or permitted.
This court has not been given, nor has it ever had the authority to maintain a general, suitable, and efficient system of free public schools. Ark. Const. art. 4, § 1. That authority rests with the legislature. For this court to assume even an inkling of legislative authority weakens our judiciary and draws us into the Serbonian Bog from which we may never emerge. Like it or not, education and its reform in Arkansas rests with the legislature. If the people of Arkansas are not satisfied with what the elected representatives have crafted, then the people have the power to facilitate change. This court has courageously sounded the call for change. This court has acted with boldness and determination, but this court cannot and must not act beyond its constitutionally given powers.
HANNAH, C.J. and GUNTER, J., join.
NOTES
[1] "The judicial power is vested in the Judicial Department of state government, consisting of a Supreme Court and other courts established by this Constitution." Ark. Const. Amend 80, § 1.
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494 Pa. 311 (1981)
431 A.2d 274
In re ADOPTION OF R.W.G., a Minor.
Appeal of R.L.G.
Supreme Court of Pennsylvania.
Submitted March 3, 1981.
Decided July 2, 1981.
William F. Morgan, Warren, for appellant.
Barbara L. Smith, Mahany, Roeder & Kirvan, Titusville, for Dianne R. McAfoose.
*312 Before O'BRIEN, C.J., and ROBERTS, NIX, LARSEN, FLAHERTY and KAUFFMAN, JJ.
OPINION OF THE COURT
ROBERTS, Justice.
This is an appeal from a final decree of the Court of Common Pleas of Warren County, Orphans' Court Division, involuntarily terminating the parental rights of appellant R.L.G. to his natural son R.W.G. pursuant to section 311(1) of the Adoption Act of 1970.[1] We affirm.
Appellant and appellee were married in 1974, and lived in Warren, Ohio. R.W.G. was born in Warren in May of 1975. Appellant and appellee separated in March of 1977 and were divorced in January of 1978.
After the separation, appellant remained in Warren, Ohio, while appellee and R.W.G. moved to Tidioute, Pennsylvania. In November of 1977, an Ohio county domestic relations court awarded appellant custody of R.W.G. as a result of appellee's failure to answer appellant's custody request. However, at all times since the separation, R.W.G. has continued to reside with appellee in Tidioute. Appellant has continued to reside in Warren, Ohio.
From May to August of 1977, appellant regularly visited R.W.G. Thereafter, he had no contact whatever with the child.
Appellee remarried in June of 1978. On April 2, 1979, appellant received a letter from counsel for appellee seeking appellant's consent to adoption of R.W.G. by appellee's new *313 spouse. Appellant did not respond to the letter, nor did he take any other action manifesting an interest in the child.
On October 12, 1979, more than six months after appellant received the letter requesting his consent to adoption, appellee and her spouse commenced the present proceedings by filing a petition for involuntary termination of appellant's parental rights. A hearing on the petition was held in January of 1980. Appellant, represented by counsel, claimed that since his last contact with R.W.G. in August of 1977 he had made frequent trips to Tidioute to visit R.W.G. Appellant maintained that he was unable to locate the child because appellee had "secreted" herself and R.W.G. Appellant, however, failed to show either that his trips to Tidioute continued after receipt of the letter seeking his consent to adoption or that despite the letter appellee had continued to "secret" herself and R.W.G.[2]
The orphans' court determined that "[appellee] did not attempt to seclude herself and the child or conceal her identity or whereabouts from [appellant]." Relying primarily upon appellant's failure to respond to the letter seeking appellant's consent to adoption, the court concluded that termination of appellant's parental rights was justified under section 311(1).
Well-established is our scope of review:
"The findings of the orphans' court, supported by competent evidence, `must be sustained unless the court abused its discretion or committed an error of law.' In re William L., 477 Pa. 322, 340, 383 A.2d 1228, 1237, cert. denied, 439 U.S. 880, 99 S.Ct. 216 [58 L.Ed.2d 192] (1978); accord, e.g., Wertman Estate, 462 Pa. 195, 340 A.2d 429 (1975); Estate of Lanning, 414 Pa. 313, 200 A.2d 392 (1964). We must accept as true all evidence in the record supporting the findings of the court and reasonable inferences therefrom. E.g., In re William L., 477 Pa. at 340 n.12, 383 A.2d at 1237 n.12; see Kay v. Kay, 460 Pa. 680, 334 A.2d 585 (1975). Conflicts in the testimony are to be *314 resolved by the trier of fact, who is the sole judge of credibility. E.g., Garges Estate, 474 Pa. 237, 378 A.2d 307 (1977); Wertman Estate, supra. This Court may not disturb a decree of the orphans' court based upon findings supported by the record unless the orphans' court applied an incorrect legal standard. See, e.g., In re William L., supra; Garges Estate, supra; cf. Girard Trust Bank v. Sweeney, 426 Pa. 324, 330, 231 A.2d 407, 411 (1967) (decision reversed where facts properly found did not meet applicable legal standard)."
Adoption of S.H., 476 Pa. 608, 611, 383 A.2d 529, 530 (1978). No abuse of discretion or error of law appears here. Despite correspondence from appellee's counsel seeking appellant's consent to the adoption of R.W.G. by appellee's spouse, the record fails to disclose that appellant made any effort either to contact appellee's counsel regarding the child or to attempt otherwise to remain a part of the child's life. Appellant failed to act even though his Ohio counsel had, according to appellant,
"told [appellant] that this was his opportunity to bring the matter before the court in Pennsylvania and therefore he should not take any action which would be extra-legal but should instead rely on the Court and obtain Pennsylvania counsel to seek redress in Warren County."[3]
The orphans' court concluded that so dramatic a development as a request to adoption and, hence, termination of parental rights, would not have gone unanswered by an interested parent. This conclusion is amply supported by the record.
Our cases are clear that
"[a] child needs love, protection, guidance, and support. These needs, physical and emotional, cannot be met by a merely passive interest in the development of the child. Thus, this Court has held that the parental obligation is a positive duty which requires affirmative performance. In re Adoption of Orwick, 464 Pa. 549, 347 A.2d 677 (1976); In re Adoption of Mahlon Nichelle McCray, 460 Pa. 210, *315 331 A.2d 652 (1975); Appeal of Diane B., 456 Pa. 429, 321 A.2d 618 (1974); In re Smith's Adoption, 412 Pa. 501, 194 A.2d 919 (1963). This affirmative duty encompasses more than a financial obligation; it requires continuing interest in the child and a genuine effort to maintain communication and association with the child. In re Adoption of Mahlon Nichelle McCray, supra; Appeal of Diane B., supra; In re Adoption of Jagodzinski, 444 Pa. 511, 281 A.2d 868 (1971). Because a child needs more than a benefactor, parental duty requires that a parent `exert himself to take and maintain a place of importance in the child's life.' Appeal of Diane B., supra, 456 Pa. at 433, 321 A.2d at 620, quoting In Re: Adoption of J.R.F., 27 Somerset L.J. 298, 304-05 (Pa.C.P. 1972)."
In re Burns, 474 Pa. 615, 624-25, 379 A.2d 535, 540 (1977). Appellant's failure to perform parental duties affirmatively, and to maintain a place of importance in R.W.G.'s life for the critical statutory period, is convincingly established by the record. The decree of the orphans' court terminating appellant's parental rights must be affirmed.
Decree affirmed. Each party pay own costs.
NOTES
[1] Act of July 24, 1970, P.L. 620, 1 P.S. § 311(1) (Supp. 1980). Section 311(1) authorizes termination of parental rights where
"[t]he parent by conduct continuing for a period of at least six months either has evidenced a settled purpose of relinquishing parental claim to a child, or has refused or failed to perform parental duties. . . ."
Section 311(1) permits termination upon a showing of "either the parent's settled purpose to relinquish parental claims to the child, or a refusal or failure to perform parental duties for six months." In re I.L.G., 492 Pa. 507, 509 n.[*], 424 A.2d 1306, 1306 n.[*]. See In re Adoption of McCray, 460 Pa. 210, 215 n.6, 331 A.2d 652, 654 n.6 (1975).
[2] According to the 1980 federal decennial census, Tidioute had a population of approximately 845.
[3] Brief for Appellant at 11.
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252 U.S. 376 (1920)
CALDWELL
v.
PARKER, SHERIFF OF CALHOUN COUNTY, ALABAMA.
No. 636.
Supreme Court of United States.
Argued March 4, 5, 1920.
Decided April 19, 1920.
ERROR TO THE DISTRICT COURT OF THE UNITED STATES FOR THE NORTHERN DISTRICT OF ALABAMA.
*377 Mr. Henry E. Davis and Mr. Charles D. Kline, with whom Mr. James A. Cobb was on the brief, for appellant.
Mr. J.Q. Smith, Attorney General of the State of Alabama, and Mr. Niel P. Sterne, with whom Mr. Benjamin Micou was on the brief, for appellee.
*380 MR. CHIEF JUSTICE WHITE delivered the opinion of the court.
Pending the existence of a state of war with Germany the appellant, a soldier in the Army of the United States serving in a camp in Alabama, was tried and convicted for the murder of a civilian at a place within the jurisdiction of the State and not within the confines of any camp or place subject to the control of the civil or military authorities of the United States. The conviction was reviewed and affirmed by the Supreme Court of Alabama and was reexamined and reaffirmed on rehearing.
The case is here to reverse the action of the court below in refusing on writ of habeas corpus a discharge which was prayed on the ground that, under the circumstances stated, the sentence was void because the state court had no jurisdiction whatever over the subject of the commission of the crime, since under the Constitution and laws of the United States that power was exclusively vested in a court-martial.
As there was no demand by the military authorities for the surrender of the accused, what would have been the effect of such a demand, if made, is not before us. The contention of a total absence of jurisdiction in the state court is supported in argument, not only by the appellant, but also by the United States in a brief which it has filed as amicus curiae. These arguments, while differing in forms of expression, rest upon the broad assumption that Congress in reenacting the Articles of War in 1916, by an exercise of constitutional authority, vested in the military courts during a state of war exclusive jurisdiction to try and punish persons in the military service for offenses *381 committed by them which were violative of the law of the several States. In other words, the proposition is that under the Act of 1916, by mere operation of a declaration of war, the States were completely stripped of authority to try and punish for virtually all offenses against their laws committed by persons in the military service. As in both arguments differences between the provisions of the Act of 1916 and the previous Articles are relied upon to sustain the accomplishment of the result contended for, we must briefly consider the prior Articles before we come to test the correctness of the conclusion sought to be drawn from the Articles of 1916.
The first Articles of War were adopted in 1775. By them the generic power of courts-martial was established as follows:
"L. All crimes, not capital, and all disorders and neglects, which officers and soldiers may be guilty of, to the prejudice of good order and military discipline, though not mentioned in the articles of war, are to be taken cognizance of by general or regimental court-martial, according to the nature and degree of the offense, and be punished at their discretion."
It cannot be disputed that the effect of this grant was to confer upon courts-martial as to offenses inherently military an exclusive authority to try and punish. In so far, however, as acts which were criminal under the state law but which became subject to military authority because they could also appropriately be treated as prejudical to good order and military discipline, a concurrent power necessarily arose, although no provision was made in the Articles regulating its exercise. But this omission was provided for in Article 1 of § X of the revised Articles adopted in 1776, as follows:
"Whenever any officer or soldier shall be accused of a capital crime, or of having used violence, or committed any offence against the persons or property of the good people *382 of any of the United American States, such as is punishable by the known laws of the land, the commanding officer and officers of every regiment, troop, or party, to which the person or persons so accused shall belong, are hereby required, upon application duly made by or in behalf of the party or parties injured, to use his utmost endeavors to deliver over such accused person or persons to the civil magistrate; and likewise to be aiding and assisting to the officers of justice in apprehending and securing the person or persons so accused, in order to bring them to a trial. If any commanding officer or officers shall wilfully neglect or shall refuse, upon the application aforesaid, to deliver over such accused person or persons to the civil magistrates, or to be aiding and assisting to the officers of justice in apprehending such person or persons, the officer or officers so offending shall be cashiered."
In view of the terms of this Article and the fact that it was drawn from the British Articles, where the supremacy of the civil law had long prevailed, it results that its provisions gave the civil courts, if not a supremacy of jurisdiction, at least a primary power to proceed against military offenders violating the civil law, although the same acts were concurrently within the jurisdiction of the military courts because of their tendency to be prejudicial to good order and military discipline.
And in harmony with this view, the Articles in question were applied up to 1806, in which year they were reenacted without change as Articles 99 and 33 of that revision, and were in force in 1863, in the Enrollment Act of which year, it was provided (Act of March 3, 1863, c. 75, § 30, 12 Stat. 736):
"That in time of war, insurrection, or rebellion, murder, assault and battery with an intent to kill, manslaughter, mayhem, wounding by shooting or stabbing with an intent to commit murder, robbery, arson, burglary, rape, assault and battery with an intent to commit *383 rape, and larceny, shall be punishable by the sentence of a general court-martial or military commission, when committed by persons who are in the military service of the United States, and subject to the articles of war; and the punishments for such offences shall never be less than those inflicted by the laws of the state, territory, or district in which they may have been committed."
It is to be observed that by this section there was given to courts-martial, under the conditions mentioned, power to punish for capital crimes, from which their authority had been from 1775 expressly excluded; and power was also given to deal, under the conditions stated and in the manner specified, with other enumerated offenses over which they had not prior to the passage of the act had jurisdiction, presumably because such acts had not in practice been treated as within the grant of authority to deal with them as prejudicial to good order and military discipline.
In 1874, when the Articles of War were revised and reenacted (Rev. Stats., § 1342), the generic grant of power to punish acts prejudicial to good order and military discipline was reexpressed in Article 62, substantially as it existed from 1775. The provisions of § 30 of the Act of 1863, supra, were in so many words made to constitute Article 58; and the duty put upon military officials, to surrender to state officers on demand persons in the military service charged with offenses against the State, was reenacted in Article 59, qualified, however, with the words, "except in time of war." Thus the Articles stood until they were reenacted in the Revision of 1916, as follows:
The general grant of authority as to acts prejudicial to good order and military discipline was reenacted in Article 96, substantially as it had obtained from the beginning. The capital offenses of murder and rape, as enumerated in § 30 of the Act of 1863, were placed in a distinct Article *384 and power was given to military courts to prosecute and punish them, as follows:
"Art. 92. Murder Rape. Any person subject to military law who commits murder or rape shall suffer death or imprisonment for life, as a court-martial may (be) direct; but no person shall be tried by court-martial for murder or rape committed within the geographical limits of the States of the Union and the District of Columbia in time of peace." (39 Stat. 664.)
The remaining offenses enumerated in the Act of 1863 were placed in a separate Article, as follows:
"Art. 93. Various Crimes. Any person subject to military law who commits manslaughter, mayhem, arson, burglary, robbery, larceny, embezzlement, perjury, assault with intent to commit any felony, or assault with intent to do bodily harm, shall be punished as a court-martial may direct." (39 Stat. 664.)
And finally, the duty to respond to the demand of the state authorities for the surrender of military offenders against the state criminal laws was reenacted as it had prevailed from the beginning, subject however to express regulations to govern in case of conflict between state and federal authority, and again subject to the qualification, "except in time of war," as first expressed in the Revision of 1874, the Article being as follows:
"Art. 74. Delivery of Offenders to Civil Authorities. When any person subject to military law, except one who is held by the military authorities to answer, or who is awaiting trial or result of trial, or who is undergoing sentence for a crime or offense punishable under these articles, is accused of a crime or offense committed within the geographical limits of the States of the Union and the District of Columbia, and punishable by the laws of the land, the commanding officer is required, except in time of war, upon application duly made, to use his utmost endeavor to deliver over such accused person to the civil *385 authorities, or to aid the officers of justice in apprehending or securing him, in order that he may be brought to trial. Any commanding officer who upon such application refuses or willfully neglects, except in time of war, to deliver over such accused person to the civil authorities or to aid the officers of justice in apprehending and securing him shall be dismissed from the service or suffer such other punishment as a court-martial may direct." (39 Stat. 662.)
Comprehensively considering these provisions, it is apparent that they contain no direct and clear expression of a purpose on the part of Congress, conceding for the sake of the argument that authority existed under the Constitution to do so, to bring about, as the mere result of a declaration of war, the complete destruction of state authority and the extraordinary extension of military power upon which the argument rests. This alone might be sufficient to dispose of the subject for, as said in Coleman v. Tennessee, 97 U.S. 509, 514, "With the known hostility of the American people to any interference by the military with the regular administration of justice in the civil courts, no such intention should be ascribed to Congress in the absence of clear and direct language to that effect." Certainly, it cannot be assumed that the mere existence of a state of war begot of necessity the military power asserted, since the Articles of War, originally adopted in 1775, were, as we have seen, in the very midst of the War for Independence, modified in 1776 to make certain the preservation of the civil power.
But the contention relied upon is directly based upon the words, "except in time of war," as qualifying the duty of the military officers to respond to the demand by state authority for the surrender of military offenders against the state criminal laws, imposed by Article 74, and the grant in Article 92, expressed in the form of a negative pregnant, of authority to courts-martial to try capital *386 crimes when committed by an officer or soldier within the geographical limits of the United States and the District of Columbia in time of war. Both these provisions took their origin in the Act of 1863 and were drawn from the terms of that act as reexpressed in the Revision of 1874. By its very terms, however, the Act of 1863 was wholly foreign to the destruction of state and the enlargement of military power here relied upon. It is true, indeed, that by that act authority was for the first time given, as pointed out in the Coleman Case, 97 U.S. 509, 514, to courts-martial or military commissions to deal with capital and other serious crimes punishable under the state law. But the act did not purport to increase the general powers of courts-martial by defining new crimes, or by bringing enumerated offenses within the category of military crimes as defined from the beginning, as we have already pointed out, but, simply contemplated endowing the military authorities with power, not to supplant, but to enforce, the state law. As observed by Winthrop, in his work on Military Law, 2d ed., p. 1033, it was intended to provide, through the military authorities, means of enforcing and punishing crimes against the state law committed by persons in the military service where, as the result of the existence of martial law or of military operations, the courts of the State were not open and military power was therefore needed to enforce the state law. And it was doubtless this purpose indicated by the text, to which we have already called attention, which caused the court in the Coleman Case to say that that statute had no application to territory where "the civil courts were open and in the undisturbed exercise of their jurisdiction." (P. 515.)
As in 1866 it was settled in Ex parte Milligan, 4 Wall. 2, that a state of war, in the absence of some occasion for the declaration of martial law or conditions consequent on military operations, gave no power to the military authorities where the civil courts were open and capable of performing *387 their duties, to disregard their authority or frustrate the exercise by them of their normal and legitimate jurisdiction, it is indeed open to grave doubt whether it was the purpose of Congress, by the words "except in time of war," or the cognate words which were used with reference to the jurisdiction conferred in capital cases, to do more than to recognize the right of the military authorities, in time of war, within the areas affected by military operations or where martial law was controlling, or where civil authority was either totally suspended or obstructed, to deal with the crimes specified, a doubt which if solved against the assumption of general military power, would demonstrate, not only the jurisdiction of the state courts in this case, but the entire absence of jurisdiction in the military tribunals. And this doubt becomes additionally serious when the Revision of 1874 is considered, since in that revision the Act of 1863 was in terms reenacted and the words "except in time of war," appearing for the first time in Article 59 of that revision, could have been alone intended to qualify the time of war with which the act dealt, that is, a condition resulting from a state of war which prevented or interfered with the discharge of their duties by the civil courts.
Into the investigation of the subject of whether it was intended by the provision "except in time of war," contained in the Articles of 1916, to do more than meet the conditions exacted by the actual exigencies of war like those contemplated by the Act of 1863, and which were within the purview of military authority, as pointed out in Ex parte Milligan, we do not feel called upon to enter. We say this because even though it be conceded that the purpose of Congress by the Article of 1916, departing from everything which had gone before, was to give to military courts, as the mere result of a state of war, the power to punish as military offenses the crimes specified when committed by those in the military service, such admission is *388 here negligible because, in that view, the regulations relied upon would do no more than extend the military authority, because of a state of war, to the punishment, as military crimes, of acts criminal under the state law, without the slightest indication of purpose to exclude the jurisdiction of state courts to deal with such acts as offenses against the state law.
And this conclusion harmonizes with the principles of interpretation applied to the Articles of War previous to 1916; Drury v. Lewis, 200 U.S. 1; Grafton v. United States, 206 U.S. 333; Franklin v. United States, 216 U.S. 559; 6 Ops. Atty. Gen. 413; and is, moreover, in accord with the decided cases which have considered the contention of exclusive power in the military courts as resulting from the Articles of 1916 which we have here considered. People v. Denman, 179 California, 497; Funk v. State, 208 S.W. Rep. 509; United States v. Hirsch, 254 Fed. Rep. 109.
It follows, therefore, that the contention as to the enlargement of military power, as the mere result of a state of war, and the consequent complete destruction of state authority, are without merit and that the court was right in so deciding and hence its judgment must be and it is
Affirmed.
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990 So.2d 675 (2008)
STATE of Florida, Appellant,
v.
Erik Alan WEYANT, Appellee.
No. 2D07-3609.
District Court of Appeal of Florida, Second District.
September 19, 2008.
*676 Bill McCollum, Attorney General, Tallahassee, and Sara Macks, Assistant Attorney General, Tampa, for Appellant.
Erin M. Davies of Escobar, Ramirez & Associates, P.A., Tampa, for Appellee.
SILBERMAN, Judge.
The State appeals an order dismissing count I of an information charging Erik A. Weyant with carrying a concealed firearm (count I), possession of cannabis (count II), and reckless driving (count III). We affirm the trial court's dismissal of the concealed firearm charge.
Section 790.01(2), Florida Statutes (2006), provides that "[a] person who carries a concealed firearm on or about his or her person commits a felony of the third degree, punishable as provided in s. 775.082, s. 775.083, or s. 775.084."[1] Section 790.001(2) defines "concealed firearm" as a firearm "which is carried on or about a person in such a manner as to conceal the firearm from the ordinary sight of another person." Section 790.25(5) addresses possession of a concealed firearm in a private conveyance, stating that
it is lawful and is not a violation of s. 790.01 for a person 18 years of age or older to possess a concealed firearm or other weapon for self-defense or other lawful purpose within the interior of a private conveyance, without a license, if the firearm or other weapon is securely encased or is otherwise not readily accessible for immediate use. Nothing herein contained prohibits the carrying of a legal firearm other than a handgun anywhere in a private conveyance when such firearm is being carried for a lawful use. Nothing herein contained shall be construed to authorize the carrying of a concealed firearm or other weapon on the person. This subsection shall be liberally construed in favor of the lawful use, ownership, and possession of firearms and other weapons, including lawful self-defense as provided in s. 776.012.
(Emphasis added.)
The phrase "readily accessible for immediate use" is defined in section 790.001(16), *677 which states that the phrase "means that a firearm or other weapon is carried on the person or within such close proximity and in such a manner that it can be retrieved and used as easily and quickly as if carried on the person." The term "securely encased" is defined in section 790.001(17), which states that the term "means in a glove compartment, whether or not locked; snapped in a holster; in a gun case, whether or not locked; in a zippered gun case; or in a closed box or container which requires a lid or cover to be opened for access." (Emphasis added.)
The undisputed facts are that Weyant had an unloaded firearm in his vehicle wedged between the two front seats. He had a magazine for the firearm containing six live rounds in the closed center console. Weyant contended in his motion to dismiss that "because the firearm was unloaded and the ammunition was securely encased, [he] was not carrying the firearm in such a manner that it could have been retrieved and used as easily and quickly as if carried on his person." The State countered that "the proximity of the unloaded firearm and the ammunition made it readily accessible and easy to quickly obtain and place into the firearm" and that the firearm could be loaded and fired "pretty quickly" or "in a fairly quick manner." The trial court concluded as a matter of law, based on these facts and the liberal construction mandated in section 790.25(5), that the unloaded gun was not readily accessible for immediate use. We agree.
Several cases have applied section 790.25(5) to conclude that it is not a violation of section 790.01(2) for a person to have a firearm inside a vehicle's closed center console because the firearm is securely encased. See Bell v. State, 636 So.2d 80, 81 (Fla. 2d DCA 1994); City of Miami v. Swift, 481 So.2d 26, 27 (Fla. 3d DCA 1985); see also Gemmill v. State, 657 So.2d 900, 901-02 (Fla. 4th DCA 1995) (holding that a firearm found in a closed box wedged between the driver's seat and the passenger's seat was securely encased). Under these authorities, if Weyant's firearm had been loaded and kept in the closed console, or if it was unloaded but kept together with the ammunition in the closed console, he would not have been in violation of section 790.01(2). However, because the firearm was not in the closed console and thus was not securely encased, we must consider, as did the trial court, whether the firearm was readily accessible for immediate use.
When an unsecured firearm located inside a vehicle is not loaded, a court must consider the location and accessibility of both the firearm and the ammunition in determining whether the firearm is readily accessible. See Ridley v. State, 621 So.2d 409, 409 (Fla.1993) (holding that an unloaded firearm located under a driver's seat was readily accessible for immediate use because a fully loaded ammunition clip was located under the passenger's seat); Ashley v. State, 619 So.2d 294, 296 (Fla.1993) (holding that a firearm in the front passenger floorboard area was not readily accessible for immediate use when no ammunition was found in the vehicle but adding "that the issue of whether the presence of ammunition in a vehicle takes a firearm out of the exception in section 790.25(5) must be determined factually on a case-by-case basis"). In Ashley, the supreme court also disapproved the decision in Amaya v. State, 580 So.2d 885 (Fla. 2d DCA 1991), concluding "that an unloaded firearm located under the passenger's seat of a vehicle is readily accessible for immediate use when ammunition for that firearm is lying in open view on the passenger's seat." 619 So.2d at 295.
Here, the ammunition was not in open view on the passenger seat. Instead, the *678 ammunition was inside the closed center console of the vehicle while the unloaded firearm was wedged between the front seats. In order to use the firearm, Weyant would have had to pull it out, open the center console, retrieve the magazine, and load the firearm before using it. Under these circumstances, he would not have been able to retrieve and use the firearm as easily and quickly as if he carried it on his person. Thus, under the applicable law, including the liberal construction that must be applied pursuant to section 790.25(5), the trial court correctly determined that the firearm was not readily accessible for immediate use.[2]
Accordingly, we conclude that the trial court correctly dismissed the concealed firearm charge.[3]
Affirmed.
WALLACE, J., Concurs.
VILLANTI, J., Dissents with opinion.
VILLANTI, Judge, Dissenting.
I respectfully dissent. As the majority recognizes, section 790.25(5) does not directly address the situation in which an unloaded firearm is concealed but otherwise readily accessible in the passenger compartment of a vehicle and ammunition for that firearm is concealed within the closed center console of the vehicle. Further, there does not appear to be any case law addressing this exact factual scenario. Thus, we are asked in this case to apply existing law to a new set of facts.
The supreme court has clearly held that an unloaded firearm cannot be a "concealed weapon" when there is no ammunition in the vehicle. See Ashley v. State, 619 So.2d 294, 296 (Fla.1993). Conversely, however, an unloaded firearm may be a "concealed weapon" when ammunition is stored elsewhere in the vehicle. Id. In that situation, the question is whether the firearm and the ammunition are located in such a way that the firearm is "readily accessible for immediate use." Id. When the locations of the unloaded firearm and the separate ammunition are undisputed, the question of whether the firearm is readily accessible for immediate use is one of law. See Boswink v. State, 636 So.2d 584, 585 (Fla. 2d DCA 1994). Thus, we need not defer to the trial court's conclusion on the issue; instead, our standard of review is de novo.
While this case addresses a new factual scenario, I nevertheless believe that the majority's opinion runs contrary to supreme court precedent. In Ashley, the supreme court discussed the facts of the underlying case of Amaya v. State, 580 So.2d 885 (Fla. 2d DCA 1991). In Amaya, the defendant's unloaded firearm was concealed under the passenger seat of his vehicle. Id. at 886. The firearm's clips and bullets were lying separately on top of the passenger seat. Id. This court held that the firearm was not "readily available for immediate use" because its clip and bullets were separate from the firearm; therefore, the firearm could not be used immediately. Id. However, in Ashley, the supreme court quashed this court's decision *679 in Amaya and held that, under those facts, the "firearm was readily accessible for immediate use" because "[t]he location and accessibility of the firearm and ammunition placed the firearm `within such close proximity ... that it [could] be retrieved and used as easily and quickly as if carried on the person.'" Ashley, 619 So.2d at 296 (quoting § 790.25(5)).
Likewise, in Ridley v. State, 621 So.2d 409 (Fla.1993), the undisputed facts were that an unloaded firearm was concealed under the driver's seat of the vehicle and a fully loaded clip for that firearm was lying under the passenger's seat. The supreme court held that the locations of the firearm and the clip were such that the firearm was "readily accessible for immediate use." Id.
In my view, the facts in this case are more compelling than those discussed by the supreme court in both Ashley and Ridley. Here, the firearm was concealed between Weyant's seat and the center console of the vehicle. A fully loaded clip was inside the unlocked center console. Thus, unlike defendants Amaya and Ridley, who would have had to fumble under the seats of their vehicles to access their firearms, Weyant in this case had both the firearm and the loaded clip literally inches from his hands. Moreover, while defendant Amaya had to grab the firearm from under the seat, apparently load bullets into the clip, and then load the clip into the firearm, here Weyant needed only to load the already-loaded clip into the firearm.[4] Thus, in my view, the firearm in this case was more "readily accessible for immediate use" than those found "readily accessible for immediate use" by the supreme court in both Ashley and Ridley. While this court is required to liberally construe section 790.25(5) in favor of the lawful use, ownership, and possession of firearms, our discretion to do so is not unbridled, and we may not do so in contravention of supreme court precedent. Therefore, I would reverse the trial court's ruling and remand for further proceedings.
Finally, I am not blind to the incongruity that results from this stringent extrapolation from Ashley and Ridley. This application results in an unloaded firearm concealed in the passenger compartment of a vehicle with ammunition concealed in an unlocked center console being a "concealed weapon" while a fully loaded firearm concealed in that same unlocked center console is not. Section 790.25(5) specifically provides an exception for "securely encased" concealed firearms. It does not provide an exception for concealed firearms and securely encased concealed ammunition. I would hope that the legislature would take this opportunity to amend section 790.25(5) to address the issue of unloaded but concealed firearms rather than leaving this issue to the courts to decide on an ad hoc basis.
NOTES
[1] Section 790.01(3) states that section 790.01(2) does not apply to a person who is licensed to carry a concealed weapon or a concealed firearm pursuant to section 790.06. Weyant does not claim that he was so licensed.
[2] This conclusion also seems logical in light of the cases and statutes cited previously which reflect that a person would not be guilty of a violation of section 790.01(2) if the person kept a loaded firearm in a closed console or kept an unloaded firearm together with the ammunition in the closed console.
[3] We also agree with the trial court's conclusion that the issue presented was not a jury question. See Boswink v. State, 636 So.2d 584, 585 (Fla. 2d DCA 1994) ("Contrary to the trial court's view, the undisputed facts imposed upon it the task of deciding as a matter of law whether the guns were `readily accessible.'").
[4] I acknowledge that there is some ambiguity in the facts in the Amaya case as to whether the clip in that case was loaded. Both this court and the supreme court referred to the firearm's "clips and bullets" lying separately from the firearm in open view on the passenger's seat. Ashley, 619 So.2d at 296; Amaya, 580 So.2d at 886. Neither opinion referred to a loaded clip. However, this possible factual dispute does not change my position that the facts in this case are more compelling than those in Amaya, which was quashed by Ashley.
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Dismiss and Opinion Filed July 14, 2014
S In The
Court of Appeals
Fifth District of Texas at Dallas
No. 05-14-00582-CV
TASHISHA JOHNSON & ALL OTHER OCCUPANTS, Appellant
V.
ADVENIR @ LAKE HIGHLANDS, Appellee
On Appeal from the County Court at Law No. 2
Dallas County, Texas
Trial Court Cause No. CC-14-01567-B
MEMORANDUM OPINION
Before Justices Moseley, O'Neill, and FitzGerald
Opinion by Justice FitzGerald
The clerk’s record in this case is overdue. By letter dated June 27, 2014, we informed
appellant that the County Clerk had notified the Court that clerk’s record had not been filed
because appellant had not paid or made arrangements to pay for the clerk’s record. We directed
appellant to file written verification that she had paid or made arrangements to pay for the clerk’s
record or that she had been found entitled to proceed without payment of costs. We cautioned
appellant that if she did not filed the required documentation within ten days of the date of the
letter, we might dismiss the appeal for want of prosecution without further notice. To date,
appellant has not provided the required documentation or otherwise corresponded with the Court
regarding the status of the clerk’s record or her appeal.
Accordingly, we dismiss this appeal for want of prosecution. See TEX. R. APP. P. 37.3(b);
42.3(b), (c).
140852F.P05 /Kerry P. FitzGerald/
KERRY P. FITZGERALD
JUSTICE
–2–
S
Court of Appeals
Fifth District of Texas at Dallas
JUDGMENT
TASHISHA JOHNSON & ALL OTHER On Appeal from the County Court at Law
OCCUPANTS, Appellant No. 2, Dallas County, Texas
Trial Court Cause No. CC-14-01567-B.
No. 05-14-00582-CV V. Opinion delivered by Justice FitzGerald,
Justices Moseley and O'Neill participating.
ADVENIR @ LAKE HIGHLANDS,
Appellee
In accordance with this Court’s opinion of this date, the appeal is DISMISSED.
It is ORDERED that appellee ADVENIR @ LAKE HIGHLANDS recover its costs of
this appeal, if any, from appellant TASHISHA JOHNSON & ALL OTHER OCCUPANTS.
Judgment entered July 14, 2014
–3–
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818 F.2d 875
Lindseyv.Army
86-1403
United States Court of Appeals,Federal Circuit.
1/13/87
MSPB, 30 M.S.P.R. 570
AFFIRMED
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695 F.2d 565
**U. S.v.Morejon-Pacheco
82-5495
UNITED STATES COURT OF APPEALS Eleventh Circuit
12/16/82
1
S.D.Fla.
AFFIRMED
2
---------------
** Local Rule: 25 case.
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426 F.2d 311
Barry Dean ROGERS, by his guardian ad litem, Luther James Rogers, Appellant,v.The UNITED STATES of America, and County of Sumter, Appellees.The UNITED STATES of America, Appellant,v.COUNTY OF SUMTER, Appellee.
No. 14048.
No. 14049.
United States Court of Appeals, Fourth Circuit.
Argued June 3, 1970.
Decided June 8, 1970.
Appeals from the United States District Court for the District of South Carolina, at Florence; Charles E. Simons, Jr., Judge.
C. Weston Houck, Florence, S. C. (R. A. Palmer and John L. Nettles, Florence, S. C., on the brief), for appellant in No. 14,048.
Joseph O. Rogers, U. S. Atty., and Wistar D. Stuckey, Asst. U. S. Atty., for appellees in No. 14,048 and appellant in No. 14,049.
Howard P. King, Sumter, S. C., for appellee in No. 14,049.
Before SOBELOFF, BOREMAN and CRAVEN, Circuit Judges.
PER CURIAM:
1
We affirm for the reasons stated by the District Court. Rogers v. United States, 302 F.Supp. 699 (1969).
2
Affirmed.
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STATE OF MICHIGAN
COURT OF APPEALS
UNPUBLISHED
In re JERNAGIN/BARNES/MASON/BRIGHT, May 25, 2017
Minors.
No. 335590
Oakland Circuit Court
Family Division
LC No. 2008-747385-NA
Before: M. J. KELLY, P.J., and BECKERING and SHAPIRO, JJ.
PER CURIAM.
Respondent, S. Jernagin, appeals as of right from the trial court’s order terminating her
parental rights to her five youngest children pursuant to MCL 712A.19b(3)(c)(i) (conditions that
led to adjudication continue to exist), (3)(g) (failure to provide proper care and custody), and
(3)(j) (reasonable likelihood of harm). We affirm.
On appeal, respondent does not challenge the statutory grounds for termination but only
asserts that the trial court erred when it found that termination of her parental rights was in the
children’s best interests.1 Whether termination of parental rights is in a child’s best interests
must be proven by a preponderance of the evidence. In re Moss, 301 Mich App 76, 90; 836
NW2d 182 (2013). A court may consider several factors including “the child’s bond to the
parent, the parent’s parenting ability, the child’s need for permanency, stability and finality, and
the advantages of a foster home over the parent’s home.” In re Olive/Metts, 297 Mich App 35,
41-42; 823 NW2d 144 (2012) (citations omitted). The court may also consider psychological
evaluations, the child’s age, any continued involvement in domestic violence, and the parent’s
history. In re Jones, 286 Mich App 126, 131; 777 NW2d 728 (2009). When a child is in relative
placement, a trial court must “explicitly address whether termination is appropriate in light of the
children’s placement with relatives.” In re Olive/Metts, 297 Mich App at 43.
We review a trial court’s finding that termination of parental rights is in a child’s best
interests for clear error. In re Jones, 286 Mich App at 129. In this case, after a review of the
1
“If the court finds that there are grounds for termination of parental rights and that termination
of parental rights is in the child’s best interests, the court shall order termination of the parental
rights and order that additional efforts for reunification of the child with the parent not be made.”
MCL 712A.19b(5).
-1-
record, we are not left with the definite and firm conviction that the trial court erred in
concluding that a preponderance of the evidence demonstrated that termination of respondent’s
parental rights was in the children’s best interests.
The psychologist who examined respondent concluded that she exhibited symptoms
consistent with psychosis. This psychologist further opined that unless respondent complied
with mental health services to address her symptoms, it was unlikely that she could maintain
stability in her life on a personal level, as well as with regard to housing and employment.
During the nearly three years that the children were in care, respondent failed to consistently
attend her therapy, and there was evidence that she was not taking prescribed medication.
Because respondent’s behavior continued to be described as erratic, there was evidence to
support a finding that at the time of termination, her mental health issues still impeded her ability
to properly parent her children.
The evidence also supported the trial court’s finding that despite being offered services,
respondent’s parenting skills had not improved. Although respondent did complete a parenting
class, there was evidence to suggest that she did not benefit from the class. Foster care workers
testified that her parenting time with the three middle children was chaotic. Respondent was
unable to control her children and redirect inappropriate behavior, and, at times, she contributed
to increasing the frenzy. Respondent’s visits with her three middle children were suspended in
December of 2015. Her visits with the other children remained supervised by the agency
because respondent engaged in a verbal altercation with a relative caregiver in the children’s
presence. At the end of nearly three years, respondent still had not demonstrated that she could
spend unsupervised time with her children, let alone that she could adequately care for them if
returned to her custody.
Four of the five children had special medical and educational needs. The children’s
foster care supervisor testified that these needs would require a parent to demonstrate
consistency and the ability to cooperate with others. The trial court specifically found that
respondent lacked the capacity to coordinate all the various needs of the children. This
conclusion is supported by the evidence. Several foster care workers testified that because
respondent had not addressed her mental health issues, she could not maintain the
communication and healthy relationships necessary to ensure that the children’s special
educational and medical needs were met.
A court may also consider the advantages of a foster home and the possibility of adoption
over the parent’s home. In re Olive/Metts, 297 Mich App at 41-42. A court appointed special
advocate testified that at the time the children came into care, they fought a lot with each other,
did not know how to use a fork and knife, were unfamiliar with basic hygiene, and were not
affectionate. After being placed in their respective foster homes, their behaviors improved. That
there existed a correlation between the placement and the children’s behavior is further
highlighted by the special advocate’s testimony that the children’s behavior digressed after visits
with respondent and that their behavior improved after parenting time was suspended. The
children clearly benefitted from the structure and boundaries created in the more stable
environments. Moreover, there was testimony from foster care workers and a psychologist that
the children liked their placements and expressed an interest in remaining in these homes. Thus,
it is clearly apparent that the children were placed in stable homes where they were progressing
-2-
and that this progress could continue as the foster parents had all indicated a desire to adopt the
children in their care.
Respondent also asserts that the trial court failed to address WB’s interests individually.
This argument is without merit. A trial court is only required to address differences between
siblings’ interests if those interests “significantly differ.” In re White, 303 Mich App 701, 715-
716; 846 NW2d 61 (2014). In this case, although WB was the youngest child, her best interests
did not significantly differ from those of her siblings. All of the children were relatively young at
the time of the termination hearing. All were equally impacted by respondent’s deficient
parenting skills and unstable mental health. WB’s need for permanency and finality was just as
great as the needs of her siblings. Additionally, to the extent that WB’s interests did differ from
those of her siblings, the record discloses that the trial court addressed those differences. As the
court noted, WB was four years old at the time of termination. She had been in care for three of
those four years, and respondent had not parented WB for most of the child’s life. The court
recognized that WB was living with her aunt and doing well in relative placement. Thus,
contrary to respondent’s assertions, the trial court specifically addressed WB’s interests.
Finally, respondent asserts that when determining the best interests of the children, the
trial court failed to consider that D’JD and WB were placed with relatives. Although placement
with a relative weighs against termination, and the fact that a child is living with relatives must
be considered, placement with relatives is not dispositive, and a trial court may terminate
parental rights in lieu of placement with relatives if it finds that termination is in the child’s best
interests. In re Olive/Metts, 297 Mich App at 43. The lower court explicitly acknowledged that
D’JD and WB were currently placed with relatives. Nonetheless, it determined that termination
of respondent’s parental rights was in these two children’s best interests. The trial court found
that the relationship between respondent and the relative caregivers had deteriorated to the point
that the individuals could no longer cooperate in a meaningful way. Implementing a
guardianship with the relative caregivers in lieu of terminating respondent’s rights was simply
not a viable option in light of her hostility toward the caregivers.
The trial court did not clearly err when it held that termination of respondent’s parental
rights was in the children’s best interests.
Affirmed.
/s/ Michael J. Kelly
/s/ Jane M. Beckering
/s/ Douglas B. Shapiro
-3-
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481 Pa. 515 (1978)
393 A.2d 23
COMMONWEALTH of Pennsylvania, Appellee,
v.
Christopher E. MARTIN, Appellant (two cases).
Supreme Court of Pennsylvania.
Submitted April 11, 1978.
Decided October 5, 1978.
*516 *517 Manuel Grife, Philadelphia, for appellant.
Edward G. Rendell, Dist. Atty., Steven H. Goldblatt, Deputy Dist. Atty. for Law, Robert B. Lawler, Chief, Appeals Div., Glen Gitomer, Philadelphia, for appellee.
Before EAGEN, C.J., and O'BRIEN, ROBERTS, POMEROY, NIX, MANDERINO and LARSEN, JJ.
OPINION OF THE COURT
EAGEN, Chief Justice.
Appellant, Christopher E. Martin, was convicted after a jury trial in Philadelphia of murder of the second degree and robbery of Willie Keaton, of attempted robbery of Jerome White, and of criminal conspiracy to commit the foregoing crimes. Martin was sentenced to life imprisonment on the murder conviction to run concurrently with a sentence of not less than five nor more than fifteen years imprisonment on the robbery charge. Sentence on the other convictions was suspended. These appeals followed.[1]
The evidence presented at trial, viewed in a light most favorable to the Commonwealth as the verdict winner, establishes the following:
On July 13, 1975, between 1:00 and 1:30 a.m., the decedent, Keaton, and White left together from a bar on the corner of Twenty-eighth and York Streets, Philadelphia. *518 While they were walking near the intersection of Newkirk and Cumberland Streets, a short distance from the bar, they were approached from behind and White heard a voice say, "Give it up." White understood "it" to mean money. White turned around to find himself confronted by Martin who attacked him and prevented him from going to the aid of Keaton who was under attack from three or four other males. White was able to break away from Martin and ran for his aunt's house around the corner, but was stabbed in his left arm by Martin just before he fled. White's aunt called the police and, upon returning five minutes later to the place where Keaton and he had been attacked, Keaton was found lying on the ground, bleeding, trouser pockets inside out, his wallet and papers strewn about, and some small change beneath the wallet. The police arrived and found Keaton lying in a pool of blood. He was taken to the Medical College of Pennsylvania Hospital and pronounced dead upon arrival. The cause of Keaton's death was determined to be stab wounds of his right front chest, left arm, and mid-back.
In these appeals, Martin contends that his motion in arrest of judgment should have been granted since the evidence was insufficient to sustain guilty verdicts, and that he is entitled to a new trial on the grounds that the circumstances of the pretrial photographic identification made by White was violative of his constitutional right to due process, and that the subsequent in-court identification was tainted by the prior out-of-court identification.
In regard to Martin's first contention challenging the sufficiency of the evidence, our standard is whether, viewing all the evidence admitted at trial in the light most favorable to the Commonwealth and drawing all reasonable inferences favorable to the Commonwealth, there is sufficient evidence to enable the trier of fact to find every element of the crime(s) charged. Commonwealth v. Bastone, 466 Pa. 548, 552, 353 A.2d 827, 829 (1976). In the instant case, White's testimony which the jury accepted, as is evidenced by their returning a guilty verdict, was clearly *519 sufficient. While it is true that there were some differences between the testimony of White and that of one Charles Boswell, the bartender who testified on behalf of Martin as to events preceding the incident in question, these discrepancies were questions of fact, and thus were for the jury to resolve. Commonwealth v. Farquharson, 467 Pa. 50, 59, 354 A.2d 545, 550 (1976). (Boswell testified that Keaton was drunk at 11:30-11:45 p.m. and left the bar alone at that time while White remained in the bar.)
Martin next contends that he is entitled to a new trial on the ground that the circumstances of the pretrial photographic identification made by White was violative of his constitutional right to due process since White was pressured by the police into making an identification, and the photographic array itself was suggestive. For the following reasons, these claims are meritless.
Although White gave police a good description of his assailant immediately after the incident on July 13, his wounds required him to be hospitalized. Thus, White did not come to the Police Administration Building until July 21 to review photographs for possible identification of his assailant. A police-detective, Stephens, testified that working from White's previous description, an effort was made to assemble photographs of males of the same race, age, complexion, and hair-style, residing in the vicinity of the incident. Martin had not yet been arrested when the nine photographs in question with no identifying data visible were shown to White by placing them in a horizontal row on a table in front of him, without any statement as to whether his assailant's picture was among them. White selected two photographs, but refused to further identify for Detective Stephens which of them was his actual assailant because he said he was afraid of retaliation.
Detective Stephens, without placing any mark on the nine photographs, then gave them to Detective Gallo. After attempting to allay White's fear of reprisal, this detective showed them to White one on top of another in the pile. White then looked through the pile, withdrew Martin's picture, *520 stated Martin was his assailant, and signed it on the back.
Under our standard of review of suppression court hearings, the findings of the trier of fact, supported by the record, may not be disturbed. Commonwealth v. Sparrow, 471 Pa. 490, 497, 370 A.2d 712, 715 (1977). In relation to the events surrounding the pretrial photographic identification in the instant case, the findings related in the paragraphs above are amply supported by the record.
A reversal of the judgment of sentence is appropriate only if the photographic identification procedure was so impermissibly suggestive as to give rise to a very substantial likelihood of irreparable misidentification. Simmons v. United States, 390 U.S. 377, 384, 88 S.Ct. 967, 19 L.Ed.2d 1247 (1968). In the instant case, neither the testimony of White nor the detectives support Martin's contention that White's pretrial photographic identification was the product of overbearing police pressure. White was not ordered to select a picture nor was he told that Martin's picture or anyone suspected of the crime was in the array. In addition, Martin's claim that the array of photographs was suggestive is without merit. The suppression court found that the nine photographs were of "young negro males of approximately the same age as the petitioner (Martin), were members of the negro race, had similar hair styles, and for the most part were of the same complexion." The mere fact that by happenstance out of the nine photographs, Martin and another person were wearing light colored outer clothing, whereas the other seven persons depicted were wearing dark colored outer clothing will not render an otherwise fair photographic display infirm. See Commonwealth v. Shoatz, 469 Pa. 545, 559-60, 366 A.2d 1216, 1223 (1976).
Since the pretrial photographic identification has been determined not to be constitutionally infirm, Martin's third contention that the in-court identification of himself by White was impermissibly tainted by the prior pretrial identification must fail.
Judgments of sentence affirmed.
NOTES
[1] Martin originally appealed the judgments of sentence imposed on the robbery, attempted robbery, and conspiracy counts to the Superior Court which certified these appeals here.
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16 Cal.2d 311 (1940)
JAMES F. McKAY et al., Appellants,
v.
RETAIL AUTOMOBILE SALESMEN'S LOCAL UNION No. 1067 et al., Respondents.
S. F. No. 16016.
Supreme Court of California. In Bank.
October 14, 1940.
I. M. Peckham, Sol A. Abrams, John Francis Neylan and Bartley C. Crum for Appellants.
Hanna & Morton, James M. McRoberts, Cullinan, Hickey & Cullinan, Rogers & Clark, Webster V. Clark, Cullinan, Hickey & Sweigert, Brobeck, Phleger & Harrison and George O. Bahrs, as Amici Curiae, on Behalf of Appellants.
Mathew O. Tobriner for Respondents.
Vallee, Beilenson & Kenny, Laurence W. Beilenson, William Berger, M. Mitchell Bourquin, Edward P. Murphy, P. J. Murphy, Clarence E. Todd and Samuel W. Gardiner, as Amici Curiae, on Behalf of Respondents.
EDMONDS, J.
The question presented for determination in this case concerns the right of labor to picket an employer's place of business. The controversy arose over a demand upon the employer to sign a contract with a union. *315
By a suit against the employer, the American Federation of Labor and a number of its affiliates, Retail Automobile Salesmen's Local Union No. 1067 and its affiliate, Retail Clerks International Protective Association, Garage Employees Union Local No. 665 and its affiliate, Brotherhood of Teamsters, Chauffeurs, Stablemen and Helpers of America, San Francisco Labor Council, and a number of officers of these organizations, the nonunion employees sought an injunction to prevent interference with their employment relations. The case is here upon the plaintiffs' appeal from an order dissolving a temporary restraining order and denying an application for a preliminary injunction.
The only evidence before the trial court in ruling upon the appellants' right to injunctive relief was the verified complaint. It alleges the following facts:
The plaintiffs, thirty-two in number, are employed as salesmen by the defendant Howard Automobile Company, which is a California corporation engaged in the business of selling and repairing automobiles in San Francisco "and elsewhere". In May, 1937, in San Francisco, the plaintiffs, being then all the salesmen employed by the company, united and organized and designated three of their number a committee to negotiate terms and conditions of employment with the company "in accordance with the terms of the Wagner Labor Relations Act". This committee forthwith notified the Regional Director of the National Labor Relations Board and the employer of its appointment, whereupon the employer recognized the committee as the bargaining agent for the entire sales force.
Other allegations of the complaint are that the plaintiffs and the employer are mutually satisfied with the terms and conditions of employment and desire to continue the relationship. Between the plaintiffs and their employer no labor dispute of any kind exists, and none of the plaintiffs has been or is now on strike. None of the plaintiffs is or has any desire to be a member of any of the defendant unions. Neither the plaintiffs nor the company has ever been a party to any agreement with any of the defendant unions or any other labor organization, and neither has ever requested any of the defendant unions to act for any of the plaintiffs as a collective bargaining agency. *316
The plaintiffs further assert that the Howard Company employs members of all of the defendant unions except members of the Salesmen's Union, and each of these unions has rules and agreements, binding on their respective members and enforceable by fines and penalties, not to pass picket lines or to do business with persons under picket. The placing of a picket at the company's plant will, pursuant to these rules and agreements, "compel" the members of these unions to abstain from visiting, delivering goods to, accepting delivery from, transacting business with, or working for the company.
The complaint also states that the Salesmen's Union has solicited the plaintiffs to join it and, in consequence of their refusal, has "placed a picket around the place of business of said company, and [its members] have congregated there in numbers, and announced their intention to maintain said picket until the said company compels plaintiffs to join said union or discharges said plaintiffs, and until said codefendants of said company have convinced said company that it is profitable for it to sign a contract with said union which would require plaintiff employees to join said union, and if they refuse to join said union, would require said company to discharge plaintiffs and each of them". None of the pickets has been or is an employee of the company. The defendant Labor Council has by resolution approved of the picket, and plaintiffs allege upon information and belief that the council has appointed a "Board of Strategy" to devise ways and means of "exerting pressure and coercion" on the company and on plaintiffs to sign a contract with and join the Salesmen's Union and has placed the company on its "We don't patronize list", a list of firms "boycotted throughout the nation by all organized labor".
Continuing their charges against the defendants, the plaintiffs say that the continuance of the picket has had the effect of "closing down the company's plant, stopping all work therein, and destroying its said business". The unions and their officers have "combined and confederated and conspired to aid, abet and carry out said boycott and said picket, and to fine, coerce and penalize any of their members who violate either boycott or picket". The effect of the boycott and picket is "ruinous to the business of any plant so boycotted or picketed, and coerces said company to deprive plaintiffs *317 and each of them of their right to earn a livelihood freely and unmolested". Unless the codefendants of the company are restrained, the company intends to and will discharge plaintiffs or demand that each of them join the Salesmen's Union.
The prayer of the complaint is for a decree enjoining the labor organizations and their representatives from picketing or boycotting the company or "from in anywise threatening, coercing or intimidating" the company or any of its employees or customers for the purposes named in the complaint; from "in any manner interfering with" the business of the company; from inducing or compelling any of the company's employees to leave its employ; from preventing others from entering the service of the company; and from acting in or aiding any combination or conspiracy to restrain the company in the free and unhindered control of its business.
Upon the filing of this complaint the superior court issued a temporary restraining order in literal accordance with the terms of the prayer and an order to show cause why a preliminary injunction should not issue. All of the defendants except the employer joined in a demurrer to the complaint, which challenged it on both general and special grounds. The application for the injunction was heard with the demurrer and submitted upon the allegations of the verified complaint. The trial court sustained the demurrer with leave to amend, dissolved the temporary restraining order and denied the application for a preliminary injunction. The appeal has been taken only from the orders denying injunctive relief.
Broadly stated, the position taken by the plaintiffs in their briefs is that in the absence of any dispute between themselves and their employer, the defendants have no right to interfere in any way with their employment relations. On the other hand, the labor organizations and their officers maintain that they collectively have a direct, substantial and legitimate interest in the employment relations of the company, and that since they are employing means which are entirely lawful, their activities may not be enjoined.
The history of the law governing the right of workingmen to combine in order to bargain for better working conditions is marked by much divergence of opinion, with many changes through the years. In England, until 1824, *318 combinations of laborers to raise wages or shorten hours or to affect business in any way were criminal even if there was no resort to a strike (5 Geo. IV C. 95; 6 Geo. IV C. 129; 34 Edw. III C. 9; Rex v. Journeymen- Taylors, 8 Mod. 10, 88 Eng. Repr. 9), and until after the middle of the nineteenth century it was a crime to threaten a strike for any purpose (Walsby v. Anley, 3 El. & El. 516, 121 Eng. Repr. 536; Skinner v. Kitch, 10 Cox, C. C. 493, L. R. 2 Q. B. 393), or to combine peacefully to persuade employees to leave work without picketing (Reg. v. Rowlands, 2 Den. C. C. 363, 17 Q. B. 671, 117 Eng. Repr. 1439). The sanctions of the criminal law against combinations of workingmen in furtherance of their interests were not finally relaxed until 1875 (The Conspiracy and Protection of Property Act, 38 & 39 Vict. C. 86, sec. 3).
Development of the early law in this country shows a similar trend. Workingmen who combined for any purpose opposed to the interest of their employer were indicted and punished as members of a criminal conspiracy. (People v. Melvin, 2 Wheeler C. C. (N.Y.) 262 (1810); People v. Fisher, 14 Wend. 9 (N.Y. 1835) [28 Am. Dec. 501]. See, also, Nelles, The First American Labor Case, 41 Yale L. J. 165 (1931); Witte, Early American Labor Cases, 35 Yale L. J. 825, 826 (1926); Landis, Cases on Labor Law, p. 28 et seq.) And although in 1842 Massachusetts held that workingmen who quit work in concert to compel an employee to join their association were not guilty of a crime (Commonwealth v. Hunt, 45 Mass. 111 [38 Am. Dec. 346]), until the end of the nineteenth century the criminal conspiracy doctrine was applied to associations of workmen to prevent strikes for any purpose. (State v. Donaldson (1867) 32 N. J. L. 151 [90 Am. Dec. 649]; Commonwealth v. Curren, (1869) 3 Pittsb. Rep. 143; Commonwealth v. Sheriff, (1881) 15 Phila. 393; People v. Wilzig, (1886) 4 N.Y. Cr. 403.) In the meantime the labor injunction had come into general use in this country. (See Frankfurter & Greene, The Labor Injunction, p. 17 et seq.; Bonnet, The Origin of the Labor Injunction, 5 So. Cal. L. Rev. 105 (1931).) In recent years the courts have gradually recognized that immediate betterment of working conditions is a legitimate object of concerted activities by employees, but there has been a wide difference of opinion as to what means may be lawfully used for the attainment of labor's ends. *319
[1] The parties are entirely correct in their agreement that, under the law as it has developed in recent years, an intentional interference with the advantageous economic relations of others by the members of labor organizations is not tortious unless violence is used or the object sought to be accomplished has no reasonable relevance to labor conditions. Therefore, the issues in the present controversy include only two questions: Whether the specific activities carried on by the defendants are peaceful, and, further, whether there is any legal justification for their conduct in view of the objects which they seek to attain.
[2] Concerning the means used, it must be taken as settled in this state, that workmen may associate together and exert various forms of economic pressure upon employers, provided they act peaceably and honestly. The conventional means of exerting this economic pressure which have been held lawful are the strike (Pierce v. Stablemen's Union, (1909) 156 Cal. 70 [103 P. 324]; Parkinson Co. v. Building Trades Council, (1908) 154 Cal. 581 [98 P. 1027, 16 Ann. Cas. 1165, 21 L.R.A. (N. S.) 550]; Southern Calif. Iron & Steel Co. v. Amalgamated Assn., (1921) 186 Cal. 604 [200 P. 1]; Lisse v. Local Union, (1925) 2 Cal.2d 312 [41 PaCal.2d 314]); the boycott, both primary and secondary (Parkinson Co. v. Building Trades Council, supra; Pierce v. Stablemen's Union, supra; Southern Calif. Iron & Steel Co. v. Amalgamated Assn., supra); and the picket (Lisse v. Local Union, supra; In re Lyons, 27 Cal.App.2d 182 [80 PaCal.2d 745]).
[3] It is true that the early cases in the state intimated that picketing in any form was illegal (Rosenberg v. Retail Clerks' Assn., (1918) 39 Cal.App. 67 [177 P. 864]; Pierce v. Stablemen's Union, supra), and that Moore v. Cooks etc. Union, 39 Cal.App. 538 [179 P. 417], held that peaceful picketing was per se unlawful. However, those conclusions were expressly renounced by this court in Lisse v. Local Union, supra. Indeed, the modern trend of decision clearly indicates that the right to picket peacefully and truthfully is one of organized labor's lawful means of advertising its grievances to the public, and as such is guaranteed by the Constitution as an incident of freedom of speech. (Carlson v. California, (1940) 310 U.S. 106 [60 S.Ct. 746, 84 L.Ed. 668]; Thornhill v. Alabama, (1940) 310 U.S. 88 *320 [60 S.Ct. 736, 84 L.Ed. 659]; In re Lyons, supra (1938); People v. Harris, (1939) 104 Colo. 386 [91 PaCal.2d 989, 122 A.L.R. 1034]; 48 Yale L. J. 308, 312 (1938).) But the law clearly requires that concerted action by union workers be peaceful. Acts of violence or "acts amounting to physical intimidation" will be enjoined. (Goldberg etc. Co. v. Stablemen's Union, (1906) 149 Cal. 429 [86 P. 806, 117 Am.St.Rep. 145, 9 Ann. Cas. 1219, 8 L.R.A. (N. S.) 460]; Southern Calif. Iron & Steel Co. v. Amalgamated Assn., supra; Lisse v. Local Union, supra.)
[4] There is nothing in the complaint now being considered which indicates that the activities of the defendants were anything other than peaceful and honest within the meaning of the controlling authorities. The complaint alleges merely that the Salesmen's Union had placed a picket around the place of business of the employer and that persons acting for it have congregated there in numbers and announced their intention to maintain this picket until their demands are complied with. Such conduct is not per se unlawful. (Lisse v. Local Union, supra; In re Lyons, supra.) True, the plaintiffs use the words "compel" and "coerce" in connection with the activities of the defendants, but by these words, in the light of the only specific activities alleged, the pleader does no more than to charge that the compulsion or coercion, though peaceful, was unlawful, which, of course, is only a conclusion.
[5] It is a fundamental principle that the drastic sanctions of equity may not be invoked without a detailed showing of specific facts justifying such relief. (Golden State Glass Corp. v. Superior Court, 13 Cal.2d 384 [90 PaCal.2d 75].) This rule is applicable to suits for injunctions in labor controversies and has been so applied in this state. In Davitt v. American Baker's Union, 124 Cal. 99 [56 P. 775] (1899), the plaintiffs sought injunctive relief against a labor union charging interference with their business by "force, menace and threat" and by the circulation of "false and malicious publications" at and near their place of business. Such averments were held to be too general to warrant relief, the court saying: "Conceding the formation of a conspiracy is charged, having for its object a common design and purpose, still we find no statement in the bill as to any specific overt act done by defendants in *321 pursuance of that design and purpose. A conspiracy, however atrocious its purpose, is not the subject of a civil action, for it does not damage. (Herron v. Hughes, 25 Cal. [555] 560.) There is no allegation whatever showing the particular threats defendants made, what amount or kind of force defendants used, what kind or character of menace was exercised, or how the business was to be boycotted."
[6] So the acts charged against the defendants are not unlawful because of the plaintiffs' allegation that they amount to coercion. One is not intimidated or coerced, in the sense of unlawful compulsion, by being induced to forego business relations with A rather than lose the benefit of more profitable relations with B. As Justice Angellotti said in his concurring opinion in the Parkinson case, an employer who yields to his employees' demands "may be said to have been coerced into doing so by fear that if he does not, he will not be able to obtain such employees as will enable him to properly carry on his business, but this is not the kind of coercion of which the courts can take notice". In the opinion written by Justice Sloss the same view is expressed.
It is equally beside the question to speak of threats, where that which is threatened is only what the party has a legal right to do. In one of his dissenting opinions Mr. Justice Holmes succinctly commented upon the use of such terms as follows: "I pause here to remark that the word 'threats' often is used as if, when it appeared that threats had been made, it appeared that unlawful conduct had begun. But it depends on what you threaten. As a general rule, even if subject to some exceptions, what you may do in a certain event you may threaten to do, that is, give warning of your intention to do in that event, and thus allow the other person the chance of avoiding the consequences. So as to 'compulsion', it depends on how you 'compel' ... So as to 'annoyance' or 'intimidation'." (Vegelahn v. Guntner, (1896) 167 Mass. 92, 107 [44 N.E. 1077, 57 Am.St.Rep. 443, 35 L.R.A. 722].)
[7] In many of the decided cases where injunctive relief was granted, facts were alleged or proved which showed that violence had been threatened either expressly or impliedly. The complaint here in controversy includes no allegations concerning such acts, and it states no cause of action if the object of the defendants' conduct was a lawful purpose. *322
[8] It is the well-established law of this state that members of a union or group of affiliated unions are privileged to refuse to work in the same shop or on the same job with other workmen irrespective of whether the latter have united or organized themselves into a separate trade union. And competition for work being an entirely lawful activity, whether the competing groups be unions, or unions and individuals, a court of equity may not interfere by restraining the use of any lawful form of concerted action used in the struggle. (Parkinson Co. v. Building Trades Council, supra.) The principle that a closed union shop is a proper object of concerted action by employees has been widely recognized in other jurisdictions (Williams v. Quill, (1938) 277 N.Y. 1 [12 N.E. (2d) 547]; Fenske Brothers v. Upholsterers' International Union, (1934) 358 Ill. 239 [193 N.E. 112, 97 A.L.R. 1318]; Bayonne Textile Corp. v. American Federation of Silk Workers, (1934) 116 N. J. Eq. 146 [172 Atl. 551, 92 A.L.R. 1450]; Seymour Ruff & Sons v. Bricklayers etc. Union, (1933) 163 Md. 687 [164 Atl. 752]; Grant Construction Co. v. St. Paul Building Trades Council, (1917) 136 Minn. 167 [161 N.W. 520, 1055]; Scofes v. Helmar, (1933) 205 Ind. 596 [187 N.E. 662]; Cohn & Roth Elec. Co. v. Bricklayers etc. Union, (1917) 92 Conn. 161 [101 Atl. 659, 6 A.L.R. 887]; Meier v. Speer, (1910) 96 Ark. 618 [132 S.W. 988, 32 L.R.A. (N. S.) 792]; Jetton-Dekle Lumber Co. v. Mather, (1907) 53 Fla. 969 [43 So. 590]; contra, Hotel & Railroad News Co. v. Clark, (1922) 243 Mass. 317 [137 N.E. 534]; Cooks' etc. Union v. Papageorge, (1921) (Tex. Civ. App.) 230 S.W. 1086) and has been adopted by the American Law Institute in its Restatement of the Law of Torts. (Vol. 4, sec. 788.)
To the contrary, many other courts have decided that the forcing of such a choice upon employees by labor unions is itself an unlawful interference with the "absolute, inherent and indefeasible right" of the individual employee to work under such conditions as he may choose. But the Supreme Court of the United States holds that there is no constitutional right inhering in individuals to work as nonunion employees. (Senn v. Tile Layers Protective Union, 301 U.S. 468 [57 S.Ct. 857, 81 L.Ed. 1229].) [9] And the law of California, as stated in Parkinson Co. v. Building Trades Council, supra, is that the members of a labor union are privileged to bring such lawful pressure to bear, as is within *323 their control, in order to induce nonunion employees to join their union. The defendant unions and their officers contend that the facts of that case are exactly the same in principle as those alleged in the plaintiffs' complaint, and that the conclusion there reached is determinative of the present controversy.
In the Parkinson case, the plaintiff, which was the employer, maintained a lumber yard, mill and plumbing and tinning shop and employed a nonunion tinner. Its other employees, who belonged to several affiliated unions of the American Federation of Labor, demanded that the tinner be compelled to join the Tinner's Union or be discharged. Both the tinner and the employer refused to accede to the unions' demands, with the result that the community labor council called a strike and secondary boycott against the employer. "Unfair notices" were sent to contractors and other customers of the employer, which according to union rules precluded the employees of these customers from working on or with materials furnished by the employer.
The resulting strike and boycott were conducted peaceably, and, with minor exceptions, no threats of force or harm to anyone. A short time after the strike, the employer was able to secure nonunion men and resume operation of its plant, but the secondary boycott against its customers was continued in force by the unions. The employer brought suit against them for injunctive relief and damages, and after a trial the superior court issued a permanent injunction broadly restraining the defendants from interfering with its business.
Upon appeal this court reversed the judgment and held, six justices concurring in three separate opinions and one justice dissenting, that the plaintiff was not entitled to relief. All of the members of the court agreed, however, that the attempt by the defendants to secure a closed union shop was a legitimate object of collective action and the right of workingmen to combine in order to better the terms and conditions of their employment was fully recognized. Such combination was found to be the "necessary and desirable counterpart" of business combinations in order to enable workmen to compete in a "fair and equal way" in the struggle for existence. The ultimate motive for their activities was self-interest--"to secure employment on more favorable terms for themselves", and in pursuit of that purpose they could lawfully *324 attempt "to secure employment by the plaintiff, to the exclusion of those not associated with them".
And there was said to be no valid distinction between union members withholding labor from their employer, with whom they had some dispute arising out of his treatment of workers, and withholding business from his customers, against whom they had no other dispute than that they were assisting the employer by trading with him. In other words, said the court, members of affiliated unions who were not employees of the employer, might lawfully engage in concerted activities against him for no other motive than that they considered him unfair to their associates. There was damage to the employer, to his customers and to his nonunion employees, but this damage was held to be merely one of the consequences of the "struggle of competition" and was therefore justified in law.
[10] The plaintiffs do not challenge the soundness of these principles but urge that they do not apply here because there is no "strike" and no "labor dispute". It is said that the related craft members "only ceased working because of the penalty imposed for passing a picket line" placed around the company's premises by the "irresponsible" Salesmen's Union. Such an interpretation of the facts assumes a lack of solidarity among the affiliated crafts and an unwillingness on the part of the members to cooperate in the action directed against the employer--an assumption which is negatived by every circumstance in the case. Moreover, as has been pointed out in C. S. Smith Metropolitan Mkt. Co. v. Lyons (post, p. 389 [106 PaCal.2d 414]), the term "labor dispute" is a broad one, and, in the absence of statutory definition, may be properly applied to any controversy "which is reasonably related to employment and to the purposes of collective bargaining".
The complaint alleges that all the unions and their officers have "combined, confederated and conspired to aid, abet and carry out said boycott and said picket" and that the defendant Labor Council "has by resolution approved of said picket" and has "appointed a Board of Strategy for the purpose of devising ways and means of exerting pressure and coercion on said company and plaintiffs, and has placed said company on the 'We don't patronize list', a list of firms boycotted through the nation by all organized labor". These averments show that all of the defendants are acting in harmony *325 in their effort to secure a union shop contract. [11] The further allegations that the unions are "conspiring ... to fine, coerce and penalize any of their members who violate either boycott or picket" mean no more than that the union members by contract and pledge have bound themselves to join in any unified action affecting their interests. In this there is no more "coercion" than there is in compelling the performance of any contract.
[12] The fact that the defendant unions are craft organizations does not preclude them from consolidating to obtain an industrial bargaining unit. (See 6 Chicago L. Rev. 675.) The complaint alleges that these unions are affiliated with the American Federation of Labor, and also that they are members of the defendant Labor Council. This indicates that they are proceeding with some unity toward the objectives they seek. To hold, as the plaintiffs insist the court should, that separate organizations may not join forces in labor controversies for the purpose of obtaining a closed shop would establish a rule of law discriminating against the labor groups in this state which are organized horizontally, or into crafts, and in favor of the vertical or industrial type of union. For if the other employees of the company belonged to a single union they would be privileged, under the California authorities, to engage in any peaceful and lawful activities in order to compel the members of the sales department to join their union.
Viewed in this light the present case cannot be distinguished from the Parkinson case so far as the acts of organized labor are concerned. The facts in the two cases are parallel. There the tinner was satisfied with his job and his services were satisfactory to the employer; here the plaintiffs and the company are mutually satisfied with the terms and conditions of employment. There, as here, the defendants, who were members of affiliated trade unions employed in the company's plant and elsewhere, engaged in activities which were not per se unlawful in order to induce nonunion employees of the company to join a union affiliated with the defendants. In each case the defendants' purpose was to obtain a closed union shop.
[13] That some of the defendants in the present case are not employees of the company does not render their conduct unlawful; there was the same situation in the Parkinson case. *326 If anything, the Salesmen's Union here has a more direct self-interest in organizing the company into a closed union shop than did the "outsiders" in the Parkinson case. The picketing here is merely a concomitant of the strike, just as the secondary boycott was the concomitant of the strike in that case. In both cases the concerted activities of the various unions were undertaken at the instigation and with the approval of a labor council, which appears to be the organization responsible for formulation of the policy and coordination of activities of the affiliated unions.
[14] Nor does the fact that in the present case relief is sought by nonmember employees rather than by the employer serve to distinguish the two cases. This court in the Parkinson case found justification for the defendants' conduct in the workingman's struggle for existence, Chief Justice Beatty saying: "In order to secure employment on more favorable terms for themselves, individuals have an absolute right to combine for the purpose of preventing employment and competition of others". Justice Sloss, in a concurring opinion, summarized the position of union labor as follows: "The defendants were seeking, in all they are shown to have done, to secure employment by the plaintiff for themselves, to the exclusion of those not associated with them, and to secure that employment upon terms deemed satisfactory or advantageous to them. That is the effort of every dealer in goods: it is the struggle of competition and is no more frowned upon where the subject of trade is labor than where it is a specific commodity." Stated in another way, the principle or rationale involved is that a court should not use its coercive implements to aid one party in an economic struggle in which the other party has a substantial interest at stake and is employing means which are not in themselves unlawful.
The interest of the defendant unions in the present controversy is direct and obvious. The closed union shop is an important means of maintaining the combined bargaining power of the workers. Moreover, advantages secured through collective action redound to the benefit of all employees whether they are members of the union or not, and members may resent nonmembers sharing in the benefits without liability for the obligations. Hence a closed shop policy is of vital importance in maintaining not only the bargaining power but also the membership of trade unions. These considerations *327 serve to justify the defendants' conduct as much against the complaint of nonmember employees as against the complaint of an employer. (See authorities cited in C. S. Smith Metropolitan Market Co. v. Lyons, supra.)
Counsel for the employer contend that by the decision in Overland Publishing Co. v. H. S. Crocker Co., Inc., 193 Cal. 109 [222 P. 812], this court has limited the principles established and applied in the Parkinson case. However, in the Overland case the plaintiff, who was engaged in the stationery business, brought suit for damages under the Cartwright Act (Stats. 1907, p. 984, as amended, Deering's Gen. Laws, Act 4166 [Deering's Gen. Laws 1937, Act 8702]) against the members of the Printers' Board of Trade, an association of stationers which, it was charged, constituted a combination in restraint of trade. The complaint alleged, among other things, that the defendants had entered into agreements with the printers, pressmen, and bookbinders' unions in San Francisco by which the union members agreed to work for only such stationers as were members of the defendants' association, and pursuant to that agreement all plaintiff's union employees were called out on strike "solely pursuant to an order of the defendants" in order to compel plaintiff to join defendants' association. The court held that these acts were in violation of the Cartwright Act. That determination has no bearing upon the facts of the present case. The attempt to induce an employer to become a member of an employers' association is not reasonably related to either the working conditions or the bargaining power of the union members and was plainly an unlawful object of concerted action on their part.
[15] Nor can the contention be sustained that, whatever justification may exist for defendants' conduct under the general principles of equity, sections 920-923, inclusive, of the California Labor Code compel the conclusion that the defendants' actions are unlawful interference with their rights. In the case of Shafer v. Registered Pharmacists Union Local 1172, S. F. No. 16200 (post, p. 379 [106 PaCal.2d 403]), which was considered and decided concurrently with the appeal in the present case, it was held that this legislation does not prohibit closed union shop contracts nor lay any restrictions upon labor in its efforts to compel employees to join a particular union. *328
Considering other allegations of the complaint, the defendants are charged with a conspiracy to cause damage to the plaintiffs and their employer. However, the employer is seeking no relief, although the threatened injury to it may affect the plaintiffs; that is, as the complaint charges, unless the defendants are restrained, the employer intends to and will discharge plaintiffs if they do not join the Salesmen's Union. The threatened damage to the employer, therefore, has significance only in so far as it may, by reason of economic pressure and choice, result in damage to the plaintiffs.
Moreover, the damage to the plaintiffs may not accurately be characterized as loss of their jobs or absolute denial of their "right to work", as much of the argument in some of the briefs implies. The extent of the damage to the plaintiffs is no more than presentation of a choice between leaving the work of their present employer, either voluntarily or upon its demand, or joining the Salesmen's Union. This choice is forced upon them by the concerted action of other salesmen who are competing with them in the sale of automobiles and by the members of allied trade unions.
[16] It is also urged that the complaint shows that the plaintiffs have established their own labor organization to bargain collectively with the employer and that under such conditions any attempt by the defendants to "unionize" them or to interfere with their employment relations is unlawful. But there are two fundamental and equally conclusive reasons why this contention cannot be sustained.
First, this is a suit in which the employees only are seeking relief. The employer, although named as a party defendant, did not make an appearance in the trial court. Assuming, without deciding, that an employer may be entitled to equitable protection from injury to his business as the result of a true jurisdictional dispute between rival unions, it is, nevertheless, the settled law of this state that a group of the employer's workers can claim no such protection. This conclusion follows inescapably from the principles established in Parkinson Co. v. Building Trades Council, supra. The interest of the defendant unions in inducing the plaintiffs to join a union satisfactory to them is just as substantial as it would be if the plaintiffs were unorganized. The element of competitive struggle between workmen is still present, except that the group of thirty- two self-organized salesmen in the present *329 case is a stronger competitor than was the lone tinner in the Parkinson case.
The case of Greenwood v. Building Trades Council, 71 Cal.App. 159 [233 P. 823], is squarely in point and decisive of the question. There a dispute had arisen between two rival unions in the building trades industry. Sheet Metal Workers Union, Local 162, had been chartered by the American Federation of Labor; Sheet Metal Workers Union, Local 2, was not affiliated with the A. F. of L. but it was a member and had the recognition of the local Building Trades Council, a group of A. F. of L. unions. Local No. 162 refused to pay dues to the Building Trades Council, which in turn sent notices to all the building trades employers that its members would refuse to work on construction jobs where members of Local No. 162 were employed. In a suit for injunctive relief brought by the members of Local No. 162 it was held, upon the authority of the Parkinson case, that the boycott instituted by the members of the Building Trades Council could not be enjoined. It must be deemed settled, therefore, that one labor union may not have the protection of equity against the lawful competitive activities of a rival union.
[17] Moreover, the facts alleged by the plaintiffs do not sufficiently show that they have organized a bona fide independent labor union. The complaint alleges only that they have "united, organized and designated three of their number a committee 'to bargain with the company' in accordance with the terms of the Wagner Labor Relations Act"; that the committee notified the company and the Regional Director of the National Labor Relations Board of plaintiffs' choice of bargaining representative; and that the "company then and there recognized said committee as bargaining agents for the entire sales force ..." The effect of the averments concerning the National Labor Relations Act need not be considered, for nowhere in the complaint does it appear that the National Labor Relations Board has certified the plaintiffs' organization as a bargaining agent, or even that the Howard Automobile Company is engaged in interstate commerce. Moreover, the allegations that they formed a labor organization "in accordance with the Wagner Labor Relations Act" is a mere legal conclusion.
The remaining allegations fall far short of affirming the existence of a freely organized and independent trade union. *330 The plaintiffs constitute only a portion of the employees of a single plant; they have no affiliation with any external labor organization; and they apparently have no constitution, bylaws, pledges or rules. In addition there is an apparent unity of interest between the plaintiffs and the defendant employer which negatives any inference that the plaintiffs have a bona fide and independent bargaining organization.
[18] The need for specific allegations concerning the nature of such an organization is clear where, as here, the complaint itself is the only evidence before the court in deciding the issue of temporary injunctive relief. It has been demonstrated that the granting of temporary injunctions in labor disputes usually has the effect of determining and terminating the entire controversy. (Frankfurter and Greene, The Labor Injunction, p. 47 et seq.) [19] The legislature has declared that interference by an employer in the collective bargaining processes of his employees is contrary to the public policy of this state. (Labor Code, sec. 923.) This necessarily means that employee organizations are unlawful when they are formed, subservient to the employer's will, chiefly in order to forestall the unionization of his plant by independent labor unions. [20] To be sure, the functional weakness of a single-department organization like the present one is not itself proof of employer domination. But it is a factor which should lead a court to scrutinize carefully all the circumstances surrounding its formation. (See 40 Columb. L. Rev. 278.) If the legislative policy is to be made effective courts cannot close their eyes to the subtle realities of industrial strife.
Of course, the employer and its salesmen argue that the appellants have no right to interfere with relations which are entirely satisfactory to them. This position ignores the broader rights of labor in seeking to advance the interests of the worker by more thorough and complete organization. And although it is undeniable that many unworthy persons within labor's ranks have abused their power, on the other hand, the record of employers is not one of entirely altruistic purposes. Labor insists that in a free economy, the right to tell the public, upon whose patronage both depend for existence, the facts concerning employment in any particular business, is essential to its welfare and entirely consistent with democratic principles. *331
The public ultimately pays the full cost of every labor dispute and better labor relations must be established. But if they cannot be brought about by enlightened self-interest the remedy lies with the legislature--not in the courts--in so far as contests peaceably conducted for a purpose legitimately connected with the welfare of labor as a whole is concerned.
The orders are, and each of them is, affirmed.
Gibson, C.J., and Carter, J., concurred.
MOORE, J., pro tem.,
Concurring.
I concur. The question involved in this case is whether the picket line around defendant employer's establishment is illegal. If the picket line be maintained by threat to use force or if its aim be to achieve an illegal purpose, it should be enjoined. But if it is maintained by neither immoral nor illegal means and if its purpose is to effectuate a lawful end, it should not be subjected to any restrictive order of the court. The allegations of the complaint do not set forth that any act has occurred whereby plaintiffs suffer any fear of violence. Hence, upon that ground defendants cannot be enjoined. We have, therefore, to determine (1) whether defendants purpose to effectuate the execution of a contract between the employer and the union be an illegal practice, and (2) whether the peaceful picketing by defendants to persuade the employer to execute such a contract gives occasion for equity to interfere.
In order to enforce a demand reasonably related to labor conditions a union is justified, by a long line of decisions, in resorting to any peaceable legal means. The courts have supported the union's right to strike, picket and boycott in the enforcement of such demands including the right to induce those in sympathy with its cause to withdraw patronage from an employer. (Parkinson Co. v. Building Trades Council, 154 Cal. 581 [98 P. 1027, 16 Ann. Cas. 1165, 21 L.R.A. (N. S.) 550]; Pierce v. Stablemen's Union, 156 Cal. 70 [103 P. 324]; Lisse v. Local Union, 2 Cal.2d 312 [41 PaCal.2d 314].) If the motive actuating a strike is immaterial (Greenwood v. Building Trades Council, 71 Cal.App. 159 [233 P. 823]) we must then determine whether the fact that union and individual defendants are not employees of *332 the defendant automobile company renders their picket line illegal.
If the acts of defendants are to be condemned, such condemnation must be founded upon statute or upon court decisions or it must be shown to violate good morals. We find no language in the Labor Code that outlaws a contract between union and employer. The chief aim of sections 921-923 was to remove from the path of labor the yellow dog contract at first canonized in some court decisions but later repudiated by legislatures and by the highest courts. Section 921 inhibits the promise at the time of employment of either worker or employer to join or not to join or withdraw from an employer or an employee organization. Section 922 forbids anyone to coerce an applicant for employment not to join a labor organization. This is an apparent effort of the legislature to preserve the economic freedom of the toiler from the oppression of the employer. But the legislature could not have intended to suppress competition among workers. They have the same right to carry on their struggle as they have always had since the decision by this court in the Parkinson case. A part of the program of every labor group is to gain the favor of employers and the effort of any group will not be interrupted by the courts because such effort may result in the defeat of a minority or of a majority. The struggle for existence and the struggle for supremacy of labor groups, as among themselves, should continue unhindered by judicial interference so long as they maintain peace and order. Nowhere have the lawmakers suggested that an organized group of workers shall not seek to induce an employer, by peaceable means, to enter into a contract to the effect that he will employ only members of their organization or affiliated bodies. The argument is made that the success of the union's picket will require the Howard Automobile Company to violate public policy as defined by section 922. But section 923 clearly indicates that it was the employer against whom the workers are to be protected. After there declaring why negotiation between employer and employee "should result from voluntary agreement between employer and employees", it proceeds: "Therefore, it is necessary that the individual workman have full freedom of association" etc., and "that he shall be free from the interference, restraint or coercion of employers" etc. That the legislature could not have intended *333 to limit the activities of any labor union in seeking advantage over another is emphasized by the facts: (1) That the right to do so was vouchsafed by the Parkinson decision more than thirty years ago, and (2) that said sections of the Labor Code are the fruit of the effort of organized labor.
The Norris-La Guardia Act, which is a fair attempt to express the public policy of the nation in regard to labor controversies, makes provision that a labor dispute includes any controversy seeking to arrange terms or conditions of employment regardless of whether or not the disputants stand in the proximate relation of employer and employee. In Lauf v. E. G. Shinner & Co., 302 U.S. 669 [58 S.Ct. 41, 82 L.Ed. 516], the Supreme Court held that while an employer cannot coerce his employees, yet the union may compel him to do so. If then the picket line of the defendants is peaceably maintained and if its purpose is to enforce a demand of the workers upon the employer of labor, wherein lies its illegality? Certainly the right of a worker to publish his criticism, and to speak freely of an employer's attitude toward union labor will not be denied even though the legislature may attempt by statute to curb such criticism. (DeJonge v. State of Oregon, 299 U.S. 353 [57 S.Ct. 255, 81 L.Ed. 278]; Herndon v. Lowry, 301 U.S. 242 [57 S.Ct. 732, 81 L.Ed. 1066]; 14th Amendment, United States Constitution.)
If labor should be prohibited from publishing all the facts concerning employment by an employer, the worker would be deprived of rights emphatically and often declared. The assertion that defendants "conspired" to injure the employer could have no significance unless they were engaged in a criminal or unlawful enterprise. (Parkinson Co. v. Building Trades Council, supra.) The demands of a union to strengthen its forces cannot be deemed unlawful even though there be no controversy between the employer and his employees. (In re Lyons, 27 Cal.App.2d 293 [81 PaCal.2d 190].) There is no provision in the organic law which forbids the unions of organized labor from competing with unorganized workers. In the case of Senn v. Tile Layers Protective Union, 301 U.S. 468 [57 S.Ct. 857, 81 L.Ed. 1229], Justice Brandeis said: "Earning a living is dependent upon securing work; and securing work is dependent upon public favor. To win the patronage of the public, each may strive *334 by legal means. Exercising its police power, Wisconsin has declared that in a labor dispute peaceful picketing and truthful publicity are means legal for unions. It is true that disclosure of the facts of the labor dispute may be annoying to Senn even if the method and means employed in giving publicity are inherently unobjectionable. But such annoyance, like that often suffered from publicity in other connections, is not an invasion of the liberty guaranteed by the Constitution. ... It is true that disclosure of the facts may prevent Senn from securing jobs which he hoped to get. But the hope for a job is not property guaranteed by the Constitution. The diversion of it to a competitor is not an invasion of a constitutional right."
Also, in the case of Nann v. Raimist, 255 N.Y. 307 [174 N.E. 690, 73 A.L.R. 669], it was declared by Justice Cardozo that the legality of defendant's conduct is not affected by the fact that no strike was in progress in any of the plaintiff's shops; that if the defendant believed in good faith that the policy pursued by plaintiff and by the shops united with the plaintiff was hostile to the interests of organized labor and was likely, if not suppressed, to lower the standards of living in the trade, defendants had the privilege by the pressure of notoriety and persuasion to bring its own policy to triumph. See Exchange Bakery & Restaurant v. Rifkin, 245 N.Y. 260 [157 N.E. 130], where it was held that in order that a union may prevail, it may call a strike and picket the premises of an employer with the intent of inducing him to employ only union labor. "Picketing without a strike is no more unlawful than a strike without picketing. Both are based upon a lawful purpose. Resulting injury is incidental and must be endured." (Ibid) If the legislature had intended to outlaw a contract between a union and an employer, obligating the employer to hire only members of the labor organization, it would have said so in terms unmistakable, for the subject has been aired in the American courts for more than a generation and has long been the theme of the publicist and the editor. Men engaged in the serious undertaking of enacting laws for a great commonwealth could not have overlooked a matter of such universal importance. On the contrary, the lawmakers have afforded to organized labor every reasonable device for the conduct *335 of its campaign to effectuate its plan of procuring employment for union members to the exclusion of other workers. For illustration, section 1011 of the Labor Code inhibits an employer from misrepresenting the kind of labor in his employ. Section 1110 upholds an agreement between two or more persons to do or not to do any act in furtherance of any trade dispute between employers and employees.
In the Parkinson case, supra, the entire court agreed that the attempt by defendant to secure a closed union shop was a legitimate objective. Therefore, since there is no statutory inhibition against the contract which defendant union seeks to have defendant automobile company enter into with said union, and since this court has already held that such a contract is a legitimate objective, for this court now to deprive an organized group of workers from procuring the execution of such a contract, where they are using only peaceful persuasion to achieve their purpose would render the court a law-making body instead of a law-interpreting tribunal.
CURTIS, J.,
Dissenting.
I dissent.
This is an action by certain individuals, thirty-two in number, employed as salesmen by defendant Howard Automobile Company, to enjoin defendant Retail Automobile Salesmen's Local Union, No. 1067, its members, and those acting on its behalf from picketing the place of business of the Howard Automobile Company and advertising the business as unfair to labor. A demurrer interposed by the defendants to the joint complaint filed by the plaintiffs was sustained with leave to amend by the trial court, and the temporary restraining order theretofore issued was dissolved and the application for a temporary injunction was denied. This appeal is taken from the order dissolving the temporary restraining order and denying the application for a temporary injunction.
As the case was decided upon the sustaining of a demurrer, by virtue of which fact the allegations of the complaint are necessarily accepted as true, a brief resume of the complaint is necessary. The pertinent facts therein alleged are as follows:
(1) Plaintiffs are all salesmen of the Howard Automobile Company, a corporation engaged in the auto selling and repairing business in San Francisco and elsewhere and are all satisfied with the terms, pay, hours of work, conditions *336 of employment, and desire to continue therein, and the company is satisfied with the terms, pay, hours and conditions of employment and with plaintiffs' services and desires to continue plaintiffs in its employ.
(2) In May of 1937, at San Francisco, plaintiffs then and there all of the salesmen of said company organized and designated three of their number a committee to negotiate rates of pay, wages, hours of labor and other conditions of employment with the company in accordance with the terms of the Wagner Act and said committee notified the company and the Regional Director of the Labor Relations Board of their choice of a bargaining representative and the company then and there recognized the committee as the bargaining agent for the entire sales force, to wit, all of the plaintiffs.
(3) No labor dispute of any kind, nor any controversy concerning terms or conditions of employment or concerning the association or representation of persons in negotiating, fixing, maintaining, changing or seeking to arrange terms or conditions of employment, existed between any of the plaintiffs and the company.
(4) None of the plaintiffs has been or now is engaged in any dispute with the company concerning wages, hours, conditions of labor or otherwise. None has been or now is on strike. There has been and now is no discussion or negotiations concerning terms of employment, hours of labor, wages or working conditions. None of the plaintiffs is a member of any of the defendant unions and none of them has any desire or has signified any desire or intention of becoming a member of any of the defendant unions. None of the plaintiffs has been or is now a party to any agreement with any of the defendant unions, or any other labor organziation, and none of the plaintiffs has ever requested any of the defendant unions to act or negotiate for any of the plaintiffs as a permanent agency or otherwise.
(5) All of the defendant unions have rules, regulations, by-laws and agreements enforceable by fines and penalties binding upon their respective members not to pass picket lines or to do business with plants and firms under picket, and said company employs members of all of said associations. The placing of a picket on the company's plant will, pursuant to such by- laws, rules, regulations and agreements, *337 compel all of the members of each of the unions to abstain from visiting, delivering goods to, accepting goods from, or transacting business with or working for said company.
(6) The Retail Automobile Salesmen's Local Union, No. 1067, has solicited plaintiffs to join the union, but plaintiffs have refused to do so and in consequence of plaintiffs' refusal, the said union has placed a picket around the place of business of the company, the members thereof congregated there in numbers and announced their intention to maintain the picket until the company compels plaintiffs to join said union or discharge them.
(7) The continuance of the picket on the company's plant has closed it down, stopping all work and destroying its business and the company will, unless the defendant union is restrained, discharge all of plaintiffs or require them to join the union. None of the pickets is an employee of the defendant Howard Automobile Company. The Labor Council has approved the picket and has appointed a Board of Strategy to devise ways and means of exerting pressure and coercion on the company and plaintiffs to sign a contract with and join the union, and has placed the company on the "We don't patronize" list.
At the outset, in order to prevent "irrelevant sparring with ghosts" as one of the attorneys herein aptly phrased it, it is essential that we state the issue exactly, definitely and clearly eliminate from consideration all extraneous matters, and avoid the pitfall of assuming to be facts certain assumptions which are wholly unwarranted. It should first be noted that plaintiffs salesmen employees are not unorganized, but are a group of organized employees who have selected three of their number to deal with their employer as their representatives to negotiate rates of pay, wages, hours of labor, and other conditions of employment with the company.
And for the purpose of presenting a precise picture of the situation, it should be pointed out that the unions of craft workers did not strike in order to compel the unionization of the entire Howard plant, but that their refusal to work was merely occasioned by the existence of the picket line which union rules forbade them, under severe penalties, to cross.
It is also to be borne in mind that none of the plaintiffs salesmen is a member of the Retail Salesmen's Local Union, *338 No. 1067, and that the defendant Retail Salesmen's Local Union, No. 1067, is a total stranger seeking to compel the plaintiffs salesmen employees to join its organization and select it as its representative to negotiate with their employer.
It is also highly important to note that there is absolutely nothing in the pleadings to warrant any assumption that the present organization of the plaintiffs employees is what is called a "company union" or is dominated by the employer. Certainly the allegation that the relations between employer and employees are harmonious and no dispute exists between them with reference to wages, salaries, or hours of employment does not afford any basis whatever for such an assumption. Much of the arguments seeking to justify the union's action in this controversy is based upon the fundamental error of assuming that the present organization is a "company union". As before stated, there is not one iota of reason for such an assumption, and any arguments based thereon are, of course, spurious.
It should also be stated that there are no allegations in the complaint charging the pickets with violence, physical coercion, or intimidation, and hence it must be taken for granted that such picketing has been peaceful.
The sole question involved in this case was phrased by the trial judge as follows: "Is it lawful for a labor union by peaceful picketing to attempt to induce an employer to employ only persons who are members of the picketing union when there is no strike and the employees of the picketed employer are satisfied with their employment and do not desire to join the union?" In one of respondents' briefs, it is stated that the activities of the union are not directed toward the employer, and are not directed toward an effort to induce the employer to do anything, but are directed solely toward "inducing and persuading" the salesmen, who have refused to join the union, to join the union. However, facing facts squarely, the conclusion is inescapable that the activities in which the Retail Automobile Salesmen's Local Union, No. 1067, are engaged are directed toward a coercion of the employer, Howard Automobile Company, to compel the members of its automobile sales force to join the Retail Automobile Salesmen's Local Union, No. 1067. Any other statement of the purpose of such activities is merely an evasion of the *339 issue. The question may, therefore, be more correctly stated as follows: Is it lawful for a labor union to picket an employer's place of business for the purpose of compelling the employer to coerce his employees to join the picketing union, when the employees are definitely opposed to joining said union, and there is no controversy between the employer and those employees?
While sections 921 and 923 of the Labor Code remain on the statute books in California, the answer, in our opinion, must be in the negative. Section 921 of the Labor Code provides:
"Every promise made after August 21, 1933, between any employee or prospective employee and his employer, prospective employer or any other person is contrary to public policy if either party thereto promises any of the following:"
"(a) To join or to remain a member of a labor organization or to join or remain a member of an employer organization,"
"(b) Not to join or not to remain a member of a labor organization or of an employer organization,"
"(c) To withdraw from an employment relation in the event that he joins or remains a member of a labor organization or of an employer organization."
"Such promise shall not afford any basis for granting of legal or equitable relief by any court against a party to such promise, or against any other persons who advise, urge, or induce, without fraud or violence or threat thereof, either party thereto to act in disregard of such promise."
Section 923 of the Labor Code furnished the rule of construction for the interpretation of section 921 and the other two sections which comprise this chapter of the Labor Code. Said section is as follows: "In the interpretation and application of this chapter, the public policy of this state is declared as follows:"
"Negotiations of terms and conditions of labor should result from voluntary agreement between employer and employees. Governmental authority has permitted and encouraged employers to organize in the corporate and other forms of capital control. In dealing with such employers, the individual unorganized worker is helpless to exercise actual liberty of contract and to protect his freedom of labor, and thereby to obtain acceptable terms and conditions of employment. Therefore it is necessary that the individual workman *340 have full freedom of association, self-organization, and designation of representatives of his own choosing, to negotiate the terms and conditions of his employment, and that he shall be free from the interference, restraint, or coercion of employers of labor, or their agents, in the designation of such representatives or in self-organization or in other concerted activities for the purpose of collective bargaining or other mutual aid or protection."
Section 921 (a) of the Labor Code plainly declares a promise by an employee to an employer to join a labor organization or to remain a member of a labor organization to be contrary to public policy. This being so, a boycott or strike or picketing by a labor organization to coerce an employer into an agreement to procure such promise from present and prospective employees becomes an act for the furtherance of an illegal purpose, and therefore properly enjoinable.
Two major arguments are advanced in opposition to this conclusion. The first argument is as follows: Section 921 (a) does not refer to a legitimate bona fide trade union but only to the so-called "company union". Therefore, the activity of the union herein being directed toward the securing from an employer of a promise from the employer to compel his employees to join the legitimate bona fide labor organization of respondent union does not come within the ban of said section and its activity in that regard cannot be curtailed. This argument is predicated upon the theory that said section is ambiguous and that by an examination of the labor struggle it becomes apparent that the purpose and intent of the legislature was directed solely to increasing the bargaining power of employees with their employers, and hence said section cannot possibly mean that closed shop agreements are unlawful. It is pointed out that for years the so-called "yellow-dog" contract was a source of conflict carried on with great bitterness by organized labor against certain employers. By such an agreement an employee might agree under coercion from his employer not to join a labor union, and such an agreement was held to be binding on the employees. (Hitchman Coal & Coke Co. v. Mitchell, 245 U.S. 229 [38 S.Ct. 65, 62 L.Ed. 260, Ann. Cas. 1918B, 461, L.R.A. 1918C, 497].) Later employers, being unable to secure such contracts because of the growth of the power of organized labor, sought the same result, domination of their *341 employees, by setting up and organizing "company unions" which they required their employees to join and over which they kept supervision and control. It is therefore argued that section 921 of the Labor Code was passed solely for the benefit of organized labor and was intended to eliminate both contracts on the part of the employees not to join an organized labor union and contracts to join a "company union". In other words, it is argued that subsections (b) and (c) of this section are directed toward rendering the so-called "yellow-dog" contracts illegal and void, and subsection (a) is directed toward rendering illegal and void, promises secured by employers from their employees to affiliate with "company unions".
We find ourselves unable to subscribe to this argument for three reasons: First: In our opinion the section is not ambiguous, but is plain and explicit and means what on its face it purports to mean. Therefore, no good reason exists for delving into the history of labor disputes in order to give an interpretation to a section contrary to the plain language employed therein. Second: The construction sought by respondents requires that the term, "labor organization" used in subsection (a) of section 921, be limited to and closely defined as "company union" to the exclusion of legitimate bona fide trade organizations, whereas the same term, "labor organization" used in subsection (b) of the section, is to be defined as the all-inclusive bona fide trade union. Obviously the legislature in using the phrase "labor organization," in several portions of the same section of the code intended that it should have a uniform meaning. To hold the same term within the same section to mean two contrary things seems wholly unreasonable. Such an interpretation does such violence to the ordinary rules of construction as to preclude our acceptance of said argument. Third: The history of the California legislature during the years, 1937, in which the Labor Code was adopted, and in 1939, clearly shows that the legislature, by its action in turning down certain bills proposed by partisans of organized labor, refused to go the lengths claimed here. In 1937, four labor bills were introduced and defeated. In one of these bills, the terms, "labor organization" and "company union", were separately defined. Undoubtedly the legislature had the distinction of these two types of organization in mind, and had it desired or intended *342 to limit the definition of subsection (a) of section 921 to "company unions", it would have been very simple for it to have so specified. In 1939, four assembly bills and two senate bills were proposed, but did not pass. One of these bills attempted to repeal sections 921 and 923 of the Labor Code, and the other five attempted to add a proviso to the effect that nothing contained in said section 921 should be construed as preventing a "bona fide" labor organization from entering into a contract with an employer whereby the employer agreed to employ only members of the said labor organization and to discharge employees, employed after such contract became effective, who did not belong to the said labor organization. In April, 1939, the District Court of Appeal, First District, Division Two, filed its opinion interpreting sections 921 and 923 of the Labor Code as rendering unlawful and therefore enjoinable peaceful picketing directed toward the securing of a closed shop contract with the employer, Howard Automobile Company, covering its salesmen employees, and although the legislature did not adjourn until June, none of these bills which would have given to these code sections the effect claimed for them by the labor union was passed. This clearly demonstrates, we think, that the legislature was in accord with the interpretation given to these sections by the District Court of Appeal, and did not intend that the sections have the construction contended for by the respondent labor union. The fact that the bills were defeated, in our opinion, shows that the legislature definitely repudiated the idea of carrying out labor's demands in their totality, and instead insisted upon declaring the public policy of the state to be freedom of interference for the individual employee from both employer and labor organization domination.
In brief, we are satisfied that said section 921 is not ambiguous, that it means what on its face it plainly purports to mean. The attorney for the labor union states in his brief that, "The whole subject of labor legislation must ultimately be dealt with by the legislature. Its failure to enact appropriate legislation at its last session is no reason now to place an impossible burden on the judiciary." This concession that the legislature failed to pass "appropriate legislation" clearly indicated that organized labor is seeking to obtain an advantage, by judicial construction, which it failed to win in the legislative halls. No doubt when, and if, "appropriate legislation" is passed, this court will be ready to *343 interpret it to carry out the expressed intention of the legislature. It is, however, outside the scope of our duty and our power to interpret present legislation to carry out the purposes of some possible future legislation.
The second argument on which emphasis is placed by the respondents is that the Labor Code sections are directed solely against promises between an employee and his employer, whereas the union-shop contract is a promise by an employer to a union. Respondents assert that section 921 of the Labor Code prohibits contracts between an employer and an employee to join or to remain a member of the labor organization, but not a contract between an employer and a labor organization that all employees of the employer shall be or become a member of a labor organization. In other words, it is respondents' position that it may be unlawful for an employer to coerce an individual employee to join or not to join a labor organization, but it is proper and permissible for the employer to coerce his employees collectively. We think such argument accepts the shadow for the substance. When an employer makes a contract with a union that he will keep no one in his employ except union members, it becomes an implied term and condition of the contract of employment of every individual employee working for him that said individual shall become and remain a member of the union. Such term and condition of employment become a promise of each employee within the prohibition of section 921 of the Labor Code, since section 920 of the Labor Code provides specifically that "promise" includes "promise, undertaking, contract, or agreement, whether written, oral, express or implied".
We do not find any merit in the theory propounded that collective bargaining contracts are not between employees and the employer but are between a labor organization as a legal entity and the employer, and therefore the prohibitions of section 921 have no reference to such contracts. There can be no escape from the conclusion that the union, whether a legal entity or not, is an agent for the employees in the execution of the contract of employment and is, therefore, acting in behalf of and for the employees, and its contract is their contract.
Another argument is advanced by respondents that said contracts are not unlawful, but merely unenforceable in law and equity, and, therefore, any coercive attempts by a labor *344 union to compel such agreements are not illegal per se and cannot be enjoined. This argument fails to take into consideration the express words of the statute. The statute definitely and expressly provides that such a contract is "contrary to public policy". This fact, in view of section 1667 of the Civil Code which declares contracts contrary to public policy to be unlawful, can mean nothing else than that the contracts prescribed by section 921 of the Labor Code are unlawful, and no amount of ingenious argument can dispel the logic of this conclusion.
The conclusion that section 921 of the Labor Code prohibits the coercion of employees by union activity for the purpose of securing a closed shop is, we think, fortified by the express provisions of section 923 of the Labor Code which declares the public policy of the state with reference to the interpretation and application of section 921. This section states that "it is necessary that the individual workman have full freedom of association, self-organization, and designation of representatives of his own choosing, to negotiate the terms and conditions of his employment, and that he shall be free from the interference, restraint, or coercion of employers of labor, or their agents, in the designation of such representatives, or in self-organization, or in other concerted activities for the purpose of collective bargaining or other mutual aid or protection." How is it possible in the same breath to reasonably say that an individual workman shall have full freedom of association, self-organization, and designation of representatives of his own choosing, and to say that it is legal and legitimate for any organization by destruction of an employer's business to force the individual workman to join a particular group and assent to a particular representative despite the fact that such workman is bending every effort, even to the extent of appeal for aid to this court, to prevent such coercion? By what process of reasoning, can it be said that the individual workman "shall be free from the interference, restraint, or coercion of" his employer, in the designation of a representative, or in self-organization and at the same time that it is perfectly all right for an employer to compel his employees to join a particular union upon threat of discharge and loss of job? The fact that the employer in his turn has been coerced by the labor organization to take such action, does not make such action any the less onerous *345 to the individual workingman, nor widen his freedom of action in the matter. The idea of freedom for the employee from interference in association and self-organization and the idea of coercion by the union through the employer to secure a closed shop are on their face opposite and antagonistic. One or the other must be dismissed. In view of the fact that the former idea, of freedom of the employee from interference, is embodied in an express statute of the state as an expression of the public policy of the state, and the other is merely a proposition argued by the respondents, there can be no doubt as to which should be given effect by this court.
We have no hesitancy in conceding that prior to the enactment of sections 921 and 923 of the Labor Code strikes, boycotts, both primary and secondary, and pickets were held to be legal in California, and courts refused to enjoin such union activities. (Parkinson Co. v. Building Trades Council, 154 Cal. 581 [98 P. 1027, 16 Ann. Cas. 1165, 21 L.R.A. (N. S.) 550]; Pierce v. Stablemen's Union, 156 Cal. 70 [103 P. 324]; Southern California Iron & Steel v. Amalgamated Assn., 186 Cal. 604 [200 P. 1]; Lisse v. Local Union, 2 Cal.2d 312 [41 PaCal.2d 314]; In re Lyons, 27 Cal.App.2d 182 [80 PaCal.2d 745].) It will also be conceded that in the case of Parkinson Co. v. Building Trades Council, supra, it was held that union men were within their rights in refusing to work for an employer who refused to sign an agreement, one of the terms of which was that said employer would only employ union men. However, at the time of that decision both an agreement not to join or not to remain a member of a labor organization (so-called "yellow-dog contract") and a promise to employ only union labor or remain a member of a labor organization (the closed union shop agreement) were legal. This situation has been reversed by the express terms of sections 921 and 923 of the Labor Code, and since the enactment of these sections, these decisions are no longer controlling.
It may also be conceded that certain decisions of the United States Supreme Court, both in interpreting federal legislation with reference to labor problems and state statutes based on such federal legislation, have given official sanction to picketing for the unionization of a nonunion shop. (Senn v. Tile Layers Protective Union, 301 U.S. 468 [57 S.Ct. 857, 81 L.Ed. 1229]; Lauf v. E. G. Shinner & Co., 303 U.S. *346 323 [58 S.Ct. 578, 82 L.Ed. 872].) These cases have been cited as persuasive in their reasoning of the interpretation to be given to sections 921 and 923 of the California Labor Code. In order to understand the inapplicability of such authorities, certain underlying facts with reference to the similarity and dissimilarity of the California Labor Code with federal legislation, such as the National Labor Relations Act, 29 U.S.C.A., sec. 151 et seq.; 49 Stats. 449, and the Norris-La Guardia Act, 29 U.S.C.A., sec. 101 et seq.; 47 Stats. 70, and other state statutes, such as the Wisconsin Labor Code and the Oregon Act, should be outlined. A mere statement of the dissimilarity will suffice to show why the federal cases, cited by respondents in support of their contention that peaceful picketing for the purpose of the unionization of a plant and the securing of a closed shop is legitimate union activity, are not only not controlling in this jurisdiction but can have no persuasive effect by virtue of their reasoning. The major fundamental difference is that the California legislature definitely and deliberately rejected labor bills patterned on the Norris-La Guardia Act. The main feature of the Norris-La Guardia Act is the fact that it defines "labor dispute" to involve practically any dispute in the labor field regardless of whether or not the disputants stand in the relation of employer and employee, and forbids (except under certain limited conditions) the issuance of an injunction by a federal court in any case involving or growing out of a labor dispute. Clearly a dispute by an employer with an outside union over the unionization of his shop comes within such definition of "labor dispute". Hence in interpreting said act, or state acts which were practically identical, the United States Supreme Court was justified in holding that an injunction could not be issued in a controversy involving an employer and a labor union over the question of a closed shop. (Senn v. Tile Layers Union, supra; Lauf v. E. G. Shinner & Co., supra.) Both of these cases involved the interpretation by the State Supreme Court of Wisconsin of a statute similar to the Norris-La Guardia Act, which defined a "labor dispute" as "any controversy concerning terms or conditions of employment, or concerning the association or representation of persons in negotiating, fixing, maintaining, changing, or seeking to arrange terms or conditions of employment, or concerning employment relations, or any other controversy arising out of *347 the respective interests of employer and employee, regardless of whether or not the disputants stand in the proximate relation of employer and employee". In both these cases the United States Supreme Court held that it was bound by the decision of the Supreme Court of the State of Wisconsin in its decision that the facts presented a controversy within the definition of "labor dispute" contained in the Wisconsin Act. Both the Norris-La Guardia Act and the Wisconsin Act contain a statement of public policy very similar to the declaration of public policy contained in section 923 of the Labor Code of California, to the effect that it is necessary that the individual worker "have full freedom of association, self-organization, and designation of representatives of his own choosing to negotiate the terms and conditions of his employment, and that he shall be free from interference, restraint, or coercion of employers of labor, or their agents, in the designation of such representatives, or in self-organization or in other concerted activities for the purpose of collective bargaining or other mutual aid or protection". In the case of Lauf v. E. G. Shinner & Co., 82 Fed.2d 68, the Circuit Court of Appeals, Seventh Circuit, having in mind the expressed public policy of the Wisconsin Act, gave precedence to such policy, and held that inasmuch as the union activity therein involved interfered with the individual workingman's freedom of association, self-organization and designation of representatives of his own choosing, such activity was unlawful and was properly enjoinable. Upon appeal to the Supreme Court of the United States, that court held that the general declaration of public policy could not narrow the definition of "labor dispute" as defined in the Norris-La Guardia Act or enlarge the federal jurisdiction to issue an injunction in cases prohibited by such act. In other words, the United States Supreme Court, merely by saying so, gave precedence to the express provisions of the Norris-La Guardia Act defining "labor dispute" over the provision setting forth generally the public policy of said act, and held that a "labor dispute" being involved in the controversy an injunction by a federal court was not proper. Thus it is seen that the broad definition of "labor dispute" has colored and controlled the decisions of the United States Supreme Court which hold that an injunction may not be sought and secured in a federal court to enjoin union activities directed against *348 an employer having as its purpose the securing of a closed shop.
California, by refusing to enact in its own legislation the definition of "labor dispute" which defines such dispute to include any and every possible controversy in which a labor question can be conceived, must be held to have rejected such definition and refused to sanction the taking away from our courts of power to issue injunctions in any and all disputes in which a labor question so broadly defined is involved, thus affirming the existing law in which "labor dispute" was defined as a controversy in which the disputants stood in the relation of employer and employee.
Therefore, while it may readily be conceded that certain decisions of the United States Supreme Court have given official sanction to picketing for the unionization of a closed shop under the broad definition of "labor dispute" as defined in the Norris-La Guardia Act, and kindred state statutes, it is readily apparent that such decisions, in the absence of such a definition in the California Labor Code (which was expressly rejected by the California legislature), can have no weight in determining what effect this court should give to sections 921 and 923 of the California Labor Code. Moreover it is worthy of note that in 1939 both Wisconsin and Oregon reversed their position and redefined "labor dispute" in much narrower terms. (Wisconsin, Laws of 1939, chap. 25; Oregon, Laws of 1939, chap. 2.)
Likewise we have no hesitancy in admitting that the principle that a closed union shop is a proper object of concerted action by unions has been recognized in some other jurisdictions. It should also be pointed out, however, that other states have rejected this principle and in well expressed opinions have given their reasons for this rejection. (See Safeway Stores v. Clerks' Retail Union, 184 Wash. 322 [51 PaCal.2d 372]; Swing v. American Federation of Labor, 372 Ill. 91 [22 N.E. (2d) 857]; Fornili v. Auto Mechanics Union, 200 Wash. 283 [93 PaCal.2d 422]; Roth v. Local Union, (Ind.) 24 N.E. (2d) 280; Meadowmoore Dairies, Inc., v. Milk Wagon Drivers Union, 371 Ill. 377 [21 N.E. (2d) 308]; Stalban v. Friedman, 171 Misc. 106 [11 N.Y. SupP.2d 343]; Hotel, Restaurant and Soda Fountain Employees Local Union No. 181 v. Miller, 272 Ky. 466 [114 S.W. (2d) 501].) In the case of Hotel, Restaurant and Soda Fountain Employees Local Union No. 181 v. Miller, supra, the employer Miller sought and secured an *349 injunction against the picketing activities of a union, affiliated with the American Federation of Labor, which was attempting by such activities to secure a closed shop agreement from him, after his employees had refused to join the union. The language employed therein is, we think, pertinent to the instant case: "Labor has become highly organized with central federated unions and active locals of great influence and power. Such is the appellant. But to say that in the matter of bargaining with employers for the advancement of the causes of labor these organizations are to be given exclusive recognition by the courts, it seems to us, would destroy the independence of any group of workers who may desire to choose for themselves whom they will have as their agents to treat with their employer, and violate their liberty of action in contracting with their employer. This right of self-organization for the purposes of securing redress of grievances and the protection from economic abuse and other impositions is recognized by contemporary legislation and judicial decree. It is current history that the Railway Labor Act of 1926, c. 347, 44 Stat. 577, with the amendment of 1934, c. 691, 48 Stat. 1185, 45 U.S.C.A., sections 151-163, and the National Labor Relations Act of 1935, commonly called the Wagner Act, 49 Stat. 449, c. 372, 29 U.S.C.A. sec. 151 et seq., were enacted by Congress at the instance and for the benefit of organized labor. Those laws, obviously, have no relation or application to the case at bar. But they and the opinions of the Supreme Court affirming their constitutionality and interpreting their provisions may be regarded as an authoritative expression of modern economic philosophy. The Wagner Act itself declared it to be the policy of the United States to encourage the practice and procedure of collective bargaining and to protect 'the exercise by workers of full freedom of association, self- organization, and designation of representatives of their own choosing, for the purpose of negotiating the terms and conditions of their employment or other mutual aid or protection'. Section 1, 29 U.S.C.A. section 151."
"As stated in National Labor Relations Board v. Jones & Laughlin Steel Corporation (301 U.S. 1 [57 S.Ct. 615, 81 L.Ed. 893, 108 A.L.R. 1352]), supra, the Wagner Act, 29 U.S.C.A., sec. 151 et seq., imposes the duty upon an employer coming within its reach to confer and negotiate with *350 such authorized representatives of his employees for the purpose of settling a labor dispute. Though there is no law making negotiations by the appellee Miller with any group obligatory, or imposing a duty upon him to deal with either the appellants or the independent organization, he has chosen to deal and to agree with the latter, and all parties are satisfied. By what right can it be said that a rival organization--even though extensive in its reach and strong in its operation--should be given sole recognition by the employer or by the courts to speak for and to bind those who do not belong to it and do not wish to belong to it?"
Finally it is urged that if sections 921 and 923, as interpreted, prohibit closed shop contracts, they are unconstitutional. The first ground suggested is that they are unconstitutional as a deprivation of freedom of contract. There is little, if any, merit in this contention. It is well recognized that the freedom of contract does not guarantee to a citizen the right to contract without abridgement or interference by any legislative authority. Such right is subject to control and regulation under the police power by means of legislation reasonably adapted to the protection of the public health, safety, morals and general welfare. (West Coast Hotel Co. v. Parrish, 300 U.S. 379 [57 S.Ct. 578, 81 L.Ed. 703, 108 A.L.R. 1330], wherein the United States Supreme Court upheld the statute of Washington establishing a minimum wage law for women.) That case quoted with approval the following statement of this rule: "It was recognized in the cases cited ... that freedom of contract is a qualified and not an absolute right. There is no absolute freedom to do as one wills or to contract as one chooses. The guaranty of liberty does not withdraw from legislative supervision that wide department of activity which consists of the making of contracts, or deny to government the power to provide restrictive safeguards. Liberty implies the absence of arbitrary restraint, not immunity from reasonable regulations and prohibitions imposed in the interests of the community. (Chicago, B. & Q. R. Co. v. McGuire, 219 U.S. 549, 567 [31 S.Ct. 259, 55 L.Ed. 328].)" Much of the legislation proposed and promoted by organized labor such as the Norris-La Guardia Act and the National Labor Relations Act could be equally well challenged on this ground. *351
To the argument that this legislation is discriminatory in that legislation in other fields of industrial enterprise, such as contracts for the exclusive handling and sale of certain products are not frowned upon, it may be said that there is clearly a difference between exclusive sale contracts for the sale of Buick automobiles, for instance, and a contract for the exclusive employment of union men, even though both contracts be secured by economic competition. In the former case, the subject-matter of the contract is inanimate and possesses no rights which need be given consideration. There are in reality only two parties to the contract. In the latter case, in a contract between an employer and a labor union with reference to employment conditions, there is the third party, the employee, who has definite rights which must not be ignored. It is the rights of these employees which furnish the justification for the legislation.
Equally without merit is the contention that this legislation deprives the unions of their constitutional right to strike. The proposition that an individual, in the absence of a contract, can work or refuse to work as he sees fit must be distinguished from the right of the union to call a strike or the right of individuals, collectively or by agreement to refuse to work. The right to strike is not absolute for if the strike is for an unlawful purpose that strike itself is unlawful (Dorchy v. Kansas, 272 U.S. 306 [47 S.Ct. 86, 71 L.Ed. 248]). Moreover in the instant case the appellants are not seeking an injunction against a strike as it is one of their contentions that a strike is not in existence at the plant and that the other workers at the Howard plant have not gone on a strike but have simply refused to pass the picket line which was established by the respondent labor union. In one of their briefs, appellants expressly disclaim any desire to secure an injunction against a strike.
Neither can we subscribe to the argument that the construction which we have put upon sections 921 and 923 of the Labor Code deprives the union of the right of free speech. This contention rests upon the proposition that picketing in and of itself is but the right of free speech and that the right to picket is no more than an exercise of free speech. However, as pointed out in an article by Charles O. Gregory, professor of law, University of Chicago Law School, which was published in the American Bar Association Journal, volume 26, *352 page 709 (September, 1940), a fundamental fallacy exists in the denomination of peaceful picketing as an expression of free speech and identification of peaceful picketing with business advertising. In said article it is stated that freedom of speech historically deals with the unrestricted dissemination and communication of ideas, chiefly concerning political and economic issues and that "our system of government is committed to the faith that the good sense of our populace is the best defense against the effusions of crackpots or against the more rigorous claims and propaganda of disciples representing undesirable political or social folkways". It is pointed out that in the United States labor organizations have always been allowed to talk, no effort ever having been made to prevent them from discussing their programs as freely as they choose. The article then points out that peaceful picketing resting as it does, not on the dissemination of ideas but on its coercive effect, is not entitled to the constitutional protection and for the sake of the welfare of our country private group pressure should not be removed from the sphere of legislative regulation. The thought that peaceful picketing may not correctly be deemed to be merely an expression of free speech is well stated in the following quotation from said well-reasoned article:
"The claim that such coercive union practices are justifiable as constitutional freedom of speech and are merely the exercise of ordinary civil rights available to all is a perversion of an American ideal which betrays an odd understanding of one of this country's most precious heritages. ... Now if freedom of speech is to prove a valuable social asset, it will be because unrestricted expression educates and convinces others intellectually. It is submitted that peaceful picketing is not an argument intended to achieve an intellectual conquest. It is a type of coercion. The only intellectual conviction to which it leads is the understanding that if the picketed enterprise does not give in, or if patrons or applicants for jobs do not cease dealing with him, they will all eventually wish they had."
"True liberals in this country no longer look askance at economic compulsion. But to call such coercion constitutionally guaranteed freedom of speech, thereby placing it beyond the reach of regulatory legislation deemed practicable by the majority seems ridiculous policy and sheer misunderstanding of the concept under discussion. Let the unions *353 employ all manner of persuasions (as contrasted to coercion) and call that freedom of speech. But when they insist upon 'expressing' themselves where everyone knows that their 'arguments' win, not because of any intellectual worth but chiefly because of annoyance and fear, they strain the concept beyond all sensible meaning. ..."
"Unless we wish to live in a society where all enterprise and all social activity, however private, is subjected to the coercive influence of annoyance and fear created by some conflicting group interest or prejudice, we had best save for our legislature the means of effective regulation of private group pressures which the founding fathers no doubt intended to include in the Constitution."
In the instant case by reason of the fact that no member of a union affiliated with the American Federation of Labor will go through a picket line thrown about his place of employment by another union also affiliated with the American Federation of Labor, the picketing has resulted in a complete shutdown of the employer's place of business. When picketing has this coercive effect, it is clearly not merely an expression of free speech and cannot correctly base its claim to a right to so picket upon the constitutional guarantee of free speech.
Throughout the discussion of respondents is the underlying thesis that its actions in this particular have been motivated by the desire to further the best interests of workingmen in general and to promote a higher social order, and in this regard it insists that its actions are justified in the instant case upon the ground that a closed shop is an important means of maintaining the combined bargaining power of the workers. Assuming that closed shops are for the best interests of workingmen in their negotiations with their employers, as their bargaining power is greater, nevertheless, it would appear that there are certain fundamental rights, important to workingmen as individuals, which are so important as to outweigh any advantage of a closed shop procured by coercive activities. One of these rights is the right of an individual to ally himself with a group of his own seeking, and to select a representative for negotiations with his employer in whom he has faith and confidence. To have forced upon him membership in an association to which he is antagonistic, and to have imposed upon him as a representative, an agency which he does not desire, is so violative of his *354 freedom of action and his liberty as an individual as to need no apology for the defense of these rights, and to justify the enactment by the legislature of a statute intended to preserve these rights to him. We cannot but believe that the rights of an individual as a citizen, are as highly important to him as his rights as a member of a social class, and should be as carefully preserved.
Nothing herein said can or should be construed as antagonistic to the principle of collective bargaining which has come to play an important part in our industrial life. However, we are convinced that the growth of the labor union has been based upon the principle of voluntary association of workers and not upon the domination of one group of workers over another group by coercion, and that insistence upon such voluntary association will in the long run work to the benefit rather than the detriment of organized labor.
Moreover, we can see no escape from the industrial war with its resulting injury to business and to individual workingmen between two or more warring factions of organized labor, as for instance, unions affiliated with the American Federation of Labor and the Congress of Industrial Organization unless the individual worker be permitted to choose the particular group with which he wishes to affiliate, and that his right to do so be protected and upheld. (Crosby v. Rath, 136 Ohio St. 352 [25 N.E. (2d) 934].)
In addition to the foregoing discussion with reference to the effect of the law of this state as laid down in the Labor Code, it may also be said that this same regulation provided by the federal government in the National Labor Relations Act (49 Stats. 449) should apply in behalf of the union of which the plaintiffs are members. It appears from the allegations of the complaint, and cannot be disputed, that the plaintiff employees are under the jurisdiction of the National Labor Relations Board. The Howard Automobile Company as their employer is engaged in interstate commerce and is likewise subject to the operation of the federal act. Under that act such an employer is forbidden to interfere in any way with the union affiliations of his employees. The employer, in this case, the Howard Automobile Company, is proscribed by the federal act from even suggesting to its employees, the plaintiffs herein, that they join or do not join a union. Yet if the judgment in this case is to stand, that company must submit to activities on the part of the defendant *355 unions, the result of which is to compel it to require its employees to join the picketing union or be discharged from their employment. If the company refuses to accede to the demand of the picketing union to violate the federal law it must suffer the loss of its business. If the company violates that law, as demanded by the picketing union, it is punishable thereunder. Such a result is not only contrary to the letter and spirit of the statutory law, but is also contrary to the "cherished judicial tradition embodying the basic concepts of fair play". (Morgan v. United States, 304 U.S. 1, 22 [58 S.Ct. 773, 778, 999, 82 L.Ed. 1129].) Such an interpretation placed on the law makes of it a weapon of coercion and intimidation to be wielded at the whim and caprice of a group not possessed of legislative authority and not subject to any legal control or restraint.
Furthermore, the plaintiff employees have the right of self-organization guaranteed to them by the federal act. (National Labor Relations Bd. v. Swank Products, 108 Fed.2d 872, 874; National Labor Relations Bd. v. Sterling Electric Motors, 109 Fed.2d 194.) Section 1 of that act was designed to protect "the exercise by workers of full freedom of association, self-organization, and designation of representatives of their own choosing, for the purpose of negotiating the terms and conditions of their employment or other mutual aid or protection". As before stated, there is nothing in the record herein to indicate that the plaintiffs' union was not organized in good faith. There is nothing whatsoever in the record upon which to base such a conclusion. The right of the plaintiff employees to organize their own union and to select their own bargaining representatives is recognized, by both state and federal law.
The picketing which the plaintiff employees are here seeking to enjoin is contrary to their rights under both laws, is therefore picketing for an unlawful purpose, and as such should be subject to the injunctive processes of the courts of this state.
It is apparent that the trial court erred in sustaining the demurrer to the complaint and in dissolving the temporary restraining order.
The judgment should be reversed.
Shenk, J., concurred. *356
MARKS, J., pro tem.,
Dissenting.
I dissent.
I agree with the conclusion reached in the opinion prepared by Mr. Justice Curtis and with much of the reasoning and arguments there set forth. I believe that the concession that the picketing described in the complaint can be classified as "peaceful picketing", requires further examination. While my reasoning follows closely that of Mr. Justice Curtis in most important particulars, there are certain departures and some additional reasons and authorities that I wish to particularize.
I have two points of departure from the majority opinion:
First, it was not necessary for the plaintiffs to allege that they had "organized a bona fide independent labor union". They alleged that they were all of the salesmen of the employer company and had "united and organized and designated three of their number a committee to negotiate rates of pay", etc., and that such committee had been recognized as bargaining agent for the entire sales force, being all the plaintiffs. These allegations follow the language of sections 921 and 923 of the Labor Code.
Second, the language used in the sections of the Labor Code just referred to is too simple and clear, the intent of the legislature in using that language is too plain to permit of judicial interpretation. Under such circumstances the courts must accept the language used by the legislature and give to it the usual, common and accepted meaning of the words employed. This being true, there is no room for judicial interpretation or speculation as to what the framers of the measure might have intended to accomplish by the legislation. The intent is clear from the act. Amendment of the act should be left to the legislature. It should not be accomplished by judicial legislation.
In considering these questions it should be observed that the word "union" or the words "labor union" do not appear in either of the three sections. It is there declared to be the public policy of the state to protect the individual worker in his "freedom of labor, and thereby to obtain acceptable terms and conditions of employment ... that the individual workman have full freedom of association, self-organization, and designation of representatives of his own choosing, to negotiate the terms and conditions of his employment ..." *357
This statute was followed in the allegations of the complaint. The pleading therefore should be sufficient to support the conclusion that the plaintiffs had formed and joined an organization of their own forming and choosing and had selected and designated their own bargaining representatives to negotiate with the employer the terms and conditions of employment. This is all the statute requires. The courts should demand no more.
A demurrer admits the truth of the allegations of a complaint. It adds nothing to those allegations nor does it subtract from them. The question of the issuance of an injunction was also submitted on the undenied allegations of the complaint, the truth of which were thus admitted.
The complaint here contains nothing that would in the slightest degree intimate that plaintiffs' organization was company inspired or company controlled. It would be purest speculation without any foundation of allegation or inference from any allegation for me to assume that the organization was dominated by the employer. Such influence or domination by the employer is prohibited by the Labor Code and is unlawful. The presumption "that a person is innocent of crime or wrong" (sec. 1963, Code Civ. Proc.) is a sufficient answer to any such speculation should I desire to indulge in it.
I am thus brought to the point where I must conclude from the allegations of the complaint that plaintiffs voluntarily and lawfully formed their own organization and freely selected their own bargaining agents to negotiate the terms of their employment. This they had the right to do under the statute. In the lawful exercise of this right they should be protected.
The last paragraph of the first section of the National Labor Relations Act of 1935 (29 U.S.C.A., sec. 151) declares it to be the policy of the United States to eliminate certain obstructions to the free flow of commerce "by protecting the exercise by workers of full freedom of association, self- organization, and designation of representatives of their own choosing, for the purpose of negotiating the terms and conditions of their employment or other mutual aid or protection". This language is so similar to that used in section 923 of our Labor Code in declaring the public policy of California that the construction of the federal act by the Supreme Court of the *358 United States should be most persuasive here. In National Labor Relations Board v. Jones & Laughlin Steel Corp., 301 U.S. 1 [57 S.Ct. 615, 81 L.Ed. 893, 108 A.L.R. 1352], it was said:
"Thus, in its present application, the statute goes no further than to safeguard the right of employees to self-organization and to select representatives of their own choosing for collective bargaining or other mutual protection without restraint or coercion by their employer."
"That is a fundamental right. Employees have as clear a right to organize and select their representatives for lawful purposes as the respondent has to organize its business and select its own officers and agents. Discrimination and coercion to prevent the free exercise of the right of employees to self- organization and representation is a proper subject for condemnation by competent legislative authority. Long ago we stated the reason for labor organizations. ..."
"We reiterated these views when we had under consideration the Railway Labor Act of 1926, 44 Stat. 577. Fully recognizing the legality of collective action on the part of employees in order to safeguard their proper interests, we said that Congress was not required to ignore this right but could safeguard it. Congress could seek to make appropriate collective action of employees an instrument of peace rather than of strife. We said that such collective action would be a mockery if representation were made futile by interference with freedom of choice. Hence the prohibition by Congress of interference with the selection of representatives for the purpose of negotiation and conference between employers and employees, 'instead of being an invasion of the constitutional right of either, was based on the recognition of the rights of both'. (Texas N. O. R. Co. v. [Brotherhood of] Railway & S. S. Clerks, 281 U.S. 548, 50 S. Ct. 427, 74 L.Ed. 1034.) We have reasserted the same principle in sustaining the application of the Railway Labor Act as amended in 1934 (45 U.S.C.A., sec. 151 et seq.). (Virginian Railway Co. v. System Federation, No. 40, 300 U.S. 515, 57 S. Ct. 592, 81 L.Ed. 789.)"
There can be no doubt of the right of the workingman to organize for his own protection and betterment. There is the eminent authority I have quoted, besides the statute, for the conclusion that the exact form such organization takes *359 is immaterial. It may take the form of the closely knit craft union, the larger industrial union or the loose organization of workers for the purpose of selecting bargaining agents such as we have here. The statute so specifies. (Sec. 923, Labor Code.)
Having concluded that plaintiffs' organization is legal and their membership in it a matter of lawful right, it is necessary to consider the effect of the judgment on plaintiffs and their organization under the allegations of the complaint. No court should by judgment force the dissolution of a lawful organization. Neither should it force individual members to forfeit membership in one lawful organization and to join another if such action be against their will and without their consent. Freedom of individual action within lawful limits is a fundamental principle of our government.
It is alleged that plaintiffs are all the salesmen employed by their employer; that they compose all of the membership of their organization; that none of them desires to become a member of any of the defendant unions which are maintaining the picket line; that defendant Salesmen's Union has solicited each of the plaintiffs to join that union; that each plaintiff has refused to do so; that a picket line has been placed around the employer plant; that the picket line will be maintained until the employer "compels plaintiffs to join said union or discharges said plaintiffs"; that unless the picketing be restrained the employer "intends to, and ... will discharge all the plaintiffs from their said employment, or demand that plaintiffs and each of them join the said union". It is also alleged that the picket line "has had the effect of closing down the said plant, (and) stopping all work therein ...".
These allegations must be accepted as true as the demurrer admits their verity and the case was not tried on its merits. But one conclusion can be drawn from them, namely, that unless they be enjoined the defendant unions will compel plaintiffs to forfeit memberships in their own organization and to join the defendant Salesmen's Union; that as a penalty for failing so to do they will forfeit their employment; that as a condition of future employment the employer will be compelled to require plaintiffs to belong to that union,--all this against the will and without the consent of plaintiffs. *360
Thus the case resolves itself into a jurisdictional dispute between labor organizations,--that of the plaintiffs small and weak numerically and those of the defendants, strong in numbers and powerful in influence.
A fundamental concept of our government always has been and always should be the protection of the lawful rights of minorities,--protection of the weak against the strong. Mere might should never make right. Mere force of numbers should never prevail over or be allowed to destroy the lawful rights of the few. Volumes have been written both in and out of the courts supporting this thesis. It should be unnecessary to cite any supporting authority other than the words of Thomas Jefferson when he wrote:
"We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness.--That to secure these rights, Governments are instituted among Men, deriving their just powers from the consent of the governed."
In this case these principles may be violated. On the face of the record they will be violated. If this order be sustained it might not be inappropriate to ask what would happen to a numerically small craft union when confronted in a jurisdictional dispute with a stronger industrial union. There is a procedure to determine the equities under the law in such a case as this. The restraining order should be continued until the parties are put on their proof. Evidence should be taken and weighed by a court. Not until that is done should the grave questions here presented be decided with the complaint containing the allegations presenting these serious problems.
Also it might not be inappropriate to ask what is to become of our constitutional guarantees, both federal and state, of equal protection of the laws if plaintiffs are forced to surrender their lawful membership in their own lawful organization and take membership in a defendant union without their will and against their consent?
Is it not true, as said by the Supreme Court of the United States, in the National Labor Relations Board case, supra, "that such collective action would be a mockery if representation were made futile by interference with freedom of choice" when referring to employer interference? How much more *361 true are those same words when applied to like interference by orders of the courts, reinforced as they are by all the powers of the state?
It has been repeatedly held that the right of a man to sell his labor is a property right that is protected by the Constitution. It is also equally well settled that this right to sell his labor is limited by the language of the rule. It does not guarantee the right of a man to labor either as a union or a nonunion worker. It is merely the right to work that is guaranteed.
However, these rules should not control the decision here. While the right of plaintiffs to labor at all is involved, the immediate question is the right to force lawful members of one lawful organization of laborers to forfeit their membership in that organization and to join another lawful organization of laborers, all against their will and without their consent. If this end should be accomplished it would deny to plaintiffs and their organization the equal protection of the laws.
I have found no reported case in California even touching upon what I conceive to be the real question involved here,--the right to force members of one lawful organization of laborers to forfeit their membership in that organization and take membership in another labor organization. The question seems to be of first impression here.
The case of Greenwood v. Building Trades Council, 71 Cal.App. 159 [233 P. 823], is not even remotely related to that question. That case involved the right of Local Union No. 162 of the Sheet Metal Workers, a voluntary association, to membership and representation in the Building Trades Council of the city of Sacramento, a voluntary association,--and the collection of per capita dues. The real rule applied to settle the controversy in that case is thus stated in the opinion of the District Court of Appeal:
"In 3 California Jurisprudence, 350, section 5, the rule as to membership is stated as follows: 'Membership in a voluntary association is not a right which can be gained independently and then enforced. It is rather a privilege which may be withheld, or accorded on such terms and conditions as the association sees fit to impose ...' ... We have not been cited to any authority holding that the courts have any power to enforce the admission of members; the only rule *362 which we have discovered is that which we have quoted from 3 California Jurisprudence."
A new factor has been injected into cases of this kind by the adoption of sections 921, 922 and 923 of the Labor Code and similar earlier statutes on which those sections are founded. Those statutes have been enacted recently and render earlier decisions inapplicable to the legal situation here presented. Those earlier cases can only be relied upon now for the announcement of principles which do not conflict with the public policy of California as declared in these sections.
It is clear to me that the Labor Code now declares that it is the public policy of California to permit workmen, regardless of their numbers, to freely organize for the purpose of selecting their own bargaining agents to bargain with their employer concerning the terms of their employment; that in the exercise of this right the workers must be free from domination, intimidation or coercion. The constitutionality of an enactment having such purpose and effect may not now be questioned. (See National Labor Relations Board v. Jones & Laughlin Steel Corp., supra; Senn v. Tile Layers Protective Union, Local No. 5, 301 U.S. 468 [57 S.Ct. 857, 81 L.Ed. 1229].) There are many other cases supporting this conclusion.
It is very generally held that an act lawful in itself does not become unlawful because it was prompted by a bad motive; that "he who does what the law allows cannot be a wrongdoer whatever his motive". (Union Labor Hospital Assn. v. Vance Redwood Lumber Co., 158 Cal. 551 [112 P. 886, 33 L.R.A. (N. S.) 1034].)
It is also held that in labor disputes where an act lawful in itself has as its object the accomplishment of a result prohibited by law, the act becomes unlawful. This was recognized by Mr. Justice Frankfurter when he wrote in 44 Quarterly Law Review at page 182: "The damage inflicted by combative measures of a union--the strike, the boycott, the picket--must win immunity by its purpose". That an unlawful purpose makes a strike illegal was established by the Supreme Court of the United States in Dorchy v. State of Kansas, 272 U.S. 306 [47 S.Ct. 86, 71 L.Ed. 248], where, in speaking through Mr. Justice Brandeis, it said:
"The right to carry on business--be it called liberty or property--has value. To interfere with this right without *363 just cause is unlawful. The fact that the injury was inflicted by a strike is sometimes a justification. But a strike may be illegal because of its purpose, however orderly the manner in which it is conducted." (See, also, Senn v. Tile Layers Protective Union, Local No. 5, supra; Overland Pub. Co. v. H. S. Crocker Co., 193 Cal. 109, at p. 119 [222 P. 812].)
In addition to the provisions of section 923 of the Labor Code to which we have already adverted, section 921 of that code interdicts any contract between an employer and employee "To join or to remain a member of a labor organization",--"not to join or not to remain a member of a labor organization",--"to withdraw from an employment relation in the event that he joins or remains a member of a labor organization".
A fair construction of the allegations of the complaint requires me to conclude that the picket line established by the defendant union seeks to accomplish the following results: to compel the employer to require plaintiffs to surrender membership in their organization (a reasonable inference from the allegations of the complaint); to compel plaintiffs to join and remain members of defendant Retail Automobile Salesmen's Local Union, No. 1067; or as an alternative to require plaintiffs to withdraw from their employment relationship with their employer. Each one of these purposes is made unlawful by the Labor Code. It should follow that the picket line, by seeking to accomplish unlawful results, is itself unlawful and that its maintenance should be enjoined, assuming the truth of the allegations which we must do at this stage of the proceedings.
Weight is lent to this conclusion by the cases of Texas & New Orleans Railroad Co. v. Brotherhood of Railway & Steamship Clerks, 281 U.S. 548 [50 S.Ct. 427, 74 L.Ed. 1034], and Consolidated Edison Co. v. National Labor Relations Board, 95 Fed.2d 390, where employers were enjoined from committing some of the very acts which the picket line in the instant case sought to compel the employer here to commit.
Another new and novel question unapproached in any reported California case is presented by the allegations of the complaint, namely, is the picketing there described peaceful? This question is entirely unrelated to the others I have considered and can in itself be decisive of this appeal. It revolves *364 around the question of what is peaceful picketing. Does this term only exclude acts or threats of physical injury or violence or does it also exclude conduct which amounts to mental and moral intimidation and coercion whereby the mind and will are overcome by fear of the consequences resulting from failure to yield to pressure?
It is thoroughly established and admitted that only peaceful picketing is lawful,--that picketing which is not peaceful is not lawful and should be enjoined. The authorities cited in the prevailing opinion fully sustain this rule.
The complant alleges that the defendant unions "all have rules, regulations, by-laws and agreements enforceable by fines and penalties binding on their members respectively, not to pass picket lines or to do business with plants or firms under picket; that said company employs members of each and all of said associations; that the placing of a picket on the plant of said company will, pursuant to said by-laws, rules, regulations and agreements, compel each and all the members of each and all of said associations to abstain from visiting, delivering goods to, accepting goods from, or transacting business with or working for said company". The briefs admit that all of the workmen employed in the plant except plaintiffs are members of the defendant unions. It is also alleged that "the continuance of said picket on the plant of said company has had the effect of closing down the said plant, stopping all work therein, and destroying its said business, ... None of said pickets have been or are employees of said company, on strike or otherwise." These allegations present the question I wish to consider, namely, can the picketing described in the complaint with the serious penalty to be imposed on union workmen for passing through the picket line be held to be peaceful?
Peace is often defined as the absence of any force. Force may be applied to the mind as well as to the body. The use of force may result in the lack of freedom of movement and action. This may result just as truly from coercion of the mind as restraint of the body. This court has recognized these truths and has held that mere intimidation and coercion of the mind is just as effective an application of force as is physical violence or restraint.
In Southern Cal. etc. Co. v. Amalgamated Association of Iron, Steel and Tin Workers, 186 Cal. 604, at page 611 [200 P. 1], this court said: *365
" 'Any act of boycotting, therefore, which tends to impair this constitutional right freely to labor, by means passing beyond moral suasion, and playing by intimidation upon the physical fears, is unlawful.' (See, also, Goldberg etc. Co. v. Stablemen's Union, 149 Cal. 429, [117 Am.St.Rep. 145, 9 Ann. Cas. 1219, 8 L.R.A. (N. S.) 460, 86 P. 806]; Berger v. Superior Court, 175 Cal. 719 [167 P. 143 (15 A.L.R. 373)]; Rosenberg v. Retail Clerks' Assn., 39 Cal.App. 67, [177 P. 864]; Moore v. Cooks' etc. Union, 39 Cal.App. 538, [179 P. 417]; American Steel & Wire Co. v. Wire Drawers' etc. Unions, 90 Fed. 608; Union Pacific R. R. Co. v. Ruef, 120 Fed. 102; Atchison, Topeka & S. F. Ry. Co. v. Gee, 139 Fed. 582; Kolley v. Robinson, 187 Fed. 415, [109 C.C.A. 247]; Franklin Union v. People, 220 Ill. 355, [110 Am.St.Rep. 248, 4 L.R.A. (N. S.) 1001, 77 N.E. 176]; 4 L.R.A. [N. S.] 302, note.)"
"We quote from Martin on Labor Unions, page 229: 'The use of force and violence is not necessary to make picketing unlawful. Intimidation is not limited to threats of violence or to physical injury to person or property. It has a broader signification, and there may also be a moral intimidation which is illegal. In the guise of picketing strikers may obstruct and annoy others and by insult and menacing attitude intimidate them as effectually as by physical assault.' "
The same rule was restated in Lisse v. Local Union No. 31, 2 Cal.2d 312 [41 PaCal.2d 314], as follows:
"In this regard it is held that in order to prove physical intimidation and fear it is not necessary to show that there was actual force or express threats of physical violence used, that such result may be accomplished as effectually by obstructing and annoying others and by insult and menacing attitude as by physical assault. (Southern Cal. Co. v. Amalgamated Assn., supra; Jordahl v. Hayda, 1 Cal.App. 696 [82 P. 1079]; Martin on Labor Unions, p. 229.) In so holding the Supreme Court in the case of Southern Cal. Co. v. Amalgamated Assn., supra, in quoting approvingly from another case (Allis-Chalmers Co. v. Iron Molders Union, 150 Fed. 155, 173), said that 'intimidation includes persuasion by or on behalf of a combination of persons resulting in coercion of the will from the mere force of numbers'; and the court then points out that the same rule is declared in Martin on Labor Unions, supra, as follows: 'Even a simple "request" to do or not to do a thing, made by one or more *366 of a body of strikers under circumstances calculated to convey a threatening intimidation, with a design to hinder or obstruct workmen, is unlawful intimidation, and not less obnoxious than the use of physical force for the same purpose.' The rule is applied with equal force as to customers and patrons. (Goldberg, Bowen & Co. v. Stablemen's Union, supra.)"
Here there is alleged the force of the rule which was applied by the picket line to all union employees working in the employer plant. The rule brought into effect by the picket prohibited union members from crossing the picket line. It imposed severe penalties on them should they violate the rule. The fact of the picket line brought that rule into play. The rule was the force applied by the picket line. The result of that force was alleged. No union member crossed the line. The plant was completely "knocked out". A barricade manned by men could not have been more effective. I cannot distinguish between the mental and moral intimidation of the rule applied by the picket line and the physical intimidation of actual threats or actual violence. The results were the same, or perhaps more effective in the case of the rule and the picket line. Physical force may arouse such resentment that it may be met with like physical force. The intimidation and coercion of the rule and the picket line were so complete that no employee sought to cross the line.
It is instructive and very persuasive to study four decisions by this court in which injunctions against picketing that were approved or modified and approved are set forth in full. The injunctions actually approved and issued should be conclusive evidence of this court's opinion of the powers it should exercise in picketing cases.
In Goldberg etc. Co. v. Stablemen's Union, 149 Cal. 429 [86 P. 806, 117 Am.St.Rep. 145, 9 Ann. Cas. 1219, 8 L.R.A. (N. S.) 460], the judgment, as amended by this court, enjoined the defendant union and its pickets from interfering with or harassing or obstructing plaintiff "by means of pickets or transparencies, or otherwise, threatening or intimidating any person or persons ... being employed at said place or places by the plaintiff".
In Pierce v. Stablemen's Union, 156 Cal. 70 [103 P. 324], the injunction ordered issued by the trial court was modified and affirmed. As so modified the defendant, its agents and employees were enjoined from "obstructing plaintiffs *367 in the conduct of ... their stable ... or from in any wise molesting, interfering with, threatening, intimidating or harassing any employee or employees of plaintiffs ... or from ... placing in front of said plaintiffs' place of business any picket, or pickets, for the purpose of ... molesting, intimidating or coercing, or attempt to molest or intimidate or coerce ... any employee now or hereafter employed by, or working for plaintiffs in their said business."
In Southern Cal. etc. Co. v. Amalgamated Association of Iron, Steel and Tin Workers, supra, this court set aside the judgment of the trial court and ordered a judgment entered which commanded the defendants "to desist and refrain from directly or indirectly, or by any means or method doing, or attempting to do, any of the following described acts, with the intent or purpose of intimidating the employees of the plaintiff, so as to prevent them from continuing in said employment, or with the intent or purpose of intimidating persons intending to or about to enter such employment, so as to prevent them from becoming such employees, to wit: stationing or placing, or causing to be stationed or placed, on the street or elsewhere, at or near the plaintiff's place of business, any picket or pickets; ... The aforesaid defendants are also enjoined from and commanded to desist and refrain from interfering or attempting to interfere in any manner with the free use, occupation, and enjoyment by the plaintiff, its agents, officers, servants, and employees of any of its property and premises of any kind or nature, or hindering or obstructing or attempting to hinder or obstruct, in any manner, the plaintiff's business or any part thereof; or molesting or interfering with or intimidating or harassing any employee of plaintiff or person who seeks to enter the employment of plaintiff".
In Lisse v. Local Union No. 31, supra, the judgment was modified and ordered re-entered to read, in part, as follows:
" 'It is therefore ordered, adjudged and decreed that defendants herein and each of them and all persons acting for them or either of them or in aid or assistance of them or either of them be and they are hereby perpetually enjoined and commanded to desist and refrain directly or indirectly or by any means or method from doing or attempting to do any of the following described acts: (a) intimidating, threatening, molesting or coercing plaintiffs in the conduct of their *368 business known as the "Rainbow Cafe" situated at No. 1218 Broadway Street, in the city of Oakland, California, or for any such purposes obstructing or otherwise interfering with, or attempting to obstruct or interfere with the free use, occupation and enjoyment thereof by plaintiffs, their agents, servants and employees; ...' " (Emphasis added.)
Each of these cases, especially the later ones in point of time, stoutly uphold the constitutional right of free speech, the right of the workingman to organize, to strike, to conduct primary and secondary boycotts, to persuade other workers, by peaceful means, to leave their employment, to seek members of their labor organization and use other such means as may be lawful to promote their own interest and better their own working conditions. These are still the lawful rights of labor if lawfully exercised. It is made equally clear, especially by the injunction in the Lisse case, that an employee who so desires is given the right to the free use and occupation of his employer's premises free from obstruction or interference of anyone. An employee cannot have the free use and enjoyment of his employer's premises unless he has the right to freely enter upon and leave those premises free from obstruction or interference by anyone. Thus the lawful rights of the unions and their members to promote their own welfare, and the lawful right of the individual workman, whether unionized or not, to sell his labor, were both protected.
Here the picket line and the rule interfere with the free use and enjoyment of the employer's premises by all of its employees. Unless this court decides to overrule the four cases last considered, the order of the trial court should be reversed. Instead of overruling any of those cases, the majority opinion cites some of them with approval.
To argue that the picket line and the union rule has not coerced the union employees of the employer into refusing to enter their place of employment because they voluntarily obeyed the rule against crossing the picket line would be the purest sophistry. Union membership and free fraternization with other union members is a right that must be valued highly. Severe penalties for violation of the union rule are described in the complaint. A fine or other punishment are penalties provided for violation of the rule. It would be as logical to argue that penalties provided for the violations of statutes do not compel obedience to those laws. Here *369 the obedience by the union members, while in a sense voluntary, is none the less under compulsion of the rule, and the penalty to be imposed for its violation.
For these reasons the orders here for review should be reversed.
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195 P.3d 89 (2008)
ANGELO
v.
ANGELO.
IN RE MARRIAGE OF ANGELO.
No. 81378-7.
Supreme Court of Washington, Department II.
September 4, 2008.
Disposition of petition for review. Denied.
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238 B.R. 914 (1999)
In re Subrina Y. ALLS, Debtor.
First Franklin Financial Corporation, Movant,
v.
Subrina Y. Alls, Respondent.
Bankruptcy No. 98-50824-JSW.
United States Bankruptcy Court, S.D. Georgia, Waycross Division.
September 2, 1999.
*915 Franklin D. Hayes, Douglas, GA, for debtor.
David M. Wolfson, Valdosta, GA, for First Franklin Financial Corporation.
MEMORANDUM OPINION
JAMES D. WALKER, Jr., Bankruptcy Judge.
This matter comes before the Court on Motion to Lift Codebtor Stay filed by First Franklin Financial Corporation ("Movant"). This is a core matter within the meaning of 28 U.S.C. § 157(b)(2)(G). After *916 considering the pleadings, evidence and applicable authorities, the Court enters the following findings of fact and conclusions of law in compliance with Federal Rule of Bankruptcy Procedure 7052.
Findings of Fact
On April 18, 1997, Subrina Y. Alls ("Debtor") and her husband, Joe Alls, Sr. ("Codebtor"), signed a note and security agreement promising to repay a consumer loan to Movant. On August 14, 1997, Debtor filed a Chapter 13 bankruptcy case. Mr. Alls did not join Debtor in her petition. Movant filed a secured claim for $546.94 in Debtor's case. However, the claim was relegated to unsecured status after the trustee objected to the secured status because of Movant's failure to submit any documents supporting its claim of secured status. On January 27, 1999, Debtor's Chapter 13 plan was confirmed. Movant has filed a motion to lift the codebtor stay.
A hearing on the motion for stay relief was held on June 24, 1999. At the hearing, no evidence was offered in support of Movant's contention that the claim is secured. For that reason, the motion for relief on that basis will be denied. However, Movant's second basis for relief, that Debtor does not propose to pay the unsecured claim in full, presents a more difficult problem. Movant contends that because Debtor does not propose to pay the entire debt owing to it under the plan, including postpetition interest, the Court must lift the stay pursuant to 11 U.S.C. § 1301(c)(2). The note provides for the Debtor to pay interest at a rate of 43.86%. In response, Debtor has requested leave to amend her Chapter 13 plan to provide full payment of Movant's unsecured claim, including postpetition interest, if necessary to avoid lifting the stay.
Conclusions of Law
"It is a settled question of law that relief from the codebtor stay is mandated to the extent that a Chapter 13 plan does not propose to pay a claim in full." Citizens and Southern Nat'l Bank v. Rebuelta (In re Rebuelta), 27 B.R. 137 (Bankr.N.D.Ga.1983) (Drake, J.).[1] Therefore, it appears to be necessary that Debtor's plan provide full payment of Movant's claim in order to prevent a lifting of the stay. The difficult question presented by this motion is whether "full payment" of an unsecured claim, as contemplated by section 1301(c)(2), requires payment of postpetition interest on an unsecured claim which would not otherwise be paid with *917 interest by the Chapter 13 Trustee. Courts are split in answering this question.
The codebtor stay is set out in 11 U.S.C. § 1301(a). That section provides, in pertinent part, as follows:
(a) Except as provided in subsections (b) and (c) of this section, after the order for relief under this chapter, a creditor may not act, or commence or continue any civil action, to collect all or any part of a consumer debt of the debtor from any individual that is liable on such debt with the debtor, or that secured such debt, unless
(1) such individual became liable on or secured such debt in the ordinary course of such individual's business; or
(2) the case is closed, dismissed, or converted to a case under chapter 7 or 11 of this title.
. . . .
(c) On request of a party in interest and after notice and a hearing, the court shall grant relief from the stay provided by subsection (a) of this section with respect to a creditor, to the extent that
(1) as between the debtor and the individual protected under subsection (a) of this section, such individual received the consideration for the claim held by such creditor;
(2) the plan filed by the debtor proposes not to pay such claim; or
(3) such creditor's interest would be irreparably harmed by continuation of such stay.
11 U.S.C. § 1301. The policy of this section is stated in its legislative history.
This section . . . is designed to protect a debtor operating under a chapter 13 individual repayment plan case by insulating him from indirect pressures from his creditors exerted through friends or relatives that may have consigned an obligation of the debtor. The protection is limited, however, to ensure that the creditor involved does not lose the benefit of the bargain he made for a cosigner.
H.R.REP. No. 95-595, at 426 (1977), reprinted in 1978 U.S.C.C.A.N. 6381. Thus, the codebtor stay is intended (1) to protect Chapter 13 debtors from indirect pressure from creditors, while at the same time (2) preserving for the creditor the benefit of its bargain in the form of a remedy against a cosigner. Harris v. Fort Oglethorpe State Bank, 721 F.2d 1052, 1053-54 (6th Cir.1983); International Harvester Employee C.U. v. Daniel, 13 B.R. 555, 557-58 (Bankr.S.D.Ohio 1981); Timex F.C.U. v. DiDomizio, 11 B.R. 357, 358 (Bankr. D.Conn.1981). These policies are furthered by ensuring that if the debtor's plan does not pay the full amount of the debt, the creditor can pursue the codebtor to the extent the plan does not propose to pay the claim. However, understanding the bankruptcy process, Congress recognized that the creditor may be delayed in fully realizing the benefit of its bargain. See H.R.REP. 95-595, at 426 (1977), reprinted in 1978 U.S.C.C.A.N. 6381 ("The creditor is delayed, but his substantive rights are not effected.").
In this case, Debtor's plan as proposed does not pay Movant's claim in full, thus triggering section 1301(c)(2). However, Debtor has requested leave to modify her plan to provide full payment of Movant's claim. So long as such a modification can *918 be confirmed, the benefit of Movant's bargain will continue to be preserved. See International Harvester Employee C.U. v. Grigsby (In re Grigsby), 13 B.R. 409, 412 (Bankr.S.D.Ohio 1981). The question which remains to be answered, however, is whether full payment of the claim may include payment of postpetition interest. The difficulty in answering this question arises from the fact that, as a general rule, postpetition interest cannot be paid on an unsecured claim in bankruptcy. 11 U.S.C. § 502(b)(2).[2] Yet the legislative history to section 1301 states that the creditor "is entitled to full compensation, including any interest, fees, and costs provided for by the agreement under which the debtor obtained his loan." H.R.REP. No. 95-595, at 426 (1977), reprinted in 1978 U.S.C.C.A.N. 6381 (Emphasis added). In addition, the legislative history states that
If the debtor proposes not to pay a portion of the debt under his Chapter 13 individual repayment plan, then the stay is lifted to that extent. The creditor is protected to the full amount of his claim, including postpetition interest, costs and attorney's fees, if the contract so provides. Thus if the debtor proposes to pay only $70 of a $100 debt on which there is a cosignor, the creditor must wait to receive the $70 from the debtor under the plan but may move against the co-debtor for the remaining $30 and for any additional interest, fees, or costs for which the debtor is liable. The stay does not prevent the creditor from receiving full payment, including any costs and interest, of his claim. It does not affect his substantive rights. It merely requires him to wait along with all other creditors for that portion of the debt that the debtor will repay under the plan.
H.R.REP. No. 95-595, at 122 (1977), reprinted in 1978 U.S.C.C.A.N. 5787, 6083 (Emphasis added).
Thus the legislative history makes clear that preserving the creditor's bargain includes protecting its right to postpetition interest. See In re Austin, 110 B.R. 430, 431 (Bankr.E.D.Mo.1990); Grigsby, 13 B.R. at 411; Mid Maine Mut. Sav. Bank v. Johnson (In re Johnson), 12 B.R. 894, 896 (Bankr.D.Me.1981); West Beneficial Fin., Inc. v. Henson (In re Henson), 12 B.R. 82, 85 (Bankr.S.D.Ohio 1981); DiDomizio, 11 B.R. at 359. But see In re Saunders, 130 B.R. 208, 213 (Bankr. W.D.Va.1991) ("[W]hen a Chapter 13 plan proposes to pay an undersecured or unsecured creditor the full amount of such creditor's claim, the creditor is not entitled to recover postpetition interest . . . from the codebtor, even if such items are provided for in the agreement under which the claim arises.").
The conflict between the language of the Code and the legislative history creates a dilemma for the debtor and the court. On the one hand, the Code prevents the debtor from paying postpetition interest on an unsecured claim, while on the other hand, the legislative history suggests that if the debt is not paid in full under the plan, including postpetition interest, the stay must be lifted. This apparent inconsistency has led to a split among the courts as to how to handle stay relief requests by creditors who are owed postpetition interest on an unsecured claim.
Some courts have concluded that if postpetition interest is not paid under the plan, the creditor is entitled to immediate relief from stay to pursue the codebtor for such amounts. Henson, 12 B.R. at 85 (relief from codebtor stay granted even though *919 plan paid 100% of principal and prepetition interest because plan did not pay postpetition interest); DiDomizio, 11 B.R. at 359 (relief granted despite 100% payment of principal and prepetition interest under the plan because plan did not pay postpetition interest). In an effort to avoid this result, some courts have allowed the debtor to pay such interest under their Chapter 13 plans in order to prevent a lifting of the stay. Campbell, Ch. 13 Case No. 98-21406, slip op. at 2; Fort Oglethorpe, 721 F.2d at 1054; Austin, 110 B.R. at 431; In re Harris, 16 B.R. 371, 377 (Bankr. E.D.Tenn.1982). While some of these courts do not cite any authority allowing the debtor to pay such interest in their plan (Ft. Oglethorpe; Harris), at least two courts have concluded that section 1322(b)(1) provides the authority, Campbell, Ch. 13 Case No. 98-21406, slip op. at 4; Austin, 110 B.R. at 431. That section permits a Chapter 13 debtor to treat codebtor claims differently than other unsecured claims. 11 U.S.C. § 1322(b)(1);[3]In re Thompson, 191 B.R. 967, 971 (Bankr. S.D.Ga.1996) (Walker, J.).
Other courts have concluded that a Chapter 13 debtor may not pay postpetition interest on a codebtor unsecured claim. In re Janssen, 220 B.R. 639, 645 (Bankr.N.D.Iowa 1998); In re Saunders, 130 B.R. 208, 213 (Bankr.W.D.Va.1991); American Nickeloid Employee C.U. v. Pyzska, 162 Ill.App.3d 84, 113 Ill.Dec. 519, 515 N.E.2d 328, 330 (1987). These cases note that the term "claim" as used in section 1301(c)(2) is defined by section 502 which does not permit postpetition interest. Janssen, 220 B.R. at 645; Saunders, 130 B.R. at 213. They further note that allowing a debtor to pay such interest on an unsecured claim renders sections 506(b), the section which expressly permits an oversecured creditor to receive such payment, and 502(b)(2) superfluous. Janssen, 220 B.R. at 645; Saunders, 130 B.R. at 213. Thus, these courts conclude that the term "claim" as used in section 1301(c)(2) can only consist of the principal and interest owing at the time the bankruptcy petition was filed. See Janssen, 220 B.R. at 645-46; Saunders, 130 B.R. at 213. As a result, the court in Janssen concluded that so long as the debtor's plan proposes to pay such claim in full, the creditor is not entitled to section 1301(c)(2) stay relief during the life of the plan to collect postpetition interest from the codebtor. 220 B.R. at 646.
The legislative history, not the provisions of the Code, have created the dilemma. The stated intent is not reflected in the provisions of the Code. While it may be convenient for the legislative body to state an abstract objective in its legislative history, it does not follow that seemingly inconsistent code provisions should be construed in conflict with their plainly worded and previously established meaning to give effect to the stated legislative intent. The job of integrating the legislative intent into the provisions of the Code belongs to the legislative branch, not the courts. Congress was fully capable of amending section 502(b)(2) to provide an exception for the allowance of a claim for unmatured interest in this case. Whether the omission is accidental or intentional is a matter for Congress, not the courts, to declare. Without the legislative history regarding the payment of interest, the provisions of section 1301(c)(2) would not be ambiguous. Our resort to legislative history is only invited in response to an ambiguity in a statute. A statute that is not ambiguous on its face, and which does not yield an absurd result, does not invite or permit reference to legislative history. *920 The legislative history is not given to us as the law. Its purpose is to explain ambiguities in the law. Legislative history cannot serve to authorize what the Code prohibits.
This court agrees with those courts that hold that a debtor may not pay postpetition interest on a codebtor, unsecured claim in its Chapter 13 plan.[4] Section 1301(c)(2) refers to payment of a "claim." Thus, unless one of three exceptions applies1) the claimant is oversecured (section 506(b)), 2) the debtor is solvent (section 726(a)(5)), or 3) the debt is secured by income-producing collateral the Code does not permit payment of postpetition interest on such claim under a Chapter 13 plan. 11 U.S.C. § 502(b)(2); Equitable Life Assurance Soc'y v. Sublett (In re Sublett), 895 F.2d 1381, 1386 n. 10 (11th Cir.1990) (citing In re Boston and Maine Corp., 719 F.2d 493, 496 (1st Cir. 1983)). While section 1322(b)(1) does permit separate treatment of codebtor unsecured claims, the section does not authorize payment of postpetition interest on such claims. Section 1322(b)(1) merely allows separate classification of codebtor, unsecured claims so that a debtor can pay more on such claims than on other unsecured claims. See Thompson, 191 B.R. at 969-71.
Congress allows special treatment of codebtor claims because, as a practical matter, debtors are more likely to favor payment of such claims over other unsecured claims in order to protect the codebtor who is often a family member or friend. Because the debtor is likely to pay such claims anyway, Congress felt Chapter 13 plans should reflect this practicality as an incentive to promote Chapter 13 cases and their viability. S.REP. No. 98-65, at 17-18 (1983). However, while section 1322(b)(1) does permit special treatment of codebtor claims, it does nothing to determine the amount of those claims. That determination is made according to section 502, and section 502(b)(2) generally disallows payment of postpetition interest on unsecured claims.
The question to be answered is whether Debtor's plan proposes to pay the "claim." To be paid, a claim must be asserted by filing it with the court. Such a "claim" can include unmatured interest. 11 U.S.C. § 101(5). Before a claim can be paid, it must be allowed. Claims are deemed allowed if there is no objection. Id. § 502(a). If there is an objection, as in this case, the court is required to disallow the postpetition interest portion of the claim. Id. § 502(b)(2). Thus, the term "claim" as used in section 1301(c)(2) can consist only of the principal and interest owed on a debt at the time the bankruptcy petition is filed and may not include unmatured interest in the form of postpetition interest. But it does not follow from this finding that the stay must then be lifted to allow the creditor to collect the postpetition interest from the codebtor. To the contrary, so long as the debtor's plan proposes to pay the creditor's allowed claim in full, section 1301(c)(2) is not triggered and, therefore, the Court is without authority to grant the creditor relief from the codebtor stay.[5] If the issue of stay relief were controlled by the legislative history rather than the code, the answer might be opposite. The creditor may pursue the codebtor for the unpaid postpetition interest once the stay has expired pursuant to section 1301(a)(2).
The benefit of the bargain for the codebtor creditor is preserved, albeit postponed. Postponement is equity's workhorse in a bankruptcy reorganization. Postponement transforms the impossible into the feasible. The primary issue in a bankruptcy reorganization is the fairness of the postponement. Movant complains that the postponement of the interest is *921 inconvenient to the creditor and expensive to the debtor. Unsecured creditors would argue that they suffer a disadvantage by the separate classification and are further disadvantaged by any payments made in the form of interest to the codebtor creditor. The fund from which all disbursements originate is the debtor's disposable income required to be paid by section 1325(b)(1).
The result in this case is required by the provisions of the Code that control the allocation of Debtor's limited funds. Just like creditors with secured claims who receive more favorable treatment, the unsecured creditor with recourse against codebtor is in a better position than an unsecured creditor without such recourse. Like the secured creditor whose secured claim is limited to the value of its collateral by section 506(a), the co-debtor creditor's claim is limited to the prepetition balance by section 502(b)(2). These limitations make it possible in some cases for creditors with neither collateral nor recourse to a co-debtor to receive a disbursement from the estate.
The rationale for bankruptcy law is balanced on a thin edge of good faith and common sense. This requirement is specifically stated in Chapter 13 by section 1325(a)(3) which requires that a plan be proposed in good faith. While it is reasonable to anticipate that a debtor is not likely to complete payments into a plan if a family member or close friend is financially disrupted by enforcement of a codebtor obligation, the delicate balance is disturbed when the fund is depleted or exhausted by payments of interest to the codebtor creditor during the plan, rather than after the case is concluded. The Code balances the inconvenience to the codebtor creditor against the benefit to unsecured creditors who, unlike codebtor creditors, will have no recourse for payment after the case is concluded.
It is argued that unsecured creditors have no cause to complain because they would receive no distribution if this were a Chapter 7 case. While this may be true, this is not a Chapter 7 case. It is likely that Debtor filed this case because Chapter 13 contains benefits which are not available in Chapter 7. The enjoyment of those benefits comes at a price to the debtor in the form of an obligation to create an estate from funds which would not be available to creditors in a Chapter 7 case. The balance in this case, as with all Chapter 13 cases, is not properly struck by suggesting that one or more creditors would be no better off in a Chapter 7 case. It is struck, instead, by fairly allocating the estate according to the provisions of the Code among the competitive interests of all creditors who have legitimate expectations arising out of a prepetition bargain with the debtor.
The cases which decide that the codebtor's claim has to be paid with interest raise additional problems. In the Campbell case decided in this district by Judge Davis where it was determined that the Trustee would be required to pay interest on the codebtor claim, the mechanics for the payment of that interest were not resolved by the decision. Under the Trustee's present system of paying claims, the specially classified unsecured claim of a codebtor creditor would be paid after secured claims. The interest component would likewise be paid later in the case. Judge Davis will have to decide in that case whether to accelerate the disbursements on that claim to an earlier time in the case and, if such disbursements are accelerated, determine whether secured creditors would be adequately protected after the necessary reduction in their disbursements in order to make such an accelerated payment to the codebtor creditor.
There is also the issue of priority and administrative expense claims. Like secured creditors, they compete for the first dollars paid into a Chapter 13 plan according to priorities established by the Code. To pay the codebtor creditor's unsecured claim earlier in the case would create conflicts with these other priorities established *922 by the Code. If the claim is not paid early in the case and is instead paid at the end according to its established Code priority, there is very little practical difference between paying interest under the plan and paying it after the plan is completed. The payment would occur at the same time either way.
Applying this analysis to this case, the Court finds that Debtor's plan must propose to pay Movant's claim in full in order to continue the codebtor stay. Because none of the three exceptions to section 502(b)(2)'s prohibition against payment of postpetition interest on a claim exist in this case, such claim cannot include postpetition interest and, consequently, cannot receive disbursements of interest from the Chapter 13 Trustee. The codebtor creditor would be stayed in the collection of its interest against the codebtor until the conclusion of the case.
Once Debtor's plan is modified to provide full payment of the claim (without interest) and the modification is confirmed, the Court will deny Movant's request to lift the codebtor stay. If such modification cannot be confirmed, then the Court will grant Movant's request and lift the stay to the extent the plan as confirmed does not propose to pay the claim.
An order in accordance with this opinion will be entered on this date.
NOTES
[1] See also Harris v. Fort Oglethorpe State Bank, 721 F.2d 1052, 1054 (6th Cir.1983); In re Schaffrath, 214 B.R. 153, 155 (6th Cir. BAP 1997); Household Fin. Corp. v. Jacobsen (In re Jacobsen), 20 B.R. 648, 650 (9th Cir. BAP 1982); In re Campbell, Ch. 13 Case No. 98-21406, slip op. at 2 (Bankr.S.D.Ga. July 7, 1999) (Davis, J.); In re Janssen, 220 B.R. 639, 645 (Bankr.N.D.Iowa 1998); In re Pardue, 143 B.R. 434, 437 (Bankr.E.D.Tex.1992); In re Saunders, 130 B.R. 208, 213 (Bankr. W.D.Va.1991); In re Fink, 115 B.R. 113, 115 (Bankr.S.D.Ohio 1990); In re Austin, 110 B.R. 430, 431 (Bankr.E.D.Mo.1990); In re Binstock, 78 B.R. 994, 996 (Bankr.D.N.D. 1987); In re Bonanno, 78 B.R. 52, 54 (Bankr. E.D.Pa.1987); In re Lamoreaux, 69 B.R. 301, 303 (Bankr.M.D.Fla.1987); First Nat'l Bank v. Garrett, 36 B.R. 432, 433 (Bankr.M.D.Tenn. 1984); In re Sandifer, 34 B.R. 507, 509 (Bankr.W.D.La.1983); Wiremen's C.U. v. Laska (In re Laska), 20 B.R. 675, 676 (Bankr. N.D.Ohio 1982); In re Harris, 16 B.R. 371, 378 (Bankr.E.D.Tenn.1982); International Harvester Employee C.U. v. Grigsby (In re Grigsby), 13 B.R. 409, 411 (Bankr.S.D.Ohio 1981); Mid Maine Mut. Sav. Bank v. Johnson (In re Johnson), 12 B.R. 894, 895 (Bankr. D.Me.1981); Timex F.C.U. v. DiDomizio (In re DiDomizio), 11 B.R. 357, 359 (Bankr.D.Conn. 1981); First Pa. Bank N.A. v. Rondeau (In re Rondeau), 9 B.R. 403, 404 (Bankr.E.D.Pa. 1981); Household Fin. Corp. v. Matula (In re Matula), 7 B.R. 941, 942 (Bankr.E.D.Va. 1981); Household Fin. Corp. v. Weaver (In re Weaver), 8 B.R. 803, 805 (Bankr.S.D.Ohio 1981); Commercial Sec. Co. v. Leger (In re Leger), 4 B.R. 718, 720 (Bankr.W.D.La.1980); American Nickeloid Employee C.U. v. Pyzska, 162 Ill.App.3d 84, 113 Ill.Dec. 519, 515 N.E.2d 328, 329 (1987); Manpoe F.C.U. v. Lee, No. CV XXXXXXXXX, 1997 WL 803859, at *2 (Conn.Super.Ct. Dec. 19, 1997).
[2] This section provides, in pertinent part, as follows:
(b) . . . if . . . objection to a claim is made, the court, after notice and a hearing, shall determine the amount of such claim as of the date of the filing of the petition, and shall allow such claim in lawful currency of the United States in such amount, except to the extent that
. . . .
(2) such claim is for unmatured interest[.]
11 U.S.C. § 502(b)(2).
[3] This section provides as follows:
(b) Subject to subsections (a) and (c) of this section, the plan may
(1) designate a class or classes of unsecured claims, as provided in section 1122 of this title, but may not discriminate unfairly against any class so designated; however, such plan may treat claims for a consumer debt of the debtor if an individual is liable on such consumer debt with the debtor differently than other unsecured claims.
11 U.S.C. § 1322(b)(1).
[4] This Court regrets that it cannot follow the precedent set in Campbell by another judge of this Court, the Honorable Judge Lamar W. Davis, Jr.
[5] Movant has not alleged any other circumstances that might require relief from the stay. See 11 U.S.C. § 1301(c)(1), (3).
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383 F.3d 49
Wayne A. KRUSE, Lisa M. McLeod, Robert Schill, David Legro, Barbara Legro, on behalf of themselves and all others similar situated, Plaintiffs-Appellants,v.WELLS FARGO HOME MORTGAGE, INC., WFC Holdings Corporation, Wells Fargo & Company, Wells Fargo Financial, Inc., Defendants-Appellees.
No. 03-7665.
United States Court of Appeals, Second Circuit.
Argued: February 11, 2004.
Decided: September 10, 2004.
Appeal from the United States District Court for the Eastern District of New York, Isreal Leo Glasser, J. COPYRIGHT MATERIAL OMITTED COPYRIGHT MATERIAL OMITTED Michael C. Spencer, Milberg Weiss Bershad Hynes & Lerach LLP (Susan M. Greenwood; Craig H. Johnson, Lon D. Packard, Joann Shields, Packard, Packard & Johnson, Salt Lake City, UT; of counsel), New York, NY, for Appellants.
Thomas M. Hefferon, Goodwin Proctor LLP (Leonard F. Lesser, Goodwin Procter LLP, New York, NY, of counsel), Washington, DC, for Appellees.
Christine N. Kohl, U.S. Department of Justice (Michael J. Singer; Peter D. Keisler, Assistant Attorney General; Roslynn R. Mauskopf, United States Attorney for the Eastern District of New York; Richard A. Hauser, Peter S. Race, Joan L. Kayagil, U.S. Department of Housing and Urban Development; of counsel), Washington, DC, for Amicus Curiae the United States.
Before: JACOBS, SACK, and RAGGI, Circuit Judges.
SACK, Circuit Judge.
1
In a complaint filed in the United States District Court for the Eastern District of New York, the plaintiffs allege that certain billing practices of the defendant home-mortgage providers with respect to their provision of real estate settlement services to the plaintiffs were contrary to the Real Estate Settlement Procedures Act, 12 U.S.C. § 2601 et seq. ("RESPA"), in particular RESPA § 8(b) (codified at 12 U.S.C. § 2607(b)). RESPA § 8(b) provides:
2
No person shall give and no person shall accept any portion, split, or percentage of any charge made or received for the rendering of a real estate settlement service in connection with a transaction involving a federally related mortgage loan other than for services actually performed.
3
Id. § 2607(b). The district court (I. Leo Glasser, Judge), concluding that the practices in question were not prohibited by RESPA, granted the defendants' motion for judgment on the pleadings pursuant to Federal Rule of Civil Procedure 12(c) and dismissed the complaint.
BACKGROUND
4
According to the complaint, the plaintiffs Wayne A. Kruse, Lisa M. McLeod, and Robert Schill are homeowners who obtained settlement services from the defendants while financing their purchases of homes in Brooklyn, New York. The plaintiffs David and Barbara Legro obtained settlement services from the defendants while refinancing their home in Santa Rosa, California. According to the complaint, the defendants Wells Fargo Financial Services, Inc., and Wells Fargo Home Mortgage, Inc., are wholly owned subsidiaries of the defendant Wells Fargo & Company, which is in turn a wholly owned subsidiary of WFC Holdings Corporation.1
5
The complaint further alleges that between February and April 2002, each of the plaintiffs, while obtaining federally related home mortgage loans, was required by the defendants to purchase certain "settlement services," see id. § 2602(3),2 including "tax service, flood certification, document preparation, and underwriting," Compl. ¶ 23.
6
The plaintiffs challenged two categories of commercial practices adopted by the defendants relating to the provision of settlement services, which the plaintiffs call "overcharges" and "mark-ups." "Overcharges" arise out of settlement services provided by the lender itself but charged to consumers seeking home mortgages for substantially more than the provider's cost. Specifically, the plaintiffs allege that the defendants performed underwriting services — which in this case consist of analyzing a borrower's ability to repay the loan in order to determine whether the Federal National Mortgage Association ("Fannie Mae") or the Federal Home Loan Mortgage Corporation ("Freddie Mac") will guarantee to purchase the loan on the secondary market, removing most of the lender's risk on the loan — using automated software obtained from Fannie Mae and Freddie Mac at a cost of $20 per loan underwritten. The defendants are said to have charged home mortgage borrowers as much as twenty-five times that amount for the service.
7
A settlement service provider "marks up" the fee for a settlement service when the provider outsources the task of providing the service to a third-party vendor, pays the vendor a fee for the service, and then, without providing an additional service, charges homeowners seeking mortgages a higher fee for the settlement service than that which the provider paid to the third-party vendor. In this case, the defendants are alleged to have paid third parties to perform tax services, flood certification, and document preparation, and then, without providing further services, to have charged plaintiffs amounts substantially in excess of the amount the defendants paid to the third parties for the services. For example, the plaintiffs alleged that the defendants outsourced document preparation to third parties at a typical per-service cost to the defendants of $20 to $50, and then, without performing any additional services, charged consumers seeking home mortgages $150 to $300 for the service.
8
On May 24, 2002, relying on a statement of policy issued by the United States Department of Housing and Urban Development ("HUD") stating that both overcharges and mark-ups violate section 8(b), see Statement of Policy 2001-1, 66 Fed. Reg. 53,052, 53,057-58 (Oct. 18, 2001) (the "Policy Statement"), the plaintiffs filed a putative class action pursuant to Federal Rule of Civil Procedure 23 in the United States District Court for the Eastern District of New York. The action was brought by and on behalf of the plaintiffs and similarly situated persons who, on or after January 1, 1995, received automated underwriting scores indicating that their loans would be guaranteed for purchase by Fannie Mae and Freddie Mac, and who paid fees to the defendants for any of the settlement services described above. The plaintiffs assert that the proposed class consists of thousands of residential mortgage borrowers, that common questions of law and fact predominate, and that the plaintiffs' claims are typical of those of the class. The plaintiffs seek treble damages pursuant to RESPA § 8(d)(2) (12 U.S.C. § 2607(d)(2)) for defendants' asserted violations of section 8(b). The plaintiffs also allege unjust enrichment on the part of the defendants, apparently as a supplemental claim under state law, and request disgorgement of funds in an amount equal to the amount by which the defendants were unjustly enriched.
9
On April 8, 2003, the defendants moved for judgment on the pleadings pursuant to Federal Rule of Civil Procedure 12(c) with respect to the plaintiffs' section 8(b) claim. In a decision delivered orally from the bench on May 16, 2003, an order issued on May 22, 2003, and a judgment entered on May 29, 2003, the district court granted the defendants' motion in its entirety, dismissing the plaintiffs' section 8(b) claim with prejudice. In reaching this decision, the district court relied heavily on the interpretation of section 8(b) advanced by the three federal courts of appeals that had, at the time of the district court's ruling, decided for defendants in litigation in which similar claims were alleged. See Haug v. Bank of Am., 317 F.3d 832 (8th Cir.2003); Krzalic v. Republic Title Co., 314 F.3d 875 (7th Cir.2002), cert. denied, 539 U.S. 958, 123 S.Ct. 2641, 156 L.Ed.2d 656 (2003); Boulware v. Crossland Mortgage Corp., 291 F.3d 261 (4th Cir.2002). The district court agreed with the conclusion of these circuits that section 8(b) unambiguously does not apply to mark-ups and overcharges, and that HUD's interpretation of the section to the contrary was either an impermissible one or entitled to no deference. During the pendency of this appeal, though, the Eleventh Circuit, in Sosa v. Chase Manhattan Mortgage Corp., 348 F.3d 979 (11th Cir.2003), advanced a textual interpretation of section 8(b)'s language at odds with that expressed in Haug, Krzalic, Boulware, and the district court in the instant case.
10
Having dismissed the federal RESPA claim, the district court declined, pursuant to 28 U.S.C. § 1367(c), to exercise supplemental jurisdiction over the plaintiffs' state-law claims, dismissing them without prejudice.
11
The plaintiffs appeal.
DISCUSSION
I. Standard of Review
12
We review the judgment of the district court de novo, both because it was a judgment on the pleadings rendered pursuant to Federal Rule of Civil Procedure 12(c), Hardy v. N.Y. City Health & Hosps. Corp., 164 F.3d 789, 792 (2d Cir.1999), and because it involved questions of statutory construction, United States v. Koh, 199 F.3d 632, 636 (2d Cir.1999), cert. denied, 530 U.S. 1222, 120 S.Ct. 2235, 147 L.Ed.2d 264 (2000). "Moreover, the question of the appropriate level of deference to accord agency regulations is one purely of law, subject to de novo review." Coke v. Long Island Care at Home, Ltd., 376 F.3d 118, 122 (2d Cir.2004).
II. Framework of the Analysis
13
The plaintiffs allege that they are the victims of two of the defendants' practices — overcharges and mark-ups — that they argue violate RESPA § 8(b). In addressing these allegations, we begin as we must with the text of the statute. The initial question is whether or not the statute clearly and unambiguously prohibits the practices of which the plaintiffs complain. "If the intent of Congress is clear, that is the end of the matter; for the court, as well as the agency, must give effect to the unambiguously expressed intent of Congress." Chevron, U.S.A., Inc. v. Natural Res. Def. Council, Inc., 467 U.S. 837, 842-43, 104 S.Ct. 2778, 81 L.Ed.2d 694 (1984); accord Household Credit Servs., Inc. v. Pfennig, ___ U.S. ___, 124 S.Ct. 1741, 1747, 158 L.Ed.2d 450 (2004) (quoting Chevron).
14
If the provisions of the statute are unclear or ambiguous, then, because the Policy Statement addresses the questions of statutory interpretation here in issue, we must decide whether to defer to HUD's reading of them as reflected in the Policy Statement. If we decide that we are to defer, we must then decide the appropriate level of deference. Compare Chevron, 467 U.S. at 843-44, 104 S.Ct. 2778 (calling for mandatory deference, in certain situations, to "permissible" agency interpretations), with Skidmore v. Swift & Co., 323 U.S. 134, 140, 65 S.Ct. 161, 89 L.Ed. 124 (1944) (requiring deference, in other situations, to the extent of the interpretations' persuasiveness).
15
If Chevron deference is required, we must defer to the interpretation HUD advances unless it is "`arbitrary, capricious, or manifestly contrary to the statute.'" Household Credit Servs., 124 S.Ct. at 1743 (quoting Chevron, 467 U.S. at 844, 104 S.Ct. 2778); accord Evangelista v. Ashcroft, 359 F.3d 145, 150 (2d Cir.2004) (same). So long as "the agency's reading fills a gap or defines a term in a reasonable way in light of the Legislature's design, we give that reading controlling weight, even if it is not the answer the court would have reached if the question initially had arisen in a judicial proceeding." Regions Hosp. v. Shalala, 522 U.S. 448, 457, 118 S.Ct. 909, 139 L.Ed.2d 895 (1998) (citation and internal quotation marks omitted). Were we to conclude that the statute is ambiguous but decide that no deference to the agency's interpretation is required, then, of course, we would resolve the ambiguity ourselves using the customary means of judicial statutory interpretation.
III. Overcharges3
16
The plaintiffs urge us to defer to the view taken by HUD in the Policy Statement. HUD has concluded that charging "unreasonably" high prices for certain settlement services, as the plaintiffs assert the defendants did with respect to services the defendants provided to them, is a violation of section 8(b).4 Under this reading of the statute, the amount by which a fee (or "charge") for a service exceeds the "reasonable value" of the service provided in return is the "portion, split, or percentage" of the charge that is "other than for services actually performed" and thus in violation of section 8(b).
17
We do not think that the text of section 8(b) can bear that interpretation. Section 8(b) does prohibit the "giv[ing] and... accept[ing of] any portion, split, or percentage of any [covered] charge made or received ... other than for services actually performed." RESPA § 8(b), 12 U.S.C. § 2607(b). But nothing in that language authorizes courts to divide a "charge" into what they or some other person or entity deems to be its "reasonable" and "unreasonable" components. Whatever its size, such a fee is "for" the services rendered by the institution and received by the borrower.
18
It would, moreover, be an odd reading of the statute to conclude that it instructs federal courts to award treble damages, see RESPA § 8(d)(2), 12 U.S.C. § 2607(d)(2), for "unreasonable" charges made by financial institutions without giving those courts so much as a hint as to how to differentiate between what is and is not "reasonable." There is nothing in the language of section 8(b) to suggest that Congress meant for us to create such a regulatory regime out of whole cloth.
19
We conclude that section 8(b) clearly and unambiguously does not extend to overcharges.
20
Whether it is appropriate for us to consider RESPA's legislative history in determining at the outset whether the statute is clear and unambiguous on this point is not at all clear. See, e.g., Coke, 376 F.3d at 127 ("[T]he Supreme Court has issued mixed messages as to whether a court may consider legislative history at ... step one of Chevron [analysis]."); id. n. 3 (collecting cases).5 We note nonetheless that, as pointed out by Haug v. Bank of America, 317 F.3d at 832, our text-based conclusion is supported by the legislative history of RESPA.
21
Prior to passage of RESPA, Senator Proxmire submitted a separate bill proposing that HUD be empowered to "establish the maximum amounts of the charges to be imposed upon the borrower and seller for services incident to or a part of a real estate settlement ... which shall be designed to reflect the reasonable charges for necessary services ... and to assure that settlement costs do not exceed such reasonable charges...." A Bill to Regulate Closing Costs and Settlement Procedures in Federally Related Mortgage Transactions, S. 2288, 93d Cong. § 4(a)(1) (1973); see also 119 Cong. Rec. 26,548-49 (1973) (describing Senator Proxmire's bill as "direct[ing] HUD to issue regulations to limit the amount of closing costs which can be charged in each section of the country"). Congress did not adopt this explicit price-control proposal. Instead, it directed HUD to report to Congress on "whether Federal regulation of the charges for real estate settlement services in federally related mortgage transactions is necessary and desirable." RESPA, Pub.L. No. 93-533, § 14(b)(2), 88 Stat. 1724, 1730 (1974); id. § 14(a) (requiring that such a report be given by HUD three to five years after the date of RESPA's passage), repealed by Pub.L. No. 104-208, § 2103(h), 110 Stat. 3009-401 (1996). We think the failure of Congress to enact Senator Proxmire's 1973 price-control bill, coupled with its charge to HUD to produce a report on whether such legislation was advisable, provides a persuasive complement to our textually based conclusion that Congress did not intend section 8(b) to serve as a price-control mechanism.
22
We thus conclude that we cannot, and we therefore do not, defer to this reading of section 8(b) by HUD. See Chevron, 467 U.S. at 842-43, 104 S.Ct. 2778. Section 8(b) did not impose price controls and therefore does not prohibit "overcharges." Accord Krzalic, 314 F.3d at 881 ("[RESPA] is not a price-control statute."); Boulware, 291 F.3d at 268 ("RESPA was meant to address certain practices, not enact broad price controls.").6
23
We affirm the judgment of the district court as to the plaintiffs' overcharges claim.
IV. Mark-Ups
A. The Language of Section 8(b)
24
The plaintiffs also argue that the district court erred in concluding that the defendants' mark-ups do not as a matter of law violate section 8(b). The term "mark-ups" as the plaintiffs use it in this context refers to fees that the defendants allegedly charged to the plaintiffs for settlement services provided by third-party vendors in excess of the fees that the third-party vendors charged to the defendants for those services, "[w]ithout performing any additional services." Compl. ¶ 24. Because HUD's Policy Statement interprets section 8(b) to prohibit mark-ups, see Policy Statement, 66 Fed.Reg. at 53,058-59, our initial inquiry is whether the text of section 8(b) is clear and unambiguous on the issue so as to foreclose our deference to the Policy Statement in this regard.
25
The Fourth, Seventh, and Eighth Circuits have held that the text of section 8(b) clearly and unambiguously does not prohibit mark-ups. Haug, supra; Krzalic, supra; Boulware, supra. These courts reason, inter alia, that the word "and" in section 8(b)'s phrase "no person shall give and no person shall accept" requires that there be both one or more persons who give and one or more persons who receive a settlement services fee other than for services actually performed for there to be a violation of the statute; so that, unless there is at least one giver and one acceptor who simultaneously violate the law, there can be no violation of section 8(b). See Haug, 317 F.3d at 836 ("Section 8(b) ... unambiguously requires at least two parties to share a settlement fee in order to violate the statute."); Boulware, 291 F.3d at 266 ("The use of the conjunctive `and' indicates that Congress was clearly aiming at an exchange or transaction, not a unilateral act."). These courts conclude that reading section 8(b) to apply to mark-ups is therefore absurd because it renders givers of mark-ups — the consumers ostensibly protected by the statute — as well as acceptors — the financial institutions from whose sometime-predatory practices they are being protected — simultaneously guilty of violating the statute. Boulware, 291 F.3d at 265 ("It would be irrational to conclude that Congress intended consumers to be potentially liable under RESPA for paying unearned fees.... [T]he giver in § 8(b) must be some party in the settlement process besides the borrower herself."); Krzalic, 314 F.3d at 879 ("On the plaintiffs' understanding, they themselves violated the statute because they gave [the defendant] a portion of the fee charged by the county recorder!").
26
In Sosa v. Chase Manhattan Mortgage Corp., 348 F.3d 979 (11th Cir.2003), however, the Eleventh Circuit found nothing absurd about a conclusion that section 8(b) covers mark-ups. "The `and' in subsection 8(b) ... operates to create two separate prohibitions.... Giving a portion of a charge is prohibited regardless of whether there is a culpable acceptor, and accepting a portion of a charge is prohibited regardless of whether there is a culpable giver." Id. at 982. The lender can thus be liable for a section 8(b) violation while the borrower is not. And if the lender pays a third party for services and, though performing no additional services itself, charges an additional amount to the borrower, it receives that additional amount "other than for services actually performed," in violation of the statute. See id. at 982-83.7
27
The words of the statute do not seem to compel either reading. The different interpretations described above derive largely from divergent, but plausible, constructions of the word "and." We thus conclude, because section 8(b) is not clear and unambiguous with respect to its coverage of mark-ups, that we must determine whether deference is due to HUD's interpretation of the statute as expressed in the Policy Statement.
28
B. Deference to HUD's Interpretation of Section 8(b)
29
The circumstances under which an agency pronouncement is due mandatory, Chevron deference are not entirely clear.8 See Richard J. Pierce, Jr., Administrative Law Treatise § 3.5 (4th ed. Supp.2004) (referring to recent Supreme Court decisions on this issue as "confusing"). But such deference is said to be required "when it appears that Congress delegated authority to the agency generally to make rules carrying the force of law, and that the agency interpretation claiming deference was promulgated in the exercise of that authority." United States v. Mead Corp., 533 U.S. 218, 226-27, 121 S.Ct. 2164, 150 L.Ed.2d 292 (2001). Within this context, formal adjudications and interpretations promulgated by an agency pursuant to notice-and-comment rulemaking are generally accorded Chevron deference. See id. at 230, 121 S.Ct. 2164 ("It is fair to assume generally that Congress contemplates administrative action with the effect of law when it provides for a relatively formal administrative procedure tending to foster the fairness and deliberation that should underlie a pronouncement of such force. Thus, the overwhelming number of our cases applying Chevron deference have reviewed the fruits of notice-and-comment rulemaking or formal adjudication." (citation and footnote omitted)).
30
The Policy Statement was not the fruit of notice-and-comment rulemaking. But notice-and-comment rulemaking is not a sine qua non of Chevron deference.
31
Less formal interpretations may also be entitled to mandatory deference, depending upon to what extent the underlying statute suffers from exposed gaps in policies, especially if the statute itself is very complex, as well as on the agency's expertise in making such policy decisions, the importance of the agency's decisions to the administration of the statute, and the degree of consideration the agency has given the relevant issues over time. See Barnhart v. Walton, 535 U.S. 212, 122 S.Ct. 1265, 152 L.Ed.2d 330 (2002).
32
Cmty. Health Ctr. v. Wilson-Coker, 311 F.3d 132, 137-38 (2d Cir.2002); see also Barnhart, 535 U.S. at 221-22, 122 S.Ct. 1265 (noting that "the fact that the Agency previously reached its interpretation through means less formal than `notice and comment' rulemaking does not automatically deprive that interpretation of the judicial deference otherwise its due." (citation omitted)); Mead, 533 U.S. at 231, 121 S.Ct. 2164 ("[T]he want of [notice-and-comment] procedure[s]... does not decide the case."). Applying Mead, Barnhart, and Wilson-Coker, we conclude that Chevron deference is due to HUD's interpretation of section 8(b) with respect to mark-ups.
33
First, "it appears that Congress delegated authority to the agency generally to make rules carrying the force of law, and that the agency interpretation claiming deference was promulgated in the exercise of that authority." Mead, 533 U.S. at 226-27, 121 S.Ct. 2164. Congress provided: "The Secretary [of HUD] is authorized to prescribe such rules and regulations, [and] to make such interpretations ... as may be necessary to achieve the purposes of [RESPA]." 12 U.S.C. § 2617(a).9 The Policy Statement, which was published in the Federal Register, see 66 Fed.Reg. 53,052-59, explicitly identified itself as having been promulgated in the exercise of HUD's congressionally delegated authority:
34
The Department is issuing this Statement of Policy in accordance with 5 U.S.C. 552 as a formal pronouncement of its interpretation of relevant statutory and regulatory provisions. Section 19(a) (12 U.S.C. 2617(a)) of the Real Estate Settlement Procedures Act of 1974 (12 U.S.C. 2601-2617) (RESPA) specifically authorizes the Secretary "to prescribe such rules and regulations [and] to make such interpretations * * * as may be necessary to achieve the purposes of [RESPA]."
35
Policy Statement, 66 Fed.Reg. at 53,052 (alterations in original). Thus Congress authorized HUD to promulgate rules, regulations, and interpretations with the force of law. We think it clear that the Policy Statement was promulgated in the exercise of that authority.
36
Second, if the Policy Statement arose out of "the careful consideration the Agency has given the question over a long period of time," Barnhart, 535 U.S. at 222, 122 S.Ct. 1265, that would suggest that we are required to defer. Indeed, the Policy Statement did.
37
HUD's initial RESPA regulation, known as Regulation X, was adopted in 1976. See 41 Fed.Reg. 22,702-12 (June 4, 1976) (codified with subsequent amendments at 24 C.F.R. § 3500.1 et seq.) (setting forth HUD's original Regulation X). It did not contain a clear statement of HUD's interpretation of section 8(b). See Echevarria v. Chicago Title & Trust Co., 256 F.3d 623, 627 & n. 1 (7th Cir.2001).10 In 1992, HUD issued a regulation implementing section 8(b): "A charge by a person for which no or nominal services are performed or for which duplicative fees are charged is an unearned fee and violates [RESPA § 8(b)]. The source of the payment does not determine whether or not a service is compensable." See id. at 627 (quoting 24 C.F.R. § 3500.14(c) (2000)); 57 Fed.Reg. 49,600, 49,611 (Nov. 2, 1992) (amending 24 C.F.R. § 3500.14(c)). But this 1992 interpretation also did not clearly state whether mark-ups violate section 8(b).
38
In Echevarria, the Seventh Circuit held that the defendant's mark-up of third-party vendors' fees did not violate section 8(b). It noted, however, that it reached this conclusion in part because, "[a]bsent a formal commitment by HUD to an opposing position, we decline to overrule our established RESPA § 8(b) case law." Echevarria, 256 F.3d at 630. HUD's interpretation of section 8(b) to prohibit mark-ups — that is contained in the Policy Statement, issued in October 2001 — was largely in response to Echevarria. See Policy Statement, 66 Fed.Reg. at 53,052, 53,058 (discussing Echevarria).
39
On the basis of this history, we disagree with the Seventh Circuit's later characterization of the Policy Statement: "One fine day, [it] simply appeared in the Federal Register." Krzalic, 314 F.3d at 881. The Policy Statement was not a set of off-the-cuff remarks, but a response to what was essentially an invitation by the Echevarria court for HUD to clarify its view on the matter. The fact that HUD explicitly designated its interpretation as a response to a judicial decision is some evidence of careful consideration by the agency. And the fact that the Policy Statement was apparently the culmination of HUD's reflections on the meaning of section 8(b) as applied to mark-ups over a period of years is further reason to defer to it.
40
Third, HUD plainly possesses expertise regarding the market for federally related home mortgage loans. The fact that HUD's interpretation here is comfortably within the ambit of that expertise bolsters the argument that we should defer to the Policy Statement. See Barnhart, 535 U.S. at 222, 122 S.Ct. 1265 (listing "the related expertise of the Agency" as a relevant factor in deciding whether to accord Chevron deference); Schuetz v. Banc One Mortgage Corp., 292 F.3d 1004, 1012 (9th Cir.2002) ("Congress authorized the Department to interpret RESPA, HUD has responsibility for enforcing the statute, and it has expertise in the home mortgage lending industry."), cert. denied, 537 U.S. 1171, 123 S.Ct. 994, 154 L.Ed.2d 913 (2003).
41
Fourth, our sister circuits have deferred to the Policy Statement, albeit in the course of determining when "yield spread premiums" violate RESPA § 8(a), 12 U.S.C. § 2607(a), rather than whether mark-ups are covered by section 8(b). See Heimmermann v. First Union Mortgage Corp., 305 F.3d 1257, 1264 (11th Cir.2002), cert. denied, 539 U.S. 970, 123 S.Ct. 2641, 156 L.Ed.2d 675 (2003); Schuetz, 292 F.3d at 1014 (according Chevron deference with respect to treatment of yield spread premiums under RESPA); Glover v. Standard Fed. Bank, 283 F.3d 953, 962-63 (8th Cir.) (according the Policy Statement deference pursuant to Bowles v. Seminole Rock & Sand Co., 325 U.S. 410, 413-14, 65 S.Ct. 1215, 89 L.Ed. 1700 (1945)), cert. denied, 537 U.S. 943, 123 S.Ct. 344, 154 L.Ed.2d 251 (2002); see also Pierce, supra, § 3.5, at 18-20 (summarizing cases deferring to the Policy Statement). While we do not think that deference to an agency with respect to its interpretation of one portion of a statute necessarily requires our deference with respect to its analysis of another portion, we think these decisions at least support our conclusion that the Policy Statement is a document of sufficient gravity to be worthy of deference.
42
After weighing all these circumstances, we accord Chevron deference to HUD with respect to its analysis of the application of section 8(b) to mark-ups. Cf. Boulware, 291 F.3d at 267 ("Deference might well be due Regulation X or HUD's statement of policy if § 8(b) were ambiguous." (citing Chevron, 467 U.S. at 842-43, 104 S.Ct. 2778)); Heimmermann, 305 F.3d at 1262 (stating with respect to the Policy Statement's interpretation of section 8(a) that, "[g]iven the express delegation of authority in RESPA, formal notice-and-comment is not needed to extend deference to the [Policy Statement]"). But cf. Krzalic, 314 F.3d at 881 ("If an agency is to assume the judicial prerogative of statutory interpretation that Chevron bestowed upon it, it must use ... something more formal, more deliberative, than a simple announcement."); id. at 882 (Easterbrook, J., concurring in part and concurring in the judgment) (contending that the Policy Statement is not entitled to Chevron deference because it is insufficiently formal).
C. Application of the Policy Statement
43
In the Policy Statement, HUD reads section 8(b) to prohibit a "settlement service provider" from "mark[ing]-up the cost of another provider's services without providing additional settlement services." Policy Statement, 66 Fed.Reg. at 53,059. Applying HUD's reading of the statute, we conclude that the plaintiffs sufficiently alleged a cause of action when they asserted in their complaint that "[t]hird-party vendors charge Defendants fees to perform ... services. Without performing any additional services, Defendants then charge borrowers a mark-up of these vendors' fees and pocket the difference as profit." Compl. ¶ 24. The grant of the motion for judgment on the pleadings as to the plaintiffs' mark-ups claim was therefore in error.11
44
Of course, whether the plaintiffs will be able to establish that the defendants in fact charged fees for services "without performing any additional services" — indeed, precisely what "providing additional settlement services" means in the context of this case — are questions that the district court may be required to address in the first instance on the basis of the factual record that is developed before it.
45
V. Supplemental Jurisdiction over State Law Claims
46
Because, as discussed above, we reverse the district court's dismissal of the plaintiffs' federal claims with respect to mark-ups and remand the case to the district court, we also vacate the judgment of the district court dismissing plaintiffs' state law claims "so that the district court may, in its discretion, exercise supplemental jurisdiction." Valley Disposal, Inc. v. Cent. Vt. Solid Waste Mgmt. Dist., 31 F.3d 89, 103 (2d Cir.1994).
CONCLUSION
47
For the foregoing reasons, the judgment of the district court is hereby affirmed in part and vacated in part. The case is remanded to the district court for further proceedings consistent with this opinion.
48
Each party shall bear his, her, or its own costs.
Notes:
1
Defendants' corporate disclosure statement, made pursuant to Federal Rule of Appellate Procedure 26.1(a), states, somewhat differently, that Wells Fargo Home Mortgage, Inc., is a subsidiary of Wells Fargo Bank, which is a subsidiary of WFC Holdings Corporation, which is a subsidiary of Wells Fargo & Company. Defendants also state that Wells Fargo Financial Services, Inc., does not currently exist. The parties' differing accounts of defendants' ownership structure are not material to our resolution of the questions presented in this appeal
2
[For purposes of RESPA,] the term "settlement services" includes any service provided in connection with a real estate settlement including, but not limited to, the following: title searches, title examinations, the provision of title certificates, title insurance, services rendered by an attorney, the preparation of documents, property surveys, the rendering of credit reports or appraisals, pest and fungus inspections, services rendered by a real estate agent or broker, the origination of a federally related mortgage loan (including, but not limited to, the taking of loan applications, loan processing, and the underwriting and funding of loans), and the handling of the processing, and closing or settlement
12 U.S.C. § 2602(3).
3
As a preliminary matter, the defendants contend that the plaintiffs' overcharge claim was waived in the district court because it was inconsistent with the mark-up theory they advanced there. We disagree. First, even if the theories are inconsistent, Federal Rule of Civil Procedure 8(e)(2) permits pleading inconsistent theories in the alternative. Second, when the district court asked counsel for the plaintiffs if counsel was withdrawing the plaintiffs' overcharge claim by arguing a "split-fee" theory — the one that defendants assert is inconsistent with the mark-up theory — he responded that he was not. And the complaint clearly alleges both
4
According to the Policy Statement:
A single service provider ... may be liable under Section 8(b) when it charges a fee that exceeds the reasonable value of goods, facilities, or services provided. HUD's regulations as noted state: "If the payment of a thing of value bears no relationship to the goods or services provided, then the excess is not for services or goods actually performed or provided."
Policy Statement, 66 Fed.Reg. at 53,059 (emphasis added) (quoting 24 C.F.R. § 3500.14(g)(2)).
5
"[S]tep two ofChevron requires us to inquire if the [agency's] regulation harmonizes with the language, origins, and purposes of the statute. Consideration of legislative history is generally accepted at this stage of the analysis." Coke, 376 F.3d at 128 (citation and internal quotation marks omitted).
6
We note that RESPA contains disclosure requirements applicable to all transactions governed by the statute. 12 U.S.C. § 2603;see also 24 C.F.R. § 3500.8 (specifying, pursuant to § 2603, HUD forms that "shall be used for every RESPA-covered transaction"). The plaintiffs do not allege that the defendants violated any such disclosure obligations.
7
The Eleventh Circuit's interpretation in this regard is largely consistent with HUD's view as follows contained in the Policy Statement:
A settlement service provider may not levy an additional charge upon a borrower for another settlement service provider's services without providing additional services that are bona fide and justify the increased charge. Accordingly, a settlement service provider may not mark-up the cost of another provider's services without providing additional settlement services; such payment must be for services that are actual, necessary and distinct services provided to justify the charge. 24 CFR 3500.14(g)(3). The HUD regulation implementing Section 8(b) states: "[a] charge by a person for which no or nominal services are performed or for which duplicative fees are charged is an unearned fee and violates this Section." 24 CFR 3500.14(c).
Policy Statement, 66 Fed.Reg. at 53,059 (emphasis added; alteration in original; footnote omitted).
8
We have at times simply avoided the question of whether an agency's interpretation is entitledChevron or some lesser degree of deference. See, e.g., Cmty. Health Ctr. v. Wilson-Coker, 311 F.3d 132, 138 (2d Cir.2002) (according agency interpretation "considerable deference, whether under Chevron or otherwise"). And "[e]ven if we are not required to defer to a permissible agency interpretation, we still may defer." Id. (emphasis in original).
9
HUD has explained that "[a]ny ... document that is published in the Federal Register by the Secretary and states that it is an `interpretation,' `interpretive rule,' `commentary,' or a `statement of policy' for purpose of [12 U.S.C. § 2617(a)]" constitutes "a rule, regulation or interpretation of the Secretary." 24 C.F.R. § 3500.4(a)(1)(ii) (emphasis added).
HUD explicitly distinguished such documents from a wide variety of others that, according to HUD, are not promulgated pursuant to the Secretary's authority under 12 U.S.C. § 2617(a), including:
the special information booklet prescribed by the Secretary or any other statement or issuance, whether oral or written, by an officer or representative of the Department of Housing and Urban Development (HUD), letter or memorandum by the Secretary, General Counsel, any Assistant Secretary or other officer or employee of HUD, preamble to a regulation or other issuance of HUD, Public Guidance Document, report to Congress, pleading, affidavit or other document in litigation, pamphlet, handbook, guide, telegraphic communication, explanation, instructions to forms, speech or other material of any nature which is not specifically included in paragraph (a)(1) of this section.
24
C.F.R. § 3500.4(a)(2). That HUD has defined a subset of its documents which are promulgated pursuant to 12 U.S.C. § 2617(a) and that the Policy Statement is within that subset provide further evidence that HUD intended the Policy Statement as an exercise of the interpretive authority delegated to it by Congress
10
Before it was amended [in 1992], Regulation X read: No person shall give and no person shall accept any portion, split, or percentage of any [charge] made or received for the rendering of a real estate settlement service in connection with a transaction involving a federally related mortgage loan other than for services actually performed. 24 C.F.R. 3500.14(b) (1992)
Echevarria, 256 F.3d at 627 n. 1; see also 41 Fed.Reg. at 22,707 (restating section 8(b) without making clear that it did, or did not, apply to mark-ups).
11
InSosa, the Eleventh Circuit dismissed a complaint, noting that in that case, unlike this one, the plaintiffs' "complaint fail[ed] to allege that Chase did not perform any services." 348 F.3d at 983. It went on to conclude on the facts before it that the plaintiffs "could [not] credibly make such an allegation." Id. We have insufficient basis to decide here whether the plaintiffs' factual allegations are or are not credible, and therefore decline to offer a view on the Eleventh Circuit's conclusion in this regard in Sosa.
| {
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Electronically Filed
Intermediate Court of Appeals
CAAP-13-0000636
14-FEB-2017
12:55 PM
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411 F.Supp. 871 (1976)
SANTA CRUZ BUILDING ASSOCIATION, Plaintiff,
v.
UNITED STATES of America, Defendant.
No. 75-397C(4).
United States District Court, E. D. Missouri, E. D.
March 25, 1976.
*872 *873 John J. Donnelly, St. Louis, Mo., for plaintiff.
Michael D. Howard, Trial Atty., Tax Division, Dept. of Justice, Washington, D. C., for defendant.
OPINION
NANGLE, District Judge.
In this action, plaintiff brought suit pursuant to Title 28 U.S.C. § 1346(a)(1) to recover internal revenue taxes, interest and penalties alleged to have been erroneously collected.
This case was tried before the Court without a jury. The Court having considered the pleadings, the documents in evidence, the stipulations of the parties and being otherwise fully advised in the premises, hereby makes the following findings of fact and conclusions of law as required by Rule 52, Federal Rules of Civil Procedure:
FINDINGS OF FACT
1. Plaintiff, Santa Cruz Building Association, is a corporation organized under a Pro-Forma Decree of the Circuit Court of St. Louis County, Missouri, with its principal office in St. Louis County.
2. On or about April 23, 1907, the Santa Cruz Council, Knights of Columbus 1215, was chartered in St. Louis (hereinafter referred to as "The Council"). The Council is a subordinate council of the Knights of Columbus incorporated in Connecticut. The Knights of Columbus was incorporated in 1882 to organize and operate a fraternal beneficiary society under the lodge system for the benefit of its members.
3. The Knights of Columbus received a Ruling letter from the Internal Revenue Service on October 25, 1940. The Ruling exempted the Knights of Columbus under Section 101(3) of the Internal Revenue Code of 1939 (now Section 501(c)(8) of the 1954 Code). This section grants tax exempt status *874 to fraternal beneficiary societies which maintain insurance benefits for members. The Ruling was a "Group Ruling letter" and therefore applied to subordinate councils, such as the St. Louis Santa Cruz Council, as long as they also comply with the appropriate Internal Revenue Code sections.
4. On May 13, 1946 members of the Santa Cruz Council filed Articles of Association for a Pro-Forma Decree of Incorporation for an entity named "The Santa Cruz Building Association" (hereinafter referred to as the "Building Association" or "Association") with the St. Louis County Circuit Court. These articles were approved by the Circuit Court in May, 1946.
5. The articles were amended in 1953, 1967 and 1968. Among the sections amended was the section stating the object of the organization. From 1953 to 1967 (and again commencing in 1968) this section read:
The objects of this organization shall be of a social nature, its purposes being to promote better relations amongst its members to provide grounds, buildings and equipment for educational, recreational and physical activities for their members, families and friends at no cost.
In 1967 the amended article read:
The purpose for which the corporation is organized shall be to promote better relations amongst its members; to provide grounds, buildings and equipment for educational and physical activities for the members; to produce, secure and provide funds and facilities to SANTA CRUZ COUNCIL OF KNIGHTS OF COLUMBUS to assist, provide and promote the welfare of charitable organizations.
6. The Articles of Association of the Building Association provide that the Association assets be turned over to the Council upon dissolution of the Association.
7. The Building Association is a separate corporate entity. The Council is subject to the rules of the National Knights of Columbus while the Building Association is not; both have their own officers, keep separate financial and minute books and have separate bank accounts. The membership of both organizations is identical. Those persons who join the Council automatically become members of the Building Association.
8. The Building Association charged both members and non-members rent for the use of its hall. On the average during the years 1964 to 1971 the Council used the hall 30% of the time while the public used the hall the remaining 70% of the time.
9. The Building Association advertised in both the yellow pages of Southwestern Bell Telephone Directory and in the Knights of Columbus golf magazine. Advertising expenditures between 1965 and 1971 ranged from a low of $282.00 in 1967 to a high of $445.00 in 1969.
10. The Building Association entered a lease agreement with General Motors Corporation in November of 1966. The parties have stipulated that for 3 years thereafter General Motors Corporation paid $39,424.80 per year to the Association for use of its parking facilities.
11. Yearly receipts, from 1965 to 1971, from bar sales and from building and parking lot rentals amounted to:
1965 $33,888.15
1966 39,644.53
1967 59,362.59
1968 78,119.39
1969 85,668.66
1970 67,448.74
1971 45,064.20
(fiscal year ending June 30th
of each year listed.)
12. These receipts accounted for the principal source of income for the Building Association. Rental of the hall occurred on a regular and recurring basis through 1971.
13. The Building Association operating committees were: buildings, grounds, publicity, rental, and bar.
14. The annual audits show a cash balance retained by the Association of:
1965 $37,129.73
1966 42,494.02
1967 51,725.14
1968 79,408.24
1969 119,925.02
1970 112,334.44
1971 119,633.58
(fiscal year ending June 30th
of each year listed.)
*875 15. In the years of 1965 to 1971 the Association engaged in the following social welfare endeavors. It listed as donations $95.00 in 1965, $200.00 in 1966, and $250.00 in 1967. Between 1968 and 1971 the Association
Spent Reason
$ 2,500.00 Statue of Christopher Columbus
7,200.00 Bus for the Boy Scouts
40,000.00 St. Mary's Home for exceptional children
500.00 Catholic Youth Council
500.00 Directors, Inc. (alcoholic center)
500.00 Missions in Peru
1,500.00 Little Sisters of the Poor
1,500.00 Oblates of Mary Immaculate
500.00 Pine Lawn Boys Club
The Association also sponsored an Easter egg hunt for children of members of the Council and underwrote a golf tournament benefit for St. Mary's.
16. During this time the Building Association also improved its parking lot at a net cost to it of $6,602.69 and installed a new ceiling and air conditioning at the cost of $10,329.80. It spent over $10,000.00 per year for beer, cigarettes and soda. In 1968 it began to set aside $2,000.00 per month for the future acquisition of real estate, but without a determination as to the ultimate disposition of the fund. In 1970, the Association purchased a $10,250.00 corporate bond.
17. Until December 31, 1971, several of the Association's principal activities consisted of renting its hall for weddings, meetings, dances and selling liquor and beer to members and to the general public who rented its facilities.
18. On April 29, 1970 the Building Association filed an exemption application, Form 1023, claiming an exemption as a charitable organization under section 501(c)(3). The Building Association, in its application, described itself as an organization for the Santa Cruz Council of the Knights of Columbus. By letter dated August 7, 1970 the Internal Revenue Service denied the plaintiff any exemption under sections 501(c)(2), (3) and (7).
19. On November 2, 1971 the Building Association filed Form 1120, U. S. Corporate Income Tax Returns, paying a total of $35,032.11 in taxes for the years 1965, 1967 through 1971.
20. On November 2, 1971 the Building Association also filed Form 843, Claim for Refund, for each year in question. The Association claimed that the reason it was entitled to a refund was that "Taxpayer qualifies as a tax-exempt organization".
21. On December 3, 1971 the Association was notified by the Treasury Department, Internal Revenue Service Center, Kansas City, Missouri, that adjustments to the tax liability had been made by adding penalties and interest for each year in question. The total amount of penalties and interest assessed was $13,968.25.
22. On February 2, 1972 the Association paid a total of $13,968.25 in penalties and interest.
23. On February 19, 1972 the Association again filed Form 843 for each year in question, claiming a refund for the penalties and interest paid for each of the 6 years at issue. The Association gave as the reason for refund "Taxpayer qualifies as a tax-exempt organization".
24. On March 16, 1972 the Internal Revenue Service wrote to plaintiff concerning plaintiff's claim for refund of penalties and interest. Defendant requested information about the reasons for filing claims for refund. There is no record of a response by plaintiff to this query.
25. On October 16, 1974 the Building Association received notice of disallowance of its claim for refund.
26. On or about October 22, 1974 an additional assessment of taxes, interest and additions to tax were made by the Internal Revenue Service for the taxable year ending June 30, 1968. The net balance due, after credit was applied to the assessment, amounted to $2,658.73. The association paid this net balance on or about December 3, 1974. Plaintiff has filed no claim for refund of this amount.
27. On September 26, 1975, three days before the date set for trial, defendant filed a motion to dismiss plaintiff's complaint for *876 failure to comply with Treasury regulations concerning refund requests. This motion was taken under submission by the Court with the case.
CONCLUSIONS OF LAW
Prior to a hearing on the merits, defendant filed a motion to dismiss for lack of subject matter jurisdiction. Defendant claims that as a matter of law plaintiff's "Claims for Refund" failed to comply with both the Code and Regulation requirements that the refund claim be detailed.
Section 7422(a) of the Internal Revenue Code, Title 26 U.S.C. § 7422(a), provides:
No suit . . . shall be maintained in any court for the recovery of any internal revenue tax alleged to have been erroneously . . . collected . . . until a claim for refund or credit has been duly filed with the Secretary . . . according to the . . . regulations . . .
Treasury Regulations § 301.6402-2(b)(1) establishes the detail required in the claim filed with the Internal Revenue Service:
The claim must set forth in detail each ground upon which a credit or refund is claimed and facts sufficient to apprise the Commissioner of the exact basis thereof. . . . A claim which does not comply with this paragraph will not be considered for any purpose as a claim for refund or credit.
Plaintiff, in its Claims for Refund for taxes paid and claims for penalty and interest paid stated as the reason for the refund request "Taxpayer qualifies as a tax-exempt organization". Thus, the issue presented is whether this statement sufficiently advises the Internal Revenue Service of the basis for claims as required by the Regulations.
The reason for this rule is two-fold. First, courts should not make tax determinations before the agency most qualified to handle these matters tackles the issue. Second, the taxpayer claiming a refund can more quickly explain his reasons, which often depend on individual factual situations, than can the Commissioner. The rule represents an attempt to economize administrative time. "Treasury Regulations are calculated to avoid dilatory, careless, and wasteful fiscal administration by barring incomplete or confusing claims." Angelus Milling Co. v. Commissioner of Internal Revenue, 325 U.S. 293, 297, 65 S.Ct. 1162, 1164, 89 L.Ed. 1619, 1623 (1945).
The claim itself is not the only information upon which the Commissioner relies to determine the basis of the claim. Thompson v. United States, 209 F.Supp. 530, 539 (E.D.Tex.1962), rev'd on other grounds 332 F.2d 657 (5 Cir. 1964). In the present case, the government also had available to it an August, 1970 claim for a tax exemption and a history of the Building Association's activities and purposes filed with that claim. These, together with the claim of "tax-exempt" seem sufficient to advise the Commissioner that 26 U.S.C. § 501 (exemption from tax on corporations, certain trusts, etc.) was at issue. The remaining question is whether plaintiff must further specify which subsections of § 501 are applicable; whether "each ground" is satisfied by pointing out the applicable section of the Code.
Defendant cites two cases to support its position that reference to § 501 is insufficient. Contractors Supply Corp. v. United States, 386 F.Supp. 907 (D.C.Va.1974) and Gainesville Nehi Bottling Co., Inc. v. United States, 74-2 U.S.T.C. ¶ 9745 (D.C.Ga.1974). In neither case were the grounds stated sufficient. In Contractors the ground was "[A]ssessment was made contrary to the laws of the United States," and in Gainesville the ground was "audit is erroneous". These cases, however, are not determinative. Both reasons are much broader than plaintiff's statement. In Contractors, the Commissioner had no idea of which law to apply whereas in this case he is apprised of the appropriate section of the Internal Revenue Code. In Gainesville, the Commissioner had no idea of why the audit was erroneous, or which part was at issue. Here, the Commissioner knows both the amount at issue and the reason why it is at issue.
*877 More to point in the case of Walker v. United States, 143 F.Supp. 566 (N.D.Tex. 1956), aff'd, 5 Cir., 240 F.2d 601, cert. denied, 354 U.S. 939, 77 S.Ct. 1402, 1 L.Ed.2d 1538 (1957). In that case plaintiffs stated as the reason for a claim of refund that collection of a penalty (for not disclosing in an anticipatory return the amount of estimated tax that would be owed) was unconstitutional. No part of the Constitution was pinpointed. The Court held that this was sufficient notice to the Commissioner. Claiming a tax refund under § 501 is no more broad than claiming a tax refund under the Constitution. Thus plaintiff's claim meets the requirements of the Treasury Regulation and so satisfies the jurisdictional requirements of 26 U.S.C. § 7422(a).
Plaintiff alternatively argues that the government by its late action in filing the motion to dismiss, has waived its claim of lack of jurisdiction. Waiver may occur either by a very tardy motion on the part of the government or by action on the merits by the Internal Revenue Service. Filing a motion just prior to trial, while questionable, is not sufficient for a waiver. Cf. Helis v. Usry, 496 F.2d 1319 (5th Cir. 1974); Reynolds v. McMurray, 77 F.2d 740 (10th Cir. 1935) (government filed motion after trial completed).
Nor has the government waived its rights to demand detailed grounds for a refund claim by action on the merits. The letter of October 16, 1974 which advised plaintiff that his claim for refund had been disallowed stated as the reason "Per Audit Determination". An audit is not an action on the merits. Hanna Iron Ore Co. v. United States, 68 F.Supp. 832, 837 (E.D.Mich. 1946):
Evidence showing an examination of claimant's books by the Commissioner, without evidence that his attention was focused on the merits of the particular dispute, failed to sustain claimant's burden of showing that Commissioner had waived defects in claim.
While the government has not waived its right to demand further explanation for a refund, the government should be estopped from claiming that right in this case for two reasons. First, the form letter sent to plaintiff on October 16, 1974 advised it that "your claim is fully disallowed" and that if plaintiff still desired to claim a refund "you may do so by filing such a suit with the United States District Court having jurisdiction". The defendant, by its last communication with plaintiff, invited it to court. Second, while the government gave as the reason for disallowance "Per Audit Determination" they did not state that the reason was failure to comply with Regulations, thus making the Association's claim impossible to process. This they could easily have done as evidenced by their earlier letter of March 16, 1972 requesting additional details from the Association in order to process their claims for interest and penalty. (No such request by the government was made to obtain more details about the claim of refund for taxes paid, although those forms were identical to the claims for interest and penalties.) The October 16, 1974 letter to plaintiff was unnecessarily unclear and misleading, thus the government should be estopped from denying jurisdiction based on plaintiff's failure to follow Regulations. Therefore, the Court concludes that jurisdiction, pursuant to Title 28 U.S.C. § 1346(a)(1) and Title 26 U.S.C. § 7422, exists.
Plaintiff Building Association requests a finding of exemption under any of four subsections of section 501(c) of the Internal Revenue Code (IRC). Any organization that is listed under § 501(c) is exempt from tax under § 501(a). Specifically, plaintiff contends that it is exempt as a title holding corporation under § 501(c)(2), or as a corporation organized and operated exclusively for religious or charitable purposes under § 501(c)(3), or as a civic organization under § 501(c)(4), or as a club organized and operated exclusively for pleasure, recreation and other non-profitable purposes under § 501(c)(7). Each will be analyzed separately.
*878 Section 501(c)(2) in conjunction with § 501(a) exempts:
Corporations organized for the exclusive purpose of holding title to property, collecting income therefrom and turning over the entire amount thereof, less expenses, to an organization which itself is exempt under this section.
Defendant argues that this section is not applicable to the Building Association for three reasons: the Association has accumulated income over the years rather than turning it over to an exempt organization, the Association was not organized exclusively to hold title to property, and the Association engages in business activities other than holding title and collecting income. Plaintiff merely argues that as its funds will pass to the Knights of Columbus upon dissolution of the Association, the fact that no money has yet been turned over to the Knights of Columbus is irrelevant.
To be exempt a corporation must be "organized" exclusively to hold title to property. "Organized" under § 501(c)(2) refers not to the actual operation of a club but to the purpose stated in its articles of incorporation. Gagne v. Hanover Water Works Co., 92 F.2d 659 (1st Cir. 1937); Sun-Herald Corp. v. Duggan, 73 F.2d 298 (2nd Cir. 1934); Banner Building Co. v. Commissioner, 46 BTA 857 (1942).
In Article II of the Articles of Association, the Building Association states its purposes. While these have been amended in 1953, 1967 and 1968, they state essentially the same purpose: "being to promote better relations amongst its members, to provide grounds, buildings and equipment for educational, recreational and physical activities for the members". Obviously, this purpose is not exclusively that of holding title. While "exclusively" does not mean "only", but rather "primarily", even under this test plaintiff's claim must fail. Cf. Treas.Reg. § 1.501(c)(3)-1(c)(1). The articles allow the Association not only to hold and maintain property, but also to promote relations among members, without limitation as to the means used for this purpose. Rev.Rul. 58-566, 1958-z Cum.Bull. 261. (The corporation in this Ruling could deal in securities and acquire real and personal property. These powers were determined to be broader than those necessary to a holding company, thus exemption was denied.)
Furthermore, from the actual operation of the organization, it is clear that the Association was engaged in activities of a broader scale than merely holding title. Roche's Beach, Inc. v. Commissioner of Internal Revenue, 96 F.2d 776 (2nd Cir. 1938). In Roche's Beach, the organization not only held title to property but also operated a beach business (renting boathouses, towels, suits, concession stands). From an examination of the corporate activities, the court concluded that the purposes of creating the organization were broader than merely holding title. Thus no exception could be taken under § 501(c)(2). In this case, by plaintiff's own admission, the Association participated in numerous activities totally unconnected with title holding. To the extent that these operations reflect organizational purposes, they are evidence of purposes broader than allowed by § 501(c)(2).
It is also clear from the Annual Audit statements submitted that for each year at issue the Association carried over substantial and increasing amounts of income. In 1965, $32,238.56 in cash was carried over. By 1971, the amount had increased to $112,334.44. In none of these years did the Association operate at a loss, thus it cannot be contended that income was retained to cover expenses. Income may be retained only to meet normal operational expenses. See Rev.Rul. 67-104, 1967-1 Cum.Bull. 120. Even in this Ruling, while income could be retained each year, it could not be accumulated over the years. Under these circumstances, Treas.Reg. § 1.501(c)(2)-1(6) applies: "A corporation described in section 501(c)(2) cannot accumulate income and retain its exemption . . .".
In summary, the Building Association does not qualify for exemption as a *879 § 501(c)(2) corporation because it was not organized to operate exclusively as a title holding company and because it accumulated income from year to year.
Section 501(c)(4) in conjunction with § 501(a) exempts:
Civic leagues or organizations not organized for profit but operated exclusively for the promotion of social welfare . . [remainder applies to employee associations.]
The government argues that the Building Association is not exempt under this provision because the Association was operated primarily for the benefit of its members, not the community as a whole, and because it carried on a business for profit with the general public. Under the Regulations neither of these elements may be present if an exemption is sought. Treas.Reg. § 501(c)(4)-1(a)(1)(i) and (ii). See also People's Educational Camp Society, Inc. v. Commissioner of Internal Revenue, 331 F.2d 923, 929 (2nd Cir. 1964), cert. denied 379 U.S. 839, 85 S.Ct. 75, 13 L.Ed.2d 45 (1964). The Association, on the other hand, argues under authority of a Revenue Ruling that sources of income are irrelevant when the organization's primary activity is civic or for the promotion of social welfare. Rev.Rul. 66-221, 1966-2 Cum.Bull. 220. In the stipulated facts, the association admitted that their primary source of income was derived from rentals (of building space and parking lot) and bar receipts.
In Rev.Rul. 66-221 (superseded in 1974 by Rev.Rul. 74-361 restating the same position) a voluntary fire-fighting association was found to be exempt even though its primary source of income came from sponsoring public dances. These social dances were found to be both incidental to the primary objective of operating a fire-fighting association and in furtherance of this objective as they brought volunteers together "in a working unit".
In substance, the Association argues for an "ultimate destination" test to determine exemption. Under this theory, it is not the nature of activities carried on but what is eventually done with the earnings that is determinative. Fund-raising activities are distinguished from social welfare activities, or those activities using the proceeds of fund-raising activities. One set of activities thus becomes the source or means to supply another set of activities or the "ends".
The primary difficulty with the ultimate destination test lies in the arbitrary, unstated assumption that fund-raising activities are but sources of funds, and thus should be ignored, while recognized charitable endeavors are the end activities and thus are to be considered to determine exemption. There exists a danger, however, that fund-raising activities may take on more importance than the purpose for which they were originally enacted. The ultimate destination test is oblivious to this possibility.
A case illustrating this is People's Educational Camp Society, Inc. v. Commissioner of Internal Revenue, supra. The Rand School of Social Science organized a membership corporation which ran a summer camp in the Poconos. Eventually the Rand School disbanded, but the Pocono retreat continued. In all respects, the camp competed with other summer resorts in the area. The organization also sponsored various programs of public interest such as musical composition contests, book award luncheons, seminars, and public forums. The amount spent on Social Welfare activities per year varied from less than 10% of accumulated earned surplus to almost 33%. The court rejected the notion that the summer retreat was but an "income producing operation designed to finance its social welfare activities".
The destination test ought not to be used to permit an entity to escape taxation where, as here, so much of its revenues are devoted to expanding its commercial facilities and increasing its surpluses, and so little of its revenues are actually spent for social welfare activities, that it is factually clear that the primary purpose of the organization is not really the promotion of social welfare but the running of a commercial operation.
Id. at 933.
*880 As the following table demonstrates, in no year did the Association donate even 33% of its surplus cash to any social welfare endeavor.
Year ending
6-30 Cash Balance Contributions[1]
1965 $ 37,129.73 $ 95.00
1967 51,725.14 3,175.25
1968 79,408.24 22,500.00
1969 119,925.02 28,700.00
1970 112,334.44 24,715.00
1971 119,633.58 2,125.00
During these same years, plaintiff also improved its parking facilities, the ceiling to the meeting hall and installed air conditioning. It also spent over $10,000.00 every year to buy cigarettes, beer and soda. These activities cannot be ignored in determining the purpose of an organization. They are evidence of an on-going business and negate the argument that the Building Association operates exclusively to promote social welfare.
Another case on point is Club Gaona, Inc. v. United States, 167 F.Supp. 741 (S.D.Cal. 1958). In Club Gaona the main source of income and principal activity of the organization were holding weekly public dances. The Club recognized profits from these dances which were used both to promote charitable endeavors and to speculate in real property. Exemption was denied as "plaintiffs derived their income from the promotion of public dances at a profit and that the profits were devoted to the accumulation of funds which were not used for any ascertainable civic projects," (emphasis original). In the present case also, profits were both accumulated and used for non-charitable endeavors. A corporate bond was purchased, and in 1968 $2,000.00 per month was earmarked "for the future acquisition of real estate".
Activities which inure to the benefit of members of the organization, without cost to them, can not be said to promote social welfare as that term is understood in the I.R.C. See, e. g. United States v. Pickwick Electric Membership Corp., 158 F.2d 272, 276 (6th Cir. 1946) which states that "civic" "embodies the ideas of the citizens of a community cooperating to promote the common good and general welfare of the community." (emphasis added); People's Educational Camp Society, Inc. v. Commissioner of Internal Revenue, supra at 930 ("civic" defined co-extensively with "social welfare" in the Pickwick case). See also Rev.Rul. 61-158, 1961-2 Cum.Bull. 115 (no exemption for an organization whose principal source of income was a weekly public drawing when profits used primarily for general organization expenses even though by-laws provide that all profits above reasonable operating expenses were to be devoted to social welfare purposes.)
Thus, the claim based on § 501(c)(4) must fail. Organizations primarily engaged in profit making and nonsocial welfare activities can not take an exemption under this section. Treas.Reg. § 1.501(c)(4)-1(a)(1)(i) and (ii); People's Educational Camp Society, supra; Rev.Rul. 61-158, supra; Rev.Rul. 68-46, 1968-1 Cum.Bull. 260 (war veterans organization not exempt when it was primarily engaged in renting a commercial building and operating a public banquet and meeting hall having bar and dining facilities).
Section 501(c)(7) in conjunction with § 501(2) provides an exemption for:
Clubs organized and operated exclusively for pleasure, recreation and other nonprofitable purposes, no part of the net earnings of which inures to the benefit of any private shareholder.
At issue under this section is whether the Building Association "operated exclusively . . . for nonprofitable purposes." The government argues that it did not, citing the Treas.Reg. § 1.501(c)(7)-1(6). This regulation is directly on point:
A club which engages in business, such as making its social and recreational facilities *881 available to the general public . . is not organized and operated exclusively for pleasure, recreation, or other nonprofitable purposes, and is not exempt under section 501(a).
The Building Association, citing the second sentence of the above regulation, that solicitation by advertising is prima facie evidence of engaging in business, argues that the government has made out a prima facie case and has proved nothing conclusively. The Building Association does not refute the government's contention that it did not operate exclusively for nonprofit purposes. On the contrary, it has admitted both that its primary source of income is from the public and that its hall is used 70% of the time by the general public.
The taxpayer has the burden of proof of establishing its qualification for exemption. Harding Hospital, Inc. v. United States, 505 F.2d 1068 (6th Cir. 1974); Augusta Golf Ass'n v. United States, 338 F.Supp. 272 (D.C.Ga.1971). A prima facie case by the government, without refutation by the Association is sufficient to sustain a denial of exemption. Cf. Trotter v. Tennessee, 290 U.S. 354, 356, 54 S.Ct. 138, 139, 78 L.Ed. 358, 360 (1933) ("Exemptions from taxation are not to be enlarged by implication if doubts are nicely balanced.")
The facts are convincing that plaintiff was engaged in a business. The Association's dealings with the general public involved neither "one-shot affairs", nor insubstantial amounts of money, nor activities distinguishable from those of profit-making organizations. Plaintiff stipulated that the building facilities were rented on a recurring basis and that its primary source of income came from rentals and bar receipts. When rented, the hall was used for activities such as meetings and weddings, which were events totally unconnected with the Building Association's membership purpose.
Furthermore, to be exempt as a social club, there must exist a meaningful "commingling of members" which plays a material part in the life of the organization. Rev.Rul. 58-589, 1958-2 Cum.Bull. 266. While the Building Association was organized with such a purpose, it was not operated to carry out that purpose. In the stipulated facts, it stated that its purpose was to act "as a housekeeping organization for the Santa Cruz Council of the Knights of Columbus". There is no evidence that the Building Association, as a separate entity, engaged in any social or recreational activities. That it may have done so through the Knights of Columbus is irrelevant. Polish Army Veterans v. Commissioner of Internal Revenue, 236 F.2d 509 (3rd Cir. 1956) (An association formed with members of the veterans Post whose primary function was to provide a building or clubrooms to the Post was not functioning as a social club).
Given these recurring and substantial business activities, it is clear that the Building Association is not exempt. See United States v. Fort Worth Club of Fort Worth, Tex., 345 F.2d 52 (5th Cir. 1965), modified on other grounds 348 F.2d 891 (5th Cir. 1965) (For social club exemption, profits from outside activities must be incidental to club activities and either negligible or non-recurring); Polish Army Veterans v. Commissioner of Internal Revenue, supra (veterans association whose principal source of income came from bars operated in clubrooms rented to the public was not exempt); Aviation Club of Utah v. Commissioner of Internal Revenue, 162 F.2d 984 (10th Cir. 1947), cert. denied 332 U.S. 837, 68 S.Ct. 220, 92 L.Ed. 409 (1947) (Aviation Club lost its exemption by allowing military officers as "guest members" during World War II; income derived therefrom was "substantial and continuing"); West Side Tennis Club v. Commissioner of Internal Revenue, 111 F.2d 6 (2nd Cir. 1940) (Tennis Club which held national championship matches open to the public from which it received more than one-half its gross income was not exempt; profits were not "incidental, trifling or non-recurrent"); Rev.Rul. 60-324, 1960-1 Cum.Bull. 173 (An organization which received between 12 and 17% of its total income from banquet sales to the general public and whose facilities were used for outside functions 40% of the *882 time was not exempt); Rev.Rul. 58-589, supra (General public participation must be incidental and in furtherance of general club purposes.); Rev.Proc. 64-36, 1964-2 Cum.Bull. 962, superseded by Rev.Proc. 71-17, 1971-1 Cum.Bull. 683 (effective June 30, 1971) ("The general public may, on occasion, be permitted to participate in a club affair, provided such participation is incidental to and relevant to the club's purpose, and there is no purpose of profit or economic benefit to the members manifested in the character or manner of conduct of the affair.")
Section 501(c)(3) in conjunction with § 501(a) exempts:
Corporations and any community chest, fund, or foundation, organized and operated exclusively for religious, charitable, scientific . . . purposes . . . no part of the net earnings of which inures to the benefit of any private shareholder or individual . . .
Under the Regulations, two requirements must be met for an organization to qualify under this subsection. The organization must be both organized and operated exclusively for the purposes listed. Treas.Reg. § 1.501(c)(3)-1(a)(1). See also Commissioner of Internal Revenue v. John Danz Charitable Trust, 284 F.2d 726 (9th Cir. 1960).
In the present case the government argues that it is clear that the Building Association was not organized exclusively for charitable purposes. Plaintiff argues that "charitable" encompasses a broad spectrum of activities; that by scanning the activities engaged in, it is clear that plaintiff operated to serve the public interest; that its business activities were merely in furtherance of its exempt purpose.
To determine for what purposes a corporation is "organized" one must refer to the articles of incorporation, charter, or any written instrument by which the organization is created. Treas.Regs. §§ 1.501(c)(3)-1(b)(1)(i), 1.501(c)(3)-1(b)(2). To be organized "exclusively" for exempt purposes, the articles must not "expressly empower the organization to engage, otherwise than as an insubstantial part of its activities, in activities which in themselves are not in furtherance of one or more exempt purposes." Treas.Reg. § 1.501(c)(3)-1(b)(1)(i)(b). A purpose is an "exempt" purpose if specified in § 501(c)(3). Treas.Reg. § 1.501(c)(3)-1(a)(2).
Plaintiff's purposes are set forth in Article II of its Articles of Association. Prior to 1967, when the article was amended, the object of the organization was "of a social nature . . . to promote better relations amongst its members, to provide grounds, buildings and equipment for educational, recreational and physical activities for the members". In 1967 the Articles were amended to delete the first phrase and to add: "to produce, secure and provide funds and facilities to SANTA CRUZ COUNCIL OF KNIGHTS OF COLUMBUS to assist, provide and promote the welfare of Charitable organizations."
The language of neither amendment limits the corporate purposes to one or more exempt purposes. Moreover, there is no limitation requiring that activities not in furtherance of exempt purposes be but an insubstantial part of its activities. For example, providing a building for the recreational use of its members does not embody any charitable purpose as that term is construed in the Regulations. Treas.Reg. § 1.501(c)(3)-1(b)(1)(iii) (Articles that allow organization "to engage in the operation of a social club" do not meet the organizational test); Treas.Reg. § 1.501(c)(3)-1(d) (Defines exempt purposes). The members who benefit are members of the Knights of Columbus. While the Knights of Columbus may engage in charitable endeavors, its members are certainly not limited to those to whom society owes an obligation. Treas. Reg. § 1.501(c)(3)-1(d)(2). (Charitable defined). See also Duffy v. Birmingham, 190 F.2d 738 (8th Cir. 1951) which defines charitable:
The reason underlying the exemption . . . is that the exempted taxpayer performs a public service. The common element of charitable purposes within the *883 meaning of the section is the relief of the public of a burden which otherwise belongs on it. Charitable purposes are those which benefit the community by relieving it pro tanto from an obligation which it owes to the objects of the charity as members of the community.
Nor does the Article indicate any limits on the amount of time or resources to be used for nonexempt purposes. Thus, the Building Association is an organization which is devoted to an unspecified extent to activities benefiting its own members, toward whom society in general has no obligation to support or aid. The Articles of Association are too broad to allow a charitable exemption under the organizational test. For the same reasons, the Association does not qualify for a § 501(c)(3) exemption under the other exempt purposes listed (religious, scientific, testing for public safety, literary, education or prevention of cruelty to children or animals), none of which was pressed on the Court by plaintiff.
The operational test for exemption requires little comment. Under the Regulations, if more than an insubstantial part of activities are directed toward nonexempt purposes, then the operational test is not met. Treas.Reg. § 1.501(c)(3)-1(c)(1). From the discussions of § 501(c)(2), (4) and (7) it is obvious that plaintiff operates both a business with the general public and for the benefit of its individual members, neither of which is insubstantial. For the reasons given in the discussion of § 501(c)(4) it cannot be said that these activities are in furtherance of the Association's exempt purpose. They have become an end on their own. Trinidad v. Sagrada Orden de Predicadores, 263 U.S. 578, 44 S.Ct. 204, 68 L.Ed. 458 (1924) is not to the contrary. In that case the Supreme Court upheld an exemption although the plaintiff sold wine, chocolate and other articles. The Court further found that there was no selling to the public nor competition with others, nor that financial gain was the end to which these sales were directed. In contrast with Trinidad, plaintiff in the present case rented to the public, in competition with other banquet halls and accumulated sufficient amounts of cash to evidence an intention of financial gain. See also, Scripture Press Foundation v. United States, 285 F.2d 800, 152 Ct.Cl. 463 (1960), cert. denied 368 U.S. 985, 82 S.Ct. 597, 7 L.Ed.2d 523 (1962); Samuel Friedland Foundation v. United States, 144 F.Supp. 74 (D.N.J.1956). Thus, an exemption based on § 501(c)(3) must be denied.
Having concluded that plaintiff is not entitled to an exemption under the provisions asserted, judgment will be for the defendant.
NOTES
[1] Contributions were viewed most favorably to the plaintiff. While the parties stipulated that there were two $20,000.00 gifts to St. Mary's Home, these gifts were listed for the years 1968, 1969 and 1970. Thus, the figures for those years may be unduly favorable to plaintiff.
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313 F.2d 668
63-1 USTC P 9265
UNITED STATES of America, Appellant,v.Howard K. MICHAELSEN and Fayetta M. Michaelsen, Appellees.COMMISSIONER OF INTERNAL REVENUE, Petitioner,v.Elmer R. JOHNSON and Bernice E. Johnson, Respondents.
Nos. 17898, 17687.
United States Court of Appeals Ninth Circuit.
Jan. 31, 1963.
No. 17687:
Louis F. Oberdorfer, Asst. Atty. Gen., Lee A. Jackson, Meyer Rothwacks, Frank I. Michelman, and Martin B. Cowan, Attorneys, Department of Justice, Washington, D.C., for petitioner.
1
Gerald J. Meindl and Robert Briggs, Portland, Or., for respondent. No. 17898:
2
John B. Jones, Jr., Acting Asst. Atty. Gen., Lee A. Jackson, Meyer Rothwacks, and Burt J. Abrams, Attorneys, Department of Justice, Washington, D.C., and Frank R. Freeman, U.S. Atty., Spokane, Wash., for appellant.
3
Kizer, Gaiser, Stoeve, Layman & Powell, and Robert E. Kovacevich, Spokane, Wash., for appellee.
4
Before HAMLEY and MERRILL, Circuit Judges, and BEEKS, District Judge.
5
MERRILL, Circuit Judge.
6
In these two cases the same question is presented: whether a teacher-taxpayer may deduct as ordinary and necessary expenses of business the cost of education secured in order to permit him to continue in the teaching profession. While the cases present different aspects of the problem, the same sections of code and regulations are involved and for clarity of discussion it has been thought best to consolidate the two cases in one opinion.
7
The deductions are sought under 162(a) of the Internal Revenue Code of 1954, which provides:'There shall be allowed as a deduction all the ordinary and necessary expenses paid or incurred during the taxable year in carrying on any trade or business * * *.'
8
Section 1.162-5 of the Treasury Regulations for education. Subsections (a) for education. Subseections (a) and (b) are set forth in the margin.1
MICHAELSEN
9
This case arises under Washington law and comes to us on appeal by the United States from a decision in favor of the taxpayer rendered by the District Court for the Eastern District of Washington.
10
The essential problem: where the line shall be drawn between the current business expenses of a teacher, and expenditures of a preparatory and qualificatory character incurred by a would-be teacher.
11
The Washington State Board of Education has provided through regulations for a teacher education program as follows:
12
(1) Four academic years of pre-service education are required, upon completion of which a 'provisional certificate' is issued, valid for one year and renewable for not longer than five years.
13
(2) At least one year of teaching experience is required under the 'provisional certificate.'
14
(3) A fifth year of education at the graduate level is required after compliance with the first two requirements, upon completion of which a 'standard general certificate' is issued.
15
Thus a teacher under a provisional certificate may not continue teaching for more than five years without completing his fifth year of education and thereby obtaining a standard certificate.
16
In February, 1954, taxpayer, having secured his provisional certificate, was employed as a teacher by the Spokane School Board. That year he enrolled as a student in a night school for a course of law. The cerdits received by him through this course of study in 1957 were accepted by the State Board of Education as satisfying the fifth year of education required by their regulations. Taxpayer claimed the cost of tuition, books and supplies for the 1957 school year in the amount of $618.00 as an ordinary and necessary business expense. This amount was disallowed by the commissioner and the deficiency was paid by the taxpayer, who then brought this suit to recover such payment. Judgment in his favor was rendered by the district court.
17
The United States contends that since this education was not required on order to permit taxpayer to continue teaching under his provisional certificate, but only for the securing of a standard certificate, it was preliminary and qualificatory. It refers us to the final sentence of the regulations as quoted in Footnote 1 of this opinion:
18
'* * * if education is required of the taxpayer in order to meet the minimum requirements for qualification or establishment in his intended trade or business or specialty therein, the expense of such education is personal in nature and therefore is not deductible.'
19
The United States contends that the 'standard' certificate represents the 'minimum requirements for qualification or establishment.' It refers us to Revenue Ruling 60-97, 1960-1, Cum.Bull. 69, dealing with minimum requirements, which in part is set forth in the margin.2
20
We cannot agree that under the regulations and rulings the 'standard' certificate represents the munimum requirement for qualification or establishment. In our judgment, that requirement is met by the 'provisional' certificate.
21
Here the state, by its 'provisional' certification, had licensed taxpayer to enter upon his teaching livelihood. It did not withhold judgment as to taxpayer's qualifications. It did not require any appraisal of the manner in which he had provisionally taught. It certified him as presently qualified to teach-- not to serve a period of apprenticeship or internship or of professional learning or tutelage-- but to teach professionally as a teacher.
22
The standard certificate when issued granted him no new authority or capacity. He continued to do precisely what he had already been doing and what he had already been certified as qualified to do. The conditions imposed upon his right to a standard certificate were not, then, conditions upon taxpayer's entrance into his profession, but upon his continuing in it.
23
Under these circumstances, it is our view that the standard certificate cannot be regarded as 'another type of certificate' under the revenue ruling (Footnote 2 of this opinion) and that under that ruling it must be regarded as a 'continuing certificate.' As the ruling itself indicates, it is not the label which the state has chosen to attach to its certificates which is determinative. As we have noted, the standard certificate was forthcoming upon completion of the fifth year of education. It certified simply that the requisites of additional experience and education had been met. Education directed toward the securing of such a certificate, in our judgment, is not progress toward attainment of another type of certificate.
24
Judgment of the district court in the Michaelsen case is affirmed.
JOHNSON
25
This case arises under Oregon law and comes to us on petition of the Commissioner of Internal Revenue for a review of a decision of the Tax Court in favor of the taxpayer.
26
The question presented is whether expenses are deductible under 162(a) when incurred for a dual objective: that of securing a regular permanent certification as teacher, and, secondly, the more immediate objective of securing the right to continue under temporary, emergency certification.
27
In September, 1955, taxpayer was issued an elementary emergency certificate by the State Board of Education of Oregon and began teaching at Coos Bay, Oregon. This certificate was issued on an annual basis. Its issuance depended upon the board's determination that a condition of emergency existed which warranted the issuance of a temporary certificate to one who had not yet qualified for regular certification.
28
In the spring of 1956, taxpayer was re-hired by the Coos Bay School District in the same capacity and at the same salary as for the preceding year, but on the express condition that she qualify under State Board regulations for issuance of a second emergency certificate by attending summer school during the summer of 1956.
29
During the summer of 1956, taxpayer attended an eight-week summer session at a cost of $501.40. Taxpayer selected courses which would serve to assist her in eventually securing permanent certification. As a result of this course of study, the taxpayer secured her second emergency certificate for the year 1956-57 and during that year continued in her employment in Coos Bay. In 1959, upon completion of the required courses of study, taxpayer received a bachelor's degree in education, and in 1960 received a permanent elementary teacher's certificate.
30
On her tax return for 1956, taxpayer claimed as a deduction the $501.40 item of educational expense. The commissioner disallowed the deduction. The Tax Court allowed it.
31
Taxpayer contends that here, as in the Michaelsen case, she had actually entered upon her professional career, having met its minimum requirements through securing her emergency certification. We need not decide upon this contention and assume, arguendo, that she had not. Nevertheless, the incurring of this expense was required by her employer as a condition to her continuing to be employer in her emergency status.
32
Marlor v. Commissioner of Internal Revenue, 2 Cir., 1958, 251 F.2d 615, is squarely to the effect that such expenses are deductible. There the taxpayer had accepted a position as a college tutor. He had to qualify as an instructor within five years in order to be able to be reappointed as tutor and in order to be reappointed for a second year he had to show substantial progress toward a doctorate. The Tax Court disallowed the taxpayer's deduction of expenses of education leading to the doctorate. 27 T.C. 624. Judge Raum dissented. On review, the Court of Appeals reversed per curiam on the basis of the dissenting opinion. That opinion, in its entirety, reads:
33
'The expenses incurred by petitioner had a dual objective. On the one hand, the attainment of the doctorate was necessary in order to qualify for appointment to the permanent staff, and I assume, arguendo, that if such were the only purpose, the expenses would not be deductible any more than educational expenses generally that are incurred by one who is preparing for his profession or calling in life. On the other hand, petitioner's work toward his doctorate had a much more immediate objective. He held a temporary appointment as a tutor and it was made clear to him that it was necessary for him to make substantial progress toward the doctorate in order to retain his position as tutor. In short, the expenses incurred by petitioner were necessary in order to earn the very income which the Commissioner seeks to tax. I find it very difficult to see why such expenses do not qualify as 'ordinary and necessary' business expenses. Petitioner's position is supported by Hill v. Commissioner, 181 F.2d 906 (C.A. 4), which is not satisfactorily distinguished in the majority opinion.'
34
In the case before us, the Tax Court opinion states:
35
'Under the decision in Hill v. Commissioner, 181 F.2d 906 (C.A. 4, 1950), expenses for summer school education are deductible by a school teacher where incurred 'to maintain her present position, not to obtain a new position; to preserve, not to expand or increase; to carry on, not to commence.'
36
'In the instant case, as a prerequisite to maintaining her employment as a teacher under an emergency certificate, petitioner was required to take the summer courses which she took in the summer of 1956 at a cost of $501.40. That the courses selected by petitioner also served to assist her in eventually securing a permanent certificate is incidental to the main reason for petitioner's taking the additional education. Petitioner, in 1959, did obtain her Bachelor's Degree and in 1960 received a permanent teacher's certificate. These facts do 'not alter the fact that the petitioner was required by her employer to obtain certain credits in order to maintain' the status and employment she enjoyed as a teacher under an emergency certificate 'and this she accomplished by her summer studies' in 1956. Robert S. Green, 28 T.C. 1154 (1957). Petitioners are entitled to deduct the $501.40 as an ordinary and necessary business expense.'
37
The commissioner contends that the Tax Court was in error and that Marlor was wrongly decided. He points out that Marlor predates 1.162-5 of the Treasury Regulations (Footnote 1 of this opinion), although the administrative position had been stated in the proposed regulation and in earlier rulings; that Judge Raum and the Court of Appeals in Marlor thus had not had the benefit of the final regulation.
38
Notwithstanding this, we agree with the views of the Tax Court in its opinion in this case.
39
Here it is conceded that the expenses of education were necessary to the taxpayer's continued employment in her emergency status. It is not contended that the educational requirement was an unreasonable one on the part of the Board of Education or that the taxpayer met this requirement in an unreasonable fashion or that the expenses for some other reason could not be regarded as ordinary. The Tax Court has determined (and we do not see how a contrary determination could be sustained) that the main purpose of incurring this expense was to be able to continue in employment.
40
Under such 'dual objective' circumstances as this, to apply the regulation (the final sentence of the quotation, Footnote 1) to preclude allowance of the deduction is, in our judgment, to place the regulation in conflict with the section it purports to regulate. It is tantamount to asserting that because of her second objective taxpayer cannot claim to have been engaged in a trade or business. But we know that she was so engaged. As pointed out in Marlor, it is the income earned from that very engagement which is here being taxed.
41
In the Johnson case the judgment of the Tax Court is affirmed.
1
'Expenses for education.-- (a) Expenditures made by a taxpayer for his education are deductible if they are for education (including research activities)
'(1) Maintaining or improving skills required by the taxpayer in his employment or other trade or business, or
'(2) Meeting the express requirements of a taxpayer's employer, or the requirements of applicable law or regulations, imposed as a condition to the retention by the taxpayer of his salary, status or employment.
Whether or not education is of the type referred to in subparagraph (1) of this paragraph shall be determined upon the basis of all the facts of each case. If it is customary for other established members of the taxpayer's trade or business to undertake such education, the taxpayer will ordinarily be considered to have undertaken this education for the purposes described in subparagraph (1) of this paragraph. Expenditures for education of the type described in subparagraph (2) of this paragraph are deductible under subparagraph (2) only to the extent that they are for the minimum education required by the taxpayer's employer, or by applicable law or regulations, as a condition to the retention of the taxpayer's salary, status, or employment. Expenditures for education other than those so required may be deductible under subparagrph (1) of this paragraph if the education meets the qualifications of subparagraph (1) of this paragraph. A taxpayer is considered to have made expenditures for education to meet the express requirements of his employer only if the requirements are imposed primarily for a bona fide business purpose of the taxpayer's employer and not primarily for the taxpayer's benefit. Except as provided in the last sentence of paragraph (b) of this section, in the case of teachers, a written statement from an authorized official or school officer to the effect that the education was required as a condition to the retention of the taxpayer's salary, status, or employment will be accepted for the purpose of meeting the requirements of this paragraph.
'(b) Expenditures made by a taxpayer for his education are not deductible if they are for education undertaken primarily for the purpose of obtaining a new position or substantial advancement in position, or primarily for the purpose of fulfilling the general educational aspirations or other personal purposes of the taxpayer. The fact that the education undertaken meets express requirements for the new position or substantial advancement in position will be an important factor indicating that the education is undertaken primarily for the purpose of obtaining such position or advancement, unless such education is required as a condition to the retention by the taxpayer of his present employment. In any event, if education is required of the taxpayer in order to meet the minumum requirements for qualification or establishment in his intended trade or business or specialty therein, the expense of such education is personal in nature and therefore is not deductible. * * *'
2
'The state's minimum requirements for qualification or establishment in his intended position have been met by a teacher or school administrator when he has acquired the education necessary to hold a continuing certificate in that position. For the purposes of this Revenue Ruling, a continuing certificate is one which need not be renewed, is renewable or convertible on the basis of experience only, or is renewable indefinitely by acquiring education which is not directed toward required conversion to another type of certificate. In other words, a teacher has met the state's minimum requirements when he is eligible for a certificate and is not required to take additional education showing progress toward the attainment of another type of certificate. The name or term applied to a certificate is not controlling.'
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7 Ill. App.3d 926 (1972)
289 N.E.2d 123
M.T. DEATON, Plaintiff-Appellant,
v.
LLOYD'S JEWELRY COMPANY et al., Defendants-Appellees.
No. 55478.
Illinois Appellate Court First District.
September 20, 1972.
*927 George Kaye, of Chicago, for appellant.
Albert Gore and Solomon I. Hirsh, both of Jacobs, Gore, Burns & Sugarman, of Chicago, for appellees.
Reversed and remanded.
Mr. JUSTICE ADESKO delivered the opinion of the court:
Plaintiff, M.T. Deaton, sued for the collection of two promissory notes executed in a partnership name. At the conclusion of plaintiff's case, in a bench trial, the court found for all defendants and dismissed the complaint. Plaintiff appeals and raises the following issues on review:
1. Whether the plaintiff was entitled to a default judgment against Lloyd's Jewelry Company, and summary judgment against defendants, Thomas J. Lloyd and Lloyd's Jewelry Company; and
2. Whether plaintiff sustained his burden of proof at trial against defendant Thomas J. Lloyd.
The evidence in this case indicates that on August 1, 1956, defendant Thomas J. Lloyd and his son William E. Lloyd were partners in a retail jewelry business in Pocatello, Idaho, operated under the name of Lloyd's Jewelry Company. On that date William E. Lloyd executed two promissory notes, in the amounts of $3,500 and $5,000, in the name of Lloyd's Jewelry Company to plaintiff M.T. Deaton. Plaintiff sues to recover the $5,497.61 still remaining outstanding on those two notes as well as interest and attorney's fees as provided in the notes.
William E. Lloyd was never served with summons in the instant case. Service upon the Lloyd's Jewelry Company partnership was attempted *928 to be obtained by serving Thomas J. Lloyd as a partner who was also served as an individual. The only answer filed in the case at bar was filed by Thomas J. Lloyd and only in his individual capacity.
On July 9, 1970, plaintiff served defendant Thomas J. Lloyd with requests for admissions of facts, pursuant to Supreme Court Rule 216. Plaintiff requested defendant to admit that on August 1, 1956, he was a partner of William E. Lloyd's in a partnership doing business as Lloyd's Jewelry Company and that from June 1, 1957 to April 3, 1965, defendant had not been physically present in the State of Idaho for more than an aggregate of 180 days. Defendant never responded to those requests.
On August 11, 1970, the case was ready for trial, a jury having been waived. The trial judge denied plaintiff's motion for a default order against defendant Lloyd's Jewelry Company, a partnership and plaintiff's motions for summary judgments against defendants Lloyd's Jewelry Company, a partnership and Thomas J. Lloyd, individually.
At trial, plaintiff relied upon the facts admitted by the pleadings and the papers on file and on documentary exhibits consisting of the originals of the two notes sued upon and of the Illinois State Bar Association Minimum Fee Schedule which were received in evidence. At the conclusion of plaintiff's case, defendant Thomas J. Lloyd moved to dismiss the case on the ground that defendant had not been shown to be a partner. The trial court granted defendant's motion. Plaintiff appeals from the order dismissing the complaint as well as the orders denying plaintiff's motions for a default judgment and for summary judgments.
1 Plaintiff's initial contention on appeal is that the trial court erred in denying his motions for a default order against the Lloyd's Jewelry Company partnership and his motions for summary judgments against the partnership and Thomas J. Lloyd individually. The Illinois Civil Practice Act provides that a partnership may be sued in its firm name by leaving a copy of the process with any partner. (Ill. Rev. Stat. 1969, ch. 110, par. 13.4.) Plaintiff made no attempt to serve William E. Lloyd, who executed the notes in the partnership name, in the instant proceeding. Instead he attempted to serve the partnership by serving Thomas J. Lloyd whom he alleged to be a partner. At the trial plaintiff offered evidence of Thomas J. Lloyd's capacity as a partner, by way of an admission. However, our examination of the record reveals that when the motion for a default judgment was argued, no evidence of Thomas J. Lloyd's partnership in Lloyd's Jewelry Company was offered. Absent proof that Thomas J. Lloyd was indeed a proper party to accept service on behalf of the partnership, there is no indication that the partnership was ever properly brought before the court. The trial court's denial of *929 plaintiff's motion for a default judgment against the partnership was proper.
Plaintiff further contends that his pre-trial motions for summary judgment against both the partnership and Thomas J. Lloyd were improperly denied by the trial court. Summary judgment may be granted "* * * if the pleadings, depositions, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment or decree as a matter of law." (Ill. Rev. Stat. 1969, ch. 110, par. 57.) Plaintiff maintains that he should have been granted summary judgment against Thomas J. Lloyd as there was no genuine issue as to any material fact. He contends that Thomas J. Lloyd admitted executing the notes in question by failing to file a verified answer denying the allegation of the complaint and that Thomas J. Lloyd admitted being a partner in Lloyd's Jewelry Company by his failure to respond to plaintiff's request for admissions of fact.
2-4 The party who moves for summary judgment must comply with the statutes or court rules relating thereto, and a failure to follow the prescribed procedure will preclude the granting of the motion. (See e.g., Brainerd v. First Lake County Nat. Bank of Libertyville, 109 Ill. App.2d 251, 248 N.E.2d 542, 23 I.L.P. Judgments, Sec. 74; 49 C.J.S. Judgments, Sec. 222.) By providing that the "* * * opposite party may prior to or at the time of the hearing on the motion file counteraffidavits[,]", Sec. 57 of the Civil Practice Act contemplates that in an action for summary judgment the opposite party should have some reasonable time to prepare a response. (Ill. Rev. Stat. 1969, ch. 110, par. 57(3)). Rule 2.1 (e) of the Circuit Court of Cook County expressly provides that a motion for summary judgment "* * * will not be heard until 10 days after service of notice of motion * * *." In the instant case, the record indicates that plaintiff failed to give defendants any prior notice of his motions for summary judgments and the trial court's denials of plaintiff's motions for summary judgments were not error.
5 Plaintiff's other contention on appeal is that the trial court erred in dismissing plaintiff's claim at the close of plaintiff's case. For the trial court to give a judgment to defendant at the close of the plaintiff's case, it is necessary that the trial court find as a matter of law that the evidence presented by plaintiff viewed most favorably to plaintiff and all the inferences most favorable to him arising from that evidence so overwhelmingly favors the defendant that no contrary verdict based on that evidence could ever stand. Pedrick v. Peoria & Eastern R.R. Co., 37 Ill.2d 494, 229 N.E.2d 504.
Plaintiff's theory at the trial of the instant case was that the execution *930 of the notes in question in the name of Lloyd's Jewelry Company partnership by William E. Lloyd was admitted by failure of defendants to deny their execution by a verified pleading as required by Section 35(2) of the Civil Practice Act. (Ill. Rev. Stat. 1969, ch. 110, par. 35(2).) Plaintiff then contended that defendant Thomas J. Lloyd admitted that he was a partner of William E. Lloyd in the Lloyd's Jewelry Company at the time the notes were executed by failing to respond to plaintiff's request for admissions of fact as required by Supreme Court Rule 216. (Ill. Rev. Stat. 1969, ch. 110A, par. 216.) Plaintiff concluded that under the Uniform Partnership Act, in effect in both Idaho (Idaho Code, Sec. 53-315) and Illinois (Ill. Rev. Stat. 1969, ch. 106 1/2, par. 15), all partners being jointly liable for partnership debts and obligations, Thomas J. Lloyd was liable on the notes in question.
Defendant argues on appeal that no evidence of Thomas J. Lloyd's partnership in Lloyd's Jewelry Company was introduced at trial. Plaintiff introduced into evidence at trial the promissory notes in question and a copy of the Minimum Fee Schedule of the Illinois State Bar Association. Plaintiff, apparently, relying upon the fact that he had made defendant's failure to respond to his request for admissions of fact and thus defendant's admission of his partnership in Lloyd's Jewelry Company, known to the trial court in some of his pre-trial motions and memoranda, failed to offer those admissions in evidence at trial. When, however, before the defense proceeded with its case, the trial court asked plaintiff if that was all the evidence he had, plaintiff replied: "I'd like to call it to your attention that T.J. Lloyd was admitted in the record in this case that he was a partner in the partnership on the date the note was executed. That was filed here on August 6th * * *. The Supreme Court Rule 216 is quite clear. It permits parties to simplify the pleadings by calling for admissions of fact. This admission of fact was duly called for. No objection to it was ever filed. No response to it was ever filed, the time went by, and it was admitted by silence."
6 Defendant had the opportunity and did respond to plaintiff's offer of the admissions arguing that defendant's failure to respond should not be deemed an admission. It appears from the record in the case at bar that the admissions of defendant were indeed sufficiently presented for the consideration of the trial court.
7 The record indicates that in the instant case, plaintiff offered evidence as to the existence of promissory notes executed in a partnership name by a partner. Plaintiff also offered an admission by defendant that he was a partner at the time the notes were executed. Viewing the evidence and the inferences reasonably drawn therefrom in the light most favorable to the plaintiff as required under the Supreme Court's Pedrick *931 decision, we are unable to agree with the trial court that such evidence so overwhelmingly favors defendant that no contrary verdict based on that evidence could ever stand.
The judgment of the Circuit Court of Cook County is therefore reversed and the cause is remanded for a new trial.
Reversed and remanded.
DIERINGER, P.J., and BURMAN, J., concur.
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F I L E D
United States Court of Appeals
Tenth Circuit
UNITED STATES COURT OF APPEALS
JUL 24 1998
FOR THE TENTH CIRCUIT
PATRICK FISHER
Clerk
G. SAM HOUSTON,
Plaintiff-Appellant,
v. No. 97-1389
(D.C. No. 93-WM-2657)
GALE A. NORTON, individually and (D. Colo.)
in her official capacity as Attorney
General, State of Colorado; JAMES
CARR, individually and in his official
capacity as the Assistant Attorney
General, State of Colorado; AMOS
MARTINEZ, individually and in his
official capacity as the Administrator
of the State of Colorado Grievance
Board; CLAIR VILLANO,
individually and in her official
capacity as the Chairperson of the
State of Colorado Grievance Board;
JIM STANLEY, individually and in
his official capacity as the Deputy
District Attorney for the First Judicial
District, State of Colorado; KEVIN
ARMSTRONG, individually and in his
official capacity as Detective, City of
Lakewood, Colorado Police
Department; DAN MONTGOMERY,
individually and in his official
capacity as the Chief of Police, City of
Westminster, Colorado, and unknown
John or Jane Does, individually and in
their official capacities as police
officers, investigators for the cities of
Westminster and Lakewood Police
Departments; RON BECKHAM,
individually and in his official
capacity as the Sheriff of the County
of Jefferson and the Jefferson County
Jail Facility; LINDA ORSELLO;
HILLARY WATTERS; ANN SHORT;
WHEAT RIDGE POLICE
DEPARTMENT, City of Wheat Ridge
Chief of Police or Police John Doe;
JOHN PICKETT; JEFFERSON
COUNTY, BOARD OF COUNTY
COMMISSIONERS; WHEAT RIDGE,
COLORADO, CITY OF; JAY
AMBROSE, Rocky Mountain News
Editor; CHARLIE ABLE; ANN
CARNAHAN; ROCKY MOUNTAIN
NEWS; JACK HURST,
Defendants-Appellees.
ORDER AND JUDGMENT *
Before KELLY, BARRETT, and HENRY, Circuit Judges.
After examining the briefs and appellate record, this panel has determined
unanimously that oral argument would not materially assist the determination of
*
This order and judgment is not binding precedent, except under the
doctrines of law of the case, res judicata, and collateral estoppel. The court
generally disfavors the citation of orders and judgments; nevertheless, an order
and judgment may be cited under the terms and conditions of 10th Cir. R. 36.3.
-2-
this appeal. See Fed. R. App. P. 34(a); 10th Cir. R. 34.1.9. The case is therefore
ordered submitted without oral argument.
Plaintiff, a prisoner appearing pro se, appeals from the district court’s grant
of defendants’ motions to dismiss or for summary judgment in this suit filed
under 42 U.S.C. § 1983. He argues on appeal that the district court abused its
discretion by issuing a final decision.
Because his appellate pleadings offer no coherent explanation of his issue
on appeal, we conclude the appeal is legally frivolous or fails to state a claim
under 28 U.S.C. § 1915(e)(2)(B)(i) or (ii) for purposes of counting “prior
occasions” under 28 U.S.C. § 1915(g). Accordingly, this appeal will be
dismissed.
The district court granted plaintiff leave to proceed in forma pauperis on
April 1, 1998. Plaintiff’s motion for leave to proceed in forma pauperis filed in
this court and referred to this panel is therefore moot. Plaintiff is reminded that
he remains obligated to pay the full amount of the filing fee. See 28 U.S.C.
§ 1915(b)(1).
DISMISSED.
Entered for the Court
James E. Barrett
Senior Circuit Judge
-3-
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2019 IL App (2d) 180505
No. 2-18-0505
Opinion filed September 10, 2019
______________________________________________________________________________
IN THE
APPELLATE COURT OF ILLINOIS
SECOND DISTRICT
______________________________________________________________________________
In re MARRIAGE OF ) Appeal from the Circuit Court
DONNA SLESSER, ) of Du Page County.
)
Petitioner-Appellee, )
)
and ) No. 15-D-2434
)
JAMES D. SLESSER, ) Honorable
) John W. Demling,
Respondent-Appellant. ) Judge, Presiding.
______________________________________________________________________________
JUSTICE HUTCHINSON delivered the judgment of the court, with opinion.
Presiding Justice Birkett and Justice Schostok concurred in the judgment and opinion.
OPINION
¶1 Respondent, James D. Slesser, appeals the trial court’s findings in its judgment for the
dissolution of his marriage to petitioner, Donna Slesser. Specifically, respondent contends that
the trial court (1) incorrectly interpreted his authority pursuant to his father’s trust, the Revocable
Living Trust of James A. Slesser; (2) incorrectly interpreted his authority under his mother’s
trust, the Revocable Living Trust of Dorothy M. Slesser; (3) ignored his responsibilities as
trustee of both trusts; (4) applied the wrong legal standard when it looked beyond the “four
corners” of lien documents in determining that the validity of alleged loans had not been shown
by a preponderance of the evidence; and (5) erred in determining the fair-market value of marital
property known as Lot 7. For the reasons that follow, we affirm.
2019 IL App (2d) 180505
¶2 I. BACKGROUND
¶3 Petitioner and respondent were married on September 27, 1980. In late 1991 or early
1992, respondent incorporated JDS Homes, a construction business. In 2006, JDS Homes
purchased a parcel of land in Burr Ridge known as the Crosscreek Subdivision. The land was
divided into 10 separate lots. With the exception of Lot 7, all of the lots were developed and
sold. In 2012, respondent incorporated JDS Home Builders. Lot 7 is the primary asset of JDS
Homes and JDS Home Builders.
¶4 On December 1, 2015, petitioner filed for dissolution of the marriage. On July 27, 2017,
respondent filed an amended petition for declaratory judgment. In his petition, respondent
alleged:
“During the development of the Crosscreek Subdivision, hundreds of thousands of dollars
were loaned to JDS by two trusts established by [respondent’s] parents, the Revocable
Living Trust of James A. Slesser dated December 13, 1991[,] and the Dorothy M. Slesser
Trust dated December 13, 1991, *** and were used by JDS to make interest and required
principal payments on the Hinsdale Bank loan, real estate tax payments on the Crosscreek
Subdivision property, and fees and miscellaneous expenses related to the Hinsdale Bank
loan.”
Respondent further alleged that the funds from his parents’ trusts were “transferred to collateral
accounts established at Wayne Hummer for the benefit of each trust, then to a holding account at
Hinsdale Bank and, finally, disbursed as needed for the various expenses related to the Hinsdale
Bank loan and the development of the Crosscreek Subdivision property.” Respondent then
averred that “the loans from the Slesser Trusts to JDS were memorialized in two separate
mortgages for $300,000 each, both of which were recorded against the undivided Crosscreek
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2019 IL App (2d) 180505
land parcel on or about February 5, 2010.” Respondent sought a declaration that the funds
transferred from his parents’ trusts created valid and enforceable liens for $300,000 each against
Lot 7, “as marital liabilities subject to equitable allocation between the parties as part of the
overall division of the marital estate.”
¶5 On August 23, 2017, petitioner filed her response to respondent’s petition. She denied its
allegations and demanded strict proof, as respondent had not provided copies of bank statements
reflecting that the funds were loaned from the trusts and that deposits were made into either a
collateral account or a holding account. Petitioner further stated that the mortgages recorded
against Lot 7 were not legitimate loans, because they were intended to benefit respondent.
¶6 The trial court ordered respondent’s petition for declaratory judgment to be taken with
the trial. The trial was held October 2 through 5, 2017. The trial court’s findings on the effect
and validity of the liens recorded against Lot 7 are the crux of this appeal. We will limit our
recitation of the facts and the evidence presented at trial to those surrounding that issue.
¶7 Respondent’s Exhibit No. 30 was his father’s trust. Respondent’s father was named
trustee, with respondent named as trustee in the event that his father was unable to properly
manage his affairs. Under article I of the trust, the trustee was provided with the power to
“withdraw any part of all of the net income or principal of the trust.”
¶8 Respondent’s Exhibit No. 31 was the first amendment to his father’s trust, dated July 2,
1998. The amendment replaced the second paragraph of article V with the following provision:
“If I predecease my spouse, at the time of my death the trustee shall divide the trust property into
two separate trusts known as the Marital Trust and the Family Trust ***.”
¶9 Respondent’s Exhibit No. 32 was a 2005 amendment to his father’s trust. In that
amendment, respondent’s father changed the trustee designation to name himself and respondent
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2019 IL App (2d) 180505
as co-trustees. That amendment also deleted article I of the trust in its entirety and replaced it
with the following:
“The trustee shall have the power to withdraw any part or all of the net income and
principal of the trust for any benefit. Any net income not withdrawn shall be added to the
principal. *** In all cases, any acting trustee may sign for my trust, solely and without
the signature of the other trustee. Only one signature of an acting trustee is necessary to
transfer property or conduct any of the business of my trust ***.”
¶ 10 Respondent’s Exhibit No. 270 was his mother’s trust. Respondent’s father was named
trustee of that trust and respondent was named trustee if his father was unable to properly
manage his financial affairs. Article I of the trust stated that the trustee “shall have power to
withdraw any part or all of the net income and principal of the trust for my benefit.”
Respondent’s Exhibit No. 38 was the July 2, 1998, first amendment to his mother’s trust, which
detailed circumstances if his father predeceased her.
¶ 11 Respondent testified at trial that JDC Homes purchased the Crosscreek Subdivision in
2006 with a loan from Suburban Bank for $1.7 million. However, that amount did not equal the
total purchase price of Crosscreek, because the then-owner took back a note. On December 31,
2017, JDS Homes received a loan from Hinsdale Bank & Trust (Hinsdale Bank) for, according
to respondent, $4,780,634. The note showed an original indebtedness of $1,746,791.30.
According to respondent, this amount was used to pay off the loan from Suburban Bank. During
2007 and 2008, all payments on the Hinsdale Bank loan increased JDS Homes’ indebtedness,
due to what respondent characterized as an interest reserve. Respondent stated that the increases
reflected interest, property tax payments, and improvements to the subdivision. At the end of
2008, the amount due on the loan was $3,301,509.18.
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2019 IL App (2d) 180505
¶ 12 At the end of 2009, the amount due on the loan had increased to $3,587,634. Respondent
testified that, at the end of 2009 and the beginning of 2010, he made payments to Hinsdale Bank
on the loan with transfers from his parents’ trusts. However, respondent was unable to provide
evidence of these transfers. The only evidence he provided concerning payments to the bank was
Exhibit No. 44, a running balance sheet with handwritten notes detailing large payments made
from the sale of lots from the Crosscreek Subdivision. The balance sheet shows an ultimate loan
payoff on June 5, 2015, which was accomplished through two payments, in the amounts of
$136,000 and $27,975.47. No notes on the balance sheet, or any other bank or business records,
were provided to show the source of those funds.
¶ 13 Respondent’s father died in April 2008. Respondent testified that he did not make the
requisite transfers into a family trust, pursuant to article V of his father’s trust, because he did not
“understand it that way.” No funds were withdrawn and no loans were made from the trust
before his father died. In October 2009, respondent’s attorney prepared two mortgages. The first
mortgage listed JDS Homes as the lender and the Dorothy M. Slesser Trust as the borrower of
$300,000. The second mortgage listed JDS Homes as the lender and the James A. Slesser Trust
as the borrower of $300,000. Respondent characterized the transposition of the lenders and the
borrowers on the mortgages as “in error.” The mortgages were recorded on February 5, 2010.
¶ 14 Respondent admitted that, when the mortgages were recorded, $300,000 had not been
paid from either trust to JDS Homes or himself. Respondent testified that he filed the mortgage
liens for those amounts because he “knew money was being taken out and being borrowed ***.”
He further admitted that he had not made any repayments on the alleged loans.
¶ 15 Respondent testified that the Hinsdale Bank loan was paid down with either proceeds
from the sale of Crosscreek Subdivision lots or funds from his parents’ trusts. He averred that
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2019 IL App (2d) 180505
Hinsdale Bank’s lien on Lot 7 was purchased by his parents’ trusts on June 5, 2015. This
agreement was memorialized through an “Assignment of Mortgage and Assignment of Rents”
between Hinsdale Bank, the “James D. Slesser Trust,” and the Dorothy M. Slesser Trust.
Respondent testified that the reference to the James D. Slesser Trust was in error, as no such
entity exists. The agreement denotes that the trusts agreed to purchase certain documents in
connection with the Hinsdale Bank loan and reflects a purchase price of $240,000. Respondent
stated that Hinsdale Bank’s lien against Lot 7 was never released but, rather, was assigned to the
trusts, as they had bought the right to enforce its terms. The “Assignment of Mortgage and
Assignment of Rents” was recorded on July 30, 2015.
¶ 16 Petitioner testified that she did not believe that any money was owed to respondent’s
parents’ trusts regarding Lot 7. Her belief was based on the “use of collateral that [respondent’s]
father allowed him to use and also the fact he didn’t sign anything to repay it.” She stated that
she did not hear or participate in any conversation in which respondent discussed repaying the
trusts. She admitted that Lot 7 was a marital asset but said that she was unaware of the existence
of any liens on that property.
¶ 17 The trial court made the following findings regarding the mortgages and liens on Lot 7:
“[T]he most contentious issue at trial was the value of JDS Homes and JDS Home
Builders. It is acknowledged that the primary asset of JDS Homes is a real estate lot, one
single real estate lot with a value of between [$400,000] and $450,000. The lot is the last
in a subdivision that has been developed and the respondent has been holding that lot to
use as a design build contract.
There is no dispute with respect to the value of the lot. The dispute lies with the
efficacy and validity of certain liens which have been placed on the real estate.
-6-
2019 IL App (2d) 180505
***
The collateralization with respect to the acquisition of the initial land was through
Hinsdale Bank. Actually it was through Suburban Bank and then finally Hinsdale Bank
collateralized it to pay off the Hinsdale Bank.
In addition to the land acquired, *** the loan was collateralized by certain trusts
and the parties’ marital real estate, marital home.
At some point, Hinsdale Bank drew payments from the trusts. These trusts
eventually negotiated a purchase of the Hinsdale Bank collateralization.
Under the terms of [respondent’s] father’s trust, [respondent] had the power to
withdraw income and principal for any purpose. The money withdrawn was moved to an
account operated under his name. The documents prepared for the purchase of the
Hinsdale loan were in [respondent’s] name, not the trust.
The evidence is not clear and does not show by the preponderance of the evidence
that the transactions were actual loans or funds which [respondent] was authorized under
the trust documents to withdraw, as opposed to withdrawals on his own behalf for his
own benefit.
Again, the evidence was not clear that the transactions were actual loans or funds,
but rather were moneys [sic] which [respondent] authorized under the trust documents to
withdraw *** on his own behalf for his own benefit.
While the liens on the property on behalf of the trust may be effective and
technically valid, [respondent’s] personal obligation on the loans and the actual validity
of the loans themselves has not been shown by a preponderance of the evidence.
***
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2019 IL App (2d) 180505
Respondent *** is awarded JDS Homes and JDS Home Builders, which has a
collective value of between [$400,000] and $450,000. [Respondent] is ordered to pay
[petitioner] $125,000 for her interest in JDS Homes and JDS Home Builders.
Judgment will enter against [respondent] and constitute a lien on the property held
by JDS Homes. ***
[Petitioner] is awarded a less disproportionate amount of the business, which is
between 31 and 27 percent based on the fact that JDS Homes and JDS Home Builders
represents the primary asset that [respondent] utilizes to generate his income, a portion of
which he will pay as maintenance.”
¶ 18 On May 31, 2018, the trial court issued its written judgment for dissolution of marriage.
The judgment reflects the findings above, although it places a value of between $400,000 and
$425,000 on Lot 7. This appeal followed.
¶ 19 II. ANALYSIS
¶ 20 On appeal, respondent contends that the trial court (1) incorrectly interpreted his
authority pursuant to his father’s trust; (2) incorrectly interpreted his authority under his mother’s
trust; (3) ignored his responsibilities as trustee of both trusts; (4) applied the wrong legal
standard when it looked beyond the “four corners” of the lien documents in determining that the
validity of the alleged loans had not been shown by a preponderance of the evidence; and (5)
erred in determining Lot 7’s fair-market value. We begin our analysis with respondent’s first
three contentions.
¶ 21 In his amended petition for declaratory judgment, respondent requested the trial court to
declare that the funds transferred from his parents’ trusts created valid and enforceable liens for
$300,000 each against Lot 7, “as marital liabilities subject to equitable allocation between the
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2019 IL App (2d) 180505
parties as part of the overall division of the marital estate.” The trial court ordered respondent’s
petition to be taken with the trial. Section 2-701(a) of the Code of Civil Procedure provides:
“No action or proceeding is open to objection on the ground that a merely declaratory
judgment or order is sought thereby. The court may, in cases of actual controversy, make
binding declarations of rights, having the force of final judgments, whether or not any
consequential relief is or could be claimed, including the determination *** of any ***
contract or other written instrument, and a declaration of the rights of the parties
interested.” 735 ILCS 5/2-701(a) (West 2016).
No technical form is prescribed for a declaration of rights in a suit for declaratory judgment, and
it is sufficient if the rights can be ascertained from the court’s findings in view of the controversy
presented. City of Quincy v. Sturhahn, 18 Ill. 2d 604, 610-11 (1960). “It is not necessary that a
declaratory judgment shall use the phrase ‘the court declares that rights of plaintiffs (or
defendants) to be,’ as long as the court actually passes upon or adjudicates the issues raised by
the pleadings.” Id. at 611. Arguments not raised in a declaratory judgment petition are forfeited
on appeal and this court will not address whether the trial court’s findings were erroneous. See In
re Marriage of Heinrich, 2014 IL App (2d) 121333, ¶ 62.
¶ 22 In finding that respondent did not show by a preponderance of the evidence that the
recorded mortgages represented actual loans from the trusts to respondent as opposed to just
money respondent withdrew for his own benefit, the trial court adjudicated the issues raised in
the declaratory judgment petition. Respondent’s petition did not raise any issues related to the
language of the trusts or his obligations as trustee under that language. Therefore, respondent’s
first three contentions are forfeited, as they were never raised before the trial court.
-9-
2019 IL App (2d) 180505
¶ 23 Respondent next contends that the trial court “applied the wrong legal standard when it
looked beyond the four corners of the lien documents in determining that [respondent’s] personal
obligation on the loans and the actual validity of the loans themselves had not been shown by a
preponderance of the evidence.” Respondent’s argument here seems to be that the mortgage
documents contain no ambiguity and must, therefore, be considered only on their face. He asks
this court to apply the de novo standard of review to this issue, as it involves the interpretation of
mortgage language. See 3432 West Henderson Building, LLC v. Gizynski, 2017 IL App (1st)
160588, ¶ 22 (a reviewing court must interpret the language of a mortgage under the de novo
standard of review, which is applied to all contracts).
¶ 24 To contend that the mortgage documents contain no ambiguity strikes us as slightly
disingenuous, considering the fact that the documents list JDS Homes as the lender and
respondent’s parents’ trusts as the borrower. That point notwithstanding, the trial court’s findings
on the validity of the alleged loans were based upon a preponderance of the evidence. When a
trial court makes findings by a preponderance of the evidence in a civil matter, a reviewing court
will reverse those findings only if they are against the manifest weight of the evidence. Best v.
Best, 223 Ill. 2d 342, 348-49 (2006). A decision is against the manifest weight of the evidence
only when an opposite conclusion is clearly apparent or when the court’s findings appear to be
unreasonable, arbitrary, or not based on the evidence. In re Marriage of Romano, 2012 IL App
(2d) 091339, ¶ 44.
¶ 25 Respondent presented no evidence to illustrate any obligation to repay his parents’ trusts.
The trial court was presented with evidence that respondent, at some point, exercised his
authority as trustee under each trust to withdraw funds and that he did so to purchase the
Hinsdale Bank loan documents. Those funds were moved to an account in respondent’s name,
- 10 -
2019 IL App (2d) 180505
not in the names of his parents’ trusts. When asked to provide proof of an actual loan, respondent
could not do so. The mere fact that respondent had his attorney draft and record mortgages,
without evidence of an obligation to actually repay the trusts any amount of money, is not
sufficient to create an encumbrance on Lot 7 and reduce its value. As such, we agree with the
trial court’s determination that “the evidence is not clear and does not show by the
preponderance of the evidence that the transactions were actual loans or funds which
[respondent] was authorized under the trust documents to withdraw, as opposed to withdrawals
on his own behalf for his own benefit.”
¶ 26 We now come to respondent’s final contention. Respondent believes that the trial court’s
determination that Lot 7’s fair-market value was between $400,000 and $450,000 was against
the manifest weight of the evidence. Again, respondent directs us to acknowledge $600,000 in
debt obligations to the trusts. The evidence presented at trial does not support this assertion.
¶ 27 The evidence respondent presented at trial indicated that Lot 7 was listed for sale at
$440,000. The evidence does not show that respondent had any actual obligation to repay a loan
or any other indebtedness. Without such evidence, there is nothing to suggest that the mortgages
actually encumbered or reduced the value of Lot 7. The trial court found that the mortgages,
while potentially valid, do not show any obligation for respondent to repay a valid loan. This
finding is not against the manifest weight of the evidence, and we will not disturb the trial court’s
valuation of Lot 7.
¶ 28 For the foregoing reasons, the judgment of the circuit court of Du Page County is
affirmed.
¶ 29 Affirmed.
- 11 -
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United States Court of Appeals
Fifth Circuit
F I L E D
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT February 23, 2006
Charles R. Fulbruge III
Clerk
No. 05-40805
Conference Calendar
UNITED STATES OF AMERICA,
Plaintiff-Appellee,
versus
SAUL HERNANDEZ-AGUIRRE,
Defendant-Appellant.
--------------------
Appeal from the United States District Court
for the Southern District of Texas
USDC No. 1:04-CR-934-ALL
--------------------
Before GARZA, DENNIS, and PRADO, Circuit Judges.
PER CURIAM:*
Saul Hernandez-Aguirre appeals his sentence for being an
alien unlawfully found in the United States following deportation
after having been convicted of an aggravated felony, in violation
of 8 U.S.C. § 1326(a) and (b). On appeal, he challenges the
constitutionality of § 1326(b)’s treatment of prior felony and
aggravated felony convictions as sentencing factors rather than
elements of the offense that must be found by a jury in light of
Apprendi v. New Jersey, 530 U.S. 466 (2000). Hernandez-Aguirre’s
constitutional challenge is foreclosed by Almendarez-Torres v.
*
Pursuant to 5TH CIR. R. 47.5, the court has determined that
this opinion should not be published and is not precedent except
under the limited circumstances set forth in 5TH CIR. R. 47.5.4.
No. 05-40805
-2-
United States, 523 U.S. 224, 235 (1998). Although Hernandez-
Aguirre contends that Almendarez-Torres was incorrectly decided
and that a majority of the Supreme Court would overrule
Almendarez-Torres in light of Apprendi, we have repeatedly
rejected such arguments on the basis that Almendarez-Torres
remains binding. See United States v. Garza-Lopez, 410 F.3d 268,
276 (5th Cir.), cert. denied, 126 S. Ct. 298 (2005).
Hernandez-Aguirre properly concedes that his argument is
foreclosed in light of Almendarez-Torres and circuit precedent,
but he raises it here to preserve it for further review.
Hernandez-Aguirre next raises a Fourth Amendment challenge
to the collection of a DNA sample as a condition of his
supervised release. As he concedes, such a claim is not ripe for
review, and we lack jurisdiction to consider it. United States
v. Riascos-Cuenu, 428 F.3d 1100, 1101-02 (5th Cir. 2005),
petition for cert. filed (Jan 9, 2006) (No. 05-8662).
Accordingly, that portion of the appeal must be dismissed.
JUDGMENT AFFIRMED; APPEAL DISMISSED IN PART.
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940 S.W.2d 687 (1996)
Tracy Jay NIXON, Appellant,
v.
The STATE of Texas, Appellee.
No. 08-94-00075-CR.
Court of Appeals of Texas, El Paso.
November 21, 1996.
Rehearing Overruled March 12, 1997.
*688 Charles Louis Roberts, El Paso, for appellant.
Jaime E. Esparza, District Attorney, El Paso, for appellee.
Before LARSEN, McCLURE and CHEW, JJ.
OPINION
CHEW, Justice.
This is an appeal from a conviction for the offense of indecency with a child. A jury convicted the Appellant, Tracy Jay Nixon, and after his plea of true to the State's enhancement allegations, sentenced him to 99 years' confinement in the Texas Department of Criminal JusticeInstitutional Division. We affirm.
Factual Background
At 4 p.m. on June 22, 1993, Tracy Nixon, finished his day's work as a construction foreman and left a construction site located in East El Paso. About an hour later, six-year-old J.J. and a friend were playing on the grounds of the Cielo Vista apartments in East El Paso. J.J. and her friend testified that a man approached them and told them that there were some dolls in the laundry room that might belong to them. The children went into the laundry room to look for the dolls. The man told J.J. that the dolls might be inside the dryer. When the child looked inside the dryer, the man lifted her skirt. J.J. told him to stop. Instead the man exposed his "private" to J.J. J.J.'s friend became frightened and ran out to get J.J.'s parents. J.J. attempted to leave the laundry room, but the man would not let her. At trial, J.J. identified Nixon as the man from the laundry room. J.J.'s mother testified that she and her husband, J.J.'s stepfather, were in their apartment on that afternoon when J.J.'s friend ran into the apartment *689 screaming that a man in the laundry room was going to take J.J. J.J.'s parents ran to the laundry room along with J.J.'s friend, calling J.J.'s name. J.J.'s mother saw a man in a light yellow car hurriedly back out of the parking lot. She was able to see the first three letters of the license plate on the car, CZB, and asked her husband to get the full number. J.J.'s stepfather was able to get part of the license plate number. He also saw the driver. He then called the police and reported the incident.
Officer Armitage arrived at the apartment complex and found J.J., J.J.'s family, and J.J.'s friend still standing in the parking lot. Officer Armitage spoke with them, getting a description of the car, the driver, and the license plate number. The license plate number, CZB 528, proved to be an invalid number. Officer Armitage left a case information card for follow-up and left the scene. The police made no further attempt to locate a suspect through the license plate number.
About two weeks after the incident, J.J. and her family were driving in the parking lot of a local shopping mall when J.J.'s mother saw what she thought to be the same car she had seen leaving the laundry room parking lot. She testified that she looked inside the car and recognized the driver as the man she saw leaving the laundry room. J.J.'s stepfather also testified that he recognized the car and the driver. They followed the car when it left the mall. During this time, J.J.'s mother and stepfather got the license plate number CZB ___. J.J.'s mother then called Detective Pantoja, who had been assigned to the case, and gave him the license plate number. CZB ___ was registered to a 1986 Pontiac owned by Nixon.
Nixon appeals his conviction by ten points of error. The first point alleges reversible error in the form of inadmissible hearsay. The next five points allege error in failing to charge the jury on their consideration of the availability of parole. The final four points address testimony and prosecution argument allegedly commenting on Nixon's post arrest silence. Each group of points is closely interrelated, therefore, we address each group together.
1. Hearsay Statement
Nixon alleges that the trial court committed reversible error in failing to sustain his objection during the following exchange between the prosecutor and Officer Armitage regarding the license number J.J.'s family gave Armitage at the time of the incident:
State: What was the license plate number that was given to you?
Defense: Objection. The question calls for hearsay.
State: It's excited utterance, present sense impression.
The Court: Overruled. You may respond.
. . . . .
Witness: They [J.J.'s family] gave me Texas, Charles Zebra Boyd 528.
Without further explanation, Nixon asserts that Officer Armitage's alleged hearsay testimony identifying the license plate number "formed a critical link" supporting the State's case "which had certain weaknesses in regard to the identification of the Appellant." Thus, Nixon appears to argue that the challenged testimony of the similar license plate number given at the scene makes it more likely that the family's identification of Nixon two weeks later is valid.
Armitage's testimony, however, is not the only evidence in the record of prior identification of a similar license plate number. J.J.'s mother testified, without objection, that she was able to identify the first three letters of the plate, CZB, when she observed the car speeding away from the laundry room. J.J.'s stepfather testified that he had been able to get the license plate "within two numbers" when he watched the car leave the scene.[1] This testimony establishes essentially the same fact Nixon complains was improperly *690 established by Armitage's alleged hearsay: that the family reported a license number very similar to Nixon's correct plate number at the time of the incident. Any error in admitting the challenged testimony is harmless therefore. When alleged hearsay evidence is cumulative of the same evidence adduced from other witnesses, no reversible error is shown. See Thomas v. State, 621 S.W.2d 158, 164 (Tex.Crim.App.1981); Huff v. State, 560 S.W.2d 652, 653 (Tex.Crim.App. 1978). Accordingly, we overrule Point of Error One.
2. Failure to Give Charge on Consideration of Parole
In Points of Error Two through Six, Nixon complains that the trial court committed reversible error in failing to charge the jury on consideration of the parole law until after the jury sent two notes indicating that they might be considering parole in assessing punishment. During the jury's deliberations, the trial court received a message from the jury which read, "need the formula for time sentence and time served." The trial court notified counsel that she intended to reply: "There is no formula for you to apply in assessing punishment. You may only consider that evidence which is before you and the instructions of the court." Defense counsel objected and requested that the reply include a provision stating that the jury should only consider the sentence to be given, and not any time that the defendant was expected to actually serve. The court overruled Nixon's objection and request and submitted the reply as first stated. The jury sent another note asking, "What is the earliest parole on a sentence of life imprisonment versus 99 years?" The trial court proposed the following supplemental charge to counsel:
I must now give you some additional law that I will charge you in this case. Under the law applicable in this case, the Defendant, if sentenced to a term of imprisonment, may earn time off the period of incarceration imposed through the award of good conduct time. Prison authorities may award good conduct time to a prisoner who exhibits good behavior, diligence in carrying out prison work assignments, and attempts at rehabilitation. If a prisoner engages in misconduct, prison authorities may also take away all or part of any good time earned by the prisoner.
It is also possible that the length of time for which the Defendant will be imprisoned might be reduced by the award of parole. Under the law applicable in this case, if the Defendant is sentenced to a term of imprisonment, he will not become eligible for parole until the actual time served equals one-half of the sentence imposed, or 30 years, whichever is less, without consideration of any good conduct time he may earn. Eligibility for parole does not guarantee that parole will be granted. It cannot accurately be predicted how the parole law and good conduct time might be applied to this Defendant if he is sentenced to a term of imprisonment because the application of these laws will depend on decisions made by prison and parole authorities.
You may consider the existence of parole law and good conduct time. However, you are not to consider the extent to which good conduct time may be awarded to or forfeited by this particular Defendant. You are not to consider the manner in which the parole law may be applied to this particular Defendant.
The State had no objection. Nixon objected to the proposed charge and requested a charge instructing the jury not to consider parole at all. The trial court overruled the objection and the request. We note that the supplemental charge was correctly given in that it tracks the language of the instruction required by Tex.Code Crim.Proc.Ann. art. 37.07, § 4 (Vernon Supp.1997).[2]
*691 Nixon alleges on appeal that the trial court erred in failing to give the Article 37.07, § 4 parole instruction with the original charge and again erred in not submitting it in response to the jury's first note. Finally, Nixon asserts that in response to the jury's second note, the trial court should have provided a stronger response than the Article 37.07, § 4 charge. When the trial court presented its initial proposed charge to the parties, defense counsel specifically stated that he had "no objection" to the charge. Although submission of the parole instruction is mandatory, any error caused by the trial court's initial failure to include it in the charge was waived by Nixon's failure to object to its absence. See Kinnamon v. State, 791 S.W.2d 84, 96 (Tex.Crim.App.1990); Ramos v. State, 831 S.W.2d 10, 17 (Tex.App. El Paso 1992, pet. ref'd).
Nevertheless, the jury's second note made it obvious that the jury was on its own initiative, probably considering the effects of parole law in deciding between a 99 year sentence on the one hand and a life sentence on the other. As a result, we conclude the issue was revived, and it became incumbent upon the trial court to give the jury the appropriate instruction pursuant to Article 37.07, § 4. See Ramos, 831 S.W.2d at 18. In this case, the trial court submitted the appropriate instruction in response to the jury's second note, which appears to have come immediately after the jury received the trial court's response to the first note, and thus cured its own error. Nixon contends, however, that the jury had already started to consider parole, and it was therefore too late to cure the harm. We must disagree. Appellate courts generally presume the jury followed the instructions, but this presumption is rebuttable. Ramos, 831 S.W.2d at 18. We must therefore consider whether, in this case, Nixon rebutted the presumption that the jury followed the supplemental charge.
The instant facts show that although the jury appeared to be improperly considering parole, the trial court gave the jury the appropriate instruction in response. The punishment assessed in this case was close to the maximum, but in light of Nixon's plea of true to three prior convictions, the lengthy sentence in and of itself does not necessarily indicate any improper consideration of parole or application of good time. We cannot know what was in the minds of the jurors as they deliberated. Their notes, however, provide some insight. The jury's second note indicated that they were probably attempting to decide between assessing 99 years on the one hand, or life on the other. The note seems to indicate that their decision between the two sentences might have been dependent upon the application of parole. There is no indication in the notes or elsewhere in the record whether consideration of good time or parole entered into the jury's determination to give one or the other of those sentences as opposed to a lesser one. Thus, on the facts of this case, we can only discern that the jury might have been considering parole in making a decision between a 99 year sentence and a life sentence. In the end, and after receiving the supplemental instructions, the jury came back with the lesser of the two sentences. On these facts, we cannot say that there is sufficient evidence to rebut the presumption that the jury fully followed the trial court's instructions on consideration of parole law once the trial court gave them, nor is there sufficient evidence to indicate a need for an additional, stronger instruction than the Article 37.07, § 4 instruction given.
Accordingly, we overrule Points of Error Two through Six.
3. Alleged Comments on Nixon's Post Arrest Silence
In Points of Error Seven through Ten, Nixon alleges that the prosecutor impermissibly referred to Nixon's post arrest silence on several occasions during questioning of witnesses and closing argument. Nixon complains of the following testimony elicited from Nixon by the State:
State: Just like you pled innocent because you're not guilty, right?
Appellant: I am not guilty.
*692 State: Okay. Just like you gave a statement to the police right up front because you weren't guilty, right?
Appellant: Not guilty.
State: So you gave them a statement, right, back on July 13th?
Appellant: No, sir.
Defense Counsel: Objection.
Appellant: No written statements have been taken from me.
State: But after you heard how the little girl testified, now you want to testify, right?
Appellant: Sir, I believe my testimony was planned long before today.
State: If we take your word for it, right, sir?
Appellant: You don't have to take my word for it.
State: You never made any other statements, did you?
Appellant: Why give a statement to the police?
State: Well, if you were innocent, maybe they would have dropped the charges.
. . . . .
State: I can't ask you questions, you know that. I can't come over to you and ask you questions in the jail, can I?
Appellant: I don't know why not.
State: Ask him. You knew about your Fifth Amendment right, didn't you?
Appellant: Yes, I do.
State: You chose to exercise it at that time, didn't you?
Appellant: I have not exercised it yet.
State: Did you give a statement?
Appellant: Not written. Was I asked for one?
State: Okay. You did talk to the police?
Appellant: For a brief period, yes.
Nixon also complains of the following statement the prosecutor made during closing:
You know, it's so important, and Mr. Pinion [Defense Counsel] brings it out repeatedly, that Detective Pantoja somehow or another was negligent because he didn't immediately take long, sworn statements from people. Yet look at the Defense's witnesses. Where are their statements? Aren't you going to evaluate people on the same level? Where's their written statements?
Impeachment
It is well established that a defendant's post-arrest silence may not be used against him at trial. Sanchez v. State, 707 S.W.2d 575, 578 (Tex.Crim.App.1986). A comment on a defendant's post-arrest silence violates the Fifth Amendment prohibition against self-incrimination. Doyle v. Ohio, 426 U.S. 610, 617-18, 96 S.Ct. 2240, 2244-45, 49 L.Ed.2d 91 (1976); Miranda v. Arizona, 384 U.S. 436, 468, n. 37, 86 S.Ct. 1602, 1625, n. 37, 16 L.Ed.2d 694 (1966). It violates the defendant's right to be free from compelled self-incrimination under Article I, Section 10 of the Texas Constitution. Sanchez, 707 S.W.2d at 578; Sutherlin v. State, 682 S.W.2d 546, 548 (Tex.Crim.App.1984); Cuellar v. State, 613 S.W.2d 494, 495 (Tex.Crim. App.1981). A comment on a defendant's post-arrest silence is akin to a comment on his failure to testify at trial because it attempts to raise an inference of guilt arising from the invocation of a constitutional right. Dinkins v. State, 894 S.W.2d 330, 356 (Tex. Crim.App.1995).
However, to preserve error concerning the erroneous admission of evidence, a defendant must timely object until receiving an adverse ruling. Harris v. State, 784 S.W.2d 5, 12 (Tex.Crim.App.1989); Tex. R.Crim.Evid. 103(a)(1). This rule applies to cases where the defendant claims that the State utilized his post-arrest silence for impeachment purposes. Wheatfall v. State, 882 S.W.2d 829 (Tex.Crim.App.1994); see also, Smith v. State, 721 S.W.2d 844, 855 (Tex. Crim.App.1986); Rezac v. State, 782 S.W.2d 869, 870 (Tex.Crim.App.1990); Cisneros v. State, 692 S.W.2d 78, 82-3 (Tex.Crim.App. 1985); Cacy v. State, 901 S.W.2d 691, 699 (Tex.App.El Paso 1995, pet. ref'd). This allows the trial court to rule on the objectionable matter and to allow opposing counsel an opportunity to supply other testimony or to withdraw the evidence. See Zillender v. *693 State, 557 S.W.2d 515, 517 (Tex.Crim.App. 1977).
Nixon did not properly object to any of the prosecutor's questions implicating his post-arrest silence. The only objection in the record is to the question, "So you gave them a statement, right, back on July 13th?" Nixon did not, however, obtain a ruling on that objection, and the witness was allowed to continue testifying. The record shows that Nixon made no objection whatsoever to any of the other alleged comments on his post arrest silence. Thus, Nixon preserved nothing for our review. Though we strongly disapprove of the prosecutor's egregious remarks, we must nonetheless overrule Points of Error Seven through Nine.[3]
Comments on Post Arrest Silence During Closing Argument
Nixon also failed to object to the prosecutor's argument. The Court of Criminal Appeals recently overturned the long-standing rule that a defendant need not object to incurable jury argument in order to preserve error. Cockrell v. State, 933 S.W.2d 73, 100 (Tex.Crim.App.1996)(overruling Romo v. State, 631 S.W.2d 504 (Tex.Crim. App.1982) and Montoya v. State, 744 S.W.2d 15, 37 [Tex.Crim.App.1987]). Consequently, a defendant must now object at trial and obtain an adverse ruling in order to complain on appeal of erroneous incurable jury argument. Accordingly, we must also overrule Point of Error Ten.
Having overruled all points of error, the judgment of the trial court is affirmed.
NOTES
[1] Although Nixon objected to J.J.'s stepfather's testimony on the ground that it was speculative, the trial court properly overruled the objection. J.J.'s stepfather testified that he got the correct license plate when the family spotted Nixon in the shopping center parking lot. He therefore had personal knowledge of the correct license plate number and also of how many numbers he correctly reported to police at the time of the incident.
[2] Nixon correctly points out that TEX.CODE CRIM. PROC.ANN. art. 37.07, § 4(b) applies to this case and the supplemental charge the trial court gave corresponds to Section 4(a). The only difference in the two is that (b) would have instructed the jury that Nixon would have to serve at least one fourth of the sentence or 15 years, rather than one half of the sentence or 30 years as the supplemental charge read. Because the substance of the instruction under (a) and (b) is identical with the exception of the difference in the calculation, and because the error was actually favorable to Nixon, that is, the jury would have thought that he would have to serve more time before parole eligibility, we do not find any harm in this particular error. Additionally, Nixon did not object to the instruction on this ground.
[3] This issue has been the focus of painstaking consideration by the Court. As issued, it reflects the effort of the Court to follow the jurisprudence and precedent of the day to provide coherent and consistent interpretation of that jurisprudence. It is the author's constitutional duty and obligation to follow the law as announced by our superior courts. That does not mean that I necessarily agree with those interpretations and rulings. It is recognized that the right to remain silent, though immune from destruction by the United States and Texas constitutions, is not immune from statute and regulation for the common good. But this case, because of its specifics, calls into question the seeming elevation of procedural rules over basic principles that guarantee a defendant a fair trial.
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Filed 6/4/14 P. v. Studer CA5
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
FIFTH APPELLATE DISTRICT
THE PEOPLE,
F066340
Plaintiff and Respondent,
(Super. Ct. No. TF006044A)
v.
TRAVIS STUDER, OPINION
Defendant and Appellant.
THE COURT*
APPEAL from a judgment of the Superior Court of Kern County. Cory
Woodward, Judge.
James Johnson, under appointment by the Court of Appeal, for Defendant and
Appellant.
Kamala D. Harris, Attorney General, Dane R. Gillette, Chief Assistant Attorney
General, Michael P. Farrell, Assistant Attorney General, Louis M. Vasquez, Leanne
LeMon and Lewis A. Martinez, Deputy Attorneys General, for Plaintiff and Respondent.
-ooOoo-
* Before Levy, Acting P.J., Peña, J. and Sarkisian, J.†
† Judge of the Superior Court of Fresno County, assigned by the Chief Justice
pursuant to article VI, section 6 of the California Constitution.
Appellant, Travis Studer, was charged with committing the following offenses on
July 12, 2012:1 attempted first degree robbery (Pen. Code, §§ 212.5 subd. (a), 664),2
first degree burglary (§§ 459, 460, subd. (a)), and assault with a deadly weapon (§ 245,
subd. (a)(1)). It was also alleged that in committing the count 1 offense, appellant
personally inflicted great bodily injury (§ 12022.7, subd. (a)). A jury convicted appellant
on counts 1 and 2, found the enhancement allegation true, and acquitted appellant on
count 3. The court imposed a prison term of five years.
On appeal, appellant contends the court erred prejudicially in admitting evidence
that the victim’s house was burglarized on July 11. We affirm.
FACTUAL AND PROCEDURAL BACKGROUND
Facts - Prosecution Case
In July 2012, Roberto Ruiz owned a house and was in the process of selling it and
moving out.3 On July 11, when appellant was not at the house, someone had entered the
garage attached to the house and stolen a generator and some batteries located in the
garage that were part of the solar-powered electrical system of the house.
Because of the burglary that had occurred earlier that day, Ruiz was staying
overnight at the house on the night of July 11-12, along with his nephew, Joel Gonzalez.
Because of the theft of the generator and batteries, the house had no electricity.
Gonzalez testified to the following: At some point “in the middle of the night,” he
“heard a door smash.” He went to the window and saw, parked in the driveway, a station
wagon “that didn’t belong [on] the property.” He went to the room where Ruiz was
sleeping and asked his uncle if he was expecting anyone.
1 All references to dates of events are to dates in 2012.
2 All statutory references are to the Penal Code unless otherwise indicated.
3 Except as otherwise indicated, our factual summary is taken from Ruiz’s
testimony.
2
Ruiz testified that he woke when Gonzalez entered the room and told him to get
up because “‘a car drove in.’” Ruiz “sent [Gonzalez] outside,” opened the door that
connected the kitchen and the garage, entered the garage, and saw appellant standing in
front of the “solar boxes.” Appellant was holding a “drill” in his hand.4 Ruiz was
carrying a flashlight but he did not have a “weapon.”
Ruiz yelled at appellant, “‘What are you doing here?’” At that point, appellant
“came at” Ruiz and the two fought. Appellant hit Ruiz one or two times in the head with
the drill and Ruiz hit appellant with the flashlight. Appellant struck Ruiz first. There was
a hammer in the garage, and at some point appellant “had it in his hand.” Ruiz was able
to take the hammer from appellant.
Gonzalez testified to the following: After he woke Ruiz and Ruiz went to the
garage, Gonzalez remained in the house. When Gonzalez heard Ruiz “screaming for
help,” he picked up a shotgun that was kept in the house and went into the garage, where
he saw appellant hitting Ruiz in the head with an “object” he could not identify. Ruiz
was saying, “‘He is going to kill me. Just shoot him.’” Gonzalez fired a shot as a
warning, and when appellant continued hitting Ruiz and Ruiz “moved to the side,”
Gonzalez fired a second shot, aiming at appellant’s shins. At that point appellant “went
outside.” Gonzalez followed. He saw appellant’s hand move in the area of his waist and,
thinking that appellant might be “pulling a gun,” Gonzalez fired a third shot at appellant’s
right leg. At that point, both appellant and Ruiz were calling for help, so Gonzalez called
911. He then went into the garage to look for Ruiz.
Ruiz testified that when appellant “started hitting [Ruiz] in the head,” Ruiz “yelled
out for [Gonzalez],” and Gonzalez “came to the garage” and “fired at” appellant.
4 Appellant testified with the aid of a Spanish-language interpreter. The transcript
indicates that initially Ruiz identified the tool appellant was holding as, “[l]ike a
screwdriver to remove the screws,” and Ruiz referred to the tool several times thereafter
as a screwdriver. The interpreter later indicated that Ruiz had testified the tool was a drill
and that the interpreter had made a translation mistake.
3
Appellant then stopped hitting Ruiz, and Gonzalez fired another shot. Appellant then ran
outside. At that point, Ruiz ran to the end of the driveway to open the gate for the police,
“because we had already called the police.” On his way back to the house, Ruiz saw the
station wagon drive off.
Kern County Deputy Sheriff Roy Haislip testified to the following: Upon arriving
at the house on July 12, he made contact with Ruiz, who was bleeding from his face and
head, and had “a severe cut to the side of his face.” Ruiz led Haislip to the garage, where
the deputy saw, on the floor directly beneath the “solar system control panel” on the wall,
a power drill, a power screwdriver, and a tool case. Ruiz told Haislip he had “never seen
[these items] before.” Haislip also found a hammer and a broken 18-volt Craftsman
flashlight on the floor in the garage. The flashlight “appeared to be the weapon that
struck [Ruiz].”
Kern County Deputy Sheriff Stephen Wells testified to the following: At
approximately 7:00 a.m., on July 12, he was dispatched to Kern Medical Center, where,
in one of the emergency rooms, he made contact with appellant. Wells observed that
appellant had suffered a gunshot wound to his right thigh and what appeared to be a
broken arm. Wells conducted a tape-recorded interview of appellant. The tape was
played for the jury and a transcript of the recording indicates appellant stated the
following: “[A] couple of Mexican gentlemen” shot him because he was “trespassing on
their property.” He had gone there “[l]ooking for trouble.” He intended to “steal stuff.”
They “grabbed ahold” of appellant. Appellant had brought an 18-volt Craftsman
flashlight with him and at some point he “swung back with [it] and it fell out of [his]
hand.” Appellant “was trying to get away from them, and [the man was] hitting [him]
with a flashlight[,] … at which point [appellant] grabbed a hold of a hammer” and he and
the other man “wrestled for [it].” As appellant was “trying to get away,” “the second guy
came in and shot [appellant].” When asked what he was “trying to steal,” appellant
answered, “I was trying to get a hold of a charging system for … a solar system.”
4
Facts - Defense Case
Appellant testified he had heard about a house that was “in escrow” and was
“empty,” so “real early in the morning” on July 12, he drove there “to see … if anything
was left.”5 He was “looking for trouble.” He brought with him a flashlight and a battery-
powered drill.
He opened the large roll-up garage door, entered, closed the door behind him and
saw, on the wall, some “solar control panels.” However, at that point he discovered his
drill was inoperative and decided to leave. He turned off his flashlight and “started for
the back door of the garage,” at which point he saw a man holding a flashlight enter the
garage through the door that connected the garage to the house. The light blinded
appellant and he “froze.” Appellant and the other man “met” at a spot between the door
to the house and a door to the outside, and the man grabbed appellant’s left arm and
“started to hit [appellant]” with the flashlight. Appellant hit him back with his flashlight.
The two men “wrestl[ed]” and both dropped their flashlights, at which point another man
entered the garage. Appellant, who was “trying to get out the door,” fell backwards. As
he did so, he “saw a flash and heard a loud bang.” He found he could not control his
right arm.
Appellant, who soon realized he was shot, exited the garage through the “back
door,” and as he stood with his hands in the air and said “‘I’m done,’” and “‘I give up,’”
he was “shot again in the thigh.” Thinking that “they were trying to kill [him],” appellant
moved toward his car, at which point he was shot a third time, in both calves, with
birdshot.
Appellant, lying on the ground, implored the shooter to shoot again and “‘put
[him] out of [his] misery.’” One of the men—either Ruiz or Gonzalez, appellant did not
5 The “Defense Case” portion of our factual statement is taken from appellant’s
testimony.
5
know which—approached him, “chanted something at [appellant] in Spanish … and then
disappeared.” Appellant then “managed to scoot over to [his car],” get in and drive off.
As a result of being shot on July 12, appellant lost two fingers and half of a thumb,
and he suffered a broken elbow and gunshot wounds to his thigh and calves.
Procedural Background
Prior to trial, appellant moved to exclude evidence that the house was burglarized
on July 11, on the grounds, as stated in his written motion that such evidence was
irrelevant, “more prejudicial than probative,” and its admission would violate appellant’s
rights to a fair trial and due process of law, under the Sixth and Fourteenth Amendments
to the United States Constitution.
At the hearing on the motion, defense counsel argued: “I think that the jurors will
come to the logical conclusion or what they believe to be a logical conclusion, that
[appellant] also burglarized the same residence the day before. And that the person that
burglarized the night before knew that the house was vacant and, therefore, the person
[who] knew that the house was vacant went back the next day to obtain some more stolen
property.”
The prosecutor responded that the evidence “would be … offered to put into
perspective the conduct of the victim and the witness in this case, why they were on high
alert, the fact that their house had been burglarized the day before.”
The court asked defense counsel if “there [was] any issue as to the identity of the
person committing the [charged] crimes.” Counsel responded identity was “still an
issue” because “it was in the dark in the garage, according to reports,” but counsel
conceded that “the fact that … two and a half of his digits were blown off by one of the
victims … makes it difficult … to challenge identity.”
The court ruled as follows:
“THE COURT: The Court is trying to determine what the
prejudicial impact would be.
6
“Assuming that the jurors discuss the fact that [appellant] was the
person there the night before, then the danger would be the conclusion that
he was the person who committed the burglary the second time. That’s
what I am trying to determine if there is some real prejudicial impact.
“It doesn’t appear to the Court that it would be; so the Court would
certainly find it probative that the victims would be on a status of high alert
based upon the burglary the night before.
“And I do not find that the prejudicial impact is greater than the
probative value; so it would be allowed.”
DISCUSSION
Appellant contends the court committed prejudicial error in admitting evidence of
the July 11 burglary. We assume without deciding that, as appellant suggests, the
challenged evidence was irrelevant, and therefore inadmissible under Evidence Code
sections 210 and 350,6 and that even if it had some degree of relevance, its probative
value was substantially outweighed by the probability that its admission would create a
substantial danger of undue prejudice, and therefore it was inadmissible under Evidence
Code section 352.7 We turn now to the question of whether such error requires reversal.
The challenged evidence was prejudicial, appellant argues, because it “invite[d]
the jury to speculate that appellant had committed the crime on July 11.” Appellant
invokes the principle that “[u]ncharged acts evidence carries great danger that the jury
will conclude the defendant has a criminal disposition, and thus probably committed the
presently charged offense.”
6 Evidence Code section 210 defines relevant evidence as “evidence, including
evidence relevant to the credibility of a witness or hearsay declarant, having any tendency
in reason to prove or disprove any disputed fact that is of consequence to the
determination of the action.” Evidence Code section 350 provides: “No evidence is
admissible except relevant evidence.”
7 Evidence Code section 352 provides, in relevant part: “The court in its discretion
may exclude evidence if its probative value is substantially outweighed by the probability
that its admission will … create substantial danger of undue prejudice ….”
7
We note first that there was no testimony that appellant committed the July 11
burglary and the prosecutor did not argue that such an inference could be drawn from the
evidence presented. However, even assuming that the jury drew the inference that
appellant burglarized the house the day prior to the day of the offenses charged in the
instant case, any error in admitting evidence of the July 11 burglary was harmless.
First, there was no dispute appellant entered the garage attached to the house;
Deputy Wells testified appellant stated he went to the house with the intention of stealing
“stuff”; and appellant testified to essentially the same thing. Thus, the jury heard
compelling evidence, in the form of Deputy Wells’s testimony of appellant’s statements
and appellant’s own testimony, that appellant entered the garage attached to the house
with the intent to steal property located within, and thus that he committed the instant
burglary. (See § 459 [burglary consists of entry into, inter alia, any “house,” “with intent
to commit grand or petit larceny”].) Therefore, to the extent the evidence of the July 11
burglary showed appellant had a propensity to commit burglary and other criminal acts,
the overwhelming and properly admitted evidence that appellant burglarized the garage
the next day showed exactly the same thing. The challenged evidence added virtually
nothing to the prosecution case. And because the purported uncharged act evidence and
the evidence of the July 12 burglary related to the same kind of act—a burglary—the
former evidence was “no stronger and no more inflammatory than the testimony
concerning the charged offenses.” (People v. Ewoldt (1994) 7 Cal.4th 380, 405.)
“[S]tate law error in admitting evidence is subject to the traditional Watson
test: The reviewing court must ask whether it is reasonably probable the verdict
would have been more favorable to the defendant absent the error.” (People v.
Partida (2005) 37 Cal.4th 428, 439 (Partida).) On this record, it is not reasonably
probable that the verdict would have been more favorable to appellant had the evidence
of the July 11 burglary been excluded.
8
Appellant argues to the contrary. Specifically, he argues the jury’s acquittal of
appellant on the count 3 charge of assaulting Ruiz with a deadly weapon shows that “[i]n
effect, the jury rejected the evidence of Mr. Ruiz as to who started the fight between
appellant and Ruiz, and effectively … believed appellant that it was Ruiz who attacked
him first, and not the other way around.” Having rejected Ruiz’s testimony, appellant
argues further, appellant’s conviction on counts 1 and 2 can only be explained by the
evidence of the July 11 burglary, which, appellant asserts, led the jury to conclude
appellant had a propensity to commit criminal acts. We disagree.
During deliberations, the jury sent the court the following written questions: “Can
the jury include [appellant’s] flashlight as a deadly weapon? Is the drill considered part
of the flashlight? Are we required not to use the flashlight as a deadly weapon? Can the
flashlight receive consideration as the deadly weapon? Are we only limited to the
hammer and drill as the use of a deadly weapon? Main question[:] Can we include the
flashlight as a weapon used?” A short time later, the jury sent the court the following:
“We agree there was an assault with a deadly weapon. If we can’t agree on what the
weapon was (hammer, drill), is the charge dismissed?” (Italics added.)
Later, the court summarized on the record its responses to the jury: “[The jury]
was asking some specific questions about the flashlight being used as a deadly weapon,
whether that might serve as the basis for Count 3. And that was responded to. I indicated
that it could not be the basis of a conviction on Count 3, but could be considered for other
related issues such as self-defense and the verdict on the other two counts.”
It is apparent from the foregoing that the jury believed Ruiz’s account of the fight
with appellant, and that the acquittal on the count 3 assault was based not on the
prosecution’s failure to prove appellant assaulted Ruiz, but on the jury’s conclusion that
appellant did not commit that assault with a deadly weapon.
Finally, appellant argues that the admission of the evidence of the July 11 burglary
violated his due process rights. There is no merit to this contention.
9
“[T]he admission of evidence, even if error under state law, violates due
process only if it makes the trial fundamentally unfair.” (Partida, supra, 37
Cal.4th at p. 436.) “‘Only if there are no permissible inferences the jury may draw from
the evidence can its admission violate due process. Even then, the evidence must “be of
such quality as necessarily prevents a fair trial.” [Citations.] Only under such
circumstances can it be inferred that the jury must have used the evidence for an
improper purpose.’ [Citation.] ‘The dispositive issue is ... whether the trial court
committed an error which rendered the trial “so ‘arbitrary and fundamentally unfair’ that
it violated federal due process.” [Citation.]’ [Citation.]” (People v. Albarran (2007) 149
Cal.App.4th 214, 229-230, fn. omitted.)
Even assuming there were no permissible inferences the jury could draw from the
challenged evidence, the admission of the evidence of the July 11 burglary did not violate
due process. From our conclusion that an error in admitting the challenged evidence was
harmless under state law standards, it follows that admission of this evidence did not
render the trial fundamentally unfair.
DISPOSITION
The judgment is affirmed.
10
| {
"pile_set_name": "FreeLaw"
} |
580 P.2d 41 (1978)
GUARANTY NATIONAL INSURANCE COMPANY, a Colorado Corporation, Plaintiff-Appellant,
v.
OHIO CASUALTY INSURANCE COMPANY, an Ohio Corporation, Defendant-Appellee.
No. 76-689.
Colorado Court of Appeals, Division II.
March 30, 1978.
Rehearing Denied April 13, 1978.
Certiorari Granted June 5, 1978.
*42 Watson & Nathan, P. C., J. Andrew Nathan, Denver, for plaintiff-appellant.
DeMoulin, Anderson, Campbell & Laugesen, Richard W. Laugesen, Jr., Denver, for defendant-appellee.
SMITH, Judge.
Plaintiff, Guaranty National Insurance Company, appeals from a declaratory judgment determining that its insurance policy provides primary coverage, while that of defendant, Ohio Casualty Insurance Company, provides only excess coverage. We reverse and remand for entry of a judgment in conformance herewith.
This case arose out of an automobile accident involving a car driven by Olive Jensen and another driven by Christy Brost. Mrs. Jensen was killed in the accident, several people in the Brost car were injured, and there was considerable damage to the two vehicles. At the time of the accident, Mrs. Jensen was driving a car belonging to G & J Specialties, d/b/a Budget Rent-a-Car, from Grand Junction to Denver. She was transporting the car for and on behalf of G & J Specialties. (For the purposes of this case, it is unnecessary to establish whether Mrs. Jensen was an independent contractor or an employee of G & J Specialties it being sufficient to show that she was operating the car as someone other than a "rentee.")
Guaranty National Insurance Company insured the car owned by G & J Specialties and driven by Olive Jensen for both liability and collision expenses. The Ohio Casualty Company policy provided "owner" coverage to Mrs. Jensen for her private automobile, and it also extended "non-owner" coverage to her in certain circumstances when she *43 was driving another's car. At issue here is the question of which insurance policy should be held to cover the liability to Christy Brost and her passengers for their injuries, as well as the liability for the collision damages. This case does not involve a claim for Personal Injury Protection (P.I.P.) benefits for Olive Jensen; therefore, §§ 10-4-706 and 707, C.R.S.1973, are inapplicable.
The plaintiff contends that Ohio Casualty's "non-owner" insurance is "primary" in this case, and that Guaranty National should only be made to pay when the Ohio Casualty policy is exhausted. Plaintiff refers us to a recently overruled insurance regulation, Regulation 74-20, which stated that "non-owner" coverage should be primary in cases such as this. Claiming to have relied on this regulation, which was in effect when its policy was written, Guaranty National argues that a retroactive application of the overruling case, Travelers Indemnity Co. v. Barnes, Colo., 552 P.2d 300 (1976), would be unfair.
The trial court rejected this argument and held that the effect of the Travelers case is to prevent the "non-owner" insurance in this case from being conclusively declared to be the primary policy. Having resolved this key issue, the court turned to a comparison of the policies themselves and held that Guaranty's "owner" coverage had primacy here.
On appeal, Guaranty National presses the same arguments that it did below, namely that: (1) the Travelers case should not be applied retroactively, and (2) if it is applied retroactively, both parties should be equally liable under the insurance policies themselves, since the policies are on an "equal footing."
Retroactivity
We deal first with the question of whether the Travelers opinion concerning Insurance Commission Regulation 74-20 should receive retroactive effect. Regulation 74-20 had interpreted certain sections of the Colorado No-Fault Act, see §§ 10-4-701 et seq., C.R.S.1973, to require that when an accident involves a driver who is neither the owner of the car nor an employee of the owner, and the driver is insured under a policy of his own which complies with the No-Fault Act, the driver's policy would provide not only personal injury (P.I.P.) benefits, "but also liability and all other coverages" contained in the policy on a primary basis. Under this regulation, the owner's policy provided merely excess coverage. The Colorado Supreme Court, in Travelers, declared that Regulation 74-20 violated the context of § 10-4-706(1)(b) to (e), C.R.S.1973, which it purported to interpret.
Appellant urges us not to apply Travelers, on the grounds that the approach to stare decisis in an overruling decision has changed from "finding what the law always was" to recognizing that a decision, statute, or regulation is an "existing juridical fact" until the day it is overruled; and that, since the appellant has arguably relied on Regulation 74-20, we should, in the interest of fairness, give Travelers prospective effect only.
Crucial to these arguments, however, is the contention that the Travelers opinion left open the question as to the application of that decision. It is well settled that the court which announces a rule may determine whether it shall be given retroactive effect. Taylor v. People, 155 Colo. 15, 392 P.2d 294 (1964); Van Cleave v. Board of County Commissioners, 33 Colo.App. 227, 518 P.2d 1371 (1973). Only in the absence of such directions may a lower court decide for itself the question of prospectivity. See generally Ruark v. People, 158 Colo. 110, 405 P.2d 751 (1965). On examining the Travelers decision, we conclude that the Supreme Court did not leave the question open for lower courts to decide.
It was the position of the court in Travelers that the invalidity of Regulation 74-20 was unmistakable and that the Insurance Commission had exceeded his authority by promulgating it. Travelers, supra. While the use of such strong language historically was often taken to mean that an offending *44 statute or regulation was void ab initio, see generally, 16 C.J.S. Constitutional Law § 101, the recent trend has been to adopt a more moderate stance, such as declaring that a statute or regulation is without effect from the date of decision forward. See, e. g., Chicot County Drainage District v. Baxter State Bank, 308 U.S. 371, 60 S.Ct. 317, 84 L.Ed. 329 (1940). "Questions of rights claimed to have become vested, of status, of prior determinations deemed to have finality and acted upon accordingly, of public policy in the light of the nature both of the statute and of its previous application," are coming under increasing scrutiny before decisions regarding retroactivity are made. Chicot County, supra; see Van Cleave, supra.
The Travelers decision makes it clear that the court there weighed these variables. The court noted that the insurance regulation did not carry the force of law; found the regulation to be in plain conflict with its mother statute; and noted that the insurance industry itself was given to ignoring the regulation, with the blessings of the commissioner. In light of this, we feel that the efficacy of Regulation 74-20 was clearly dealt withall effects resulting from the existence of the regulation were to halt immediately. [1]See Chicot County, supra.
Because this intention is so manifest, it would be inappropriate for us to deal with Regulation 74-20 on an ad hoc basis and to resurrect it in cases such as this where a party claims to have relied on the regulation. To do so would be to elevate the regulation above the statute which it patently misinterpreted. Cases such as Van Cleave, supra, are inapposite in this respect.
We hold therefore that Regulation 74-20 is of no effect and does not serve to resolve the nature of Ohio Casualty's liability. This case must instead be decided on the merits of the two insurance policies themselves.
The Applicability of the Two Policies
Although the trial court made no specific findings relative to the terms of these policies, we note that where all of the written instruments at issue are properly before us on appeal, their interpretation becomes a matter of law for this court. Sentinel Acceptance Corp. v. Colgate, 162 Colo. 64, 424 P.2d 380 (1967).
Ohio Casualty argues that its policy specifically excludes coverage under circumstances such as those which occurred here. It points first to the policy's definitions regarding coverage for a "non-owned automobile," and states that coverage was not contemplated if the subject car was provided for "regular use" to the named insured, as G & J's cars were ostensibly provided for Mrs. Jensen here. See Hayes v. Fireman's Fund Insurance Co., 170 Colo. 164, 460 P.2d 225 (1969).
According to the stipulated facts, Mrs. Jensen was merely driving the car as "other than a `rentee.' "As the record stands, we can only conclude that the defendant has not met its burden of proving that the "regular use" exclusion applies here. See West v. Credit Life Insurance Co., 30 Colo.App. 455, 494 P.2d 601 (1972); see generally Ferndale Development Co. v. Great American Insurance Co., 34 Colo.App. 258, 527 P.2d 939 (1974).
Defendant also directs our attention to a provision excluding coverage for the named insured while that person is engaged in another's automobile business. However, "automobile business" is defined in the contract as the business of "selling, repairing, servicing, storing or parking automobiles." Whether G & J's business here be characterized as that of "renting" or "transporting" automobiles, it is not identified in the contract as an "automobile business," and the inference which we must draw is that it was not considered to be one. Denver Joint Stock Land Bank v. Markham, 106 Colo. 509, 107 P.2d 313 (1940).
*45 Thus, from our examination of the Ohio Casualty contract, we conclude that Mrs. Jensen's driving of the non-owned vehicle was covered under the terms thereof.
Applicability of the "Excess Clauses"
This brings us to the issues surrounding the "excess insurance" clauses contained in the policies. Each insurance company has attempted to use such a clause to limit its liability for any given occurrence, to that amount which would remain unpaid after all other valid and collectible insurance is exhausted. See Ruan Transport Corp. v. Truck Rentals, Inc., 278 F.Supp. 692 (D.Colo.1968).
Ohio Casualty asserts that it should get the full benefits of its excess clause, on the ground that Guaranty National's excess clause is, on the face of that policy, not applicable. Ohio points to the fact that Guaranty's policy contains two main sections, A-125, which provides owner coverage for G & J Specialties, and A-4396, which provides renter coverage. Following these sections is an addendum entitled "Automobile Rental Endorsement," which contains the excess clause at issue here. In pertinent part, the addendum states that the excess clause applies to "[c]onditions 6 of the policy and condition 5 of coverage part A-4396." Ohio Casualty argues that the only conditions of the Guaranty National policy which are designated by the Arabic numbers, 5 and 6, are contained in the "rental" section, and that the excess clause therefore applies to rental situations only.
But the language in the addendum is not as clear as defendant suggests. The fact that it was written in a dichotomous mannerreferring first to "policy" and second to "part A-4396"combined with the fact that the numbers "6 and 5" are out of sequence, leaves the phrasing ambiguous. Furthermore, replacing condition "6" of the rental section with an excess insurance clause is curious at best, since condition "6" deals with "benefit to bailees." Looking for help in that section of the policy dealing with "owner" coverage, see Smith v. Woodward, 51 Colo. 311, 117 P. 140 (1911), we note that the provisions for "other insurance" there fall under the heading: "VI Additional Conditions." In light of this, it is clear to us that, by the words "conditions 6 of the policy," the plaintiff and G & J Specialties meant to indicate the Roman Numeral "VI," and to apply the excess clause to the "other insurance" portion of the "owner" policy. See Hutchison v. Elder, 140 Colo. 379, 344 P.2d 1090 (1959). We conclude, therefore, that the excess clauses in both policies are applicable here.
Excess Clauses and the "No Fault" Act
Ohio Casualty next claims that, notwithstanding the fact that the two policies by their terms might share an equal footing, public policy behind the "No Fault" legislation demands that Guaranty National's statutorily-required "owner" coverage be deemed the primary policy here. We disagree.
No Colorado court has yet faced this precise issue. Guaranty National argues that the only concern fostered by the "No Fault" legislation is that of insuring the availability of adequate compensation for accident victims, and that holding both insurance companies liable here would do no disservice to that concern, as the victims would be compensated at least to the statutory minimum. See § 10-4-706, C.R.S.1973. Ohio Casualty, on the other hand, argues that the policy behind the act goes one step further than that characterized above, and encompasses an interest in administrative efficiency, by guaranteeing that owner coverage would be absolutenot subject to dilution or avoidance.
Neither the legislative declaration,§10-4-702, C.R.S.1973, nor the rest of the act is committal on the point of primary coverage. The two purposes stated in the declaration are: the avoidance of inadequate compensation for victims and the procurement of insurance by owners. Nothing, however, is stated in or implied by the act to the effect that a particular insurance company's policy shall be primary.
*46 It is our belief that the General Assembly intended, through the "No Fault" Act, to provide a financial net below which it would not let accident victims fall. As long as this concern is satisfied, the act was not intended to be a restriction on the insurance companies' prerogatives in the free marketplace to contract with their insureds for more extensive coverage (in the voluntary non-owner policies) or to design coverage which would be shared with other companies under certain circumstances (as here, with the excess clause on compulsory owner insurance). See Cosmopolitan Mutual Insurance Co. v. Continental Casualty Co., 28 N.J. 554, 147 A.2d 525 (1959); but see Rocky Mountain Fire & Casualty Co. v. Allstate Insurance Co., 107 Ariz. 227, 485 P.2d 552 (1971). We hold therefore that there is no public policy bar to the existence of excess clauses in compulsory owner insurance under the No Fault Act.
Ohio Casualty Company alternatively argues that Guaranty's policy should still be considered primary, because that company undertook to write a commercial risk for G & J Specialties, as opposed to the incidental "non-owner" coverage provided for Mrs. Jensen by Ohio Casualty. We are not swayed by such an argument. It is true that Guaranty undertook to insure a business operation of G & J Specialties and that the risks inherent in that business were undoubtedly much better known to that insurer. By the same token, however, Ohio Casualty was in a better position to have taken into account the personal driving history of Mrs. Jensen. See Federal Insurance Co. v. Prestemon, 278 Minn. 218, 153 N.W.2d 429 (1967) (Otis, J. dissenting). We do not feel that the risks here were unforeseeable by either company when the respective contracts were entered into. See generally, Continental Casualty Co. v. St. Paul Mercury Flyer & Marine Insurance Co., 163 F.Supp. 325 (D.Fla.1958).
Apportioning the Loss
Having determined that the two policies stand on an equal footing, as regards excess coverage, we are faced with the problems of how the loss between the companies should be apportioned. Guaranty National insured G & J Specialties for up to $1,000,000 for losses resulting from all causes, including bodily injury and property damage. Ohio National provided Mrs. Jensen with coverage of up to $25,000 for bodily injury liability, and a like amount for property damage.
A preliminary question concerns the effect of the two "excess" clauses. The modern trend in dealing with conflicting "excess" clauses has been to give validity to neither one at the expense of the other, but rather to declare them both void, as being mutually repugnant. See Ruan Transport, supra; see generally State Farm Mutual Automobile Insurance Co. v. Employers Commercial Union Insurance Co., 35 Colo.App. 406, 535 P.2d 266 (1975). We agree with this method of resolution.
Since both policies are primary, and neither is insulated any longer by the shield of an "excess" clause, the final issue is the basis upon which the coverage should be prorated.
There are two major approaches presently being followed on the prorating issue. The firstseemingly the majority approachprorates the losses on the basis of the maximum coverage provided in each policy. In the instant case, for example, this approach would require Guaranty to pay $20 for every $1 paid by Ohio National. This method of prorating ostensibly takes into account both the coverage which each insurer has volunteered to provide and the relative premiums paid by the insureds. However, the drawback of this approach is that it is based "on a partial fiction (proportionality between premium charges and maximum policy limits)," Ruan Transport, supra. This results in an unfairness to the larger insurer. That is just because one company has insured a party against high loss accidents, it should not therefore pay more in a case involving a low loss accident than another company which insured against just such an accident.
*47 To meet this inequity a minority approach has developed which is beginning to displace the "maximum coverage" formula. See Ruan Transport, supra; Cosmopolitan Mutual Insurance Co. v. Continental Casualty Co., 28 N.J. 554, 147 A.2d 525 (1959); annot., 69 A.L.R.2d 1115 (1959). Under the new approach, both companies are made to share equally in the loss until the lesser policy is exhausted.
On this issue, again, there is no Colorado precedent. We acknowledge the recent Colorado Supreme Court decision, Dairyland Insurance Co. v. Drum, Colo., 568 P.2d 459 (1977), which apportioned liability on the basis of a ratio of the policy limits as called for in the prorating clauses of the contracts themselves. The circumstances of that case, however, made it unnecessary to address the issue which we must face today. "We need not decide . . .," said the Dairyland majority, "which rule applies in Colorado, since both insurance policies provide for apportionment under the majority approach." Under the circumstances of the instant case, neither policy provided for apportionmentboth insurance companies having opted, instead, for the use of excess clauses to deal with "other" insurance.
We also acknowledge a recent decision of this court, which falls generally into the "minority approach" camp. See State Farm Mutual Automobile Insurance Co. v. Employers Commercial Union Insurance Co., 35 Colo.App. 406, 535 P.2d 266 (1975). There, the court held that where both policies were individually sufficient to cover the entire loss, each should cover half. As with the Dairyland case, the resolution in State Farm does not fit the circumstances before us, andas with Dairyland the court in State Farm expressly refrained from adopting one of the two approaches.
After weighing the two approaches to the apportionment problem, we must conclude that the minority approach is the fairer method of resolution. Accordingly, we adopt it here. Therefore, both companies in this case should share the loss equally until one of the policies is exhausted, at which time the other company should bear the remainder of the loss.
Reversed and remanded for entry of a judgment in accordance with the views expressed in this opinion.
ENOCH, J., concurs.
STERNBERG, J., dissents.
STERNBERG, Judge, dissenting:
I respectfully dissent.
Certainly the majority opinion is correct in declining to resurrect the Insurance Commissioner's Regulation 74-20. Had the Supreme Court wanted its opinion in Travelers Indemnity Co. v. Barnes, Colo., 552 P.2d 300 (1976), to be given only prospective application, that court would have so ordered. I also agree with the implication in the majority opinion that it is necessary to look to the language of the insurance policies because, without the Regulation, the no-fault act, §§ 10-4-701 et seq., C.R.S.1973, does not answer the issue presented by this appeal.
The issue, therefore, is whether the commercial liability policy of the rental car dealership, or the personal liability policy of the employee-driver, provides primary coverage when one of the dealer's cars is being transported in its business and is involved in an accident. My answer to this question would be to apply the commercial policy, that of Guaranty National. My analysis proceeds as follows: Budget-Rent-A-Car bought liability insurance from Guaranty National. Budget, a corporation, obviously cannot drive automobiles. Instead, when vehicles in its fleet that are not rented need to be transported from one place to another, be it from one part of a garage to a different location therein, or as here, from one city to another by necessity employees drive the cars. Here, while one of the cars was being transported by Mrs. Jensen, who often did such work for Budget and others, it was involved in an accident. Budget's policy must be considered primary. That is the basic protection Budget paid for. To *48 hold otherwise provides Guaranty National with an unwarranted windfall.[1]
Turning to the specific terms of the policy in question, it is my view that by its very language Guaranty National's excess clause is inapplicable to this situation. I do not agree with the analysis of the majority in this regard. The same legal reasoning that requires strict proof of Ohio's policy terms (see analysis of regular use and business use in the majority opinion) should lead to the conclusion that the excess clause in Guaranty National's policy does not apply. Simply stated, I cannot agree to a convoluted rewriting of Guaranty's policy to reach the conclusion that when writing its policy Guaranty National said "6" but really meant "VI". Guaranty's excess clause applies only to "temporary substitute" or "newly acquired" vehicles, i. e., additional coverages. It does not apply to situations where the policy provides primary coverageand that is what is involved here.
My conclusion in this regard is fortified by analysis of the statute requiring Budget to provide liability coverage on its vehicles. Section 10-4-706(1)(a), C.R.S.1973. Guaranty, its insurer, should not be allowed to provide something less than the coverage required by the statute. Limitation of the scope of its liability coverage by an excess clause is one of the ways in which an insurance company may attempt to escape its statutorily mandated duty. Rocky Mountain Fire & Casualty v. Allstate Insurance, 107 Ariz. 227, 485 P.2d 552 (1971). Consequently, even if Guaranty's excess clause were drafted in such a way as to make it applicable to this coverage, public policy as enunciated in our statute would void it. Rocky Mountain Fire & Casualty v. Allstate Insurance, supra.
For these reasons alone, without considering the applicability of the "regular use" and "business use" exclusions in Ohio's policy, I would affirm this judgment.
NOTES
[1] We need not face the issue of whether the Travelers court meant for Regulation 74-20 to be treated as void ab initio.
[1] In Travelers Indemnity Co. v. Barnes, supra, the case which voided the Regulation that would have made an operator's policy primary, the Supreme Court pointed out that generally an owner's policy is primary and delving into the area of rate making and other considerations of the insurance industry stated:
"Such language is based upon customary industrywide rate making and underwriting procedures. It is essential to these procedures and determination of premiums to be charged to consider the type of vehicle insured under each policy, its cost, the equipment thereof, and where (geographically) it is principally used and whether for business or pleasure. Also considered by the industry are the characteristics of the owner and those expected to drive the vehicle. These factors are material to the rights and obligations of both the insured and the insuring companies under such policies."
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91 F.3d 144
NOTICE: Sixth Circuit Rule 24(c) states that citation of unpublished dispositions is disfavored except for establishing res judicata, estoppel, or the law of the case and requires service of copies of cited unpublished dispositions of the Sixth Circuit.UNITED STATES of America, Plaintiff-Appellee,v.Lynetta Gail CARTER, Defendant-Appellant.
No. 94-6562.
United States Court of Appeals, Sixth Circuit.
July 15, 1996.
Before: NELSON and BATCHELDER, Circuit Judges, and McKEAGUE, District Judge.*
PER CURIAM.
1
A federal jury found defendant Lynetta Gail Carter guilty on three counts of an indictment containing gambling and money laundering charges, among other things. Grouping the three counts together for sentencing purposes--and using the base offense level prescribed by the sentencing guidelines for money laundering, the most serious of three substantive offenses involved in the single conspiracy count of which Ms. Carter was convicted--the district court imposed a sentence of imprisonment for 37 months.
2
Ms. Carter argues on appeal that although the evidence against her was sufficient to support a conviction for conspiracy to conduct an illegal gambling business, the evidence was not sufficient to support a conviction for conspiracy to commit a money laundering offense. The sentencing guidelines assign a lower base offense level to the former crime, and Ms. Carter contends that the district court erred in gearing the sentence to the latter crime.
3
We find no error, and we shall affirm the judgment in all respects.
4
* Defendant Carter worked for a Memphis businessman named Danny Owens. Mr. Owens operated an illegal gambling business and several topless nightclubs and houses of prostitution.
5
According to Mr. Owens' testimony at trial, Ms. Carter was his "errand girl." Her responsibilities included emptying money from gambling machines and filling out gambling records; collecting rent money from the gambling and prostitution establishments; depositing illicit receipts in a bank; and paying cashiers at the houses of prostitution with checks drawn on the bank in which the proceeds of unlawful activities had been deposited. On at least one occasion, according to an Internal Revenue Service investigator who was keeping her under surveillance, Ms. Carter crossed a state line in the course of her work.
6
A federal grand jury handed up a multi-defendant indictment three counts of which named Ms. Carter. Count 1 charged her with conspiracy (a) to conduct an illegal gambling business in violation of 18 U.S.C. § 1955; (b) to travel and use interstate commerce facilities in aid of racketeering in violation of 18 U.S.C. § 1952; and (c) to conduct financial transactions with the proceeds of illegal prostitution and gambling businesses in violation of the federal money laundering statute, 18 U.S.C. § 1956(a)(1). Count 4 of the indictment charged Ms. Carter with a substantive gambling offense, and Count 5 charged her with an interstate travel offense.
7
At trial, following denial of a motion for acquittal, the jury found Ms. Carter guilty on all three counts. The district judge grouped the three counts together for sentencing purposes, as required by U.S.S.G. § 3D1.2(b). Because conspiracy to conduct money laundering activities carried the highest base offense level under the sentencing guidelines, Ms. Carter received a sentence pegged to that violation in accordance with U.S.S.G. § 3D1.3(a).
8
Ms. Carter contends on appeal that the evidence was not sufficient to show that she was involved in a money laundering conspiracy. Accordingly, she argues, a lower base offense level ought to have been used in calculating her guideline sentence range.
II
9
It is settled law that a conspiracy may be formed by tacit agreement. United States v. Gresser, 935 F.2d 96, 101 (6th Cir.), cert. denied, 502 U.S. 885 (1991). The importance of a defendant's connection to a conspiracy need not be great. This court has determined that only a "slight connection" need be established. United States v. Betancourt, 838 F.2d 168, 174 (6th Cir.), cert. denied, 486 U.S. 1013 (1988) (citing United States v. Marsh, 747 F.2d 7, 13 (1st Cir.1984)).
10
Based on the evidence presented here, the jury was amply justified in concluding that Ms. Carter conspired to violate the money laundering statute. Ms. Carter knew that the rent she agreed to collect for Mr. Owens represented the proceeds of illegal gambling and prostitution activities. She knew and intended that her disposition of the funds would promote the carrying on of these activities. And she knew and intended that the payments to cashiers at the houses of prostitution--payments she made with the proceeds of the specified unlawful activity--would promote the carrying on of that activity. See 18 U.S.C. § 1956(a)(1)(A)(i), which makes it a crime to conduct a financial transaction with property that represents the proceeds of specified unlawful activity, knowing that the property represents such proceeds and intending to promote the carrying on of the unlawful activity.
11
The jury's verdict on Count 1 was a general verdict that did not explicitly state which substantive offense or offenses Ms. Carter conspired to commit. Ms. Carter argues that we are not entitled to assume that the jury found her guilty of conspiracy to do anything more than conduct an illegal gambling business. The case law does not support this argument.
12
Where a multiple-object conspiracy charge uses the conjunctive in listing the substantive offenses that were the objects of the conspiracy, it is normally held that a general verdict of "guilty" relates to all of the substantive offenses listed. See United States v. Banks, 78 F.3d 1190, 1201-04 (7th Cir.1996) (collecting cases). Count 1 of Ms. Carter's indictment was phrased in the conjunctive. Under the case law of which Banks is representative, Ms. Carter must be treated as having been found guilty of conspiracy to commit all of the substantive offenses listed in Count 1--including money laundering.
13
This being so, there was no error in the district court's calculation of Ms. Carter's guideline sentence range. When applying the sentencing guidelines to a conspiracy conviction, a court must determine the base offense level by looking to the substantive offense that is the object of the conspiracy. See U.S.S.G. § 2X1.1(a). If there are multiple counts that involve substantially the same harm, U.S.S.G. § 3D1.2 requires that the counts be grouped together. The court must then use the highest offense level of the counts in the group. U.S.S.G. § 3D1.3(a). That is precisely what the district court did here.
III
14
Ms. Carter contends, in the alternative, that the indictment did not adequately pinpoint the precise part of the money laundering statute involved. She should therefore have received a base offense level of 20 pursuant to U.S.S.G. § 2S1.1(a)(2), she argues, rather than a base offense level of 23 pursuant to U.S.S.G. § 2S1.1(a)(1). Subsection (a)(1) prescribes a base offense level of 23 if the defendant was "convicted under 18 U.S.C. § 1956(a)(1)(A), (a)(2)(A), or (a)(3)(A)." Otherwise, subsection (a)(2) provides, the base offense level for laundering of monetary instruments is 20.
15
Although the money laundering portion of Count 1 cited 18 U.S.C. § 1956(a)(1) without specifying any particular part of this subsection, the language of the indictment tracks that of 18 U.S.C. § 1956(a)(1)(A)(i). The presentence investigation report is consistent with this reading, and it was entirely appropriate for the district court to use a base offense level of 23.
16
AFFIRMED.
*
The Honorable David W. McKeague, United States District Judge for the Western District of Michigan, sitting by designation
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892 F.2d 296
29 Fed. R. Evid. Serv. 91
UNITED STATES of Americav.John WILLIAMS, Appellant in No. 89-3093.UNITED STATES of America, Appellant in No. 89-3184,v.John WILLIAMS.UNITED STATES of America, Petitioner in No. 89-3307,v.John WILLIAMS, Actual Respondent,The Honorable William L. Standish, Nominal Respondent.
Nos. 89-3093, 89-3184 and 89-3307.
United States Court of Appeals,Third Circuit.
Argued Oct. 16, 1989.Decided Dec. 26, 1989.Rehearing and Rehearing In Banc Denied Jan. 25, 1990.
Thomas S. White, Joel B. Johnston (argued), Asst. Federal Public Defenders, George E. Schumacher, Federal Public Defender, Pittsburgh, Pa., for appellant/appellee/respondent.
Constance M. Bowden (argued), Asst. U.S. Atty., Charles D. Sheehy, Acting U.S. Atty., Pittsburgh, Pa., for appellee/appellant/petitioner.
Before BECKER, COWEN and SEITZ, Circuit Judges.
OPINION OF THE COURT
COWEN, Circuit Judge.
1
John Williams appeals from a judgment of conviction for possessing a gun as a convicted felon, in violation of 18 U.S.C. § 922(g)(1) (1982 & Supp. V 1987).1 We will affirm.
I.
2
A jury could reasonably find the following facts. Larry Anderson spent Christmas day, 1987, drinking with friends in Clifton Park, on the North Side of Pittsburgh.2 He returned to Wanda Gillmore's house at 860 Kirkbride Street and at 8:30 or 9 p.m. fell asleep in a living room chair. Wanda Gillmore is related to Anderson by marriage. She is also John Williams' sister.
3
About an hour and a half later, Anderson was awakened by a push. John Williams stood over him, saying he had a contract out on Anderson and three other people. Anderson, blurry from sleep, asked Williams what he meant, but Williams simply stared at him. Williams then said that Anderson owed him three dollars. Anderson replied that he had paid it back, to which Williams responded, "Well, I ought to shoot you." Williams began to pull a pistol from his side, then stopped, saying he would not use it in his sister's house. He pushed the pistol back and turned towards the door; then turned back and said, "Now I am going to shoot you." As Williams pulled out the pistol, Anderson got up from his chair and ran into the dining room. Williams fired. He chased Anderson between the dining and living rooms several times before running out of the house.
4
Anderson watched Williams leave and closed the door behind him. He went back to the living room and watched Williams cross the street to 853 Kirkbride, where Williams' sister Harriet Boyd lived. Shaken, Anderson sat in the living room until Wanda Gillmore arrived home about a half hour later.
5
Wanda Gillmore testified that when she walked into her house between 11 p.m. and midnight Christmas night, she found Anderson in the apartment, shaking. App. at 660. She asked what was wrong and Anderson told her that her brother, John Williams, had shot at him and chased him around the apartment. Gillmore smelled gunfire in the air and saw a bullet hole in the wall. App. at 661.
6
Gillmore left to talk to her sister Harriet Boyd about the shooting. When she arrived at Boyd's house, she found Williams lying on the couch. She asked him why he fired a gun in her house. She testified, "[H]e told me if I do not get out of his face, he would shoot me next." App. at 665. Gillmore could tell Williams had been drinking by the smell on his breath and the way he acted. She called the police.
7
Sergeant Edward L. Sorace of the Pittsburgh Police testified he was the first to arrive, shortly after the police received a call at 2:40 a.m. on December 26. App. at 676, 679. When he stepped out of his car, he smelled gun smoke in the air. He entered 860 Kirkbride, where Larry Anderson told him that John Williams had fired several shots at him inside the house. Anderson showed him a bullet hole in the back wall of the living room and said Williams had fled to a house across the street, number 853.
8
Sorace knocked on the door of 853 Kirkbride and was admitted. He found John Williams lying on the couch and Harriet Boyd talking on the telephone. Sergeant Sorace arrested Williams and asked him where the gun was, but Williams "didn't know anything about anything, about a gun or anything." App. at 677, 679. Williams was taken to the police wagon.
9
Sergeant Frederick Wolfe and Lieutenant John F. Mook arrived as Williams was being put in the wagon. Lieutenant Mook testified that when he entered 853 Kirkbride Street, Mrs. Boyd was sitting on a couch, talking on the telephone. He explained to Mrs. Boyd that the police were interested in finding the gun used in the shooting and, because the suspect had been arrested in her home, he thought the gun might be here as well. She granted him permission to search the house.
10
The officers began to search, which took some effort since the house was in disarray. Lieutenant Mook spoke to Mrs. Boyd again, saying that if she had the gun, he wished she would say so, since he hated to waste time.
11
Mrs. Boyd responded that she had a gun. App. at 698. She took Mook and other officers upstairs, went into a cupboard and took out a silver .22 revolver. Mook could tell the weapon had not been fired recently, since it was fully loaded and had no smell of gun powder on it.
12
Meanwhile, Officer William Seifer and his partner, searching downstairs, discovered a gun underneath the sofa. Seifer testified the gun smelled as if it had been fired recently.3 Anderson later recognized the gun as the one Williams fired--a black revolver with a brown handle. The gun contained a spent shell. Dents on the shell matched the gun's firing pin.
13
Harriet Boyd also testified at her brother's trial. She first saw him at five or six o'clock on Christmas day. App. at 628-29, 633. At some point--Boyd could not remember the time--Williams left, saying he was going to Miss Sis's house. Williams was gone for forty-five minutes or an hour. When he returned, Williams told Boyd, "Tony and Larry stole the dope man's dope" and that he was going to get them. App. at 631. She understood that Williams was referring to Larry Anderson. Williams pulled a gun from his side and showed it to Boyd. She recalled it was a revolver, although she could not recall the color. When Williams showed her the gun, she said he should not have it. Williams did not reply.
14
Some controversy attended Mrs. Boyd's testimony. Like her brother John, she is a prior felon. She was convicted of manslaughter and on February 22, 1977, was sentenced to imprisonment of not less than eighteen months and not more than five years. She testified that she was taken to a halfway house two days after her conviction. She was "very sure" that she served eighteen months there, after which she was released. She could not remember whether she was released before or after October of 1978.4
15
On the basis of her testimony, the district court concluded that she had been released from custody more than ten years prior to the trial, which began on October 17, 1988. Therefore, the district court preliminarily determined that, pursuant to Fed.R.Evid. 609(b), her conviction was inadmissible for the purpose of impeaching her credibility generally.5
16
In addition, the defense argued the conviction was relevant to show bias. Since Boyd had a prior felony conviction and was found in possession of a gun, she was subject to indictment for the same offense as Williams. She therefore had a motive to ingratiate herself with the government in order to avoid indictment. The court reserved decision on admissibility of the conviction for this purpose until later in the trial. The court ultimately ruled the conviction was inadmissible to show bias.
17
Prior to trial, Dr. Ralph E. Tarter, a clinical psychologist, examined Williams for the purpose of evaluating his mental capacities and documenting any psychological disorders he might suffer. Tarter interviewed Williams on August 1, 1988 for a period of three to four hours, administering a variety of tests and conducting a structured psychological interview. Dr. Tarter set forth his findings in a written report, see Supplemental Appendix to the Response and Reply Brief of the United States, and in a videotaped deposition taken for purposes of presentation at trial, App. at 87-179.
18
Dr. Tarter found that Williams, a man in his forties, possessed a full scale IQ of 67 on the Wechsler Adult Intelligence Scale, placing him in the mentally retarded ranges of intelligence. His IQ is in the second percentile for intellectual capacity in the normal population.6 He has a pervasive learning disability, limited capacity to exercise adequate judgment and very poor memory. His answers to the structured interview (the Diagnostic Interview Schedule) revealed that he generally drinks continuously during the day, and has done so since the age of seventeen, consuming approximately one-half gallon per day of whatever alcohol is available. Williams told the doctor he experienced "blackouts" on many occasions, which the doctor found consistent with his constant drinking. Supp.App. at 2; App. at 139-40. In Dr. Tarter's opinion, the additive effects of the neurotoxins in cheap liquors may have contributed to Williams' cognitive deficiencies. Dr. Tarter also found Williams suffers from an antisocial personality disorder and when stressed is unable to restrain himself in a socially normative fashion.
19
It was Dr. Tarter's opinion that Williams was having a blackout at the time of the incident. App. at 155-57, 160. He based his opinion on Williams' fragmented memory of the events of Christmas day and Williams' admission that he had been drinking that day. App. at 157, 160.
20
According to Dr. Tarter, a blackout is caused by rapid absorption of alcohol in the body, such that there is too much alcohol in the system to be broken down. This causes the brain, in effect, to become anesthetized. In this condition, the brain cannot perform its regular functions and shuts down. Or, as Dr. Tarter put it, it "goes on automatic pilot, if you will, and that causes a blackout. The more general term is anterograde amnesia...." App. at 127.
21
Dr. Tarter proceeded to describe the effects of a blackout:
22
[B]ecause the brain is not functioning in its normal way, events that occurred while the person was intoxicated are never put into the brain. We refer to that as the failure to consolidate memories, and it is not like the person forgets when they are sober because they can never get it back. It has just never gotten in because the brain can't function
23
....
24
It is an anterograde amnesia to the extent that information happening now is lost in the future because it is not consolidated, and that's the consequence of a blackout, and alcoholics, of course, commonly have blackouts because they drink large amounts over extended periods of time and are, in effect, bathing their brains with alcohol.
25
App. at 128.
26
Persons in the blackout state nonetheless retain the ability to perform many ordinary physical tasks:
27
The most profound example I can give is, I once had--he was actually a patient who was a pilot who flew a commercial plane from San Francisco to Hawaii in a blackout state. How this happens is that flying for this person is an automatic process. The skills are established....
28
What is impaired is capacity to perform a task efficiently. What is not impaired is the ability to do--or, the appearance of being able to do ordinary and routine things. Thus, people who are in blackouts regularly drive their car home after a heavy bout of drinking at a bar, and they could be in a blackout and never know how they got home.
29
App. at 133-34.
30
Dr. Tarter testified that it is extremely difficult to tell from outward appearance whether a person is in a blackout. Blackouts, like other forms of anterograde amnesia, are measured after the fact.
31
In responding to the question whether a person in a blackout state is conscious, the doctor testified:
32
They are not conscious in a normal sense. They are able to function as I mentioned on automatic pilot....
33
So the issue, is the person aware, the answer is yes, at one level, but no at another level. And it's much like I said, akin to sleepwalking, where it seems the person is performing or behaving in a purposeful way, but yet, the person is not aware of self-awareness, if you will. They are not aware of their own self-awareness, [or] able to recall subsequent to the event those events.
App. at 136-37.7
34
Prior to trial, the government moved to exclude Dr. Tarter's testimony from evidence. The trial court granted the motion, reasoning that the testimony did not show that Williams lacked intent or knowledge that he possessed the gun, but rather that he lacked the ability to remember or to be "aware of his self-awareness."
II.
35
On appeal, Williams contends the district court erred in prohibiting the defense from cross-examining Harriet Boyd about her manslaughter conviction. The district court ruled the conviction was inadmissible for the purpose of (1) attacking credibility generally or (2) showing bias.
36
There was no error in the first ruling. Federal Rule of Evidence 609(b) prohibits impeachment based on convictions for which the witness was confined and released more than ten years prior to trial. Although Boyd's testimony was somewhat contradictory, there was sufficient evidence presented from which the district court could reasonably conclude that ten years had elapsed since Boyd's release from custody. The court's finding was not clearly erroneous.
37
The court erred, however, in prohibiting reference to the conviction in order to show bias. The Confrontation Clause of the Sixth Amendment guarantees criminal defendants the opportunity to cross-examine witnesses against them. Davis v. Alaska, 415 U.S. 308, 315-16, 94 S.Ct. 1105, 1109-10, 39 L.Ed.2d 347 (1974). Revealing a witness's bias or motivation in testifying is among the proper and important functions protected by the right to cross-examination. Davis, 415 U.S. at 316-17, 94 S.Ct. at 1110-11. Trial judges nonetheless retain wide latitude under the Confrontation Clause in limiting cross-examination to avoid harassment, prejudice, confusion of the issues or interrogation that is repetitive or only marginally relevant. Delaware v. Van Arsdall, 475 U.S. 673, 679, 106 S.Ct. 1431, 1435, 89 L.Ed.2d 674 (1986).
38
In this case, however, the trial court prohibited all inquiry into the possibility that Boyd was biased. This we find to be an abuse of discretion, Alford v. United States, 282 U.S. 687, 694, 51 S.Ct. 218, 75 L.Ed. 624 (1931), and a violation of rights secured by the Confrontation Clause. Van Arsdall, 475 U.S. at 679, 106 S.Ct. at 1435.
39
The government argues the trial court correctly barred cross-examination because Boyd's manslaughter conviction and gun possession were irrelevant to show bias. There was no evidence to suggest that Boyd, rather than Williams, held and fired the gun. There was no support for the theory, therefore, that Boyd was attempting to shift suspicion away from herself by falsely accusing her brother.8 Indeed, the evidence is to the contrary. Boyd voluntarily showed policemen her own gun, perhaps in an attempt to keep them from finding her brother's.9 This, the government argues, shows that Boyd had little concern about incriminating herself--she would rather help her brother.
40
The government's argument goes to the weight and not the relevance of the conviction. It is equally conceivable that when the full consequences of gun possession became apparent to Mrs. Boyd--once her brother became a subject of a federal grand jury investigation and a defendant in a criminal trial--she became fearful of being indicted for the same crime. In an effort to gain favor with federal authorities, as well as to focus attention away from herself, she may have decided to testify falsely against her brother in the grand jury and at trial. The defense was entitled to develop facts to support this theory through proper cross-examination. The trial judge's decision to preclude all reference to her prior conviction was therefore an abuse of discretion.
41
The error, however, was harmless beyond a reasonable doubt. Our standard of review was articulated in Delaware v. Van Arsdall:
42
The correct inquiry is whether, assuming that the damaging potential of the cross-examination were fully realized, a reviewing court might nonetheless say the error was harmless beyond a reasonable doubt. Whether such an error is harmless 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 is cumulative, the presence or absence of evidence corroborating or contradicting the testimony of the witness on material points, the extent of cross-examination otherwise permitted, and, of course, the overall strength of the prosecution's case.
43
Van Arsdall, 475 U.S. at 684, 106 S.Ct. at 1438.
44
There is little doubt that Williams is guilty of possessing a gun, and much worse. He admitted as much to Wanda Gillmore when he told her, if she didn't get out of his face, he'd shoot her next. Larry Anderson's testimony stands uncontradicted. Though he admitted to drinking during the day, and told the defense investigator he had smoked crack that day, he consistently told the police, the grand jury, the jury and the defense investigator that John Williams fired a gun at him. The bullet hole in the wall and the smell of smoke in the air--confirmed by Gillmore and Sergeant Sorace--are overwhelming proof that the gun was fired in the house. That the gun was found under the couch where Williams lay, still smelling of gun powder, is strong circumstantial evidence that Williams is the one who fired it. In combination with Anderson's testimony and Williams' threat to shoot Gillmore next, the proof of Williams' guilt is overwhelming.10
45
By contrast, taken even in the best light, the defense's theory of bias is not convincing. Mrs. Boyd volunteered to show police her own gun, apparently in an attempt to draw attention from her brother's gun. She thus willingly exposed herself to criminal liability for his sake. It is difficult to believe the same woman would turn against her brother in front of the grand jury and the jury.
46
Boyd was subjected to extensive cross-examination on other subjects. She admitted that she received a witness fee to appear before the grand jury. App. at 648-49. She was questioned extensively about inconsistencies in her prior statements to government agents and the grand jury. App. at 635-40, 646-54. She admitted she had been drinking on the day of the occurrence. App. at 638. She admitted she was familiar with guns because guns "had been around in her family." App. at 634-35.
47
Despite extensive cross-examination, her testimony is consistent in material respects with Larry Anderson's.11 According to Boyd, Williams said he was going to get Larry, which Boyd understood to mean Larry Anderson. App. at 630-31. Boyd, like Anderson, said Williams kept the gun at his side, App. at 630, and that the gun was a revolver. App. at 632.
48
It is highly unlikely that additional cross-examination on bias would have led the jury to treat Boyd's testimony any differently. The evidence of bias was less than persuasive, cross-examination on other subjects was extensive, and Boyd's testimony was consistent with others'. In addition, the jury need not have believed Boyd in order to convict Williams. As discussed above, Anderson and Gillmore's testimony, in combination with the observations of Pittsburgh police officers, provided overwhelming proof of Williams' guilt. In all, there is no reasonable possibility that additional cross-examination directed at Boyd's bias would have affected the judgment.
49
We conclude that the limitation of cross-examination was error, but harmless error beyond a reasonable doubt.
III.
50
Williams argues that the district judge improperly excluded Dr. Tarter's testimony from evidence. The testimony was offered to show that Williams was probably having a blackout on Christmas night; that therefore he did not have the mens rea required for committing the crime, i.e., he was so drunk that he did not knowingly possess the gun.
51
Evidence of voluntary intoxication can be introduced to negate the specific intent required to commit a particular crime. It has been held repeatedly, however, that the crime defined in section 922(g) is a crime of general intent. See, e.g., United States v. Hatfield, 815 F.2d 1068, 1072 (6th Cir.1987); United States v. Weiler, 458 F.2d 474 (3d Cir.1972). For general intent crimes, evidence of voluntary intoxication is not an acceptable method of negating the required intent.
52
Williams argues that our decision in United States v. Pohlot, 827 F.2d 889 (3d Cir.1987), cert. denied, 484 U.S. 1011, 108 S.Ct. 710, 98 L.Ed.2d 660 (1988), requires a different result. We disagree. Pohlot interpreted the Insanity Defense Reform Act, 18 U.S.C. § 17 (Supp. V 1987), as excluding all evidence of mental abnormality "that does not support a legally acceptable theory of lack of mens rea." 827 F.2d at 906. For crimes of general intent, voluntary intoxication is not an acceptable theory of lack of mens rea. This is not because general intent crimes require no proof of mens rea, but because the relevant mens rea has been established by a common law presumption, i.e., a person who voluntarily becomes intoxicated is presumed to intend all the actions that follow.
53
The district court was thus correct in excluding evidence of Williams' intoxication introduced for the purpose of negating mens rea.
IV.
54
Williams' remaining arguments on appeal are without merit. It is important to note, for purposes of the following discussion, that prior to his conviction in this prosecution, Williams had been convicted three times for committing violent felonies under state law.12
A.
55
Williams argues first that the district court erroneously determined that he is a career offender under the federal sentencing guidelines.
56
As it stood at the time Williams was sentenced, the Career Offender provision of the guidelines provided:
57
A defendant is a career offender if (1) the defendant was at least eighteen years old at the time of the instant offense, (2) the instant offense of conviction is a felony that is either a crime of violence or a controlled substance offense, and (3) the defendant has at least two prior felony convictions of either a crime of violence or a controlled substance offense.
58
U.S.S.G. § 4B1.1 (effective Jan. 15, 1988).13
59
A defendant is not a career offender under the guideline unless the offense for which he or she is convicted is a "crime of violence." Williams argues that under section 4B1.2(1) of the guidelines, possessing a gun as a convicted felon is not a crime of violence.
60
At the time of Williams' sentencing, section 4B1.2(1) provided that a "crime of violence" for purposes of sentencing was defined by 18 U.S.C. § 16. U.S.S.G. § 4B1.2(1) (effective Jan. 15, 1988).
61
Application Note 1 to section 4B1.2 provided:
62
"Crime of violence" is defined in 18 U.S.C. § 16 to mean an offense that has as an element the use, attempted use, or threatened use of physical force against the person or property of another, or any other offense that is a felony and that by its nature involves a substantial risk that physical force against the person or property of another may be used in committing the offense. The Commission interprets this as follows: murder, manslaughter, kidnapping, aggravated assault, extortionate extension of credit, forcible sex offenses, arson, or robbery are covered by this provision. Other offenses are covered only if the conduct for which the defendant was specifically convicted meets the above definition. For example, conviction for an escape accomplished by force or threat of injury would be covered; conviction for an escape by stealth would not be covered. Conviction for burglary of a dwelling would be covered; conviction for burglary of other structures would not be covered.
63
U.S.S.G. § 4B1.2 commentary (n. 1) (effective Jan. 15, 1988) (emphasis added).
64
By analogy to the escape example, possessing a gun while firing it at Larry Anderson is a crime of violence; possession without firing the weapon is not. According to the Application Note, therefore, Williams committed a crime of violence. The district court's application of the Career Offender guideline was correct.
B.
65
Finally, Williams argues the district court erred in applying both the sentence enhancement provision of 18 U.S.C. § 924(e)(1) (Supp. V 1987) and the enhanced punishment provisions of the Career Offender guideline simultaneously. He argues that he is effectively being punished twice for the same offense, in violation of the Double Jeopardy Clause of the Fifth Amendment. We find no merit in the argument.
66
Section 924 of Title 18 of the United States Code sets forth the penalties available for violations of 18 U.S.C. § 922. Section 924(e)(1) provides for imprisonment of not less than fifteen years for a person convicted of violating section 922(g) and who has previously been convicted of three violent felony offenses committed on separate occasions. As noted above, Williams has been convicted three times for violent felonies under state law.
67
When Congress provided for "imprisonment of not less than fifteen years," it meant a maximum of life. United States v. Jackson, 835 F.2d 1195, 1197 (7th Cir.1987), cert. denied, 485 U.S. 969, 108 S.Ct. 1244, 99 L.Ed.2d 442 (1988). In addition, Congress instructed the Sentencing Commission to "specify a sentence to a term of imprisonment at or near the maximum term" for repeat offenders. 28 U.S.C. § 994(h) (Supp. V 1987). The Career Offender guideline carries out Congress's intention by specifying sentencing ranges at or near the maximum.
68
In Williams' case, the guideline provides for a sentence above the minimum of fifteen years--to wit, 360 months to life. The district court imposed a sentence of 360 months. Since the guideline range and the sentence actually imposed are well within the range authorized by statute, there is no double punishment: only a single substantial punishment for a violent offense committed by a recidivist. See United States v. Garrett, 712 F.Supp. 1327, 1333 (N.D.Ill.1989).
V.
69
Before imposing sentence, the district court ruled that the special assessment provision contained in 18 U.S.C. § 3013 (Supp. V 1987) was enacted in violation of the Origination Clause of the United States Constitution, art. I, § 7. Accordingly, the court did not impose a special assessment as part of Williams' sentence.
70
At No. 89-3184, the government appealed from the district court's order under 28 U.S.C. § 1291 (1982). The government also petitioned for a writ of mandamus at No. 89-3307. In light of our recent decision in United States v. Simpson, 885 F.2d 36 (3d Cir.1989), the government's appeal at No. 89-3184 must be dismissed for lack of jurisdiction. The petition for writ of mandamus will be granted and the district court will be directed to vacate its order and impose a special assessment.
VI.
71
We will affirm the judgment of conviction. We will dismiss the government's appeal at No. 89-3184 for lack of jurisdiction. We will grant the government's petition for a writ of mandamus at No. 89-3307. The district court will be directed to vacate its order declaring 18 U.S.C. § 3013 unconstitutional and impose a special assessment.
1
The relevant part of the statute provides:
It shall be unlawful for any person--
(1) who has been convicted in any court of a crime punishable by imprisonment for a term exceeding one year;
....
to ... possess in or affecting commerce, any firearm or ammunition; or to receive any firearm or ammunition which has been shipped or transported in interstate or foreign commerce.
18 U.S.C. § 922(g)(1).
2
Anderson testified first that he drank two beers and two glasses of wine. App. at 540, 583. On cross-examination, he admitted he had been drinking all evening. App. at 584
He denied taking drugs that day. App. at 540. A defense investigator testified, however, that Anderson said he and his friends had been "partying up" all day, drinking and smoking cocaine. App. at 781.
3
Estimates varied as to when the gun was fired. Officer Seifer stated the smell could remain on the gun for up to an hour. App. at 721. Sergeant Sorace estimated from the smell that the gun had been fired within the last ten or fifteen minutes. App. at 680-82
4
At one point, Mrs. Boyd stated she went to the halfway house in 1978. App. at 503. Then she stated she was released from the halfway house in 1978. Id
She recalled that when she was released, there was snow on the ground. App. at 503. We note this account conflicts with the rest of her testimony, which established February 1977 as the month she began serving her sentence and August 1978 as the date of her release. Certainly there was no snow on the ground in August of 1978.
5
The relevant part of Rule 609(b) provides:
Evidence of a conviction under this rule is not admissible if a period of more than ten years has elapsed since the date of the conviction or of the release of the witness from the confinement imposed for that conviction, whichever is the later date, unless the court determines, in the interests of justice, that the probative value of the conviction supported by specific facts and circumstances substantially outweighs its prejudicial effect.
6
He was unable, for example, to accurately recite the alphabet and made numerous errors up to the letter G, where he stopped, not knowing what the next letter was. Supp.App. at 1
7
The doctor gave a similar account during cross-examination:
One could ask a person who is sleepwalking, "What are you doing down here making a ham sandwich," and you will get a perfectly articulated answer, and the question is, is the person conscious. That's the problem we have with that type of question in trying to divide up what we mean by conscious.
Yes, the person is conscious to the extent that they are communicating, but they are not conscious to the extent that they are aware of their own awareness.
App. at 150.
8
Cf. Davis v. Alaska, 415 U.S. at 311, 94 S.Ct. at 1108 (defense should be allowed to show that the witness might have falsely identified Davis as the culprit in order to shift suspicion away from himself as the one who robbed the Polar Bar)
9
She admitted that the police arrested her that night and charged her with hindering the investigation. App. at 653. The charges were subsequently dropped. App. at 654-55
10
Williams contends that the prosecutor himself admitted Anderson's testimony was insufficient ground upon which to base the prosecution. To wit:
I will tell you this, ladies and gentlemen, if it was just a matter of Larry Anderson coming in here and testifying to you, then I really question whether or not we would be here....
App. at 983.
Williams does not quote the rest of the prosecutor's remarks:
[B]ut that is not the case. Larry Anderson's testimony, what he said, was corroborated. It was corroborated by not two other witnesses. [Defense counsel] said that this case really turns on two witnesses. I believe the evidence of possession is what he said came from two people. [He] and I do not see this case the same way at all. As far as the Government is concerned, the evidence of possession in this case came from 12 people, 12 witnesses, who were called by the Government to paint the picture for you, the ladies and gentlemen of the jury, of what occurred to allow you to develop the insight that you need in order to determine what the truth is. It wasn't two people.
Id.
The prosecutor stated what we have stated here; that Anderson's testimony, in conjunction with Gillmore's, Sorace's and the other police officers', is overwhelming proof of Williams' guilt.
11
The defense emphasized both at trial and on appeal the discrepancy between Anderson's and Boyd's recollection of the time various events occurred. Aside from showing that the witnesses had a poor sense of time, the inconsistencies do not overcome the overwhelming proof that a gun was fired in Gillmore's house and that Williams was the one who fired it
12
On April 18, 1966, he was convicted for burglary. App. at 902-05. On January 16, 1974, he was convicted for rape. App. at 906-09. On March 28, 1978, he was convicted for robbing a man and assaulting him with a baseball bat, causing the man to lose an eye. App. at 910-16
13
Effective November 1, 1989, guidelines 4B1.1, 4B1.2 and their application notes were amended. The amended guidelines have no application to this case, however, since they were not in effect on the date of sentencing. 18 U.S.C. § 3553(a)(4) (Supp. V 1987)
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145 S.W.3d 633 (2004)
STATE of Tennessee
v.
Bobby BLAIR.
Court of Criminal Appeals of Tennessee, at Nashville.
Assigned on Briefs September 17, 2003.
February 13, 2004.
Application for Permission to Appeal Denied June 21, 2004.
*635 William B. "Jake" Lockert, III, District Public Defender, for the appellant, Bobby Blair.
Paul G. Summers, Attorney General and Reporter; John H. Bledsoe, Assistant Attorney General; Dan Mitchum Alsobrooks, District Attorney General; and Lisa Carol Donegan, Assistant District Attorney General, for the appellee, State of Tennessee.
Application for Permission to Appeal Denied by Supreme Court June 21, 2004.
OPINION
JOSEPH M. TIPTON, J., delivered the opinion of the court, in which DAVID G. HAYES and JOHN EVERETT WILLIAMS, JJ., joined.
A Humphreys County Circuit Court jury convicted the defendant, Bobby Blair, of manufacturing methamphetamine, a Class B felony, and the trial court sentenced him as a Range I, standard offender to twelve years in the Department of Correction. The defendant appeals, claiming that (1) the evidence is insufficient to support his conviction; (2) the trial court erred by refusing to grant a continuance when the state announced a few days before trial that it was going to call an expert witness to testify; (3) the trial court erred by denying the defendant's motion to suppress and exclude evidence because the defense was not able to examine and test the equipment and chemicals found at the crime scene; (4) the trial court erred by allowing the state's expert to testify that the defendant was not manufacturing methamphetamine for personal use; (5) the trial court erred by failing to instruct *636 the jury on the lesser included offense of simple possession of methamphetamine; and (6) the trial court erred by refusing to instruct the jury on "immediate precursor." We conclude that no error occurred, and we affirm the judgment of the trial court.
This case relates to the defendant's being found at a campsite with equipment and chemicals commonly used to make methamphetamine. Ronnie T. Toungette, the Humphreys County Sheriff, testified that on the afternoon of July 10, 2001, he and another deputy went to a remote area on Bear Creek. He said that the area had a boat ramp and was a popular fishing spot, that camping was prohibited there, and that the nearest house was about one-quarter mile away. He said that when he and the deputy arrived at Bear Creek, they saw a camper-type vehicle, evidence of a campfire, and evidence that someone had been cooking. He said that an all-terrain vehicle also was present and that wooden boards had been nailed to trees in order to make tables. He said that a boat was parked at the campsite but that he saw no evidence anyone had been fishing. He said that no one was at the campsite and that he and the deputy left. He said that when he returned to the Sheriff's Office, he posted a flyer ordering night officers to return to the area.
Jessie McCloud testified that in July 2001, he was a deputy for the Humphreys County Sheriff's Department. He testified that on July 10, he worked the evening shift and saw Sheriff Toungette's order posted on the bulletin board. He said he and Officer William Macken went to Bear Creek Landing about 11:00 p.m. and saw the defendant sitting in a recliner with a blanket covering the recliner. He said that he called to the defendant a couple of times and that the defendant finally got out of the chair. He said he told the defendant that the defendant was going to have to leave because camping was not allowed. He said he was standing beside a closed cooler and smelled ether in the cooler. He said he had become familiar with the smell of ether because he had been working on cases involving methamphetamine. He said he opened the cooler, saw a red bucket containing a liquid and something floating in the liquid, and arrested the defendant, charging him with manufacturing methamphetamine. He said that he telephoned the Twenty-Third Judicial District Drug Task Force and that it contacted the federal Drug Enforcement Administration (DEA), which arrived to clean up the scene.
Mr. McCloud testified that a DEA agent poured out the liquid in the red bucket, let the substance that had been floating in the liquid air dry, and gave him the substance as evidence. He said that he thought the substance was methamphetamine and that the substance was sent to the Tennessee Bureau of Investigation (TBI) for testing. He said the DEA destroyed a bottle of Heet and a bottle of drain cleaner that also were at the campsite. He said that batteries, Morton's salt, aluminum foil, five empty Mason jars without lids, and Coleman lanterns also were present.
On cross-examination, Mr. McCloud testified that a police inventory list showed that officers found the following items at the scene: Four Coleman lanterns, one tackle box containing fishing tackle, a motorcycle, an all-terrain vehicle, a rake, three folding chairs, an ax, three coolers, five skillets, a radio, a canoe, and ten fishing poles. He said that he did not know if other people were staying at the campsite with the defendant and that when he arrived at the scene, the defendant was pretending to be asleep. He said that he did not try to collect fingerprints from any of the items found at the campsite and that *637 he did not ask the DEA agents to fingerprint anything. He said the DEA kept most of the chemicals found at the campsite and destroyed them. He said that police officers photographed the scene but that the only physical evidence he was allowed to keep was the air-dried substance from the red bucket. He acknowledged that at the defendant's preliminary hearing, he testified that he was positive the substance in the red bucket was methamphetamine. He acknowledged, though, that he later learned the substance was not methamphetamine. He also acknowledged that he did not find iodine or anhydrous ammonia, ingredients commonly used in the methamphetamine manufacturing process, at the campsite. He said that he was at the campsite for three to four hours and that he did not see anyone other than law enforcement officers arrive during that time.
Tara Barker, a special agent forensic scientist with the TBI, testified that she tested the dried substance from the red bucket. She said that the substance was 378.6 grams of pseudoephedrine.
Rick Stewart, a DEA agent and expert in manufacturing methamphetamine, testified that he did not visit the campsite but saw photographs of it. He said that when small-town police officers find methamphetamine laboratories, they should call the DEA and let DEA agents destroy the laboratories because they are extremely dangerous. He said officers should not try to fingerprint items at a methamphetamine laboratory because chemicals could react or get on the officers' skin. He said there are two methods for making methamphetamine, the "Nazi" method and the "Red Phosphorous" method. He said that in order to make methamphetamine, a person needs a precursor such as pseudoephedrine, which is contained in decongestant pills such as Sudafed. He said the pills must be mixed with a liquid such as Heet in order to separate the pseudoephedrine from the pills' other ingredients.
The state showed Agent Stewart a photograph of the red bucket containing the liquid and the substance floating in the liquid. He noted that the substance had a pink tint, indicating that the liquid was breaking down Sudafed pills, which have a pink coating. He said that using the Red Phosphorus method, a person could make about one-half pound of methamphetamine and that a pound of methamphetamine was worth $10,000 to $20,000. He said that based upon photographs taken at the campsite and the large amount of pseudoephedrine present, he believed the defendant was manufacturing methamphetamine and that the defendant was not making the drug for personal use.
On cross-examination, Agent Stewart testified that it would have been impractical to dust the red bucket for fingerprints because fingerprints can only be collected from flat, clean surfaces. He said that Coleman fuel is used to make methamphetamine and that lithium strips from batteries are used in the Nazi method. He acknowledged that batteries also are used in flashlights and that Coleman fuel could have been used in the Coleman lanterns found at the scene. He said that taken alone, the equipment and chemicals found at the campsite had legitimate purposes. He said that taken together, though, the items indicated manufacturing methamphetamine. He said that he could not tell which manufacturing method the defendant was using but that the pseudoephedrine in the red bucket was an "immediate precursor" to making methamphetamine. The jury convicted the defendant of manufacturing methamphetamine, a Schedule II controlled substance.
*638 I. SUFFICIENCY OF THE EVIDENCE
The defendant claims that the evidence is insufficient to support his conviction. He contends that because almost all of the equipment and chemicals found at the campsite were destroyed, the state was unable to link him to the equipment through fingerprint evidence or prove with scientific testing that the chemicals were the chemicals the state claimed. He also argues that the evidence is insufficient to show that he was manufacturing methamphetamine for distribution because the police did not find any scales, packaging materials, or cash at the campsite to indicate that the defendant was manufacturing the drug for anything other than personal use. Finally, he contends that the evidence is insufficient because the police did not find methamphetamine at the campsite and because pseudoephedrine is not an "immediate precursor" to manufacturing methamphetamine. The state claims that the evidence is sufficient. We agree with the state.
Our standard of review when the defendant questions the sufficiency of the evidence on appeal 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). We do not reweigh the evidence but presume that the jury has resolved all conflicts in the testimony and drawn all reasonable inferences from the evidence in favor of the state. See State v. Sheffield, 676 S.W.2d 542, 547 (Tenn.1984); State v. Cabbage, 571 S.W.2d 832, 835 (Tenn.1978). Questions about witness credibility were resolved by the jury. See State v. Bland, 958 S.W.2d 651, 659 (Tenn.1997).
It is a crime for a person knowingly to manufacture a controlled substance. T.C.A. § 39-17-417(a)(1). A "controlled substance" is a "drug, substance, or immediate precursor in Schedules I through VI of §§ 39-17-403XX-XX-XXX." T.C.A. § 39-17-402(4). Pursuant to T.C.A. § 39-17-408(d)(2), methamphetamine is a Schedule II controlled substance. "Manufacture" means
the production, preparation, propagation, compounding, conversion or processing of a controlled substance, either directly or indirectly by extraction from substances of natural origin, or independently by means of chemical synthesis, and includes any packaging or repackaging of the substance or labeling or relabeling of its container, except that "manufacture" does not include the preparation or compounding of a controlled substance by an individual for the individual's own use....
Viewing the evidence in the light most favorable to the state, the proof shows that the defendant was alone at the campsite with much of the chemicals and equipment needed to make methamphetamine. Mr. McCloud testified that he smelled ether in a cooler at the campsite and that he was familiar with the smell from working in other methamphetamine cases. Expert witness Agent Rick Stewart studied photographs taken at the scene and identified various items in the photographs as being needed to make methamphetamine. He testified that while each item alone had a legitimate purpose, the items as a whole showed the campsite was a methamphetamine laboratory. Moreover, he testified that the liquid in the red bucket was breaking down pseudoephedrine, an immediate precursor to methamphetamine; that the large amount of pseudoephedrine recovered demonstrated that the campsite was a methamphetamine laboratory; and *639 that the methamphetamine was not being manufactured for personal use.
The defendant correctly points out that pseudoephedrine is not listed as an "immediate precursor" to methamphetamine as defined in the Tennessee Drug Control Act of 1989. See T.C.A. § 39-17-408(f) (listing only phenylacetone as an "immediate precursor"). However, the fact that pseudoephedrine is not listed does not mean it is not an immediate precursor to the drug, i.e., a substance from which the drug is derived. Instead, it means that our Commissioner of Mental Health and Developmental Disabilities has not designated pseudoephedrine as a precursor that needs to be controlled. See T.C.A. § 39-17-402(13) (providing that an "immediate precursor" is a "substance which the commissioner of mental health and developmental disabilities ... has found to be and by rule designates as being ... an immediate chemical intermediary used or likely to be used in the manufacture of a controlled substance, the control of which is necessary to prevent, curtail, or limit manufacture"). Therefore, based upon the expert's opinion and the evidence found at the campsite, a rational jury could have found beyond a reasonable doubt that the defendant was guilty of manufacturing methamphetamine.
II. MOTION TO CONTINUE
The defendant claims that the trial court erred by refusing to grant a continuance when the state announced a few days before trial that it was going to call an expert witness to testify. In addition, he contends that he was prejudiced by the trial court's denying his motion to continue because he did not have time to interview the state's expert or hire his own expert to contradict the state expert's testimony that the defendant was manufacturing methamphetamine and was not making the drug for his personal use only. The state argues that the defendant has waived this issue because he failed to include the transcript of the hearing on the motion in the appellate record. In addition, the state contends that the trial court properly denied the motion. We conclude that the trial court did not abuse its discretion by denying the defendant's motion for a continuance.
The record reflects that in October 2001, the trial court ordered the state to provide the defense with a list of witnesses and potential witnesses. On the afternoon of Friday, February 15, 2002, the state notified the defense that it intended to call DEA Agent Rick Stewart to testify at the February 20 trial. February 16-18 was a three-day weekend due to President's Day. On the morning of the trial, the defense filed a motion requesting a continuance because the defense had not had an opportunity to talk with Agent Stewart. During the hearing on the motion, the state informed the trial court that it had told the defense "from the word go" that it was trying to find an expert to testify in the case, that it did not find Agent Stewart until the Friday before trial, that it had informed the defense immediately of its intent to call Agent Stewart to testify, and that it provided the defense with Agent Stewart's telephone number on February 19. The defense acknowledged that it had not attempted to contact Agent Stewart and stated the following:
[The state] is correct that she did afford us the opportunity to talk to the person yesterday. I would still point outand we were aware and anticipated that she was going to try to find an expert.
Until the state does produce an expert, it would be premature to come in to Your Honor and say I want to get an expert to rebut the expert that I think *640 the state is going to get if they are apt to find one. And we are asking for $5,000.00 to do that, because we think they will probably find one. Until they get an expert, we are not in a position to do that and justify doing that.
The trial court denied the defendant's motion, ruling that the defense had had time to contact Agent Stewart and that, in any event, given the evidence against the defendant, the defense should have hired an expert without waiting "for the state to prove something and then you try to rebut it." The trial court held that the defendant had waited too long to request a defense expert's assistance and denied his motion for a continuance.
The decision whether to grant a continuance rests within the discretion of the trial court. State v. Morgan, 825 S.W.2d 113, 117 (Tenn.Crim.App.1991). The denial of a continuance will not lead to a reversal absent an abuse of discretion and resulting prejudice. See State v. Seals, 735 S.W.2d 849, 853 (Tenn.Crim.App.1987).
Initially, we note that despite the state's claim that the defendant failed to include the transcript of the hearing on the motion to continue in the appellate record, the transcript is in the record before us and, therefore, the defendant has not waived the issue. That said, we do not believe the trial court abused its discretion by denying the defendant's motion. The defense told the trial court that it knew the state was trying to find an expert. Nevertheless, despite the fact that the defense was "aware and anticipated" that the state was looking for an expert well before trial, the defense did not attempt to hire an expert to testify on the defendant's behalf. Moreover, the defendant has failed to show that he was prejudiced by the trial court's ruling. He has not demonstrated that had a continuance been granted, he would have hired an expert to rebut Agent Stewart's conclusion that the defendant was manufacturing methamphetamine and that the defendant was not manufacturing it for personal use. The defendant did not introduce any additional evidence at the hearing on the motion for new trial to support a showing of prejudice. He is not entitled to relief.
III. MOTION TO SUPPRESS EVIDENCE
The defendant contends that the trial court erred by allowing photographs of and testimony about equipment and chemicals found at the campsite because the evidence was destroyed before the defense got to inspect or test it. He contends that pursuant to State v. Ferguson, 2 S.W.3d 912 (Tenn.1999), in which our supreme court stated that the prosecution has a general duty to preserve evidence, the trial court should have dismissed the case or instructed the jury that the missing evidence may have had exculpatory value. The state claims that the defendant is not entitled to relief because his inability to inspect or test the evidence did not result from bad faith or negligence by the prosecution. We conclude that the trial court did not err by allowing into evidence photographs and testimony about the equipment and chemicals.
On the morning of trial, the defense filed a Motion to Suppress and Exclude State's Evidence. According to the motion, the state "by destroying the physical evidence, has effectively deprived the defendant of his right to confront the evidence the Government will introduce...." The defense requested the trial court "to suppress and exclude from evidence any items not physically before the jury for its inspection, and to stay the State from mentioning through any witness the existence of any item not before the jury." Just before trial, the *641 trial court held a hearing on the motion. The trial court overruled the defense, holding that the defense had known for a long time that the evidence had been destroyed and had waited too long to file its motion.
Pursuant to Rule 12(b)(3), Tenn. R.Crim. P., motions to suppress evidence must be raised "prior to trial," which means sometime earlier than the day of the trial. State v. Hamilton, 628 S.W.2d 742, 744 (Tenn.Crim.App.1981). The failure to pursue a motion to suppress "prior to trial" constitutes waiver unless good cause is shown for the failure to move for suppression in a timely manner. Tenn. R.Crim. P. 12(f); Hamilton, 628 S.W.2d at 744; State v. Davidson, 606 S.W.2d 293, 295 (Tenn.Crim.App.1980). Obviously, the defendant knew well before trial that virtually all of the physical evidence collected in this case was unavailable and that only photographs of the evidence existed. However, he has provided no explanation to the trial court or this court as to why he waited until the morning of trial to file a motion to suppress the photographs or testimony. Therefore, we conclude that the trial court did not err by ruling that the defendant's motion to suppress and exclude evidence was untimely.
As to the defendant's claim that the trial court should have dismissed the case or instructed the jury pursuant to State v. Ferguson, we note that he made no such argument in the trial court. We conclude that the issue is waived. See T.R.A.P. 3(e).
IV. EXPERT'S TESTIMONY
The defendant claims that the trial court erred by allowing Agent Stewart to testify that the defendant was not manufacturing methamphetamine for personal use. He argues that this was an issue to be resolved by the jury, not Agent Stewart. The state does not address this argument. However, we conclude that Agent Stewart's testimony was proper.
During Agent Stewart's direct testimony, the following exchange occurred:
[State]: Insofar as your experience, is this type of lab, given the quantity that you've seen here today, is this type of lab consistent with
[Defense]: Objection. Judge, he can testify as to what it was, but if she's going a step further now and asking him what it's consistent with, I'd ask for a jury out before we go into what she's going to go into.
THE COURT: I don't know what the question is yet.
[Defense]: I don't either, I anticipate.
THE COURT: Ask the question and then I'll rule on it.
....
[State]: Is this type of lab consistent with a lab for manufacturing purposes, for broad scale manufacturing purposes, or is it consistent with a lab for personal use?
[Agent Stewart:] Again, we get a lot of what we call mom and pop labs, just for personal use, that just makes grams or ounces at a time. You don't find near this many pseudoephedrine or at least this much pseudoephedrine after it's been washed or stripped down or reduced. So I'd have to say based on the amount of pseudoephedrine he had and the way that it was found, no, that's not personal use.
Rule 702, Tenn. R. Evid., provides that if "scientific, technical, or other specialized knowledge will substantially assist the trier of fact to understand the evidence or to determine a fact in issue, a witness qualified as an expert by knowledge, skill, experience, training, or education may testify in *642 the form of an opinion or otherwise." The trial court "shall disallow [an expert's] testimony in the form of an opinion or inference if the underlying facts or data indicate lack of trustworthiness." Tenn. R. Evid. 703. Moreover, testimony is not objectionable merely because it embraces an ultimate issue before the trier of fact. Tenn. R. Evid. 704. We review the admission or exclusion of evidence for an abuse of discretion. State v. Gray, 960 S.W.2d 598, 606 (Tenn.Crim.App.1997).
Initially, we note that the defense should have stated the grounds for its objection more clearly. See Tenn. R. Evid. 103(a)(1) (providing that a timely objection for purposes of preserving the issue for appeal must state "the specific ground of objection if the specific ground was not apparent from the context"). In any event, Rule 704 states that experts may give their opinion on an ultimate issue to be decided by the jury. Agent Stewart testified that the amount of pseudoephedrine found in the red bucket was enough to make one-half pound of methamphetamine and that one pound of methamphetamine was worth $10,000 to $20,000. He also testified that most "mom and pop labs" produce only a few ounces or a few grams of the drug. In light of this testimony, we believe that Agent Stewart established a basis for his conclusion that the defendant was not making the methamphetamine for personal use and that his testimony was proper. See State v. William Ray Collier, No. M2001-00893-CCA-R3-CD, 2002 WL 170731, Davidson County (Tenn.Crim.App. Feb. 4, 2002), app. denied (Tenn. July 15, 2002) (police sergeant properly testified as expert witness that amount of heroine recovered and way in which it was packaged demonstrated that defendant did not possess drug for personal use); State v. William Aubrey Trotter, Jr., No. 01C01-9701-CR-00019, 1998 WL 75423, Davidson County (Tenn.Crim.App. Feb. 24, 1998) (officer properly testified that amount of cocaine and cash on defendant's person indicated cocaine was not for personal use).
V. LESSER INCLUDED OFFENSE INSTRUCTION
The defendant claims that the trial court erred by failing to instruct the jury on simple possession as a lesser included offense of manufacturing a Schedule II controlled substance. He argues that a simple possession instruction was warranted in this case because the police found no large amount of money, packaging materials, scales, or other items at the campsite to indicate that the defendant was making the methamphetamine for any reason other than personal use. The state argues that even if the trial court erred by failing to give the instruction on simple possession, the error is harmless because the trial court instructed the jury on possession of drug paraphernalia, which the jury rejected. See State v. Williams, 977 S.W.2d 101, 106 (Tenn.1998) (holding that "by finding the defendant guilty of the highest offense to the exclusion of the immediately lesser offense, ... the jury necessarily rejected all other lesser offenses"). We hold that although simple possession is a lesser included offense of manufacturing a controlled substance, an instruction was not warranted in this case.
Our supreme court has held that an offense is a lesser included offense if:
(a) all of its statutory elements are included within the statutory elements of the offense charged; or
(b) it fails to meet the definition in part (a) only in the respect that it contains a statutory element or elements establishing
(1) a different mental state indicating a lesser kind of culpability; and/or
*643 (2) a less serious harm or risk of harm to the same person, property or public interest; or
(c) it consists of
(1) facilitation of the offense charged or of an offense that otherwise meets the definition of lesser-included offense in part (a) or (b); or
(2) an attempt to commit the offense charged or an offense that otherwise meets the definition of lesser-included offense in part (a) or (b); or
(3) solicitation to commit the offense charged or an offense that otherwise meets the definition of lesser-included offense in part (a) or (b).
State v. Burns, 6 S.W.3d 453, 466-67 (Tenn.1999). If an offense is a lesser included offense, then the trial court must conduct the following two-step analysis in order to determine whether the lesser included offense instruction should be given:
First, the trial court must determine whether any evidence exists that reasonable minds could accept as to the lesser-included offense. In making this determination, the trial court must view the evidence liberally in the light most favorable to the existence of the lesser-included offense without making any judgments on the credibility of such evidence. Second, the trial court must determine if the evidence, viewed in this light, is legally sufficient to support a conviction for the lesser-included offense.
Id. at 469.
As previously stated, T.C.A. § 39-17-417(a)(1) provides that it is an offense for a defendant knowingly to "[m]anufacture a controlled substance." "Manufacture" means "the production, preparation, propagation, compounding, conversion or processing of a controlled substance of natural origin, or independently by means of chemical synthesis...." Simple possession is set forth in T.C.A. § 39-17-418(a), which provides that it is an offense "for a person to knowingly possess ... a controlled substance unless the substance was obtained directly from, or pursuant to, a valid prescription." Because manufacturing a controlled substance contemplates that a person also will possess it, simple possession is a lesser included offense under part (a) of the Burns test.
Nevertheless, an instruction on simple possession was not warranted in this case. A "controlled substance" is "a drug, substance, or immediate precursor in Schedules I through VI of §§ 39-17-403XX-XX-XXX." T.C.A. § 39-17-402(4). However, as stated earlier, our review of those sections reveals that pseudoephedrine has not been designated as a drug, substance, or immediate precursor of amphetamine or methamphetamine. Therefore, because the defendant only possessed pseudoephedrine, which is not a controlled substance in Tennessee, he could not be guilty of simple possession, and the trial court's failure to instruct on that offense was not error.
We note that despite the state's claim, possession of drug paraphernalia is not a lesser included offense of manufacturing a controlled substance. Drug paraphernalia means
all equipment, products and materials of any kind which are used, intended for use, or designed for use in planting, propagating, cultivating, growing, harvesting, manufacturing, compounding, converting, producing, processing, preparing, testing, analyzing, packaging, repackaging, storing, containing, concealing, injecting, ingesting, inhaling or otherwise introducing into the human body, a controlled substance as defined in [T.C.A. § 39-17-402(4)].
*644 The elements of possession of drug paraphernalia are that (1) the defendant possessed an object, (2) the object is classified as "drug paraphernalia," and (3) the defendant intended to use the object for an illicit purpose listed in the statute. State v. Mallard, 40 S.W.3d 473, 486 (Tenn. 2001). These statutory elements are not included within the statutory elements of manufacturing a controlled substance. We conclude that possession of drug paraphernalia is not a lesser included offense of manufacturing under Burns.
VI. "IMMEDIATE PRECURSOR" INSTRUCTION
Finally, the defendant claims that the trial court erred by failing to instruct the jury on the statutory definition of an "immediate precursor." He contends that pseudoephedrine is not recognized as an "immediate precursor" in this state and, therefore, that the jury could not have convicted him if the trial court had given the jury an "immediate precursor" instruction.
As noted in section I, the fact that pseudoephedrine is not a listed "immediate precursor" as defined in the Tennessee Drug Control Act of 1989 is irrelevant to whether the defendant was guilty of manufacturing methamphetamine. Thus, instructing the jury on the statutory definition of an "immediate precursor" would have confused and misled the jury, and the trial court did not err by failing to give an "immediate precursor" instruction.
We note that the defendant also claims that cumulative errors denied him the right to a fair trial. However, having found no errors, there is no merit to this claim.
Based upon the foregoing and the record as a whole, we affirm the judgment of the trial court.
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377 F.3d 879
Eric T. TOLEN, Plaintiff — Appellant,v.John ASHCROFT, Attorney General for the Department of Justice, Defendant — Appellee.
No. 03-2927.
United States Court of Appeals, Eighth Circuit.
Submitted: May 10, 2004.
Filed: July 28, 2004.
COPYRIGHT MATERIAL OMITTED Appeal from the United States District Court for the Eastern District of Missouri, Warren K. Urbom, J.
Eric T. Tolen, argued, pro se, Clayton, MO, for appellant.
Thomas M. Larson, argued, Asst. U.S. Attorney, Kansas City, MO, for appellee.
Before MORRIS SHEPPARD ARNOLD, MCMILLIAN, and MELLOY, Circuit Judges.
MELLOY, Circuit Judge.
1
Eric Tolen ("Tolen") was employed by the Department of Justice as an Assistant United States Attorney from 1987 until his termination in 1999. His termination followed allegations of, inter alia: perjury in connection with his brother's bank robbery trial, the unauthorized outside practice of law, making false statements to investigating officers, using government time, clerical assistance, and space for personal reasons, and misusing his position as an Assistant United States Attorney for personal gain. Pursuant to Department of Justice policy, Tolen was placed on administrative leave while the Executive Office for United States Attorneys ("EOUSA") completed an investigation into the allegations and ultimately recommended Tolen's dismissal.
2
After being terminated, Tolen brought numerous claims of racial discrimination and retaliation against various defendants, including Attorney General Ashcroft, FBI Special Agent Gary Fuhr, and former Department of Justice attorney Joseph Gontram, under Title VII and Bivens v. Six Unknown Named Agents of Fed. Bureau of Narcotics, 403 U.S. 388, 91 S.Ct. 1999, 29 L.Ed.2d 619 (1971). The defendants moved to dismiss Counts IV through IX of Tolen's First Amended Complaint, and Tolen conceded that some of the counts were precluded by remedies under the Civil Service Reform Act. The district court1 granted the Motion to Dismiss. Consequently, Counts I, II, and III, which alleged race discrimination and retaliation against Attorney General Ashcroft (Counts I and II) and Special Agent Fuhr (Count III), remained. The district court then granted Tolen leave to amend his complaint. In a four-count Second Amended Complaint, Tolen solely named Attorney General Ashcroft as a defendant and sought to hold him liable for race discrimination and retaliation under Title VII.
3
Attorney General Ashcroft subsequently moved for summary judgment, arguing that Tolen failed to present a prima facie case of discrimination or retaliation. The district court agreed and entered summary judgment in Ashcroft's favor. Tolen appeals.2 Having reviewed de novo the record and carefully considered the parties' briefs, see Forrest v. Kraft Foods, Inc., 285 F.3d 688, 691 (8th Cir.2002) (standard of review), we agree with the district court's bases for granting summary judgment and affirm.
4
Count I of Tolen's Second Amended Complaint alleges race discrimination. To establish a prima facie case on this claim, a Title VII plaintiff must show: (1) that he is a member of a protected class, (2) that he was meeting the employer's legitimate job expectations, (3) that he suffered an adverse employment action, and (4) that similarly situated employees outside the protected class were treated differently. E.g., Clark v. Runyon, 218 F.3d 915, 918 (8th Cir.2000). If the plaintiff can make out a prima facie case, the employer must come forward and identify a legitimate, non-discriminatory reason for the adverse employment action. See Reeves v. Sanderson Plumbing Prods., Inc., 530 U.S. 133, 142, 120 S.Ct. 2097, 147 L.Ed.2d 105 (2000). If the employer meets this burden of production, the presumption raised by the prima facie case disappears, and the burden shifts back to the plaintiff to show that the articulated reason was a pretext for discrimination. See Mayer v. Nextel West Corp., 318 F.3d 803, 807 (8th Cir.2003) (explaining McDonnell Douglas burden-shifting paradigm in context of ADEA).
5
The district court found that Tolen failed to generate a jury question as to the fourth element of the prima facie case. We agree. Tolen argues that he is the only employee who former United States Attorney Dowd caused to be investigated, while he (Dowd) did not report other employees' misconduct, in violation of Department of Justice policy. In addition, Tolen contends that he was treated less favorably than other Assistant United States Attorneys who the director of the EOUSA recommended be dismissed for misconduct. To be similarly situated, the comparable employees "`must have dealt with the same supervisor, have been subject to the same standards, and engaged in the same conduct without any mitigating or distinguishing circumstances.'" Gilmore v. AT & T, 319 F.3d 1042, 1046 (8th Cir.2003) (quoting Clark, 218 F.3d at 918).
6
To demonstrate that he was treated more harshly, Tolen asserts that his offered comparables were accused of committing serious violations while he was accused of relatively minor infractions. No reasonable fact-finder, however, could conclude that the unauthorized outside practice of law during Tolen's regular working hours, accusations of perjury and misleading federal prosecutors, among other allegations, were "minor." Tolen has not designated specific evidence in the record to dispute that he engaged in much of the misconduct the Department of Justice charged against him.3 Nor does he contend that the charges were fabricated. Thus, to compare the severity of Tolen's conduct to that of employees who were accused of neglecting work and being confrontational, for example, would be inappropriate for purposes of the "similarly situated" analysis. Furthermore, as the district court pointed out, the frequency of Tolen's misconduct distinguishes him from his offered comparables. Consequently, upon de novo review, we agree that Tolen failed to establish a prima facie case of race discrimination.
7
The district court, moreover, found that even if Tolen were able to establish a prima facie case, he had failed to rebut Attorney General Ashcroft's legitimate, non-discriminatory reasons for his (Tolen's) dismissal. The charges that the EOUSA sustained against Tolen constitute legitimate, non-discriminatory reasons for Tolen's termination, and Tolen has not presented any evidence that supports an inference that Attorney General Ashcroft's articulated reasons for dismissing Tolen were pretextual. Nor has Tolen presented evidence from which a reasonable jury could find that he was terminated "under circumstances that would permit the court to infer that unlawful discrimination had been at work." Habib v. NationsBank, 279 F.3d 563, 566 (8th Cir.2001). Summary judgment, therefore, was properly entered against him on his race discrimination claim.
8
Counts II, III, and IV of Tolen's Second Amended Complaint allege retaliatory conduct for Tolen's refusal to resign and the ensuing investigation (Count II), for his refusal to facilitate an inculpatory statement from his brother who stood accused of bank robbery (Count III), and for filing a discrimination charge with the EEOC (Count IV). A prima facie case of retaliation requires the plaintiff to establish (1) that he engaged in conduct protected by Title VII, (2) that the employer took an adverse employment action against the plaintiff, and (3) that the adverse employment action was causally related to the plaintiff's protected activity. See Sowell v. Alumina Ceramics, Inc., 251 F.3d 678, 684 (8th Cir.2001) (outlining elements of prima facie retaliation case under Title VII).
9
We agree with the district court's analysis of Tolen's retaliation claims. The record before the district court did not show that Tolen generated a triable issue as to whether he engaged in activity protected by Title VII as alleged in Counts II and III. On de novo review, we also find lacking a genuine issue for trial regarding causation. Regarding Count IV, we likewise agree with the district court's analysis that no genuine issue of material fact existed as to whether Tolen suffered a post-termination adverse employment action that was causally linked to his filing of an EEOC charge. Accordingly, the district court properly entered summary judgment on each of Tolen's retaliation claims.
10
Therefore, we affirm the judgment of the district court.
Notes:
1
The Honorable Warren K. Urbom, United States District Judge for the Eastern District of Missouri
2
Tolen also appeals the dismissal of the constitutional claims alleged against Special Agent Fuhr and attorney Gontram in Tolen's First Amended Complaint. However, Tolen voluntarily dismissed hisBivens claim against Gontram and did not include either of these claims in his Second Amended Complaint. "It is well-established that an amended complaint supercedes an original complaint and renders the original complaint without legal effect." Karnes v. Poplar Bluff Transfer Co. (In re Atlas Van Lines, Inc.), 209 F.3d 1064, 1067 (8th Cir.2000); accord Forsyth v. Humana, Inc., 114 F.3d 1467, 1474 (9th Cir.1997) ("If a plaintiff fails to include dismissed claims in an amended complaint, the plaintiff is deemed to have waived any error in the ruling dismissing the prior complaint."); Fuhrer v. Fuhrer, 292 F.2d 140, 144 (7th Cir.1961) ("The prior pleading is in effect withdrawn as to all matters not restated in the amended pleading, and becomes functus officio."). Accordingly, Tolen has waived his Bivens claims, precluding our review of the district court's dismissal of them.
3
Tolen failed to cite to specific portions of the record to support much of his arguments resisting the defendant's motion for summary judgment. The district court was not required to wade through his voluminous "Exhibit 1" to find the existence of triable issues, even though the district court expended much effort in doing so. Tolen's numerous citations to "Exhibit 1" and to full affidavits did not meet Rule 56's specificity requirementsSee Jaurequi v. Carter Mfg. Co., 173 F.3d 1076, 1085 (8th Cir.1999) ("[A] district court is not `obligated to wade through and search the entire record for some specific facts which might support the nonmoving party's claim[.]"' (quoting White v. McDonnell Douglas Corp., 904 F.2d 456, 458 (8th Cir.1990))).
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726 F.Supp. 278 (1989)
DELTA ROCKY MOUNTAIN PETROLEUM, INC.; Delta Petroleum Company, Inc.; Paul B. Maxwell; Jesse R. Swoap; Martyn J. Lucas; Michael R. Crotty; and 21st Century Lubricants, Inc., Plaintiffs,
v.
The UNITED STATES DEPARTMENT OF DEFENSE; the Defense Logistics Agency; and Karl Kabeiseman, in his official capacity as General Counsel, Defense Logistics Agency, Defendants.
Civ. A. No. 89-B-1766.
United States District Court, D. Colorado.
November 29, 1989.
*279 Durward E. Timmons, Edward A. Gleason, and Brian G. Eberle, Sherman & Howard, Colorado Springs, Colo., for plaintiffs.
Kathleen Torres, Asst. U.S. Atty., Denver, Colo., for defendants.
MEMORANDUM OPINION AND ORDER
BABCOCK, District Judge.
Oral argument on plaintiffs' complaint for permanent injunction was heard Wednesday, November 22, 1989 at 10:00 a.m. Both parties have submitted briefs and I have reviewed the administrative record. The facts are undisputed and the only issue in this administrative appeal is whether the Defense Logistics Agency (DLA) decision to debar plaintiffs from all government procurement and sales contracting for three years was arbitrary, capricious, and an abuse of discretion.
To find an agency action arbitrary or capricious under the Administrative Procedure Act (APA), 5 U.S.C. § 706(2)(A), I must first consider whether the DLA decision was based on a consideration of the relevant factors and whether there has been a clear error of judgment. Citizens to Preserve Overton Park v. Volpe, 401 U.S. 402, 416, 91 S.Ct. 814, 823, 28 L.Ed.2d 136 (1971). The ultimate standard of review is a narrow one. I may not substitute my judgment for that of the DLA. Id.
Plaintiffs contend that the DLA, in debarring plaintiffs, disregarded evidence of their present integrity and responsibility, and failed to give proper weight to my findings made at the April 18, 1989 criminal sentencing of plaintiffs Delta Rocky *280 Mountain Petroleum, Inc. (Delta-Denver), Maxwell, and Swoap. I disagree.
Debarment is an administrative action which excludes nonresponsible contractors from government contracting. Caiola v. Carroll, 851 F.2d 395, 397 (D.C.Cir.1988). Debarment is designed to insure the integrity of government contractors in the present and into the future. Shane Meat Co., Inc. v. United States Dept. of Defense, 800 F.2d 334 (3d Cir.1986). It is not penal in nature. 48 C.F.R. § 9.402(b).
The test for whether debarment is warranted is the present responsibility of the contractor. Roemer v. Hoffman, 419 F.Supp. 130, 131 (D.D.C.1976). In government contract law, "responsibility" is a term of art, defined to include the honesty and integrity of the contractor as well as the ability to successfully perform a contract. Id. A contactor can meet the test of present responsibility by demonstrating that it has taken steps to ensure that the wrongful acts will not recur. Robinson v. Cheney, 876 F.2d 152, 160 (D.C.Cir.1989). "A finding of lack of present responsibility, however, can be based upon past acts." Lawrence C. Shank, 83-1 BCA ¶ 16,439, p. 81,790 (1983).
Here, plaintiffs Delta-Denver, Maxwell, and Swoap were convicted of a crime in connection with the performance of a government contract. These convictions constituted "cause" for debarment under 48 C.F.R. § 9.406.2(a). Caiola v. Carroll, 851 F.2d at 397. However, "[t]he existence of a cause for debarment ... does not necessarily require that the contractor be debarred; the seriousness of the contractor's acts or omissions and any mitigating factors should be considered in making any debarment decision." 48 C.F.R. § 9.406-1(a). (First emphasis in original; second emphasis added).
48 C.R.R. § 209.406-1 sets forth the following mitigating factors to be considered in a debarment action:
(1) Whether the contractor had effective standards of conduct and internal control systems ... in place at the time of the activity on which the felony conviction was based or has adopted such procedures prior to any government investigation leading to the suspension or debarment proceedings;
(2) Whether the contractor made timely disclosure to the appropriate government agency;
(3) Whether the contractor cooperated fully with government agencies during the investigation and any court or administrative action;
(4) Whether the contractor has paid or has agreed to pay all criminal, civil, and administrative liability for the improper activity;
(5) Whether the contractor has made or has agreed to make full restitution, including any investigative or administrative costs incurred by the government;
(6) Whether the contractor has taken appropriate disciplinary action against the individuals responsible for the activity upon which the conviction was based, including dismissal when such action is warranted based on a consideration of all the available facts;
(7) Whether the contractor has implemented or agreed to implement remedial measures; and
(8) Whether the contractor has agreed to institute new or revised review and control procedures and ethics training programs.
Here, plaintiffs submitted the following mitigating factors for DLA to consider: (1) plaintiffs fully cooperated with all government entities and personnel during the government's investigation; (2) plaintiffs pled guilty to the criminal charges brought against them; (3) plaintiffs instituted a corporate code of business ethics; (4) plaintiffs purchased and installed at Delta-Denver additional tanks to ensure sufficient separate storage of all specified components used in blending government end oil products; (5) plaintiffs established an accurate and complete record keeping system; (6) plaintiffs' lack of prior criminal behavior; and (7) this Court's findings made at plaintiffs' April 18, 1989 sentencing hearing.
*281 In its Memorandum of Decision on the Proposed Debarment of plaintiffs, DLA stated:
The gravamen of [plaintiffs'] Counsel's response to the Notices of Proposed Debarment is that debarment is unnecessary to protect the Government's interests. Counsel's reliance on statements made by Judge Babcock during the sentencing of DRMP and Messrs. Maxwell and Swoap is misplaced. The court determined that the defendants before the court were guilty of cheating the Department of Defense and at that point the matter reverted to the Department of Defense for determination of Respondents' responsibility for contracting. The views of Judge Babcock are not to be taken lightly. It is important to note, however, that my inquiry must include considerations of the Respondents' responsibility as business partners who can be relied on to provide products that conform to contract requirements.... In regard to the question of Respondents' present responsibility I also considered Counsel's admission that his clients' actions did "impugn (sic) the integrity of the contracting system" Despite Counsel's claim that there was no harm to the Government, Counsel does not dispute the fact that Respondents did not provide the item contracted for by the Government....
I have also considered the fact that the corporations are said to have cooperated in the investigation of the wrongdoing and that various measures have been taken to try to prevent a recurrence of such unethical practices in the future. Despite the reforms, however, the principal malefactors, Mr. Maxwell and Mr. Swoap, remain in control of the corporations, their policies, and daily operations. Thus, corporate management remains unchanged from the times involved in the criminal misconduct. Reforms are only as effective as the people responsible for carrying them out ... I have no confidence that the reforms alone are sufficient to protect the Government's interests or that, in the case of some economic necessity in the future, Mr. Maxwell or Mr. Swoap would not again countenance deviation from contract requirements for the financial benefit of the corporations....
Respondents' submissions to date have not provided the assurances necessary to support a determination that they are now responsible, trustworthy business partners for the United States....
The DLA concluded that, despite the mitigating factors, a maximum term of debarment was necessary to protect the government's interests.
DLA's emphasis on protecting the government's interest is in accord with the purpose of debarment as expressed in the regulations. See 48 C.F.R. § 904(b). Moreover, although DLA did not explicitly articulate its consideration of each mitigating factor presented, or its reason for imposing the maximum three-year period of debarment, it is clear from the DLA Memorandum of Decision on the Proposed Debarment that DLA considered and weighed the mitigating factors submitted and concluded that the changes made were not substantive or sufficient to protect the government from a recurrence of the wrongdoing. See Shane Meat Co., Inc., 800 F.2d at 339. The scope of my review is narrow and I cannot substitute my judgment for that of the DLA. See Citizens to Preserve Overton Park, supra, 401 U.S. at 416, 91 S.Ct. at 823. Accordingly, because the DLA decision debarring plaintiffs from government contracting for the three year period was based on a consideration of the relevant factors, I conclude that DLA's decision to order debarment was not arbitrary and capricious or a clear error of judgment.
Plaintiffs further argue that the government is collaterally estopped from asserting that plaintiffs lack present responsibility because it did not contest this question in its criminal presentation against plaintiffs. Again, I disagree.
Collateral estoppel precludes relitigation of issues acutally and necessarily decided in a prior action. Parklane Hosiery Co. v. Shore, 439 U.S. 322, 326, 99 S.Ct. 645, 649, 58 L.Ed.2d 552 (1979). It *282 can only be applied to subsequent actions when (1) the issue previously decided is identical with the one presented in the action in question; (2) the prior action has been finally adjudicated on the merits; (3) the party against whom the doctrine is invoked was a party or in privity with a party to the prior adjudication; and (4) the party against whom the doctrine is raised had a full and fair opportunity to litigate the issue in the prior action. Matter of Lombard, 739 F.2d 499, 502 (10th Cir.1984).
Issues determined in a criminal conviction may be accorded preclusive effect at a later administrative adversary proceeding if the normal standards for collateral estoppel are satisfied. Chisholm v. Defense Logistics Agency, 656 F.2d 42 (3d. Cir.1981). Hence, I must examine the record of the criminal proceedings to determine specifically the issues there decided. Id. at 48; Appley v. West, 832 F.2d 1021 (7th Cir.1987).
A review of that record demonstrates that plaintiffs have failed to meet the four criteria. In sentencing plaintiffs, I was required to, and did, consider the nature and circumstances of the offense and the history and characteristics of the defendants. 18 U.S.C. § 3553(a)(1). I also entered on the record my determination of the corporation's rehabilitation and present integrity. Nevertheless, the precise issue of plaintiffs' present responsibility was not litigated and necessarily decided adversely to the government. At the sentencing hearing, plaintiffs' counsel requested that the Court "offer some guidance to the Department of Defense" regarding waiver of debarment. Record, pp. 404-406. I then asked the government to respond to plaintiffs' request. The government stated:
Our policyand I have done these cases beforeour policy has been to stay away from that, from making that type of recommendation. Certainly if we were asked about the extent of the corporation's cooperation, a factual type statement, we would make it. If I were asked if they cooperated, I would state that they did. I haven't seen a court make the kind of recommendation that has been requested here.
The way I understand that process is that's some kind of business decision made by the appropriate people in that department and a business decision on behalf of the government that we felt we weren't really in a position to influence one way or the other.
Record, pp. 413-14.
It is clear from this exchange that the government had little incentive at the sentencing hearing to litigate aggressively the issue of plaintiffs' present responsibility. Thus, I conclude that the government is not collaterally estopped from asserting that plaintiffs lack present responsibility based upon my findings made at plaintiffs' sentencing hearing. Accordingly, IT IS
ORDERED that the DLA order debarring plaintiffs for the maximum three-year period is affirmed and judgment shall enter in favor of defendants against plaintiffs on their complaint.
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121 F.3d 251
Marshall C. SPIEGEL, Plaintiff-Appellant,v.Daniel M. RABINOVITZ, Defendant-Appellee.
No. 96-2150.
United States Court of Appeals,Seventh Circuit.
Argued Feb. 10, 1997.Decided June 2, 1997.Opinion Published July 28, 1997.1
David C. Thomas (argued), Chicago, IL, for plaintiff-appellant.
Terry L. McDonald, Patrick M. Blanchard (argued), Office of the State's Attorney of Cook County, Chicago, IL, for defendant-appellee.
Before BAUER, EASTERBROOK and DIANE P. WOOD, Circuit Judges.
BAUER, Circuit Judge.
1
On May 29, 1993, Marshall Spiegel ("Spiegel") and his family were disturbed by the clamor of hammering emanating from the apartment above them. This was not the first time that the Spiegels had endured such racket. Spiegel's wife, Carol, walked upstairs to complain. She soon became embroiled in an argument with the upstairs tenants, Loren Cherny and his common-law wife, Mim Bobbin.2 Overhearing this argument, Spiegel dashed upstairs holding his young son in his arms. Some time after Spiegel reached the upstairs apartment, Bobbin threatened that Cherny would kill Spiegel. Cherny struck Spiegel in the back, and Bobbin also hit him. The record is not clear as to what occurred between the time of Spiegel's arrival upstairs and the ensuing threat and blows. We do know, however, that Spiegel never laid his hands on Bobbin or Cherny.
2
On May 31, 1993, Spiegel reported the incident to the police. On June 23, Spiegel filed criminal complaints, charging Bobbin and Cherny with battery. When they learned of these charges on June 25, Bobbin and Cherny, in turn, filed criminal battery complaints against Spiegel. Specifically, these complaints charged Spiegel with committing battery against Cherny. On that same day, Spiegel was booked, fingerprinted and placed in a cell for over an hour before he posted bond and was released.
3
The two criminal cases were placed on the same court call for August 4, 1993. On that same day, Daniel Rabinovitz, a Cook County Assistant State's Attorney, was assigned to assess whether the office should pursue one or both of the cases. Rabinovitz reviewed the police reports, spoke with the police officers involved, and questioned all of the players in this case after administering a Miranda warning to each of them. He then submitted his evaluation to his superiors.
4
The State's Attorney's Office decided to pursue only Bobbin's and Cherny's case against Spiegel. Spiegel was tried and acquitted. In the interim, Spiegel claims that he was evicted from his apartment, his employment status with the Chicago Mercantile Exchange was "adversely affected," and he lost and continues to lose income.
5
Spiegel brought this action under Title 42 U.S.C. § 1983 against Rabinovitz in his individual capacity. Spiegel alleged that the State's Attorney's Office relied on Rabinovitz's report when it decided not to pursue Spiegel's battery case against Bobbin and Cherny and went ahead with Bobbin's and Cherny's battery case against Spiegel. Spiegel alleged that Rabinovitz conducted a willfully incomplete and inadequate assessment of the case. According to Spiegel, Rabinovitz should have uncovered a signed, written statement by Bobbin which failed to mention that Spiegel touched Cherny. Spiegel also claimed the Rabinovitz should have realized that Cherny manufactured evidence by submitting a photograph of a bruise that Spiegel could not have inflicted. Spiegel believed that Rabinovitz overlooked witnesses, including a disinterested neighbor, who could have corroborated Spiegel's version of the events of May 29. Spiegel further contended that Rabinovitz should have been mindful that Cherny's and Bobbin's charges against Spiegel came only after they learned of his charges against them. Finally, Spiegel maintained that Rabinovitz was biased against Spiegel because Spiegel at one time had filed charges with the Attorney Registration and Disciplinary Commission against one of Rabinovitz's co-workers. With Spiegel as the complaining witness, Rabinovitz subsequently prosecuted and lost this case against his co-worker.
6
Spiegel alleged that Rabinovitz's acts and omissions, conducted under color of state law, violated Spiegel's Fifth and Fourteenth Amendment rights. Spiegel maintained that Rabinovitz's actions were intentional and malicious and constituted reckless disregard for Spiegel's constitutional rights. He requested compensatory damages and punitive damages. In response, Rabinovitz brought a 12(b)(6) Motion to Dismiss, asserting that he, as a prosecutor, was absolutely immune from suit and that Spiegel failed to raise issues cognizable under 42 U.S.C. § 1983. The district court found that Spiegel had stated a claim for malicious prosecution under § 1983 but that Rabinovitz was absolutely immune from suit. The district court dismissed Spiegel's case. Spiegel now appeals, arguing that the district court erred when it determined that Rabinovitz was absolutely immune from suit.
7
We review de novo a district court's 12(b)(6) dismissal. Ledford v. Sullivan, 105 F.3d 354, 356 (7th Cir.1997) (citation omitted). We accept as true all facts alleged in the complaint and draw all reasonable inferences from them in the plaintiff's favor. Id. (citations omitted). We will affirm the dismissal of a complaint if "it is clear that no relief could be granted under any set of facts that could be proved consistent with the allegations." Id. (quoting Hishon v. King & Spalding, 467 U.S. 69, 73, 104 S.Ct. 2229, 2232, 81 L.Ed.2d 59 (1984)).
8
Title 42 U.S.C. § 1983 creates a federal cause of action for "the deprivation, under color of [state] law, of a citizen's rights, privileges, or immunities secured by the Constitution and laws of the United States." Id. (quoting Livadas v. Bradshaw, 512 U.S. 107, 132, 114 S.Ct. 2068, 2082, 129 L.Ed.2d 93 (1994)). Section 1983 is not itself a font for substantive rights; instead it acts as an instrument for vindicating federal rights conferred elsewhere. Id. at 356 (citation omitted). The first step in any § 1983 analysis is to pinpoint the specific constitutional right which was allegedly violated. Id. (citing Graham v. Connor, 490 U.S. 386, 394, 109 S.Ct. 1865, 1870, 104 L.Ed.2d 443 (1989); Kernats v. O'Sullivan, 35 F.3d 1171, 1175 (7th Cir.1994)). The validity of the claim must then be judged by reference to the specific constitutional standard which governs that right. Graham, 490 U.S. at 394, 109 S.Ct. at 1870.
9
In this case, Spiegel presents his claim of malicious prosecution within the confines of substantive due process. The protections of substantive due process have been conferred primarily upon matters relating to marriage, family, procreation, and the right to bodily integrity. See, e.g., Planned Parenthood of Southeastern Pa. v. Casey, 505 U.S. 833, 847-49, 112 S.Ct. 2791, 2804-05, 120 L.Ed.2d 674 (1992) (describing cases in which substantive due process rights have been recognized). Spiegel's malicious prosecution claim is strikingly different from those rights which have been recognized under the rubric of substantive due process.
10
In general, the common law tort of malicious prosecution does not amount to the deprivation of a constitutional right under 42 U.S.C. § 1983; however, malicious prosecution, like the common-law tort of defamation, can be a component of a constitutional tort. Albright v. Oliver, 975 F.2d 343, 346 (7th Cir.1992). For example, in Albright, we stated that defamation accompanying a discharge from a job can make it impossible for a person to procure equivalent employment elsewhere, thus depriving him of the liberty of occupation, one of the liberties protected by the Due Process Clause. Id. In the same vein, malicious prosecution can result in imprisonment, which is likewise a deprivation of liberty within the confines of the Due Process Clause. Id. Put another way, we said that in the absence of "incarceration or other palpable consequences," malicious prosecution should not be actionable as a constitutional wrong. Id. at 347.
11
In Albright, a criminal information was issued charging Albright with drug trafficking. Albright was booked and posted bond. One condition of his bond was that he not leave Illinois without the court's permission. Shortly before trial was to begin, the court dismissed the information against Albright because it failed to state an offense recognized under Illinois law.
12
Albright subsequently brought a § 1983 claim in federal district court. Albright alleged that the case had received some publicity and that he missed a job interview in St. Louis due to the travel restriction of his bond. He argued that these consequences resulted from his prosecution and were sufficiently serious to elevate his common-law malicious prosecution claim to the level of a constitutional tort. On appeal, we disagreed, reasoning:
13
The medley of harms that a malicious prosecution inflicts when, as in this case, the defendant is exonerated before any punishment is imposed-indeed, before he is even put on trial--is similar to that inflicted by defamation, which by impairing a person's reputation not only embarrasses and even outrages him but also undermines his ability to make favorable transactions, whether business or personal, thereby subjecting him to costs pecuniary or nonpecuniary or both. It also puts him to the expense of bringing a suit for defamation to recover his good name. If the injuries that defamation imposes do not constitute a deprivation of liberty or property within the meaning of the due process clause, then neither do the injuries that malicious prosecution imposes.
14
Id. at 345-46. Albright's case subsequently went before the United States Supreme Court.
15
Before the Supreme Court, Albright claimed that police violated only his substantive due process right to be free from prosecution without probable cause. Albright v. Oliver, 510 U.S. 266, 271, 114 S.Ct. 807, 811, 127 L.Ed.2d 114 (1994). The Supreme Court affirmed our decision, but the plurality did so on different grounds. Writing for the plurality, Chief Justice Rehnquist, joined by Justices O'Connor, Scalia and Ginsburg, held that an allegation of arrest without probable cause must be analyzed under the Fourth Amendment without reference to more general considerations of due process. Id. at 281, 114 S.Ct. at 816. Specifically, the plurality opined that "substantive due process, with its 'scarce and open-ended' 'guideposts,' can afford ... no relief." Id. at 275, 114 S.Ct. at 813 (quoting Collins v. Harker Heights, 503 U.S. 115, 125, 112 S.Ct. 1061, 1068, 117 L.Ed.2d 261 (1992)).
16
Justice Kennedy, joined by Justice Thomas, concurred with the plurality. However, Kennedy wrote separately because he believed that the root of Albright's due process claim concerned not his arrest but instead the malicious initiation of an unfounded criminal prosecution against him. Id. at 281, 114 S.Ct. at 816. Justice Kennedy stated that "[i]n the ordinary case where an injury has been caused not by a state law, policy, or procedure, but by a random and unauthorized act that can be remedied by state law, there is no basis for intervention under § 1983, at least in a suit based on 'the Due Process Clause of the Fourteenth Amendment simpliciter.' " Id. at 285, 114 S.Ct. at 819 (quoting Parratt v. Taylor, 451 U.S. 527, 536, 101 S.Ct. 1908, 1913, 68 L.Ed.2d 420 (1981)). Justice Kennedy went on to say that "Illinois provides a tort remedy for malicious prosecution; indeed, Albright brought a state-law malicious prosecution claim, albeit after the statute of limitations had expired.... Given the state remedy and the holding of Parratt, there is neither need nor legitimacy to invoke § 1983 in this case." Id. at 285-86, 114 S.Ct. at 819-20.
17
This Court's subsequent case of Smart v. Board of Trustees of the University of Illinois is also instructive. 34 F.3d 432 (7th Cir.1994). In Smart, we concluded that if a state actor wages a malicious prosecution which results in the arrest or some other seizure of the defendant, an infringement of liberty occurs. 34 F.3d at 434. However, from Albright, we gleaned that the defendant's only constitutional remedy is under the Fourth Amendment, as applied to the states by the Fourteenth Amendment, and not under the Due Process Clause directly. Id. (citing Albright v. Oliver, 510 U.S. 266, 114 S.Ct. 807, 127 L.Ed.2d 114 (1994)). In Smart, we reasoned:
18
If liberty is not at stake, it is difficult to see how either tort [malicious prosecution or abuse of process] could be thought to invade an interest protected by the due process clause (life, liberty, property) merely by virtue of its effect on the reputation or, like any suit, the pocketbook of the defendant. Defamation is not actionable in such circumstances, because reputation is not deemed property within the meaning of the due process clause.... How torts so closely related to defamation in the interests that they invade as malicious prosecution and abuse of process could be thought to deprive a defendant of property mystifies us.
19
Id. We find this reasoning to be particularly apropos in our case.
20
On appeal, Spiegel does not discuss whether his claim is cognizable under § 1983. Rabinovitz mentions the issue only in a footnote. The parties instead concentrate their arguments on whether Rabinovitz is absolutely immune from suit. However, from Spiegel's response to Rabinovitz's Motion to Dismiss, we get some indication of why Spiegel thinks his malicious prosecution claim is cognizable under § 1983. In his response, Spiegel alleged that his subsequent eviction, adverse employment status, and loss of income were deprivations of constitutionally-protected property interests which raised his state-law malicious prosecution claim to that of a constitutional tort. The district court found that our decision in Albright precluded Spiegel's employment-related claims, but it deemed Spiegel's eviction to be a "palpable consequence" of his malicious prosecution. We disagree. Although Spiegel's circumstances are unfortunate, the rationale of Smart instructs that none of them are deprivations of property of a constitutional magnitude.3
21
In any event, Rabinovitz is absolutely immune from suit. The determination of whether a prosecutor was acting within his quasi-judicial capacity and thus absolutely immune from suit is a legal question. Hunt v. Jaglowski, 926 F.2d 689, 692 (7th Cir.1991) (citation omitted). It is a matter to be decided by the trial court in light of the facts surrounding the actual conduct of the defendant. Id. (citation omitted). We review de novo the trial court's determination of immunity. Id. (citation omitted).
22
The Supreme Court has held that "in initiating a prosecution and in presenting the State's case, the prosecutor is immune from a civil suit for damages...." Imbler v. Pachtman, 424 U.S. 409, 431, 96 S.Ct. 984, 995, 47 L.Ed.2d 128 (1976). This Court has read Imbler broadly:
23
When determining which type of immunity a [prosecutor] enjoys, we look to the nature of the function that the [prosecutor] was performing in the particular case. If a [prosecutor's] function was quasi-judicial, the [prosecutor] enjoys absolute immunity. If the function was administrative or investigatory, the [prosecutor] enjoys only qualified immunity.
24
Henderson v. Lopez, 790 F.2d 44, 46 (7th Cir.1986). Under Illinois law, the State's Attorney, as a member of the executive branch of government, is vested with exclusive discretion in the initiation and management of a criminal prosecution. Hunt, 926 F.2d at 692 (citing People ex rel. Daley v. Moran, 94 Ill.2d 41, 67 Ill.Dec. 790, 792, 445 N.E.2d 270, 272 (1983)). This discretion also encompasses the determination of which charges will be brought. Id. (citing People v. Pankey, 94 Ill.2d 12, 67 Ill.Dec. 804, 445 N.E.2d 284, 287 (1983)).
25
Spiegel contends that Rabinovitz functioned as an investigator, not a prosecutor, and that therefore his actions were subject only to the qualified immunity enjoyed by police officers. See, e.g., Buckley v. Fitzsimmons, 509 U.S. 259, 273, 113 S.Ct. 2606, 2615, 125 L.Ed.2d 209 (1993) (stating that when a prosecutor functions as an investigator or an administrator, he is entitled only to qualified immunity). Spiegel apparently wants to have his cake and eat it, too. Spiegel has brought malicious prosecution charges against Rabinovitz in his personal capacity. Yet, Spiegel also contends that Rabinovitz is not absolutely immune from suit for these charges because he was acting as a mere investigator who would pass on his assessment of the case to his superior, who alone would ultimately decide whether and against whom charges should be brought. How can Spiegel charge Rabinovitz with malicious prosecution while at the same time allege that Rabinovitz was not authorized to decide whether to prosecute Spiegel?
26
Perhaps Spiegel has chosen this approach because a prosecutor is entitled to absolute immunity for his malicious prosecution of someone whom he lacked probable cause to indict. See Buckley, 509 U.S. at 273 n. 5, 113 S.Ct. at 2616 n. 5. We recall that in Buckley, the Supreme Court stated that absolute immunity must extend to "the [prosecutor's] professional evaluation of evidence assembled by the police and appropriate preparation for its presentation at trial or before a grand jury after a decision to seek an indictment has been made." Id. at 273, 113 S.Ct. at 2616. In this case, Rabinovitz simply evaluated the evidence assembled. He reviewed the police records, interviewed the parties involved, and then passed on his assessment of the case to his superior. Thus, regardless of whether the decision to prosecute was a joint one or solely in the hands of Rabinovitz's superior, Rabinovitz is absolutely immune from suit.
27
Spiegel's case also bears some resemblance to Hunt v. Jaglowski 926 F.2d 689 (7th Cir.1991). In Hunt, Hunt testified that he confessed and agreed to give a statement to the police. The police had already conducted their investigation before they contacted the State's Attorney's Office, the agency responsible for actually charging a defendant. We determined that the Assistant State's Attorney (ASA) was called down to the police station merely to review and approve or disapprove the actions of the police, and possibly issue the charges the police sought. Hunt, 926 F.2d at 693. We thus concluded that the ASA's review constituted an act toward "initiating a prosecution and in presenting the State's case." Id. (citing Imbler v. Pachtman, 424 U.S. 409, 431, 96 S.Ct. 984, 995, 47 L.Ed.2d 128 (1976)).
28
In this case, two complaints were brought. In response, the police conducted an investigation and wrote up reports. Rabinovitz merely reviewed these documents and interviewed the parties in order to evaluate the value of the cases involved. This is clearly not the same case as Buckley, where the Supreme Court found that the prosecutors were not functioning as "advocates" when they went to the scene of the crime to determine whether a boot print found there was made by the plaintiff, who was a suspect at the time. See Buckley, 509 U.S. at 274, 113 S.Ct. at 2616. The Court concluded that a prosecutor is not an advocate before he has probable cause to have anyone arrested. Id. Conversely, the district court aptly summed up Rabinovitz's role in this case when it reasoned, "Under Buckley, a prosecutor assumes the role of advocate, once there is probable cause for arrest. In this case, the police reports and the two complaints clearly demonstrated a probable cause for Rabinovitz to file a charge against some individual." We therefore find Rabinovitz absolutely immune from suit.
29
In sum, Spiegel's claim of malicious prosecution does not constitute a constitutional tort cognizable under § 1983. Even if Spiegel's claim were cognizable, Rabinovitz is entitled to absolute immunity because he functioned as a prosecutor in this case.
30
For the foregoing reasons, the judgment of the district court is AFFIRMED.
1
Pursuant to Circuit Rule 53, this opinion was originally issued as an unpublished order on June 2, 1997. The court, upon request, issues this decision as an opinion
2
The record is not clear as to whether and how Bobbin and Cherny are common-law husband and wife. Illinois, of course, does not recognize common-law marriages. But if a couple contracts a common-law marriage and that couple is domiciled in another state that recognizes common-law marriage, Illinois will consider that marriage valid if the couple subsequently sets up its domicile here. Generally, those jurisdictions that recognize common-law marriages have determined that the essence of a common-law marriage is a present intent to enter into the contract of marriage usually coupled with cohabitation and a holding out of the marital relationship in the couple's community of residence. Thus, it is possible that Bobbin and Cherny were once domiciled in a state that recognizes, or once recognized, common-law marriage. For all we know, the couple may have lived in such a state, consummated their relationship, held themselves out before both God and man to be husband and wife, and then later decided to set up shop in Illinois, all before they got into this scrape with Spiegel. However, suffice it to say that we need not, nor do we wish to, delve into the sordid details as to why Bobbin is referred to as Cherny's "common-law wife" in the proceedings below
3
We also consider that, as Rabinovitz points out, on July 6, 1993, the Hollywood Towers Condominium Association ordered Spiegel to leave his apartment by July 23, 1993. However, Rabinovitz was not assigned to investigate the unneighborly confrontation until August 4, 1993. Spiegel's notice of eviction thus could not have been a consequence of Rabinovitz's prosecution
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212 Ga. 182 (1956)
91 S.E.2d 335
MYERS et al.
v.
GRANT et al; and vice versa.
19214, 19218.
Supreme Court of Georgia.
Argued January 10, 1956.
Decided February 13, 1956.
Kenyon, Kenyon & Gunter, for plaintiff in error.
R. Wilson Smith, Jr., Emory F. Robinson, Wheeler, Robinson & Thurmond, R. F. Schuder, Robt. J. Reed, contra.
MOBLEY, Justice.
"Where the court sustains any or all demurrers to pleadings, and allows time for the filing of an amendment, such judgment or order shall not be subject to exception or review, but the court shall render a judgment on the sufficiency of the pleadings after the expiration of the time allowed for amendment which shall supersede the judgment allowing time for amendment." Ga. L. 1952, p. 243 (Code, Ann. Supp., § 81-1001); Norton v. Hamilton, 92 Ga. App. 2 (87 S. E. 2d 442). And where, as here, the trial court entered a judgment overruling the defendants' general demurrer and overruling certain grounds of the defendants' special demurrers to the petition as amended, and sustaining other special demurrers, and allowed time within which to amend the petition, and after the expiration of such time no further adjudication was made on the sufficiency of the petition, but the defendants in a direct bill of exceptions excepted to the judgment in so far as it overruled their general and special grounds of demurrer, and the petitioners in a cross-bill of exceptions assigned error upon the judgment in so far as it sustained any of the grounds of special demurrer such judgment is not subject to exception or review, and this court is without jurisdiction of the writs of error, and they must be
Dismissed. All the Justices concur.
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NONPRECEDENTIALȱDISPOSITION
Toȱbeȱcitedȱonlyȱinȱaccordanceȱwith
ȱFed.ȱR.ȱApp.ȱP.ȱ32.1
United States Court of Appeals
ForȱtheȱSeventhȱCircuit
Chicago,ȱIllinoisȱ60604
SubmittedȱFebruaryȱ10,ȱ2010
DecidedȱFebruaryȱ11,ȱ2010
Before
RICHARDȱA.ȱPOSNER,ȱCircuitȱJudge
JOHNȱDANIELȱTINDER,ȱCircuitȱJudge
DAVIDȱF.ȱHAMILTON,ȱCircuitȱJudge
No.ȱ09Ȭ2301
UNITEDȱSTATESȱOFȱAMERICA, AppealȱfromȱtheȱUnitedȱStatesȱDistrict
PlaintiffȬAppellee, CourtȱforȱtheȱSouthernȱDistrictȱofȱIllinois.
v. No.ȱ07Ȭ30182Ȭ01ȬWDS
MIGUELȱMARISCAL,ȱJR., WilliamȱD.ȱStiehl,ȱ
DefendantȬAppellant. Judge.
OȱRȱDȱEȱR
MiguelȱMariscalȱpleadedȱguiltyȱtoȱconspiracyȱtoȱdistributeȱcocaineȱandȱmarijuana,
conspiracyȱtoȱpossessȱcocaineȱandȱmarijuanaȱwithȱtheȱintentȱtoȱdistribute,ȱandȱpossessionȱof
cocaineȱwithȱtheȱintentȱtoȱdistribute.ȱȱSeeȱ21ȱU.S.C.ȱ§§ȱ846,ȱ841(a)(1).ȱȱHeȱwasȱsentencedȱto
240ȱmonths’ȱimprisonment.ȱȱMariscalȱappeals,ȱbutȱhisȱappointedȱcounselȱseeksȱtoȱwithdraw
pursuantȱtoȱAndersȱv.ȱCalifornia,ȱ386ȱU.S.ȱ738ȱ(1967),ȱbecauseȱsheȱcannotȱidentifyȱany
nonfrivolousȱissuesȱtoȱraiseȱonȱMariscal’sȱbehalf.ȱȱWeȱconfineȱourȱreviewȱtoȱtheȱpotential
issuesȱidentifiedȱinȱcounsel’sȱfaciallyȱadequateȱbriefȱandȱMariscal’sȱresponseȱunderȱCircuit
Ruleȱ51(b).ȱȱSeeȱUnitedȱStatesȱv.ȱSchuh,ȱ289ȱF.3dȱ968,ȱ973–74ȱ(7thȱCir.ȱ2002).ȱȱWeȱgrant
counsel’sȱmotionȱtoȱwithdrawȱandȱdismissȱMariscal’sȱappeal.
Mariscal’sȱpleaȱagreementȱcontainedȱaȱwaiverȱprecludingȱhimȱfromȱappealingȱor
challengingȱhisȱconvictionȱorȱsentenceȱunderȱanyȱprovisionȱofȱfederalȱlawȱunlessȱheȱwas
No.ȱ09Ȭ2301 Pageȱ2
sentencedȱtoȱaȱtermȱofȱimprisonmentȱaboveȱhisȱguidelinesȱrange.ȱȱItȱalsoȱcontainedȱan
estimateȱofȱMariscal’sȱoffenseȱlevelȱandȱcriminalȬhistoryȱcategoryȱunderȱtheȱsentencing
guidelines.ȱȱButȱbothȱMariscalȱandȱtheȱgovernmentȱwereȱsurprisedȱbyȱtheȱpresentence
investigationȱreport,ȱwhichȱcalculatedȱanȱoffenseȱlevelȱandȱcriminalȬhistoryȱcategoryȱgreater
thanȱeitherȱpartyȱhadȱanticipated.ȱȱMariscalȱthoughtȱhisȱlawyerȱhadȱmisledȱhimȱandȱmoved
toȱwithdrawȱtheȱplea.ȱȱTheȱdistrictȱcourtȱappointedȱaȱnewȱlawyer,ȱandȱafterȱconsultingȱwith
him,ȱMariscalȱchangedȱhisȱmindȱandȱwithdrewȱhisȱmotion.ȱȱTheȱdistrictȱcourtȱadoptedȱthe
presentenceȱinvestigationȱreport’sȱcalculations,ȱgrantedȱtheȱgovernment’sȱmotionȱforȱa
belowȬguidelinesȱsentenceȱinȱrecognitionȱofȱtheȱsubstantialȱassistanceȱMariscalȱhad
provided,ȱandȱsentencedȱMariscalȱtoȱ240ȱmonths’ȱimprisonment.
Mariscalȱadvisedȱcounselȱthatȱheȱhasȱchangedȱhisȱmindȱagainȱandȱnowȱwishesȱto
withdrawȱhisȱplea,ȱsoȱcounselȱproperlyȱconsidersȱchallengingȱwhetherȱtheȱpleaȱwas
knowingȱandȱvoluntary.ȱȱWeȱagreeȱwithȱcounselȱthatȱtheȱonlyȱpossibleȱerrorȱtheȱdistrict
courtȱcommittedȱduringȱtheȱchangeȬofȬpleaȱcolloquyȱwasȱneglectingȱtoȱinformȱMariscalȱof
hisȱrightȱtoȱpersistȱinȱhisȱpleaȱofȱnotȱguilty.ȱȱSeeȱFED.ȱR.ȱCRIM.ȱP.ȱ11(b)(1)(B).ȱȱButȱtheȱerrorȱis
harmlessȱbecause,ȱhavingȱpreviouslyȱmovedȱtoȱwithdrawȱhisȱguiltyȱplea,ȱMariscalȱalready
knewȱtheȱinformationȱtheȱdistrictȱcourtȱomitted.ȱȱSeeȱUnitedȱStatesȱv.ȱDriver,ȱ242ȱF.3dȱ767,ȱ769
(7thȱCir.ȱ2001).ȱȱMariscal’sȱpleaȱagreementȱalsoȱadvisedȱhimȱofȱthisȱright.
CounselȱnextȱconsidersȱchallengingȱMariscal’sȱsentence.ȱȱButȱasȱcounselȱproperly
observes,ȱMariscal’sȱappealȱwaiverȱforeclosesȱanyȱchallengeȱtoȱhisȱsentenceȱexceptȱaȱclaim
thatȱitȱexceededȱtheȱstatutoryȱmaximum,ȱthatȱtheȱdistrictȱcourtȱreliedȱonȱanȱunconstitutional
factor,ȱorȱthatȱtheȱappealȱwaiverȱitselfȱwasȱtheȱproductȱofȱineffectiveȱassistance.ȱȱSeeȱUnited
Statesȱv.ȱLockwood,ȱ416ȱF.3dȱ604,ȱ608ȱ(7thȱCir.ȱ2005);ȱUnitedȱStatesȱv.ȱBownes,ȱ405ȱF.3dȱ634,ȱ637
(7thȱCir.ȱ2005);ȱJonesȱv.ȱUnitedȱStates,ȱ167ȱF.3dȱ1142,ȱ1145ȱ(7thȱCir.ȱ1999).
Mariscal’sȱresponseȱtoȱcounsel’sȱmotionȱdoesȱcontainȱallegationsȱthatȱtheȱlawyerȱwho
negotiatedȱtheȱappealȱwaiverȱprovidedȱineffectiveȱassistance.ȱȱAnȱineffectiveȬassistance
claim,ȱhowever,ȱisȱbestȱraisedȱonȱcollateralȱreview,ȱwhereȱaȱcompleteȱrecordȱcanȱbe
developed.ȱȱMassaroȱv.ȱUnitedȱStates,ȱ538ȱU.S.ȱ500,ȱ504ȱ(2003);ȱUnitedȱStatesȱv.ȱHarris,ȱ394ȱF.3d
543,ȱ557–58ȱ(7thȱCir.ȱ2005).
WeȱGRANTȱcounsel’sȱmotionȱtoȱwithdrawȱandȱDISMISSȱMariscal’sȱappeal.
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22 B.R. 421 (1982)
In re TOWN & COUNTRY COLOR TELEVISION, INC., Employer ID No. XX-XXXXXXX, and Henry Allen Flowers, SS # XXX-XX-XXXX, Debtors.
Donald D. BECKER, trustee, Plaintiff,
v.
AMERICAN BANK OF COMMERCE and Glass & Fitzpatrick, Defendants.
Bankruptcy Nos. 81-01000 MA, 81-00999 MA, Adv. No. 82-0174 M.
United States Bankruptcy Court, D. New Mexico.
August 12, 1982.
*422 Donald D. Becker, Albuquerque, N.M., for plaintiff.
Bradford H. Zeikus, Albuquerque, N.M., for defendant ABC.
Charles N. Glass, Albuquerque, N.M., for defendant Glass & Fitzpatrick.
MEMORANDUM OPINION
MARK B. McFEELEY, Bankruptcy Judge.
This matter came before the Court on the trustee's complaint to avoid the lien of creditor Glass & Fitzpatrick. At issue is $1,535.42 presently held by American Bank of Commerce (ABC) pursuant to a writ of garnishment served on ABC by Glass & Fitzpatrick. The trustee asserts that the writ of garnishment is a lien which is voidable by the trustee. ABC argues that no lien resulted and that it is entitled to the funds as a setoff of debts owed to ABC by the debtors.
I. FACTUAL HISTORY
Henry Allen Flowers and Town & Country Color Television, Inc. (Town & Country), the debtors, became indebted to Glass & Fitzpatrick for money due for services rendered by Glass & Fitzpatrick. A complaint for money due was filed in Bernalillo County (New Mexico) District Court, and when the debtors failed to appear, Glass & Fitzpatrick obtained a default judgment. Pursuant to that judgment, a writ of garnishment was served on ABC, attaching $3,829.05 which was in an account in the name of Town & Country. At the time of service of the writ of garnishment, ABC had made three separate loans to Town & Country: one was unsecured, one was secured by two 1979 Ford vans, and one was secured by a 1978 Pontiac stationwagon. The unsecured loan was being kept current by Mrs. Flowers, who had guaranteed it. The secured loans were in default.
Forty-five days after the writ of garnishment was served on ABC, the debtors filed their bankruptcy petitions. The vehicles which secured the Town & Country loans were abandoned to ABC. The Pontiac stationwagon was sold, leaving a deficiency on the note which it secured of $3,684.15. The balance on the note secured by the vans is $5,760.68 plus repairs necessary for sale and costs of sale. The trustee then sued to recover from ABC the amount of the writ of garnishment and ABC answered, claiming a setoff in the entire amount of the Town & Country account, $3,829.05. At the trial on the trustee's complaint to avoid lien, the Court found that if there is an avoidable lien, it is limited to the amount of the Glass & Fitzpatrick judgment, $1,535.42. The balance was ordered to be distributed to ABC to be applied toward the deficiency of $3,684.15 on the note secured by the Pontiac stationwagon. It was further ordered that, if the sale of the two Ford vans brought more than the balance on the note secured by the vans, ABC must turn the excess over to the trustee, rather than applying it toward the deficiency on the other secured note. Preserved as issues were: (1) whether the writ of garnishment created a lien on the funds in the amount of the *423 judgment debt, and (2) if so, what is the effect of the lien on the various parties' entitlements to the funds.
II. EFFECT OF THE WRIT OF GARNISHMENT
The effect of a writ of garnishment is determined by the laws of the state in which the writ issues. In re Woodman, 3 C.B.C.2d 798, 8 B.R. 686 (Bkrtcy.W.D.Wis. 1981). The service of a writ of garnishment was interpreted to result in a lien in the case of McFadden v. Murray, 32 N.M. 361, 257 P. 999 (1927). Although the garnishment statute has undergone several changes since the date of that opinion, the present statute tracks the garnishment statute in the 1953 compilation of the New Mexico Statutes. That statute was found to be "identical in substance if not in form" to the garnishment statute considered in McFadden. Advance Loan Co. v. Kovach, 79 N.M. 509, 512, 445 P.2d 386, 389 (1968). Accordingly, we find that service of the writ of garnishment on ABC created a lien on that account, and that for purposes of the Bankruptcy Code, it is a judicial lien. 11 U.S.C. Section 101(27).
III. EFFECT OF THE LIEN ON THE ENTITLEMENT OF THE ESTATE OR THE BANK TO THE FUNDS
In determining which entity is entitled to receive these funds, we find the reasoning in In re Woodman, supra, to be persuasive. In that case, as in the case before us, there existed a garnishment statute which made the garnishee responsible to the garnishing creditor for property of the defendant in the garnishee's possession at the time of service. The Wisconsin courts had further found that this statute created an equitable lien on the property, as is the case here. Analyzing these facts, the Woodman court found that these events created a transfer under 11 U.S.C. Section 547(e)(1)(B), because the garnishing creditor would have superior rights to another judgment creditor with a subsequent judicial lien based on a simple contract. Id., 3 C.B.C.2d at 798-799, 8 B.R. at 687. Here, too, the transfer from garnishee to garnishing creditor took place at the time of service of the writ of garnishment. That being the case, the $1,535.42 to which Glass & Fitzpatrick was entitled by judgment was no longer in the possession of ABC, and ABC was no longer indebted to the debtors in that amount. Obviously, then, no right of setoff existed. Further, because this transfer of funds to Glass & Fitzpatrick meets the definition of a preferential transfer set out in 11 U.S.C. Section 547(b), it can be avoided by the trustee.
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301 F.Supp.2d 259 (2004)
Rosalie H. FIELDS, Plaintiff
v.
MERRILL LYNCH, PIERCE, FENNER & SMITH, INC., Defendant.
No. 03 Civ. 8363(SHS).
United States District Court, S.D. New York.
January 27, 2004.
*260 Anne Marie Estevez, W. Dan Boone, Bolin & Boone, New York City, for Plaintiff.
Sarah T. Martinez, Morgan, Lewis and Bockius LLP, New York City, for Defendant.
*261 OPINION & ORDER
STEIN, District Judge.
Rosalie Fields has brought this action alleging in Count IV of the complaint that defendant Merrill Lynch, Pierce, Fenner & Smith, Inc. ("Merrill") failed to promote her because of her gender in violation of Title VII of the Civil Rights Act of 1964, 42 U.S.C. §§ 2000e-2, et seq. ("Title VII"). Defendant now moves pursuant to Fed.R.Civ.P. 12(b)(6) to dismiss Count IV of the complaint as time-barred. For the reasons set forth below, defendant's motion is granted.
I. Background
The following facts are as set forth in the complaint. Fields has been employed by Merrill since 1985 as a Financial Advisor. (Compl.¶ 2). In March of 2001, she interviewed for a position as a Producing Sales Manager, and was initially told by a Merrill employee, Michael Fusco, that she had secured the position. (Compl.¶¶ 16, 19, 22). She was later told by a different supervising employee that no new Sales Managers would be hired. (Compl.¶ 27). Finally, in August 2001 and again in February of 2002, two males were hired as Sales Managers, the position for which plaintiff had applied. (Compl.¶¶ 28, 29). Merrill's failure to promote her is the basis of Fields' claim for employment discrimination, and the last act complained of occurred in February 2002.
Prior to bringing this action, plaintiff participated as a class member in a lawsuit filed in the United States District Court for the Northern District of Illinois, Marybeth Cremin, et al., v. Merrill Lynch, Pierce, Fenner & Smith, Inc., et al., No. 96 Civ. 3773, which was eventually settled by agreement of the parties and order of the court. (Compl.¶ 48). As part of that settlement, Merrill agreed to establish a new independent remedy to address employment discrimination called the Merrill Lynch Employment Dispute Resolution Program ("Merrill EDR Program") (Id.). That program has three steps: First, the employee presents her discrimination claim to a Merrill human resources representative to see if the dispute can be resolved at that level. If the dispute is not resolved by the human resources representative, the employee can proceed to step two and formally request a mediation, which must be held within 60 days of the request. Finally, if the mediation fails, the employee can then either demand arbitration or file a federal suit. (Compl., Exh. A, "Employment Dispute Resolution Program: Rules & Procedures," ("Rules & Procedures"), p. 2).
Fields contends that she kept trying to present her claims to a Merrill human resources representative pursuant to step one of the Merrill EDR Program through November 20, 2002. (Compl. ¶¶ 31, 33, and Exh. B; see also Plt's Mem. in Opp., p. 6). Taking the position that her dispute had not been resolved by the Merrill human resources representative, she invoked step two of the Merrill EDR Program seven months later, on June 19, 2003, when she formally requested mediation. (Compl.¶ 35, Exh. D). Although the Merrill EDR Program "Rules & Procedures" states that the mediation should have occurred within 60 days of being requested, (Compl, Exh. A), the mediation "has never been held." (Compl. ¶ 38).
After plaintiff requested the mediation through Merrill's EDR Program, she also filed a Charge of Discrimination with the Equal Employment Opportunity Commission ("EEOC") in late July 2003. (Compl. ¶ 61; Exh. E). The EEOC then issued a Right to Sue letter two weeks later, on August 5, 2003, (Compl.Exh. F), in which the EEOC wrote that it was "closing its file" and dismissing plaintiff's charge because "[y]our charge was not timely filed *262 with EEOC; in other words, you waited too long after the date(s) of the alleged discrimination to file your charge." (Id.). The EEOC also notified the plaintiff that any federal litigation "must be filed within 90 days" of receipt of the Right to Sue letter. (Id.). Fields filed this complaint on October 23, 2003, which was within the 90 day period.
II. Discussion
A. Standard of Review
When deciding a motion to dismiss a claim for relief pursuant to Fed.R.Civ.P. 12(b)(6), a court must accept all of the well-pleaded facts in the complaint as true and draw all reasonable inferences from those allegations in favor of the plaintiff. See Scheuer v. Rhodes, 416 U.S. 232, 236, 94 S.Ct. 1683, 40 L.Ed.2d 90 (1974). The complaint will survive the defendant's motion to dismiss unless "it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief." See Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 2 L.Ed.2d 80 (1957). The court may only consider "the facts alleged in the complaint and any documents attached to the complaint or incorporated by reference." Rombach v. Chang, 355 F.3d 164, 169 (2d Cir.2004); see also Kramer v. Time Warner Inc., 937 F.2d 767, 773 (2d Cir.1991).
B. Plaintiff's Title VII Claim Is Time-Barred
A party seeking to recover damages pursuant to Title VII must first comply with the prerequisite set forth in 42 U.S.C. § 2000e-5(e)(1) by filing a Charge of Discrimination with the EEOC within 300 days of the last act of unlawful discrimination. If that charge is not timely filed, a Title VII claim must be dismissed. See Lambert v. Genesee Hosp., 10 F.3d 46, 53 (2d Cir.1993).
The last act of discrimination alleged by Fields in this complaint is the February 2002 failure by Merrill to promote her to Sales Manager. In a claim brought pursuant to Title VII based on failure to promote, that failure to promote is treated as a discrete act of discrimination, and the EEOC Charge of Discrimination must be brought within 300 days of that failure. Nat'l R.R. Passenger Corp. v. Morgan, 536 U.S. 101, 114, 122 S.Ct. 2061, 153 L.Ed.2d 106 (2002).
Thus, plaintiff's Charge of Discrimination filed with the EEOC in July 2003 seventeen months after the last act of discrimination complained of was outside the statutory period. However, "filing a timely charge of discrimination with the EEOC is not a jurisdictional prerequisite to suit in federal court, but a requirement that, like a statute of limitations, is subject to waiver, estoppel, and equitable tolling." Zipes v. Trans World Airlines, Inc., 455 U.S. 385, 393, 102 S.Ct. 1127, 71 L.Ed.2d 234 (1982). This is because "[f]airness, and not excessive technicality, must guide the consideration of Title VII actions." Love v. Pullman Co., 404 U.S. 522, 526-27, 92 S.Ct. 616, 30 L.Ed.2d 679 (1972). The Court will now examine whether any grounds exist permitting this litigation to go forward despite plaintiff's failure to comply with the statutory prerequisite to doing so.
1. The Merrill EDR Program Did Not Release Fields from the Obligation to File a Timely Charge of Discrimination
Plaintiff claims that because the Merrill EDR Program offered an alternative method of resolving employment disputes, it "effectively waive[s] the 300[day] filing rule altogether by establishing a different procedure." (Plt.'s Mem in Opp., p. 8 & fn. 11). Her belief is based on the fact *263 that step three of the Merrill EDR Program permits a complainant to file a law suit without explicitly referencing any time limit in which to do so. Thus, she contends that the system suggests to the complainant that if she enters into the Merrill EDR Program, and that program fails to resolve the dispute, she will be able to file a suit, without regard to the 300 day limitation. Fields' contention is unsupported by the Merrill EDR Program's Rules & Procedures, (Compl., Exh. A), because those Rules & Procedures in no way indicate that the Merrill EDR Program displaces its employees' statutory time limitations and prerequisites to filing Title VII remedies.
Fields quotes the following language from the Rules & Procedures in support of her contention: "Nothing contained in these Rules & Procedures shall preclude a current or former employee from filing an administrative charge or complaint with the EEOC ... but Merrill Lynch may seek a stay of the processing of any such charge ... during the pendency of ... arbitration." (Compl.Exh. A, p. 10). Plaintiff reads this passage to mean that the Merrill EDR Program did not require complainants participating in arbitration to file EEOC claims within the statutory 300 days. However, nothing in the passage supports her contention. On the contrary, a plain reading of this passage indicates that the arbitration process operates separate and apart from EEOC procedures and all that passage does is permit Merrill to seek a stay of the processing by the EEOC of any charge that was filed there it does not authorize any late filing at the EEOC.
Other information provided in the Rules & Procedures supports the conclusion that an employee cannot ignore the 300 day requirement set forth in 42 U.S.C. § 2000e-5(e)(1). In the section entitled "Time Limits/Tolling of Statute of Limitations," the Rules & Procedures states that "[n]othing in these Rules & Procedures shall be construed as extending any statutes of limitation that expired prior to the ... receipt of the Request for Mediation." (Compl.Exh. A, p. 4-5). Because plaintiff claims she requested mediation on June 19, 2003, (Compl.¶ 35, Exh. D), which was long after the 300 day period had expired, the Rules & Procedures can give plaintiff no comfort in her position. Her participation in the Merrill EDR Program does not excuse her obligation to comply with the statutory prerequisites to a Title VII claim.
2. The Doctrine of Equitable Estoppel Will Not Save Plaintiff's Time-Barred Claim
Fields also claims that the doctrine of equitable estoppel should be applied to excuse her failure to file her EEOC charge within 300 days of the alleged discriminatory act based on her participation in the Merrill EDR Program. Equitable estoppel prevents a defendant from using the statute of limitations as a defense only where "a plaintiff knew of the existence of his cause of action, but the defendant's conduct caused him to bring his suit in a defective manner." See Avillan v. Potter, No. 01 Civ. 1648, 2002 WL 252479, at *3 (S.D.N.Y. Feb. 21, 2002); Cerbone v. Int'l Ladies' Garment Workers' Union, 768 F.2d 45, 48-49 (2d Cir.1985). "The burden of demonstrating the appropriateness of equitable tolling ... lies with the plaintiff." Boos v. Runyon, 201 F.3d 178, 185 (2d Cir.2000).
The doctrine applies where the employer has "lulled the plaintiff into believing that it was not necessary for him to commence litigation." Dillman v. Combustion Eng'g, Inc. 784 F.2d 57, 61 (2d Cir.1986). "Equity will not actually lift the procedural bar, however, unless the plaintiff *264 shows that he (1) was unaware of or unable to meet his procedural obligations (2) because of affirmative misconduct on the part of the defendant." Avillan v. Potter, 2002 WL 252479, at *3. Fields has not met the second prong of that test because she has not shown that Merrill's conduct caused her to fail to file an EEOC charge within the statutory 300 day window.
Plaintiff makes various bald assertions that Merrill administered the Merrill EDR Program in bad faith. Those assertions will not invoke the doctrine of equitable estoppel, however, unless plaintiff can show that Merrill's alleged misconduct was the cause of her procedural default. She accuses Merrill of "stall[ing] and temporizing" in addressing her complaint during step one of the Merrill EDR Program. (Compl.¶ 34). Fields fails to show how any delay in concluding step one of the Merrill EDR Program prevented her from filing a timely Charge of Discrimination.
During the interval between November 20, 2002, when Fields admits her step one efforts had concluded, (Compl. ¶¶ 31, 33; Exh. B), and June 19, 2003, when plaintiff requested mediation, a full seven months later, her 300 days to initiate the EEOC Charge of Discrimination expired. Plaintiff has not set forth any conduct by Merrill in that November-to-June period that prevented her from filing an EEOC charge during that time. Equitable estoppel will not apply to excuse her failure in that time period, especially because courts are "less forgiving in receiving late filings where the claimant failed to exercise due diligence in preserving his legal rights." Irwin v. Dept. of Veterans Affairs, 498 U.S. 89, 96, 111 S.Ct. 453, 112 L.Ed.2d 435 (1990). Thus, because Fields has not shown that her failure to file an EEOC Charge of Discrimination within 300 days of the last act of discrimination charged can be attributed to defendant's affirmative misconduct, equitable estoppel will not save her procedurally barred Title VII claim.
3. The Continuing Violation Doctrine Does Not Save Plaintiff's Claim
Plaintiff contends that her Charge of Discrimination was in fact timely filed with the EEOC due to the operation of the continuing violation doctrine. That doctrine provides: "If a Title VII plaintiff files an EEOC charge that is timely as to any incident of discrimination in furtherance of an ongoing policy of discrimination, all claims of acts of discrimination under that policy will be timely even if they would be untimely standing alone." Lambert, 10 F.3d at 53. Here, however, plaintiff has not alleged that Merrill engaged in any discriminatory conduct during the 300 days prior to filing her Charge of Discrimination with the EEOC. Absent a specific allegation of discriminatory conduct within the applicable time period, the fact that plaintiff continued to work for Merrill after the last act complained of is insufficient to constitute a continuing violation. See Delaware State College v. Ricks, 449 U.S. 250, 257, 101 S.Ct. 498, 66 L.Ed.2d 431 (1980). Therefore, the continuing violation doctrine does not save plaintiff's claims.
4. Plaintiff's Claim Is Not Saved by the Single Filing Rule
Plaintiff believes that because she participated in a class action suit against Merrill that was filed in 1996, her charge of discrimination falls within the "single filing" rule. (Compl.¶ 61). That rule operates so that "[w]here one plaintiff has filed a timely EEOC complaint, other non-filing plaintiffs may join the action if their individual claims arise out of similar discriminatory treatment ..." Adames v. Mitsubishi Bank, Ltd., 751 F.Supp. 1565, 1571 (E.D.N.Y.1990). Fields alleges that *265 the class action in which she participated as a member of the class, Marybeth Cremin, et al., v. Merrill Lynch, Pierce, Fenner & Smith, Inc., et al., No. 96 Civ. 3773, afforded Merrill sufficient notice of the gender-based discrimination occurring within the company, and should thereby bring her claim within the single filing rule. However, she has not shown a sufficient link between that lawsuit and the present action. Allowing her to attach her present claims to that 1996 lawsuit more than seven years after it was initiated, solely on the grounds that it involved gender discrimination, would eviscerate the statutory requirement of 42 U.S.C. § 2000e-5(e)(1) for all entities that had ever faced a discrimination lawsuit. Because plaintiff has not pointed to any EEOC Charge of Discrimination involving similar discriminatory treatment that she should be entitled to join, the single filing rule will not preserve her untimely claim.
III. Conclusion
Because plaintiff did not file her charge of discrimination with the EEOC within 300 days of the last act of discrimination complained of, defendant's motion to dismiss Count IV of the complaint is granted. Plaintiff's remaining claims for relief are based on state law. This Court declines to accept supplemental jurisdiction over those state law claims pursuant to 28 U.S.C. § 1367(c)(3). Therefore, Count IV is dismissed with prejudice and the remaining claims are dismissed without prejudice.
SO ORDERED.
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RECOMMENDED FOR FULL-TEXT PUBLICATION
Pursuant to Sixth Circuit I.O.P. 32.1(b)
File Name: 15a0150p.06
UNITED STATES COURT OF APPEALS
FOR THE SIXTH CIRCUIT
_________________
CHARLES WALTON WRIGHT, ┐
Petitioner-Appellant, │
│
│ No. 13-6573
v. │
>
│
WARDEN, RIVERBEND MAXIMUM SECURITY │
INSTITUTION, │
Respondent-Appellee. │
┘
Appeal from the United States District Court
for the Middle District of Tennessee at Nashville.
No. 3:99-cv-00997—William J. Haynes, Jr., District Judge.
Argued: June 17, 2015
Decided and Filed: July 15, 2015
Before: COLE, Chief Judge; ROGERS and McKEAGUE, Circuit Judges.
_________________
COUNSEL
ARGUED: Kelley J. Henry, FEDERAL PUBLIC DEFENDER’S OFFICE, Nashville,
Tennessee, for Appellant. Jennifer L. Smith, OFFICE OF THE TENNESSEE ATTORNEY
GENERAL, Nashville, Tennessee, for Appellee. ON BRIEF: Kelley J. Henry, FEDERAL
PUBLIC DEFENDER’S OFFICE, Nashville, Tennessee, for Appellant. Jennifer L. Smith,
OFFICE OF THE TENNESSEE ATTORNEY GENERAL, Nashville, Tennessee, for Appellee.
_________________
OPINION
_________________
PER CURIAM. Charles Walton Wright, a Tennessee death row inmate represented by
counsel, appeals from a federal district court order denying his Federal Rule of Civil Procedure
60(b)(6) motion for relief from judgment. Wright argues that a change in law—the Supreme
Court’s decisions in Martinez v. Ryan, 132 S. Ct. 1309 (2012), and Trevino v. Thaler, 133 S. Ct.
1
No. 13-6573 Wright v. Warden, Riverbend Page 2
1911 (2013)—combined with various equitable factors justify disturbing a 2007 judgment
denying his habeas petition. Wright’s motion fails because Martinez and Trevino are not an
extraordinary circumstance requiring Rule 60(b)(6) relief, McGuire v. Warden, 738 F.3d 741,
750 (6th Cir. 2013), and the other equitable arguments that he advances in support of his motion
are not compelling.
Thirty years ago in April 1985, a Tennessee state jury convicted Wright of two counts of
pre-meditated murder in the first degree for the shooting deaths of Gerald Mitchell and Douglas
Alexander. Wright was sentenced to life imprisonment for killing Mitchell and sentenced to
death for Alexander’s murder. The Tennessee Supreme Court affirmed Wright’s convictions and
sentences on direct appeal. State v. Wright, 756 S.W.2d 669, 677 (Tenn. 1988).
Three sets of state post-conviction proceedings followed. In May 1989, Wright, acting
pro se, filed a petition for post-conviction relief in the trial court. Counsel was appointed, and an
amended petition was filed. The trial court conducted an evidentiary hearing and subsequently
denied relief. The Tennessee Court of Criminal Appeals affirmed the decision. Wright v. State,
No. 01C01-9105-CR-00149, 1994 WL 115955, at *10-*14, *22 (Tenn. Crim. App. Apr. 7,
1994). During the appeal from the denial of the first post-conviction petition, Wright, again
acting pro se, filed a second post-conviction petition, which was denied without a hearing.
Wright did not appeal that decision. In January 1995, Wright, acting through counsel, filed a
third petition for post-conviction relief. The trial court denied relief, and that decision was
affirmed on appeal. Wright v. State, No. 01C01-9506-CR-00211, 1997 WL 126818, at *9 (Tenn.
Crim. App. Mar. 20, 1997), aff’d, 987 S.W.2d 26, 30 (Tenn. 1999).
In October 1999, Wright, acting pro se, filed a petition for a writ of habeas corpus in
federal district court. The district court subsequently appointed counsel for Wright and, in June
2000, Wright filed an amended petition. The warden moved for summary judgment. The court
partially granted the warden’s motion. After an evidentiary hearing, the court denied habeas
corpus relief for the remaining claims. This court affirmed that decision. Wright v. Bell,
619 F.3d 586, 604 (6th Cir. 2010) (“Wright I”).
In March 2013, Wright moved in the district court for relief from judgment under Rule
60(b), asserting that Martinez, a 2012 Supreme Court decision, changed the law of procedural
No. 13-6573 Wright v. Warden, Riverbend Page 3
default such that, if his case were reopened, the district court could reach the merits of claims
previously dismissed as procedurally defaulted. The district court closed the action without
prejudice until the Supreme Court’s issuance of Trevino. Wright’s initial motion to reopen the
case was denied because he failed to identify which claims he sought to reopen. Wright renewed
the motion, identifying the claims for which he was seeking relief. The district court denied
Wright’s renewed Rule 60(b)(6) motion. After filing a notice of appeal from that decision,
Wright unsuccessfully moved to amend or correct that order and filed a notice of appeal from
that order. The district court granted Wright a certificate of appealability on the issue of Rule
60(b)(6) relief. Wright appeals.
Rule 60(b)(6) relief is available only in “exceptional or extraordinary circumstances,”
Stokes v. Williams, 475 F.3d 732, 735 (6th Cir. 2007), and Wright has not demonstrated that such
circumstances are present here. Wright relies heavily on Martinez and Trevino, but “neither
Martinez nor Trevino sufficiently changes the balance of the factors for consideration under Rule
60(b)(6) to warrant relief.” Henness v. Bagley, 766 F.3d 550, 557 (6th Cir. 2014), cert. denied,
135 S. Ct. 1708 (2015). Changes in decisional law are usually not an extraordinary
circumstance. This court has held that Martinez and Trevino are not an exception to that general
principle because those decisions were “not a change in the constitutional rights of criminal
defendants, but rather an adjustment of an equitable ruling by the Supreme Court as to when
federal statutory relief is available.” McGuire, 738 F.3d at 750–51. Thompson v. Bell, 580 F.3d
423 (6th Cir. 2009), a case cited by Wright, does not change this analysis. In Bell, the petitioner
relied on a change in state law, rather than federal law, which this court held to constitute an
“extraordinary circumstance” warranting Rule 60(b)(6) relief “because refusing to recognize [the
change in state law] ‘would disserve the comity interests enshrined in AEDPA by ignoring the
state court’s view of its own law.’” Id. at 443 (quoting In re Abdur’Rahman, 392 F.3d 174, 187
(6th Cir. 2004)).
Even considering the change in law alongside Wright’s other arguments in equity, Wright
has not shown the presence of extraordinary circumstances which would mandate relief. Other
than the change in law, the only circumstance appearing to favor Rule 60(b)(6) relief is Wright’s
diligence in pursuing his Martinez claim. Wright’s diligence alone, while a factor to be
considered, is not enough to demonstrate extraordinary circumstances in light of the other factors
No. 13-6573 Wright v. Warden, Riverbend Page 4
that counsel against Rule 60(b)(6) relief, most notably the “public policy favoring finality of
judgments and termination of litigation.” McGuire, 738 F.3d at 750.
The state of Tennessee has an interest in the finality of its judgments, which in this case
were first issued long ago and have been extensively litigated ever since. Twenty-five years
passed between the Tennessee Supreme Court’s affirmance of Wright’s conviction and sentence
and Wright’s filing of the Rule 60(b) motion. Nearly twenty years passed between the
Tennessee Court of Criminal Appeals’ denial of his first state post-conviction challenge and
Wright’s filing of the Rule 60(b) motion. Of course, the Supreme Court has stated that
“[c]onventional notions of finality of litigation have no place where life or liberty is at stake and
infringement of constitutional rights is alleged.” Thompson, 580 F.3d at 444 (quoting Sanders v.
United States, 373 U.S. 1, 8 (1963)). Thus, we have recognized that “the finality of the judgment
against [the petitioner] must be balanced against the more irreversible finality of his execution.”
Id.
The federal courts also have an interest in the finality of their judgments. “[N]ot every
interpretation of the federal statutes setting forth the requirements for habeas provides cause for
reopening cases long since final.” Gonzalez v. Crosby, 545 U.S. 524, 536 (2005). Six years
passed between the district court’s order denying Wright’s habeas petition and Wright’s Rule
60(b) motion seeking relief from that order.
This case has been thoroughly litigated in the state and federal courts. See McGuire, 738
F.3d at 749. Indeed, Wright’s case has been before the United States Supreme Court four
separate times: after his initial conviction and sentence, Wright v. Tennessee, 488 U.S. 1034
(1989); after his first state post-conviction petition, Wright v. Tennessee, 513 U.S. 1163 (1995);
after his third state post-conviction petition, Wright v. Tennessee, 528 U.S. 828 (1999); and after
his first federal habeas petition, Wright v. Bell, 132 S. Ct. 127 (2011). Each time, the Supreme
Court declined review.
Wright has had his day in court. Over the past thirty years, the courts have considered
and rejected Wright’s claims, including the claim his appeal highlights: an ineffective-assistance-
of-counsel claim for failure to investigate and present personal history mitigation at sentencing.
Also important is the weakness of Wright’s underlying claim. See Gonzalez, 545 U.S. at 534;
No. 13-6573 Wright v. Warden, Riverbend Page 5
see also Martinez, 132 S. Ct. at 1318. As this court originally explained in affirming the district
court’s denial of habeas relief, Wright’s trial counsel was not ineffective in investigating and
presenting Wright’s personal history:
[N]othing in the additional declarations presented by Wright’s family members
renders the state court’s determination unreasonable, or contrary to clearly
established federal law. The decision not to call any family members other than
Wright’s mother was made after a reasonable investigation, including extensive
contact with Wright’s family members. Critically, Wright never alleges that his
attorneys failed to speak to Rose Wright, and her declaration states only that she
would have testified if asked. Rose Wright’s testimony would have painted a
much more vivid picture of the tragic circumstances of Wright's family life;
however, Wright’s mother testified as to Wright’s impoverished upbringing, and
the most vivid images from Rose Wright’s testimony, those of criminal neglect
and sexual abuse, concern Wright’s sisters, rather than Wright himself.
Wright I, 619 F.3d at 597. Considering all of these factors together, equity weighs against
reopening Wright’s case. The district court’s denial of Wright’s Rule 60(b)(6) motion was not
an abuse of discretion.
We do not dispose of this appeal on the simple basis that an application of Martinez and
Trevino would make no difference in light of our alternative holding in Wright I. In Wright I we
held that the claim underlying this appeal—that counsel ineffectively failed to obtain and present
important mitigating evidence regarding his childhood—was procedurally defaulted. Id. at 598.
Wright now challenges that procedural default determination on the basis of Martinez and
Trevino. But in Wright I we added in the alternative that the argument was without merit. Id.
This is likely the law of the case, or at least an independent compelling reason to conclude that
there is no warrant under Rule 60(b)(6) to undo the finality of the judgment. Strikingly, the
warden did not make this argument in the briefs, and Wright accordingly did not address it in his
briefing. For that reason, we do not rely solely upon that alternative holding in Wright I to
uphold the denial of Rule 60(b)(6) relief.
The judgment of the district court is affirmed.
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Fourth Court of Appeals
San Antonio, Texas
January 26, 2018
No. 04-17-00644-CV
Edgardo R. BAEZ and The Baez Law Firm,
Appellants
v.
Gilberto VILLEGAS,
Appellee
From the 37th Judicial District Court, Bexar County, Texas
Trial Court No. 2016CI02694
Honorable David A. Canales, Judge Presiding
ORDER
The reporter’s record was due on January 3, 2018. See TEX. R. APP. P. 35.1. Several
days later, after no reporter’s record or notification of late record was filed, this court advised
court reporter Luis Duran Jr. that the record was late. On January 23, 2018, the court reporter
filed a notice of late record and advised this court that Appellant has not paid the fee to prepare
the reporter’s record.
We ORDER Appellant to provide written proof to this court within TEN DAYS of the
date of this order that (1) the reporter’s fee has been paid or arrangements have been made to pay
the reporter’s fee, or (2) Appellant is entitled to appeal without paying the reporter’s fee. If
Appellant fails to respond within the time provided, Appellant must file a brief with this court
within THIRTY DAYS of the date of this order, and the court will only “consider and decide
those issues or points [raised in Appellant’s brief] that do not require a reporter’s record for a
decision.” See id. R. 37.3(c).
If Appellant timely complies with this order, the reporter’s record will be due THIRTY
DAYS after Appellant files written proof showing compliance with this order. See id. R. 35.3(c)
(limiting an extension of time to file the record in a regular appeal to thirty days).
Any request for additional time to file the reporter’s record must be accompanied by a
signed, written status report.
The report must describe the transcript by day with the date, description, page counts, and
remarks for each day. The page counts must include the total number of pages, the number of
pages edited, proofread, and formatted into the required electronic form (including bookmarks).
The report may describe any unusual aspects of the record. The report must describe any
problems the court reporter reasonably believes may delay the completion of the record beyond
the requested date.
A preferred form for the status report, with an accompanying example, is attached to this
order.
_________________________________
Patricia O. Alvarez, Justice
IN WITNESS WHEREOF, I have hereunto set my hand and affixed the seal of the said
court on this 26th day of January, 2018.
___________________________________
KEITH E. HOTTLE,
Clerk of Court
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414 F.Supp. 807 (1976)
John Henry FANT, # 88580, Plaintiff,
v.
Curtis FISHER, Superintendent, Enid Community Treatment Center, and Lee Semones, Employment Counselor, Defendants.
No. CIV-75-1051-D.
United States District Court, W. D. Oklahoma.
April 12, 1976.
*808 John Henry Fant, pro se.
Larry Derryberry, Atty. Gen. of Oklahoma by Amalija J. Hodgins, Asst. Atty. Gen., Oklahoma City, Okl., for both defendants.
ORDER
DAUGHERTY, Chief Judge.
This cause comes before the court on defendant's Motion for Summary Judgment and/or Motion to Dismiss. The plaintiff is a prisoner incarcerated by the State of Oklahoma at the Enid Community Treatment Center, Enid, Oklahoma. He seeks relief under 42 U.S.C. § 1983 and 28 U.S.C. § 1343 for deprivation, under color of state law, of rights allegedly secured by the federal Constitution.
Both parties agree that the Complaint does not present any issue concerning the denial of adequate medical or dental care in violation of the 8th and 14th Amendments to the United States Constitution. Stated in plaintiff's own words "the question is raised as to whether a trusty inmate was to be required to pay for his own medical care, while other trusty inmates at the same penal institution were provided free medical care." (Plaintiff's Response p. 2.) The plaintiff admits, however, that other trusty inmates have had to pay for their medical care at the Center.
It would further appear that there is no dispute between the parties to the following facts: Defendant Curtis Fisher is the Superintendent at the Enid Community Treatment Center. Defendant Lee Semones is the Employment Counselor at the Enid Community Treatment Center. The plaintiff was transferred to the Center on March 10, 1975 in trusty status. During the times pertinent to his Complaint plaintiff was assigned a job as cook at the Center and paid the sum of $30.00 a month. In September, 1975, the plaintiff was permitted by the defendants to enroll at the O. T. Autry Vocational Technical Center in Enid at his own expense. As a student he received Veterans Administration Educational Benefits in the amount of $270.00 per month. Since as an inmate he was receiving free room and board, the only expense of the plaintiff, except for voluntary expenditures for personal items, was $75.00 tuition paid every nine weeks. The plaintiff is the only trusty presently incarcerated in the Center who is permitted to attend school. In September, 1975, the plaintiff was provided dental care by a local dentist who charged $112.00 for his services. This bill was originally paid by the Center which was later reimbursed by the plaintiff. In October and November, 1975, the Center incurred additional expense for dental care for the plaintiff in the amount of $116.00. The plaintiff paid $71.00 of this amount and the Center $45.00.
On these facts, the plaintiff is not entitled to recover. The court cannot accept plaintiff's claim that he is absolutely entitled to free medical services. So long as free medical services may not be demanded of the State as a right by its free citizens, it is unreasonable to suggest that such free services may be demanded by a convicted felon. Persons convicted of felonies do not acquire by virtue of their convictions a constitutional right to services and benefits that are not available as of right to persons never convicted of criminal offenses. James v. Wallace, 382 F.Supp. 1177 (M.D.Ala.1974). Failure by the State to provide urgently needed medical attention to a prisoner may amount to cruel and *809 unusual punishment. Dewell v. Lawson, 489 F.2d 877 (CA10 1974). In Coppinger v. Townsend, 398 F.2d 392, 394 (CA10 1968) the court defined the State's obligation:
"The prisoner's right is to medical care not to the type or scope of medical care which he personally desires."
It does not include a duty that the medical care be furnished without cost to a non-indigent prisoner whose ability to pay is not questioned.
The provision of medical care is subject to "the general rule that the basic responsibility for the control and management of penal institutions, including the discipline, treatment and care of those confined, lies with the responsible administrative agency and is not subject to judicial review unless exercised in such a manner as to constitute clear abuse or caprice upon the part of prison officials." Paniagua v. Moseley, 451 F.2d 228, 230 (CA10 1971). Except in extreme cases where a prisoner is totally deprived of essential medical care, a court will not inquire into the internal prison administration of medical services. Argentine v. McGinnis, 311 F.Supp. 134 (S.D.N.Y. 1969).
Under the circumstances it was not arbitrary or capricious to ask the plaintiff to pay a portion of the dental bills incurred by the State for his care. He was the only trusty who was also a student. With his income of $300.00 a month and minimal obligations it was not unreasonable for him to assume part of the cost of his care. There are many instances wherein certain conditions of confinement may vary on the basis of pecuniary status and disparity in dental treatment based on wealth alone is not enough to establish a denial of equal protection in violation of the 14th Amendment to the Constitution. Bartling v. Ciccone, 376 F.Supp. 200 (W.D.Mo.1974). Before the Equal Protection Clause can be the basis for relief under 42 U.S.C. § 1983 the facts must show a significant violation of a constitutional right. Madison v. Sielaff, 393 F.Supp. 788 (N.D.Ill.1975). No such showing is made here.
Accordingly the court concludes that there is no genuine issue as to any material fact and the defendants are entitled to judgment as a matter of law. Pursuant to Rule 56(c) Federal Rules of Civil Procedure the defendants' Motion for Summary Judgment is granted and judgment will be entered in accordance with this opinion.
IT IS SO ORDERED.
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137 B.R. 797 (1992)
In re Ronald David NEESE and Susan Joy Neese, Debtors.
Bankruptcy No. SB 87-00541 LR.
United States Bankruptcy Court, C.D. California.
February 27, 1992.
*798 Rosemarie F. Patterson, Patterson & Patterson, Whittier, Cal., for debtor.
Mark C. Schnitzer, Hanover & Schnitzer, San Bernardino, Cal., for trustee.
MEMORANDUM OF DECISION DENYING DEBTORS' MOTION FOR ALLOWANCE OF ADMINISTRATIVE CLAIM
LYNNE RIDDLE, Bankruptcy Judge.
This matter came on to be heard on the motion of Ronald David Neese and Susan Joy Neese ("Debtors") for an order allowing a commission to Debtors, to be paid as an administrative expense, or in the alternative for an order reducing other administrative claims so that a distribution might be made to Debtors. Upon consideration of the evidence submitted with the motion, other pleadings in the file, and the authorities cited by the parties, the Court concludes that the relief requested by Debtors is not warranted by law.
JURISDICTION
The Court has jurisdiction pursuant to 28 U.S.C. § 1334 (district courts have original and exclusive jurisdiction of all cases under Title 11), 28 U.S.C. § 157(a) (district courts may refer all Title 11 cases and proceedings to the bankruptcy judges for the district), and General Order No. 266, dated October 9, 1984 (referring all Title 11 cases and proceedings to the bankruptcy judges of the Central District of California). This action constitutes a core proceeding under 28 U.S.C. § 157(b)(2)(B).
FACTS
In 1985, Debtors commenced an action in San Bernardino Superior Court styled Neese v. Loma Linda Medical Center, et al., for compensatory and punitive damages arising from an alleged wrongful discharge. Debtors retained counsel to represent them on a contingent fee basis and the suit "moved forward with vigorous discovery by both sides." (Declaration of Special Counsel in Support of Application to Compromise Disputed Claim, filed May 14, 1990, p. 4.)
On January 30, 1987, Debtors filed a voluntary petition for relief under Chapter 7; N.L. Hanover was appointed Chapter 7 Trustee ("Trustee"). Pursuant to 11 U.S.C. § 541(a), Debtors' interest in the state court action, including any potential award of damages, became an asset of the bankruptcy estate. Debtors believed their claims were meritorious and urged the Trustee to pursue the action on behalf of the estate. Toward that end, by Order entered May 3, 1988, Thomas P. Dovidio was employed as special counsel to the Trustee to prosecute the action.
The litigation was eventually resolved at a settlement conference in early 1989. During the course of the negotiations, Debtors, Mr. Dovidio and the Trustee spent considerable time analyzing the information in the bankruptcy schedules regarding the amount of claims against the estate in order to calculate what portion of the settlement would be available for distribution to Debtors. The Trustee estimated that creditor claims would total approximately $20,000, and trustee fees and administrative costs would be no more than $3,000. After factoring in Mr. Dovidio's attorney fees, the Trustee concluded that from the proposed settlement of $42,500, Debtors would receive between $4,000, at a minimum, and probably closer to $10,000, after payment of claims and administrative expenses. In order to assure that there would be a dividend to Debtors, Mr. Dovidio agreed to reduce his attorney fees from $13,267 to $10,000.
*799 Debtors testified that they were told that a judge or jury would have awarded a much higher amount, but they agreed to the $42,500 settlement based on the Trustee's representation that they would receive a portion of the money. Debtors further declared that they would not have subjected themselves to the expense, effort and emotional stress associated with preparation of the case except for the Trustee's assurance that they would be compensated. (Declaration of Ronald Neese, filed Oct. 24, 1991, ¶¶ 5, 6.)
Notice of the proposed settlement was given to all creditors and no objection was received. Upon a hearing, the settlement was approved by this Court by Order entered June 11, 1990.
The Trustee filed the Final Report and Account on April 19, 1991. Unfortunately, it appears that, although creditors will be paid in full, there will be no money available for distribution to Debtors. Debtors are justifiably disappointed and brought a motion for an order allowing a distribution to them in the form of an administrative expense.
DISCUSSION
1. Commission under § 503(b)(1)(A)
Debtors first claim that they are entitled to a "commission"[1] for services rendered to the estate under § 503(b)(1)(A).[2] Section 503(b)(1)(A) provides:
(b) After notice and a hearing, there shall be allowed administrative expenses, . . . including
(1)(A) the actual, necessary costs and expenses of preserving the estate, including wages, salaries, or commissions for services rendered after the commencement of the case.
The decision to award administrative expense priority rests within the broad discretion of the court, "limited by the clear intent of section 503(b)(1)(A): the actual and necessary costs of preserving the estate." In re Dant & Russell, Inc., 853 F.2d 700, 707 (9th Cir.1988). "Actual" and "necessary" are narrowly construed in order to keep administrative expenses at a minimum. Id. at 706.
The modifiers "actual" and "necessary" must be observed with scrupulous care. Before incurring expenses, the trustee should conclude that they are absolutely necessary to preserve the estate. Preservation of the estate, however, should not be strictly interpreted. Thus, while there is an implicit duty incumbent on officers to preserve the estate or some part thereof for the benefit of creditors, preservation may also be a mere means to other ends in the administration of an estate such as the continuation of the business or immediate liquidation.
3 L. King, Collier on Bankruptcy ¶ 503.04[1][a][i] at 503-24 (15th ed. 1991).
In addition, actual benefit must accrue to the estate. In re Dant & Russell, Inc., 853 F.2d 700, 706 (9th Cir.1988). In the context of Chapter 11, the rationale for allowing administrative priority is to encourage creditors to continue doing business with the debtor postpetition. However,
"[s]ince the goal in a Chapter 7 case is to `cash out' the bankrupt entity, rather than continue its operations, Chapter 7 is more concerned with maximizing the size of the estate to be distributed than with the Chapter 11 goal of inducing third parties to contribute towards the continued operations of the business."
Id. at 706-07 (quoting Broadcast Corp. v. Broadfoot, 54 B.R. 606, 611 (N.D.Ga.1985)).
At first blush, Debtors' argument has some appeal. As Collier noted, the Code makes no attempt
to enumerate specifically all of the potential items of expense which could constitute "the actual, necessary costs and expenses *800 of preserving the estate" save that this includes wages, salaries or commission for services rendered after the case has been begun by the filing of a petition.
3 L. King, supra, ¶ 503.04[1][a][i] at 503-19. The Trustee may hire labor, including former personnel or the debtor himself, to preserve the estate or operate the business pending liquidation. Id. ¶ 503.04[1][a][iii] at 503-28. However, "such employment will be subject to extensive scrutiny" and "the employment must be necessary and actual to merit status as an administrative expense." Id. at 503-28.1.
Debtors contend that they conferred benefit on the estate by assisting the Trustee in recovering property, thus maximizing the estate to the point that all creditors will be paid. The Court acknowledges that the estate had no other assets to satisfy creditors, and that without Debtors' assistance the claims might not have settled at the amount ultimately approved by the Court. (See also Declaration of N.L. Hanover, filed Oct. 28, 1991, p. 2.)
Nevertheless, the fact that Debtors conferred benefit on the estate does not resolve the administrative expense issue. The Court must further find that the value of Debtors' services was an "actual" and "necessary" expense to the estate within the meaning of § 503(b)(1)(A).
Debtors acknowledge the absence of case authority for their position on these facts.[3] This Court concludes that the value of Debtors' services was not a "necessary" expense because those services were already pledged to the estate by the act of filing bankruptcy. In re Roco Corp., 37 B.R. 770, 773 (Bankr.D.R.I.1984) (principal of corporate debtor was not entitled to administrative claim for services rendered to trustee since services were required by § 521 with no right of compensation).
The assistance given by Debtors was no more than that required of them by § 521, which provides:
The debtor shall
* * * * * *
(3) if a trustee is serving in the case, cooperate with the trustee as necessary to enable the trustee to perform the trustee's duties under this title;
(4) if a trustee is serving in the case, surrender to the trustee all property of the estate and any recorded information, including books, documents, records, and papers, relating to property of the estate, . . .
This section is supplemented by Bankruptcy Rule 4002, which lists specific duties of the debtor, including the duty to "cooperate with the trustee in . . . the administration of the estate;. . . ." The duties imposed by § 521 are affirmative obligations. E.g., In re Sowers, 97 B.R. 480, 487 (Bankr. N.D.Ind.1989); W. Norton, Norton Bankruptcy Law and Practice Rules and Official Forms 274 (1991) (Editor's Comment to Rule 4002).
The nature of debtor's cooperation is coextensive with the tasks to be performed by the trustee in administering the estate.
An examination of the duties of a trustee serving under chapter 7, 11 or 13 will disclose wherein the debtor can cooperate with the trustee in the performance of his duties. The trustee, in a liquidation case, is required to collect and reduce to money the property of the estate. *801 The debtor may well cooperate in this respect, informing the trustee of and assisting him in locating property of the estate in the possession of third parties, executing documents necessary to convey property and assisting in the collection of accounts receivable. . . . "Cooperate" is a broad term, indeed, and must be construed that whenever the trustee calls upon the debtor for assistance in the performance of his duties, the debtor is required to respond. . . . [Debtors] meet the requirement of section 521(3) if they cooperate to the best of their ability.
3 L. King, supra, ¶ 521.10 at 521-53.
Debtor's cooperation is so essential, that it can be a prerequisite to a grant of discharge. E.g., In re Dreyer, 127 B.R. 587, 595 (Bankr.N.D.Tex.1991) (debtor failed to provide complete financial information to trustee); In re Sowers, 97 B.R. 480, 487 (Bankr.N.D.Ind.1989) (debtor failed to turn over property of estate to trustee); In re McDonald, 25 B.R. 186, 189 (Bankr.N.D.Ohio 1982) (debtor failed to provide tax return to trustee; court noted that in the past, failure to cooperate was characterized as "bankruptcy crime"). Moreover, debtor's duty to cooperate does not end when discharge is granted. In re Albers, 80 B.R. 414, 417 (Bankr.N.D.Ohio 1987) (debtor had continuing duty not to destroy documents after discharge granted); see In re James, 77 B.R. 174, 177 (Bankr.S.D.Ohio 1987) (discharge revoked, in part because debtor failed to provide financial information to trustee).
Although Debtors do not describe the services provided to the Trustee, their function was primarily to provide evidence to support the factual basis of the state law claims.[4] This is consistent with Debtors' duty to provide information to the Trustee under § 521(3) and (4). In fulfilling this duty, Debtors expended money for telephone calls and travel to meet with special counsel and the Trustee. Yet Debtors are not entitled to compensation for fulfilling their duties under § 521. In re Roco Corp., 37 B.R. 770, 773 (Bankr.D.R.I. 1984). In exchange for their time and trouble, Debtors received a discharge of their debts and a fresh start. Debtors voluntarily submitted themselves to the protection of this Court; they must also bear the inconvenience that attends that protection.
2. Custodian under § 503(b)(3)(E)
Section 503(b)(3)(E) provides,
(b) After notice and a hearing, there shall be allowed administrative expenses, . . . including
(3) the actual, necessary expenses, . . . incurred by
(E) a custodian superseded under section 543 of this title, and compensation for the services of such custodian.
A custodian is defined in § 101(11) to include a
(C) trustee, receiver, or agent under applicable law, or under a contract, that is appointed or authorized to take charge of property of the debtor for the purpose of enforcing a lien against such property, or for the purpose of general administration of such property for the benefit of the debtor's creditors.
Debtors contend that they were acting as agents who exercised effort to benefit debtors' creditors.
Debtors' argument, although creative, is without merit since all the elements of the § 101(11)(C) definition are not satisfied. Debtors were not appointed nor authorized by any contract or other law. Debtors did not "take charge" of the "property," i.e., the state court litigation, and did not "generally administer" the litigation for the benefit of creditors. The Code instead authorized the Trustee to "take charge" of the litigation and reduce the claims to money. 11 U.S.C. § 704. Debtors simply fulfilled their obligations under § 521 by assisting the Trustee and special counsel in reducing "property" of the estate to money.
*802 CONCLUSION
The Court sympathizes with Debtors' situation, as does the Trustee. (Declaration of N.L. Hanover, filed Oct. 28, 1991, page 3). Unfortunately, the Code does not authorize payment to Debtors under these circumstances. Debtors are not entitled to an administrative claim under either § 503(b)(1)(A) or § 503(b)(3)(E). Nor have Debtors pointed to any authority or justification for reducing other approved administrative claims.
Based upon the foregoing, the Court has made an order that Debtors' Motion for Order Granting Allowance of Administrative Claim, or Alternative Relief, is DENIED, and Debtors' Opposition to Proposed Distribution is OVERRULED.
A separate order is being filed concurrently herewith.
NOTES
[1] Debtors suggest that a reasonable commission for their efforts is 15% of the settlement, or $6,375, plus actual expenses. (Motion for Order Granting Administrative Claim, filed Oct. 7, 1991, p. 5.)
[2] References to section numbers are references to sections in the Bankruptcy Code, Title 11 U.S.C.
[3] The Court found two cases in which non-debtors requested administrative priority for expenses incurred in preparing for litigation; in both cases the administrative claim was denied. A creditor in In re Gherman, 105 B.R. 714, 717 (Bankr.S.D.Fla.1989), submitted a claim under § 503(b)(3)(D), which authorizes an administrative claim for expenses incurred by a creditor in making a substantial contribution to a Chapter 11 case. The creditor sought to recover the value of his time and expense in submitting to examination and producing documents in the trustee's action to recover property for the estate. The court disallowed the claim, in part because the creditor was subject to subpoena and his voluntary production of evidence was consistent with his civic duty.
In In re Club Dev. & Management Corp., 27 B.R. 610, 613 (9th Cir.BAP 1982), principals of the corporate debtor requested salaries from the estate as compensation for, among other things, their cooperation in litigation. The court concluded that the principals would be harmed if they did not assist in the litigation and therefore it was unlikely that they would be uncooperative. Accordingly, salaries were not necessary.
[4] Some of the expenses Debtors incurred appear to relate solely to the bankruptcy case, rather than to assisting Mr. Dovidio in the preparation of the state court action. For example, Debtors claim mileage for several trips to the Trustee's office and the bankruptcy court, as well as telephone calls to the Trustee.
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835 F.Supp. 762 (1993)
John and Christine POWELL and Parker G. Rouse, III, Plaintiffs,
v.
H.E.F. PARTNERSHIP, Hawk Mountain Corp., Federal Deposit Insurance Corporation, and Carroll, Sussman & Obuchowski, Defendants.
No. 2:91-CV-60.
United States District Court, D. Vermont.
September 30, 1993.
*763 Michael L. Burak, Brian J. Sullivan, Thomas R. Melloni, Burak & Anderson, Burlington, VT, for plaintiffs John Powell and Christine Powell.
G. Parke Rouse, III, pro se.
John J. Collins, Sutherland & Collins, Burlington, VT, for defendant H.E.F. Partnership.
Andre D. Bouffard, Downs, Rachlin & Martin, Burlington, VT, for defendant F.D.I.C.
Douglas C. Pierson, Pierson, Wadhams, Quinn & Yates, Burlington, VT, for defendant Carroll, Sussman & Obuchowski.
*764 OPINION AND ORDER
PARKER, Chief Judge.
The Report and Recommendation of the Magistrate Judge was filed March 16, 1993. The Magistrate Judge recommended that the defendant Carroll, Sussman & Obuchowski's motion for summary judgment and to dismiss the complaint (Papers 54 & 73) be granted and that the plaintiffs John and Christine Powell's motion to amend their complaint be denied. These recommendations rendered plaintiffs' motion to compel discovery against Carroll, Sussman & Obuchowski moot. The plaintiffs filed timely objections to the Report and Recommendation on April 30, 1993.
A district judge must make a de novo determination of those portions of a magistrate judge's report and recommendation to which an objection is made. Fed.R.Civ.P. 72(b); 28 U.S.C. § 636(b)(1); Perez-Rubio v. Wyckoff, 718 F.Supp. 217, 227 (S.D.N.Y. 1989). The district judge may "accept, reject, or modify, in whole or in part, the magistrate's proposed findings and recommendations." Perez-Rubio, 718 F.Supp. at 227.
DISCUSSION
The facts of this case have been adequately recited in the Report and Recommendation ("R & R") and do not bear repetition here. It will suffice to relate that the plaintiffs were investors in a failed hotel/condominium project ("the Project"). They have alleged a number of securities violations under federal and state law against the developers, H.E.F. Partnership ("H.E.F."), the bank that provided financing for the Project, Dartmouth Bank[1], and the law firm of Carroll, Sussman & Obuchowski ("CS & O"), which drafted the Offering Memorandum and Amended Offering for H.E.F..
The plaintiffs object to the dismissal of their complaint as to CS & O on the following grounds:
1. The Magistrate Judge's determination that CS & O was not H.E.F.'s agent under Vt.Stat.Ann. tit. 9, § 4225 (1984) was erroneous;
2. The Magistrate Judge's conclusion that the plaintiffs failed to state a federal securities claim was erroneous;
3. The Magistrate Judge's decision to deny the plaintiffs' motion to amend their complaint was erroneous.
Each of these contentions will be addressed in turn. Because this Court rejects portions of the recommendations of the Magistrate Judge, it will also discuss plaintiffs' motion to compel, which, consistent with the following analysis, is no longer moot.
I. SECTION 4225 and CS & O
Count IX of the Amended Complaint alleges that CS & O violated the Vermont Securities Act as an agent of H.E.F.. This Court previously ruled that Vermont statutory law, Vt.Stat.Ann. tit. 9, § 4225 (1984), supplies the rule of decision in the present case.[2]Powell v. H.E.F. Partnership, 793 F.Supp. 91, 95 (D.Vt., 1992). Section 4225 provides, in pertinent part:
Every sale or contract for sale made in violation of the provisions of this chapter shall be voidable at the election of the purchaser and the person making such sale or contract for sale and every director, officer, or agent of or for such seller who shall have participated or aided in any way in making such sale shall be jointly and severally liable to such purchaser in an action at law....
Therefore, a cause of action under § 4225 exists against not only the sellers of securities who violate the Vermont Securities Act, Vt.Stat.Ann. tit. 9, §§ 4201-4241 (1984), but also those who participate or aid the seller in any way if they are a director, officer or agent. Id., § 4225.
The Magistrate Judge stated that "to be liable under § 4225, Plaintiffs must show, at a minimum, that CS & O had the authority to and did in fact, act on the behalf [of] H.E.F. in the sale of securities" and concluded *765 that the amended complaint "alleges no facts to support such a conclusion." R & R, p. 17. Plaintiffs disagree with this standard and the Magistrate Judge's conclusion. They argue that CS & O was an agent of H.E.F. and, by drafting the Offering Memorandum and Amended Offering, participated and aided H.E.F. in the sale of securities.
For purposes of the Vermont Securities Act "agent" is defined as "salesman," in addition to its ordinary meaning. Vt.Stat.Ann. tit. 9, § 4202(1) (1984) (emphasis added).[3] Plaintiffs are correct in asserting that an attorney acting on behalf of a client does so as the client's agent. Neet v. Silver Street Partnership, 148 Vt. 99, 102, 528 A.2d 1117 (1987). With this in mind it is clear that CS & O was an agent for H.E.F., within the ordinary meaning of that term, when it prepared the Offering Memorandum and the later Amended Offering.
The Court also finds that by doing so, CS & O aided H.E.F. in the sale of securities as defined in the Securities Act. The definition section of the Securities Act provides that "Sale" or "sell":
shall include every disposition or attempt to dispose of a security or interest in a security for value. Any security given or delivered with, or on account of, any purchase of securities or any other thing, shall be conclusively presumed to constitute a part of the subject of such purchase and to have been sold for value. "Sale" or "sell" shall also include an exchange, an attempt to sell, an option of sale, a solicitation of a sale, a subscription or an offer to sell directly or by an agent, a circular, letter, advertisement, or otherwise.
Vt.Stat.Ann. tit. 9, § 4202(7) (1984) (emphasis added).
CS & O does not dispute that it prepared both the initial Offering Memorandum in 1988 and the Amended Offering in 1989. Those documents were integrally related to the offer to sell securities that H.E.F. made to plaintiffs and others. While it does not appear that CS & O actively "peddled" the securities or met individually with any potential purchasers of securities, by drafting the offering documents it aided H.E.F.'s efforts to sell the securities. Because § 4225 provides a cause of action against "every ... agent ... who shall have participated or aided in any way in making such sale ...," plaintiffs have stated a cause of action under § 4225 against CS & O. Therefore, that part of the Magistrate Judge's Report recommending dismissal of this claim is rejected.
II. THE FEDERAL SECURITIES CLAIM
In Count III, the plaintiffs alleged that CS & O aided and abetted the alleged federal securities violations committed by H.E.F.. The basis for plaintiffs' federal securities claims is section 10(b) of the Securities Exchange Act of 1934, 15 U.S.C. § 78j(b). The specific claim against CS & O alleges that the law firm aided and abetted H.E.F.'s violation of section 10(b) by drafting the Amended Offer in 1989 and omitting material facts.
The Magistrate Judge correctly set forth the standard for liability that a plaintiff must satisfy for such a claim:
(1) the existence of a securities law violation by the primary (as opposed to the aiding and abetting) party;
(2) "knowledge" of this violation on the part of the aider and abettor; and
(3) "substantial assistance" by the aider and abettor in the achievement of the primary violation.
IIT, An International Investment Trust v. Cornfeld, 619 F.2d 909, 922 (2d Cir.1980). The Magistrate Judge also correctly set forth the standard for reviewing a motion to dismiss for failure to state a claim pursuant to Fed.R.Civ.P. 12(b)(6). Accordingly, these portions of the Magistrate Judge's Report and Recommendation are adopted.
The Magistrate Judge found that the plaintiffs' claim failed to sufficiently allege scienter, the second prong of the aiding and abetting standard. For this reason the Report and Recommendation found that the federal securities claim should be dismissed.
*766 Plaintiffs object on a number of grounds. They claim that the Magistrate Judge applied a more stringent standard than called for when reviewing claims of federal securities violation on a motion to dismiss for failure to state a claim; that material omissions in offering documents may be grounds for imposing liability upon attorneys if it is reasonably foreseeable that investors will rely upon the documents; and that the distinction the Magistrate Judge made between material omissions and affirmative misrepresentations is inconsistent.
The Court agrees with the Magistrate Judge that no issue is presented on the primary liability component of the aiding and abetting claim. Thus the sufficiency of the complaint must be analyzed with respect to the other two prongs of the standard for aiding and abetting liability set out in IIT: "knowledge", or scienter, and "substantial assistance."
A. Scienter
The Magistrate Judge's Report and Recommendation addressed the second prong of the test and found that because CS & O was under no duty to disclose the alleged material facts, the scienter requirement could only be met if plaintiffs asserted facts which would "give rise to an inference that CS & O intentionally aided in the perpetration of securities fraud." R & R, p. 15; see Armstrong v. McAlpin, 699 F.2d 79, 91 (2d Cir. 1983). This degree of proof of scienter is also referred to as the "conscious intent" standard. IIT, 619 F.2d at 925 (quoting Woodward v. Metrobank of Dallas, 522 F.2d 84, 97 (5th Cir.1975)). Finding the Complaint insufficient in this regard, the Magistrate Judge recommended that the claim for aiding and abetting securities fraud be dismissed.
Plaintiffs contend that the Magistrate Judge applied the wrong standard to determine the sufficiency of the scienter allegation. They argue that factual allegations of recklessness are sufficient for purposes of meeting the scienter requirement. Because this Court finds plaintiffs' allegation of actual knowledge sufficient to meet the scienter requirement regardless of the applicable standard, this issue need not be addressed.[4]
Plaintiffs have alleged actual knowledge of material omissions in the amended offering memorandum and further alleged specific facts in support of the allegation. (See, e.g., First Amended Complaint, ¶¶ 30, 37, 38). This allegation of actual knowledge is sufficient to satisfy the scienter requirement regardless of the appropriate standard.
Although CS & O relies heavily on portions of the opinion in IIT v. Cornfeld, 619 F.2d 909, IIT itself demonstrates the sufficiency of pleading actual knowledge. In IIT, the court reviewed the sufficiency of an aiding and abetting complaint with respect to three defendants: two underwriters and Arthur Anderson & Co. In its discussion of the scienter requirement, the court determined that the following scienter allegation was sufficient:
The Underwriter Defendants aided and abetted and joined in the conspiracy by circulating a prospectus which they knew, or should have known, contained material misrepresentations of fact and material omissions.
IIT, 619 F.2d at 923. After finding the complaint sufficient under Fed.R.Civ.P. 9(b) because other portions of the complaint alleged the specific misrepresentations and omissions, the court addressed scienter:
*767 The "or should have known" clause ... would not qualify under the definition of recklessness contained in the cases cited [citations omitted]. However, [the complaint] alleges in the disjunctive that the underwriter defendants "knew" of the misrepresentations and omissions alleged.... As a matter of pleading, more is not required. ...
Id. at 924. In contrast, the complaint was found insufficient with respect to defendant Arthur Andersen & Co. in part because "[t]here [was] no specific allegation of knowledge or recklessness concerning the failure to disclose in the section of the complaint labelled `Role of Arthur Andersen'...." Id.[5]
CS & O's reliance on IIT's discussion of the scienter requirement with respect to Andersen is thus misplaced. Because there was no specific allegation of knowledge, Andersen's position in IIT is distinguishable from CS & O's position here. The scienter allegation made against CS & O is more similar to the allegations against the underwriting defendants in IIT. Plaintiffs' allegations of actual knowledge satisfy the scienter requirement.
B. Substantial Assistance
The inquiry must now move to the sufficiency of the substantial assistance prong of the aiding and abetting claim. Plaintiffs have alleged that CS & O's preparation of the amended offering memorandum substantially assisted the primary fraud. CS & O argues that liability cannot attach because the work performed for H.E.F. was merely drafting of "grist of the mill" documents that make up the daily work of law firms.[6]See Woodward v. Metrobank of Dallas, 522 F.2d *768 at 97. The Court agrees with the plaintiffs that the allegation of substantial assistance is sufficient.
While it is true that "[s]everal cases in other circuits refuse to impose aiding or abetting liability for inaction except when there exists an independent duty to disclose," IIT 619 F.2d at 926-27, this is not a case of inaction. Contrary to CS & O's assertions, drafting a document that contains material omissions is not "inaction" as the term is used in the case law.
A number of the cases highlight this distinction. Wessel v. Buhler, 437 F.2d 279 (9th Cir.1971), a case quoted in IIT and relied on by CS & O, involved an accountant who did not prepare the allegedly fraudulent prospectus and was not responsible for the figures contained in it. Id. at 281. Rather, he had prepared three nonpublic statements which possibly were used by others in preparing the prospectus. Id. at 283. The plaintiff argued that the accountant aided and abetted the primary fraud by not disclosing his knowledge when he became aware of deficiencies in the prospectus. It was in response to this fact pattern that the court in Wessel held that liability cannot be based solely on inaction absent a duty to disclose.
IIT discussed inaction in the context of Arthur Andersen's lack of disclosure with respect to improprieties unrelated to the parts of the prospectus it had prepared. IIT, 619 F.2d at 927. It did not hold that preparing a prospectus was "inaction."
In In re Gas Reclamation, Inc., 659 F.Supp. 493, 504 (S.D.N.Y.1987), the court also discussed the substantial assistance prong of aider and abettor liability. With respect to one group of defendants, the court concluded that "the Investors have alleged active wrongdoing by these defendants satisfying the substantial assistance requirement. These include inter alia, allegations that the defendants reviewed and approved the first [private placement memorandum], devised the marketing and financing scheme ... and engaged in atypical financing transactions." Id. at 504. With respect to Peat Marwick, which had its 12(b)(6) motion granted because it was not found to have substantially assisted the primary fraud, the court found that "[plaintiffs] do not allege ... that Peat Marwick was in any way associated with the only disclosure document specifically referred to in the [complaint]." Id. (emphasis added). The aiding and abetting claim against Peat Marwick was thus held to be premised on inaction.
In Armstrong v. McAlpin, 699 F.2d at 91, aiding and abetting claims against parties who were aware of the primary churning violation and did not intervene were held to be insufficient because "awareness and approval, standing alone, do not constitute substantial assistance." Id. The allegation of CS & O's awareness does not stand alone, but stands in conjunction with its alleged preparation of the Amended Offering.
In sum, the substantial assistance alleged by plaintiffs here is not inaction. It is CS & O's affirmative conduct of preparing the offering memorandum and its amendment. See Andreo, 660 F.Supp. at 1366 ("the primary fraud allegedly was substantially assisted by [defendant law firm's] inclusion of false information and/or omission of material information from drafts of offering memoranda and tax opinions. Thus the complaint sufficiently alleges the ... third element[] of aiding and abetting liability").
Because the Court finds that the Powells successfully state a claim for aiding and abetting liability under Fed.R.Civ.P. 12(b)(6), that part of the Magistrate Judge's recommendation dismissing the Powells federal securities law claim is rejected.
III. MOTION FOR SUMMARY JUDGMENT
Because this Court rejects the Magistrate Judge's recommendation with respect to defendant's motion to dismiss under Rule 12(b)(6), the defendant's motion for summary judgment must be addressed.[7] CS & O *769 argues that the plaintiffs are barred from asserting their claim under the statute of limitations set forth in Lamps, Pleva, Lipkind, Prupis and Petigrow v. Gilbertson et al. ___ U.S. ___, 111 S.Ct. 2773, 115 L.Ed.2d 321 (1991), because they did not file their complaint within one year of the time when they should have discovered the fraudulent conduct.
The plaintiffs contend that the complaint was timely because it was filed within one year of their discovery of fraud and further contend that the undisputed facts do not support the defendant's assertion that the fraud should have been discovered earlier.
A defendant may gain summary judgement based on securities fraud statute of limitations only "when uncontroverted evidence irrefutably demonstrates" that fraud should have been discovered. Mosesian v. Peat, Marwick, Mitchell & Co, 727 F.2d 873, 877 (9th Cir.), cert. denied, 469 U.S. 932, 105 S.Ct. 329, 83 L.Ed.2d 265 (1984). "The court will refuse to grant summary judgement for defendant if there is an issue of fact as to when the limitations period began." 10A Charles A. Wright, Arthur R. Miller & Mary Kay Kane, Federal Practice and Procedure: Civil 2d. § 2743 (1983).
Both parties agree that the applicable statute of limitations is set forth in section 9(e) of the 1934 Act, 15 U.S.C. § 78i(e)[8], which provides:
No action shall be maintained to enforce any liability created under this section, unless brought within one year after discovery of the facts constituting a violation and within three years of such violation.
The limitations period of a federal securities claim is triggered when the plaintiff discovered or should have discovered the fraudulent conduct. IIT, 619 F.2d at 929. The disputed issue is whether the plaintiffs should have discovered the fraud more than one year prior to February 25, 1991, the day the present lawsuit was filed.
In support of their argument that the plaintiffs should have discovered the fraud earlier, CS & O points to the plaintiffs closing, which took place on November 22, 1989. Because the security sold in this transaction was real estate, CS & O asserts that plaintiffs must have known, by virtue of a title search conducted pursuant to closing, that: (1) the number of units sold at the project was less than had been represented; and (2) that a lien had been placed on the project by Pizzagalli Construction Company. Further, CS & O argues, plaintiffs should have known of the alleged fraud in January of 1990 when they did not receive a distribution from the "cash flow guaranty" fund.
Plaintiffs counter these arguments by asserting that: (1) the title search was conducted only for their unit in the project and thus did not reveal the status of other sales; (2) the existence of the lien was not evidence of fraud because it was explained, at the time of closing, as a run-of-the-mill payment dispute, soon to be discharged, which did not affect the viability of the project; this explanation was consistent with the plaintiffs' own experience in the construction field; and (3) they were unaware of the absence of payment from the "cash flow guaranty" fund.
Based on the above assertions, there can be no question that a factual dispute exists. First, there is a factual dispute over what the plaintiffs learned in their title search incident to closing. Second, there is a factual dispute over the plaintiffs knowledge of the January 1990 missed payment of the "cash guarantee fund." The only undisputed fact is the plaintiff's knowledge of the lien on Project, and *770 the circumstances surrounding that fact are disputed. Thus it is not at all clear from the facts before the Court that the fraud should have been discovered before February 25, 1990, one year before the case was filed. Defendant's motion for summary judgement must therefore be denied.
IV. Motion To Amend The Complaint
As to plaintiff's objection to the recommended denial of their motion to amend their Complaint, this Court agrees with the Magistrate Judge's analysis and adopts the recommendation.
V. Motion To Compel
Plaintiffs motion to compel discovery against CS & O was mooted by the Magistrate Judge's recommendation that CS & O's motions for summary judgement and dismissal be granted. Because this Court's opinion declines to adopt the Magistrate Judge's recommendation with respect to these motions, the motion to compel must now be addressed.
Plaintiffs seek to discover communications between CS & O and H.E.F. that relate to the Project. CS & O argues that discovery of such documents is improper as a violation of the attorney-client privilege, the attorney work-product privilege, and the Vermont Code of Professional Responsibility, DR 4-101(A) and (B)(1). Each of these contentions will be addressed separately.
A. Attorney-Client Privilege
Both parties agree that the attorney-client privilege in this case belongs to CS & O's client, H.E.F. Partnership. What is actually in dispute is whether H.E.F. has waived the attorney-client privilege that would customarily apply to the documents at issue. See 8 Wigmore, Evidence § 2327 (McNaughton rev. 1961) ("The privilege is designed to secure the client's confidence in the secrecy of his communications ... hence the privilege is not violated by receiving such disclosures as the client by his own will permits to be made.")
The client in this case has apparently already allowed plaintiffs' counsel access to all documents relating to the present action, including correspondence between H.E.F. and CS & O.[9] This decision by H.E.F. surely functions as a waiver of any attorney-client privilege that may have existed prior to disclosure. Indeed, the absence of a privilege may be gleaned from the fact that this Court has previously granted Plaintiffs' Motion to Compel Discovery Against Defendant, H.E.F. Partnership (Paper 51). Because the documents at issue are discoverable from H.E.F., there is no issue of secrecy and CS & O can also be compelled to produce them. 8 Wigmore, Evidence § 2307 (McNaughton rev. 1961) ("It follows then, that when the client himself would be privileged from production of the document ... the attorney having possession is not bound to produce. ... On the other had, if the client would be compellable to produce ... then the attorney is equally compellable, if the document is in his custody, to produce under the appropriate procedure.")
B. Work Product Doctrine
Defendant's objections based on the attorney work-product privilege are wholly without merit. Fed.R.Civ.P. Rule 26(b)(3) protects documents prepared in anticipation of litigation. The documents at issue relate to a securities offering; no work-product immunity exists for these purposes. See 8 Charles Wright & Arthur Miller, Federal Practice and Procedure § 2023 (1970) ("There is no work product immunity for documents prepared in the regular course of business rather than for the purpose of litigation.")
*771 CS & O also attempts to fuse the work product doctrine with DR 4-101 of the Vermont Code of Professional Responsibility, apparently in an attempt to expand immunity to all attorney work-product, litigation-related or not. This attempt fails for the reasons set forth below.
C. Vermont Code of Professional Responsibility
CS & O contends that compliance with plaintiffs' discovery requests would violate the Vermont Code of Professional Responsibility. CS & O relies on the following obligation, which is set forth as DR 4-101(A) and (B):
(A) "Confidence" refers to information protected by the attorney-client privilege under applicable law, and "secret" refers to other information gained in the professional relationship that the client has requested be held inviolate or the disclosure of which would be embarrassing or would likely be detrimental to the client.
(B) Except when permitted under DR 4-101(C), a lawyer shall not knowingly:
(1) Reveal a confidence or secret of his client.
As previously discussed, the documents requested are not covered by the attorney-client privilege. Consequently, they cannot be deemed a "confidence" under the terms of the Rule. H.E.F.'s own decision to allow plaintiffs' counsel access to all its documents indicates that the documents are not covered as "information ... that the client has requested be held inviolate." Furthermore, the fact that the documents requested are already subject to discovery pursuant to this Court's order precludes the possibility that disclosure of the same items by CS & O would be embarrassing or detrimental to H.E.F. Thus the documents cannot be deemed a "secret" under the rule. Again, CS & O would not be revealing anything that H.E.F. itself has not already agreed to, or been compelled to, reveal.
Because CS & O's arguments based on attorney-client privilege, the work product doctrine, and the Vermont Code of Professional Conduct are each without merit, the Court finds no reason why the requested documents should not be produced and grants the plaintiffs' motion to compel discovery.
CONCLUSION
The Magistrate Judge's Opinion and Order, as modified, is hereby ADOPTED in part and REJECTED in part. Defendant CS & O's motion for summary judgement (Papers 54 and 73) is hereby DENIED. Defendant CS & O's motion to dismiss (Papers 54 and 73) is hereby DENIED as to the federal securities fraud claim and DENIED as to the Vermont securities fraud claim. Plaintiffs' motion to amend their Complaint (Paper 79) is DENIED. Plaintiff's motion to compel discovery against defendant Carroll, Sussman, & Obuchowski (Paper 59) is GRANTED.
NOTES
[1] The FDIC, as Liquidating Agent of Dartmouth Banking Co., was substituted as a Party-defendant. (Paper 67)
[2] Section 4225 was repealed in 1989 but was in effect when the events alleged in this case occurred.
[3] Salesman is defined to include "every person, other than a dealer, employed or appointed or authorized by a dealer or issuer to sell securities in any manner in this state." § 4202(8).
[4] Although determination of the appropriate standard for proof of scienter is unnecessary in this case, the Court is inclined to agree with the reasoning of courts within the circuit that have applied the recklessness standard absent a fiduciary duty in cases where lawyers or accountants can reasonably foresee that third parties will rely on documents they prepare. S.E.C. v. Electronics Warehouse, 689 F.Supp. 53, 60 (D.Conn. 1988), aff'd sub nom., S.E.C. v. Calvo, 891 F.2d 457 (2d Cir.1989), cert. denied 496 U.S. 942, 110 S.Ct. 3228, 110 L.Ed.2d 674 (1990); Stevens v. Equidyne Extractive Industries 1980, 694 F.Supp. 1057, 1066 (S.D.N.Y.1988); Andreo v. Friedlander, Gaines, Cohen, Rosenthal & Rosenberg, 660 F.Supp. 1362, 1367 (D.Conn.1987); Morgan v. Prudential Group, Inc., 527 F.Supp. 957, 961 (S.D.N.Y.1981), aff'd without op., 729 F.2d 1443 (2d Cir.1983); Investors Funding Corp. of N.Y., 523 F.Supp. 550, 558 (S.D.N.Y.1980); Oleck v. Fischer, 73 Civ. 1460 (S.D.N.Y.1979) [available on WESTLAW 1979 WL 1217], aff'd on other grounds 623 F.2d 791 (2d Cir.1980).
[5] This statement is in direct contravention of CS & O's assertion, contained in its memorandum of law, that the complaint in IIT "alleged that the information provided for the prospectus was false and that Arthur Andersen & Co. knew and failed to correct it" (emphasis added). It was the fact that Andersen was not alleged to have had knowledge that was the crucial distinction between the claim against Andersen, which failed, and the claim against the two underwriters, which survived the 12(b)(6) motion. Because the plaintiff in IIT had pled actual knowledge on the part of the underwriters, the distinction was clear. "Since by contrast the sections of the complaint [dealing with the underwriters] both contain the `knew or should have known' charge, the omission as to Andersen could hardly have been inadvertent." IIT, 619 F.2d at 924.
[6] The cases cited by CS & O to support this proposition are distinguishable for a variety of reasons. Schatz v. Rosenberg, 943 F.2d 485, 492 (4th Cir.1991), cert. denied, ___ U.S. ___, 112 S.Ct. 1475, 117 L.Ed.2d 619 (1992), involved a defendant law firm that "did not ... prepare any solicitation documents. In fact, [the parties to the transaction] worked out the details of the purchase before involving attorneys for either side." Because of this, the court found that the defendant firm "did no more than `paper the deal' or act as scrivener for [the client]." Id. at 497. CS & O's preparation of solicitation documents is a distinguishing factor in the present case.
The court in Abell v. Potomac Ins. Co., 858 F.2d 1104, 1128 (5th Cir.1988), vacated on other grounds, 492 U.S. 914, 109 S.Ct. 3236, 106 L.Ed.2d 584 (1989), found allegations against a law firm insufficient because the scienter requirement was not met ("Aroused suspicions, however, do not constitute actual awareness ...). In essence, the defendant law firm was alleged to have failed to sufficiently investigate a bond offering, not to have possessed actual knowledge of material omissions, as is the case here.
In Latigo Ventures v. Laventhol & Horwath, 876 F.2d 1322, 1327 (7th Cir.1989), the claim against an accounting firm failed primarily because the plaintiff did not sufficiently allege reliance. The plaintiffs did "not claim to have relied either directly or indirectly on any reports by Laventhol & Horwath in deciding to buy [the stock]." Id. Reliance is alleged by the plaintiffs here.
Barker v. Henderson, Franklin, Starnes & Holt, 797 F.2d 490 (7th Cir.1986) reviewed a motion for summary judgment, not a motion to dismiss, and thus analyzed claims based of a set of undisputed facts, facts which differ markedly from the allegations in plaintiffs' complaint. Furthermore, the defendants in Barker were not alleged to have had actual knowledge of inaccuracies in selling documents. "A plaintiff's case against an aider, abetter, or conspirator may not rest on a bare inference that the defendant `must have had' knowledge of the facts. The plaintiff must support the inference with some reason to conclude that defendant has thrown in his lot with the primary violators." Id. at 497. Plaintiffs here do more than allege that defendants "must have known" of H.E.F.'s reliance of insider sales, they support their allegation of knowledge by alleging in the complaint that a letter from H.E.F. received by CS & O provided notice that the Project was in trouble. While the actual significance of the letter is subject to dispute, a factual determination is not appropriately resolved by virtue of a motion to dismiss, which must take all of plaintiff's factual allegations as true.
[7] Defendant CS & O filed both a motion to dismiss, based on the insufficiency of the plaintiffs' claim, and a motion for summary judgment, based on an affirmative statute of limitations defense. The Magistrate Judge's Report and Recommendation granted the defendant's motion for summary judgement and motion to dismiss, but did not discuss the motion for summary judgement in the body of the report. Thus the Court will review the motion for summary judgement for the first time in this opinion.
[8] CS & O relies of Lamps, Pleva, Lipkind, Prupis and Petigrow v. Gilbertson, ___ U.S. ___, 111 S.Ct. 2773, 115 L.Ed.2d 321 (1991) to support its position. However, the retroactive impact of this decision was limited by an act of Congress, which directed courts, when considering implied private actions brought under 10(b) filed before June 19, 1991, to apply the statute of limitations applicable in the jurisdiction on June 19, 1991. 102 P.L. 242, 473; 105 Stat. 2236 (December 19, 1991). This legislative override of Lamps is of no significance here, however, because Ceres Partners v. GEL Associates, et al. 918 F.2d 349 (2d Cir.1990) adopted the federal statute of limitations for private 10(b) actions in the Second Circuit prior to the filing of this action and plaintiff does not argue that a "borrowed" state statute of limitations should apply.
[9] In Plaintiffs' Motion to Compel Discovery against H.E.F., plaintiffs asserted that: "Prior to the commencement of this litigation, a representative of H.E.F. communicated to Plaintiff, John Powell that H.E.F. would make its files relating to the Inn at Essex available for Mr. Powell's attorney's to review. Said representative was fully aware that this review would be undertaken to determine whether to file suit against certain entities, including H.E.F.. In order to perform the reasonable inquiry necessary to file our Complaint, we accepted the offer and reviewed some files on or about January 14, 1991." Plaintiffs' Motion to Compel Discovery Against Defendant, H.E.F. Partnership, page 2. H.E.F. did not counter this assertion and did not, in fact, oppose the motion to compel.
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185 F.Supp. 283 (1960)
Petition of Frederick W. SMIGELSKI.
Civ. No. 627-60.
United States District Court D. New Jersey.
July 14, 1960.
*284 Frederick W. Smigelski, pro se.
WILLIAM F. SMITH, Chief Judge.
This matter is before the Court on an application for the assignment of counsel. The applicant is in custody in a State institution of the reformatory type pursuant to the judgment and commitment of a State Court. He alleges that he is deprived of his liberty in violation of his constitutional rights guaranteed by the Fourteenth Amendment. The application alleges in sufficient detail the facts concerning the applicant's commitment and detention, and we therefore treat it as an application for a writ of habeas corpus under sections 2241 and 2254 of Title 28 U.S.C.A. This course is adopted because it is the opinion of the Court that counsel should not be assigned unless it appears that the applicant may have a meritorious cause.
It appears from the application, supplemented by the reported decisions to which reference is hereinafter made, that the Grand Jury of Hudson County returned an indictment which charged the applicant with murder. The applicant was fourteen years of age at the time the offense was committed, September 12, 1947. The applicant was arraigned in the Hudson County Court of Oyer and Terminer on October 14, 1947, and there, represented by competent counsel, moved to quash the indictment on the ground that the Court was without jurisdiction.
It was there urged that the applicant was a juvenile delinquent within the meaning of the Juvenile and Domestic Relations Court Law, and particularly R.S. 9:18-12, as amended by the Laws of 1946, N.J.S.A. 9:18-12, now N.J.S.A. 2A:4-14, and therefore subject to the exclusive jurisdiction of the Juvenile and Domestic Relations Court. The motion was denied and the denial thereof was upheld on appeal. State v. Smigelski, 137 N.J.L. 149, 58 A.2d 780; State v. Smigelski, 1 N.J. 31, 61 A.2d 583. See Ex parte Mei, 122 N.J.Eq. 125, 192 A. 80, 110 A.L.R. 1080. Thereafter, the applicant entered a plea of non vult (R.S. 2:138-3, now N.J.S.A. 2A:113-3), and was thereupon sentenced to a term of imprisonment of 25 to 30 years.
The decision of the old Court of Errors and Appeals of New Jersey in the case of Ex parte Mei, supra, was expressly overruled by the decision of the new Supreme Court of New Jersey in the case of State v. Monahan, 15 N.J. 34, 104 A.2d 21, 48 A.L.R.2d 641, decided on March 22, 1954. It was therein held that under the provisions of the Juvenile and Domestic Relations Court Law, supra, the misconduct of a child under sixteen years of age, including misconduct defined by statute as criminal, shall be treated as "juvenile delinquency" as therein defined, and that exclusive jurisdiction of the offender is in the Juvenile and Domestic Relations Court. We are in accord with this construction of the statute.
Thereafter the applicant, represented by counsel who had represented him previously, *285 petitioned the Assignment Judge to vacate the original sentence and to set aside the plea of non vult previously entered. Rule 3:7-15 of the Rules of Criminal Practice. The relief was granted on June 29, 1954, and the cause was subsequently transferred to the Juvenile and Domestic Relations Court with a specific direction that "the petitioner be proceeded against forthwith * * * in accordance with the statute in such cases made and provided, * * *." A formal complaint charging the applicant with juvenile delinquency was filed in the said court on August 25, 1954, when a hearing was held. It should be noted that at that time the applicant was approximately twenty-one years of age. A motion to dismiss the complaint was made on the ground that the applicant, now more than eighteen years of age, was no longer subject to the jurisdiction of the Juvenile and Domestic Relations Court. The motion was denied and the applicant thereupon entered a plea of guilty to the charge of juvenile delinquency. The general allegation that there was a denial of due process is not supported by the record.
The applicant was committed on September 30, 1954, to the Bordentown Reformatory "for an indefinite term," and has since been confined there. The commitment was approved as valid under N.J.S.A. 2A:4-37 as it existed prior to its amendment of 1957. In re Smigelski, infra, 154 A.2d at pages 6 and 7. A writ of habeas corpus issued in 1956 on a petition which challenged as arbitrary and an abuse of discretion the refusal of the Board of Managers of the institution to discharge the applicant on parole. The writ was discharged on the ground that the appropriate remedy was under Rule 4:88-8 of the Rules of Civil Practice. There was no appeal taken from this decision. Another writ of habeas corpus was granted in 1958 on a petition which again challenged, on the grounds previously urged, the jurisdiction of the Juvenile and Domestic Court. This writ of habeas corpus was discharged after a full hearing. The applicant was represented by counsel assigned by the Court in both later proceedings.
An appeal to the Superior Court, Appellate Division, followed, and thereafter, pursuant to Rule 1:10-1, the Supreme Court of New Jersey entertained jurisdiction of the appeal on its own motion for certification. In re Smigelski, 30 N.J. 513, 154 A.2d 1. The jurisdictional question raised in the earlier proceedings was carefully considered, and after such consideration it was held that the age of the applicant at the time the offense was committed was determinative of the jurisdiction of the Juvenile and Domestic Relations Court. This decision followed the earlier decision of the Supreme Court of New Jersey in the case of Johnson v. State, 18 N.J. 422, 114 A.2d 1, in which it was also held that the statutory criterion of the said Court's jurisdiction is the age of the offender at the time of the offense. We are in accord with this construction of the statutory provisions.
The present application again challenges the jurisdiction of the Juvenile and Domestic Relations Court on the grounds previously urged and considered by the Supreme Court of New Jersey. The question raised is primarily one of statutory construction. The ultimate authority on the construction placed upon the pertinent provisions of the Juvenile and Domestic Relations Court Law, supra, is the highest court of this State. Hanover Fire Ins. Co. v. Harding, 272 U.S. 494, 509, 47 S.Ct. 179, 71 L.Ed. 372; Hartford Accident & Indemnity Co. v. N. O. Nelson Mfg. Co., 291 U.S. 352, 358, 54 S.Ct. 392, 78 L.Ed. 840; State of Minnesota ex rel. Pearson v. Probate Court, 309 U.S. 270, 273, 60 S.Ct. 523, 84 L.Ed. 744. The jurisdiction of this Court is limited to a determination of the federal question; we may determine whether or not the pertinent provisions of the Act, as construed by the highest court of the State, violate the due process clause of the Fourteenth Amendment. Ibid. We are of the opinion that they do not. We are aware of the opinion of Judge Forman, formerly of this court, *286 in the case of Application of Johnson, D.C., 178 F.Supp. 155, but for reasons we need not discuss we are not fully in accord with his views.
The applicant again challenges as arbitrary the refusal of the Board of Managers of the institution to release him on parole. The allegations advanced in support of the challenge would seem to suggest that, in the opinion of the applicant, his rehabilitation is sufficient to warrant his release on parole; the opinion is clearly subjective. It is rather obvious that a correctional system devised for the rehabilitation of the youthful offender would become a travesty if the personal opinion of the inmate of an institution were made a determinative factor.
The authority to grant release on parole is defined by statute. There is vested in the "several boards of managers of state correctional institutions, except the state prison," the discretionary "power to release upon parole such inmates of their respective institutions * * * as they may determine to be eligible therefor," N.J.S.A. 30:4-106, subject however, to other statutory limitations. The grant of parole is a matter of legislative grace and the ultimate decision as to its grant or denial is entrusted to the paroling authority. White v. Parole Board, 17 N.J.Super. 580, 86 A.2d 422; State ex rel. Kincaid v. State Parole Board, 53 N.J.Super. 526, 147 A.2d 817. A writ of habeas corpus is not available to secure relief from its decisions. See Hauck v. Hiatt, 3 Cir., 141 F.2d 812 and the cases therein cited. The applicant may not demand, as a matter of right, that he be discharged on parole.
The observation of Mr. Justice Hall in the case of In re Smigelski, 30 N.J. 513, 527, et seq., 154 A.2d 1, 8, et seq., is pertinent here: It is therein stated "The responsibility of the board of managers in this type of case is a heavy one, both to society and to the prisoner. Since confinement here has already extended over about 12 years, during the greater part of which we presume there has been exposure to rehabilitative treatment, his status should be the subject of careful attention and periodic review at reasonably short intervals. As was said in State v. Wingler, 25 N.J. 161, 181, 135 A.2d 468, 479 (1957), `arbitrary or capricious action is impermissible and upon a sufficient showing of such conduct judicial relief will justly be afforded.'" We can safely presume that the Board of Managers in the proper discharge of its function, and following the admonition of the Supreme Court of New Jersey, will review the case of the applicant from time to time as occasion requires.
It appears to be the further contention of the applicant that the vacation of his original sentence, imposed in 1949, and his subsequent commitment "for an indefinite term" violated the prohibition against double jeopardy. The contention is clearly without merit. The original sentence was held to be invalid; this decision did not entitle the applicant to release. However, it is not necessary for this Court to even consider the contention; the prohibition against double jeopardy embodied in the Fifth Amendment is not one of the fundamental protections guaranteed by the due process clause of the Fourteenth Amendment. Palko v. State of Connecticut, 302 U.S. 319, 58 S.Ct. 149, 82 L.Ed. 288.
The applicant further alleges that he was not permitted to communicate with the representatives of two publications and was thus denied the opportunity to place the facts of his case before the public. We assume that the rules necessary in the orderly conduct of the institution prohibited such communication. Such a rule would not violate any constitutional right of the applicant. The usual concomitance of lawful incarceration is the withdrawal or limitation of many privileges; these limitations are justified by the considerations underlying the orderly administration of the penal system. Price v. Johnston, 334 U.S. 266, 285, 68 S.Ct. 1049, 92 L.Ed. 1356. The inmate of a correctional institution has no right to unrestricted freedom in the receipt and transmission of mail and the courts will not interfere *287 with rules defining appropriate restriction. Ortega v. Ragen, 7 Cir., 216 F.2d 561, certiorari denied 349 U.S. 940, 75 S.Ct. 786, 99 L.Ed. 1268; Adams v. Ellis, 5 Cir., 197 F.2d 483; United States ex rel. Vraniak v. Randolph, D.C., 161 F.Supp. 553; Reilly v. Hiatt, D.C., 63 F.Supp. 477; United States ex rel. Mitchell v. Thompson, D.C., 56 F.Supp. 683. However, the legality of the restriction is not a matter for consideration upon petition for writ of habeas corpus. Ibid.
It is the opinion of the Court for the reasons hereinabove discussed that the application, considered in the light most favorable to the applicant, presents no federal question cognizable under a petition for writ of habeas corpus.
It Is Ordered on this 14th day of July, 1960, that the application for the assignment of counsel and the said application treated as a petition for writ of habeas corpus be, and it hereby is, denied; and,
It Is Further Ordered that the said application be filed without prepayment of costs.
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NO. 12-13-00222-CV
IN THE COURT OF APPEALS
TWELFTH COURT OF APPEALS DISTRICT
TYLER, TEXAS
IN THE GUARDIANSHIP OF § APPEAL FROM THE
BRANDON SCOTT JACKSON, § COUNTY COURT AT LAW
AN INCAPACITATED PERSON § RUSK COUNTY, TEXAS
MEMORANDUM OPINION
Brandon Scott Jackson appeals from the trial court’s order appointing Debra Poole
guardian of his person and his estate. In his sole issue, Jackson contends that the evidence is
legally and factually insufficient to support the trial court’s finding that a guardianship was
necessary and in his best interest. We affirm.
BACKGROUND
Jackson’s aunt, Debra Poole, filed an emergency application in the County Court of Rusk
County to have herself appointed guardian of Jackson’s person and estate. Poole asserted that
Jackson, who was thirty years old at the time, was mentally incapable of handling his affairs or
providing for his physical health. The trial court appointed her temporary emergency guardian
pending a complete psychiatric evaluation. A few weeks later, the court appointed Poole
permanent guardian. Jackson’s motion for new trial was granted. On its own motion, the court
transferred the cause to the County Court at Law of Rusk County.
A hearing was held in the county court at law. The trial court found Jackson to be
incapacitated, granted Poole’s application, and appointed her guardian of Jackson’s person and
estate. The order set out Poole’s authority and the limitations placed on Jackson. This appeal
followed.
SUFFICIENCY OF THE EVIDENCE
In his sole issue, Jackson contends the evidence is legally and factually insufficient to
support the trial court’s finding that he is incapacitated, a guardianship is necessary, and that a
guardianship is in his best interest. He complains that there is no evidence of specific time
frames for specific acts or occurrences regarding his incapacity. Therefore, he argues, the
statutory requirement that incapacity be evidenced by recurring acts or occurrences within the
preceding six month period was not satisfied.
Standard of Review
A trial court has broad discretion in the selection of a guardian. Thedford v. White, 37
S.W.3d 494, 496 (Tex. App.–Tyler 2000, no pet.). An appellate court will not reverse an order
appointing a guardian absent a showing that the trial court abused its discretion. Id. A trial court
abuses its discretion when it acts without any guiding principles. Downer v. Aquamarine
Operators, Inc., 701 S.W.2d 238, 241-42 (Tex. 1985). An abuse of discretion does not occur as
long as some evidence of substantive and probative character exists to support the trial court’s
decision. Butnaru v. Ford Motor Co., 84 S.W.3d 198, 211 (Tex. 2002). Under an abuse of
discretion standard of review, legal and factual sufficiency claims are merely factors to consider
in assessing whether the trial court abused its discretion. Trimble v. Tex. Dep’t of Protective &
Regulatory Serv., 981 S.W.2d 211, 215 (Tex. App.–Houston [14th Dist.] 1998, no pet.).
In a legal sufficiency review where the burden of proof is clear and convincing evidence,
we must look at all the evidence in the light most favorable to the finding to determine whether a
reasonable trier of fact could have formed a firm belief or conviction that its findings were true.
In re J.F.C., 96 S.W.3d 256, 266 (Tex. 2002). We must assume that the fact finder settled
disputed facts in favor of its finding if a reasonable fact finder could do so, and we disregard all
evidence that a reasonable fact finder could have disbelieved or found incredible. Id. This does
not mean that we are required to ignore all evidence not supporting the finding because that
might bias a clear and convincing analysis. Id.
In addressing a factual sufficiency of the evidence challenge, we must consider all the
evidence in the record, both that in support of and contrary to the trial court’s findings. In re
C.H., 89 S.W.3d 17, 27-29 (Tex. 2002). This court must give due consideration to evidence that
the factfinder could reasonably have found to be clear and convincing. Id. at 25. We must
determine whether the evidence is such that a fact finder could reasonably form a firm belief or
2
conviction about the truth of the allegations. Id. We must consider whether disputed evidence is
such that a reasonable trier of fact could not have reconciled that disputed evidence in favor of its
finding. In re J.F.C., 96 S.W.3d at 266. The trier of fact is the exclusive judge of the credibility
of the witnesses and the weight to be given their testimony. See In re C.H., 89 S.W.3d at 27.
Applicable Law
The legislature has determined that the court shall appoint a guardian for a person other
than a minor according to the circumstances and considering the best interests of the ward. TEX.
EST. CODE ANN. § 1104.101(West 2014).1 Before appointing a guardian, the court must find by
clear and convincing evidence that (1) the ward is an incapacitated person, (2) it is in the best
interest of the ward to have the court appoint a guardian, and (3) the rights of the ward or the
ward’s property will be protected by the appointment of a guardian. TEX. EST. CODE ANN.
§ 1101.101(a)(1) (West 2014). An “incapacitated person” is defined, in relevant part, as “an
adult individual who, because of a physical or mental condition, is substantially unable to
provide food, clothing, or shelter for himself or herself, to care for the individual’s own physical
health, or to manage the individual’s own financial affairs.” TEX. EST. CODE ANN. § 1002.017
(West 2014). The court must find by a preponderance of the evidence that the ward is totally
without capacity as provided by the code, or “lacks the capacity to do some, but not all, of the
tasks necessary to care for himself or herself or to manage the individual’s property.” TEX. EST.
CODE ANN. § 1101.101(a)(2)(D) (West 2014). A determination of incapacity of an adult
proposed ward must be evidenced by recurring acts or occurrences within the preceding six
month period and not by isolated instances of negligence or bad judgment. TEX. EST. CODE
ANN. § 1101.102 (West 2014).
Analysis
Jackson was interviewed by Wilson Renfroe, a psychologist, on December 18, 2012.
Renfroe’s report was admitted into evidence through the testimony of Christie Adams, the
guardian ad litem. In his report, Renfroe stated that Jackson was agitated, impulsive, easily
angered, and emotionally labile. Renfroe noted that Jackson struggles with a depressed mood.
Renfroe administered numerous tests to Jackson. His scores indicate that he is intellectually
deficient and functionally illiterate. His severe bipolar disorder is “quite evident,” and he has
1
The Texas Probate Code was recodified as the Texas Estates Code after this case was tried. For ease of
reference, we will cite to the new Estates Code because the text of the applicable statutes was not substantively
changed.
3
problems functioning effectively in his relationships with others. Jackson also has mild mental
retardation. His current Global Assessment of Functioning score is 45. Renfroe concluded that
Jackson does not have the ability to care for himself and recommended that Jackson remain
“under someone else’s legal jurisdiction,” obtain psychiatric care, and live in a residential
treatment facility.
Adams, the guardian ad litem, testified, explaining that she spoke to Jackson, his family
members, and medical providers. She observed that Jackson was paranoid and agitated. Jackson
is very hard to understand, is mildly retarded, and has bipolar disorder. Jackson told her he did
not like to take his medication and that he believes marijuana helped with his bipolar issues. He
admitted to smoking marijuana. Jackson told her that he visits emergency rooms on a regular
basis to obtain pain medication although he has no medical condition requiring pain medication.
He told her that he knew what to say to get doctors to give him medications. Although not
certain of the time frame, Adams understood Jackson to mean that he had done that fairly
recently. Adams confirmed that Jackson had been placed in a home with a community based
services program in Longview. Jackson was not allowed to stay in the program because he
would not comply with the requirements. Adams testified that she believes Jackson is in need of
a guardian for both his person and his estate. In 2006, Jackson was placed on deferred
adjudication community supervision for possession with intent to manufacture a controlled
substance. In 2005, he was placed on deferred adjudication community supervision for burglary
of a habitation. The trial court took judicial notice of Adams’s report, and it was filed with the
court records.
Minnie Womack testified that she has known Jackson for three or four years. She stated
that Jackson can bathe himself, dress himself, feed himself, drive, and can take care of his
financial responsibilities. She explained that he functions on about the same level as her son
who has Down syndrome.
The evidence shows that Jackson has previously been expelled from a group home for
failure to follow the rules. While there is no testimony as to when he was expelled from that
home, other evidence referenced his current condition. He has current, ongoing, severe mental,
emotional, and intellectual problems causing him to be unable to care for himself. Testimony
shows that he currently is paranoid and agitated. The record shows that Jackson regularly
refuses to take medication prescribed for his serious medical condition yet self-medicates with
4
illegal substances. He also obtains pain medication, when he is not in pain, by illicit means.
Jackson told Adams exactly what he says to emergency room doctors to get the drugs he wants.
We conclude that Jackson’s incapacity is evidenced by recurring occurrences within the
preceding six months.
Viewing all the evidence in the light most favorable to the trial court’s finding of
incapacity, we conclude that a reasonable trier of fact could have formed a firm belief or
conviction that Jackson is an incapacitated person. See TEX. EST. CODE ANN. § 1002.017. The
evidence is legally sufficient to support the trial court’s finding of incapacity. See In re J.F.C.,
96 S.W.3d at 266; In re Parker, 275 S.W.3d 623, 631 (Tex. App.–Amarillo 2008, no pet.).
In considering Jackson’s factual sufficiency challenge, we consider evidence contrary to
the court’s findings, in addition to evidence supporting the court’s findings. Womack testified
that Jackson can take care of his personal hygiene. This fact, if true, does not override the
evidence of incapacitation. See In re J.F.C., 96 S.W.3d at 266. Moreover, the statute
anticipates that an incapacitated individual might be able to do some tasks necessary to take care
of himself. TEX. EST. CODE ANN. § 1101.101(a)(2)(D). Womack further testified that, as far as
she had seen, Jackson can take care of his financial responsibilities. She elaborated that, when
he is with her, he pays his own way. The trial court could have determined that Womack had not
been privy to information giving her a full picture of Jackson’s ability to handle finances. Thus,
the trial court could have disregarded Womack’s testimony. See In re C.H., 89 S.W.3d at 27.
The trial court could reasonably form a firm belief about the truth of the allegations in the
application for appointment of a guardian. We conclude that the evidence is factually sufficient
to support the trial court’s order. See In re C.H., 89 S.W.3d at 25; In re Parker, 275 S.W.3d at
631. Accordingly, the trial court did not abuse its discretion in granting Poole’s application for
guardianship of the person and estate of Jackson. We overrule Jackson’s sole issue.
DISPOSITION
We affirm the trial court’s order.
JAMES T. WORTHEN
Justice
Opinion delivered August 6, 2014.
Panel consisted of Worthen, C.J., Griffith, J., and Hoyle, J.
(PUBLISH)
5
COURT OF APPEALS
TWELFTH COURT OF APPEALS DISTRICT OF TEXAS
JUDGMENT
AUGUST 6, 2014
NO. 12-13-00222-CV
IN THE GUARDIANSHIP OF BRANDON SCOTT JACKSON,
AN INCAPACITATED PERSON
Appeal from the County Court at Law
of Rusk County, Texas (Tr.Ct.No. G12-010)
THIS CAUSE came to be heard on the appellate record and briefs filed
herein, and the same being considered, it is the opinion of this court that there was no error in the
trial court’s order.
It is therefore ORDERED, ADJUDGED and DECREED that the trial court’s
order appointing guardian of the person and estate of Brandon Scott Jackson be in all things
affirmed, and that all costs of this appeal are hereby adjudged against the appellant, BRANDON
SCOTT JACKSON, for which execution may issue, and that this decision be certified to the
court below for observance.
James T. Worthen, Chief Justice.
Panel consisted of Worthen, C.J., Griffith, J., and Hoyle, J.
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Case: 10-20382 Document: 00511370702 Page: 1 Date Filed: 02/03/2011
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT United States Court of Appeals
Fifth Circuit
FILED
February 3, 2011
No. 10-20382 Lyle W. Cayce
Summary Calendar Clerk
CONSTANTIN G. IOANNIDES,
Plaintiff-Appellant,
v.
UNIVERSITY OF TEXAS M.D. ANDERSON CANCER CENTER; JOHN
MENDELSOHN; DAVID GERSHENSON,
Defendants-Appellees
Appeal from the United States District Court
for the Southern District of Texas
USDC No. 4:09-CV-1988
Before JOLLY, GARZA, and STEWART, Circuit Judges.
PER CURIAM:*
In this appeal, Constantine Ioannides (“Ioannides”), a former employee at
the University of Texas M.D. Anderson Cancer Center, argues that the district
court erred by granting summary judgment to the Defendants-Appellees
(“University”). The district court concluded that Ioannides’s claim under 42
*
Pursuant to 5TH CIR . R. 47.5, the court has determined that this opinion should not
be published and is not precedent except under the limited circumstances set forth in 5TH CIR .
R. 47.5.4.
Case: 10-20382 Document: 00511370702 Page: 2 Date Filed: 02/03/2011
No. 10-20382
U.S.C. § 1983 failed because as a matter of law, the University did not violate
Ioannides’s due process rights. We agree.
The University initially hired Ioannides as a visiting scientist in a non-
tenure track position. Subsequently, the University offered Ioannides two
separate seven-year term appointments. A year before Ioannides’s second term
expired, the school offered him a one-year contract, which extended his
employment until August 2008. The school sought to end Ioannides’s tenure
because the administration had learned, among other things, that: (1) Ioannides
had falsely claimed funding for a project listed on his curriculum vitae; and (2)
Ioannides had not obtained any new grants or funding since 2001. Ioannides
initiated an administrative appeal and the school’s president delayed Ioannides’s
termination, offering Ioannides another one-year appointment. Renewal of this
contract depended on Ioannides obtaining grants or funding equal to at least
thirty percent of his salary. Ioannides failed to obtain the money, and in July
2009, the University notified Ioannides that his employment would end when
the contract expired in January 2010.
Ioannides sued his former employer, arguing that the University had
violated his property interests under the Fifth and Fourteenth Amendments by
terminating him. The University moved for summary judgment arguing, among
other things, that Ioannides was not deprived of his due process rights. The
district court agreed, concluding that University officials had afforded Ioannides
an opportunity to contest, and appeal, the school’s termination decision. The
district court also found that Ioannides’s substantive due process rights were not
violated because the University’s decision to terminate Ioannides was reasonably
related to a legitimate governmental interest.
We review a district court’s summary judgment ruling de novo. Whiting
v. Univ. of S. Miss., 451 F.3d 339, 343 (5th Cir. 2006). Under the Federal Rules
of Civil Procedure, a party is entitled to summary judgment if the pleadings and
2
Case: 10-20382 Document: 00511370702 Page: 3 Date Filed: 02/03/2011
No. 10-20382
discovery materials demonstrate “that there is no genuine dispute as to any
material fact.” F ED. R. C IV. P. 56(a). Facts and inferences reasonably drawn
from the record are considered in the light most favorable to the non-moving
party. Whiting, 451 F.3d at 343.
Under the Fifth and Fourteenth Amendments, procedural due process
guarantees the right to notice and a hearing for a public employee with a
property right in his employment. Cleveland Bd. of Educ. v. Loudermill, 470
U.S. 532, 546 (1985); see also Lindquist v. City of Pasadena, Tex., 525 F.3d 383,
388 (5th Cir. 2008). Several months before his contract ended, the University
provided Ioannides notice that he would not be re-hired. Ioannides
administratively appealed both his performance evaluation and the school’s
employment decision. During the appeals process, Ioannides was afforded a
hearing and the opportunity to individually meet with the school’s president.
Thus, the University did not violate Ioannides’s procedural due process rights.
To state a substantive due process claim, a plaintiff must show that the
government’s deprivation of property right was either “arbitrary or not
reasonably related to a legitimate governmental interest.” Williams v. Tex. Tech
Univ. Health Scis. Ctr., 6 F.3d 290, 294 (5th Cir. 1993). Ioannides argues that
the University terminated him in retaliation for a letter Ioannides had written
to an outside organization. This interpretation of the facts is incorrect. From
the record, it is clear that the University repeatedly informed Ioannides that he
needed to obtain outside funding for his research laboratory. Ioannides failed
to do this. In addition, in employee evaluations, University officials told
Ioannides that he had not met the school’s performance expectations. Thus, the
record bellies Ioannides’s contention that the school had terminated him
arbitrarily or in retaliation for his acts.
Ioannides also argues that the district court erred by considering the
substantive due process issue sua sponte. Ioannides asserts that in the
3
Case: 10-20382 Document: 00511370702 Page: 4 Date Filed: 02/03/2011
No. 10-20382
University’s summary judgment brief, the University did not argue for summary
judgment as to the substantive due process claim. Ioannides contends this
means he was not afforded notice that the district court would consider his
substantive due process claim. The record clearly contradicts this allegation.
Ioannides correctly notes that at certain points, the University’s brief in support
of their motion confused procedural due process with substantive due process.1
Despite this, at other points in the University’s brief, the school clearly explained
that officials had terminated Ioannides because he failed to secure funding.
And, in its reply brief, the University discussed the correct legal standard for a
substantive due process claim and argued why Ioannides’s termination was
reasonable. More importantly, Ioannides’s response, in which he argued about
the substantive due process issue at length, demonstrates that Ioannides knew
the substantive due process issue could be considered by the district court.
Thus, both parties raised and argued the substantive due process claim and the
district court did not err by considering the issue.
We AFFIRM the district court’s order because there are no material
questions of fact as to whether the University violated Ioannides’s procedural or
substantive due process rights.
1
For example, on page 13 of their brief in support of the motion, the University stated:
“At every turn, Dr. Ioannides was given fair notice and an opportunity to be heard and thus,
was afforded substantive due process as a matter of law.”
4
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FILED
DEC 11 2014
1 NOT FOR PUBLICATION
2 SUSAN M. SPRAUL, CLERK
U.S. BKCY. APP. PANEL
OF THE NINTH CIRCUIT
3 UNITED STATES BANKRUPTCY APPELLATE PANEL
4 OF THE NINTH CIRCUIT
5 In re: ) BAP No. AZ-13-1519-DJuKi
)
6 GARY E. HIRTH, ) Bk. No. 10-39593
)
7 Debtor. ) Adv. No. 11-00474
______________________________)
8 )
GARY E. HIRTH, )
9 )
Appellant, )
10 )
v. ) M E M O R A N D U M1
11 )
PEGGY DONOVAN; DAVID )
12 DONOVAN, )
)
13 Appellees. )
______________________________)
14
Submitted Without Oral Argument
15 on November 20, 2014
16 Filed - December 11, 2014
17 Appeal from the United States Bankruptcy Court
for the District of Arizona
18
Honorable Daniel P. Collins, Chief Bankruptcy Judge, Presiding
19
20 Appearances: Allan D. NewDelman and Roberta J. Sunkin of ALLAN
D. NEWDELMAN, P.C. on brief for appellant; Edwin
21 B. Stanley of SIMBRO & STANLEY, PLC on brief for
appellees.
22
23 Before: DUNN, JURY AND KIRSCHER, Bankruptcy Judges.
24
25
26 1
This disposition is not appropriate for publication.
27 Although it may be cited for whatever persuasive value it may
have (see Fed. R. App. P. 32.1), it has no precedential value.
28 See 9th Cir. BAP Rule 8013-1.
1 The debtor, Gary Hirth, appeals the bankruptcy court’s order
2 granting summary judgment in favor of Peggy and David Donovan on
3 their § 523(a)(2)(A) claim.2 While this appeal was pending, the
4 debtor passed away. For the reasons set forth below, we AFFIRM.
5 FACTS3
6 The debtor owned and controlled Aruba Holdings, Ltd. (“Aruba
7 Holdings”), a corporation that handled real estate investments.
8 Neither the debtor nor Aruba Holdings held real estate licenses.
9 Through Aruba Holdings, the debtor acquired approximately
10 40 acres of unimproved land in Coconino County, Arizona
11 (“Tract”). The Tract was part of a development known as Moqui
12 Ranchettes. The debtor divided the Tract into four 10-acre
13 parcels, one of which he sold to the Donovans in November 2004
14 (“Property”).4
15 Under Arizona law, sellers of real property are required to
16 disclose to prospective buyers all known material facts about the
17 real property being sold. To this end, sellers must fill out a
18
19
2
Unless otherwise indicated, all chapter and section
20 references are to the federal Bankruptcy Code, 11 U.S.C. §§ 101-
21 1532, and all “Rule” references are to the Federal Rules of
Bankruptcy Procedure, Rules 1001-9037. All “Evidence Rule”
22 references are to the Federal Rules of Evidence, Rules 101-1003.
23 3
We have taken a number of facts from the joint pre-hearing
24 statement submitted by the debtor and the Donovans in the
adversary proceeding.
25
4
According to the joint pre-hearing statement, the debtor,
26 Aruba Holdings and the Donovans entered into the sale agreement
27 on November 10, 2004. Aruba Holdings conveyed the parcel to the
Donovans by warranty deed, which they recorded on November 8,
28 2004.
2
1 form titled, “Vacant Land/Lot Seller’s Property Disclosure
2 Statement” (“SPDS”). The SPDS lists more than 160 questions and
3 directions that purport to help sellers make these disclosures.
4 The debtor filled out the SPDS and provided a copy of it to
5 the Donovans. Out of the 160 plus questions and directions
6 listed in the SPDS, the following three are relevant to this
7 appeal:
8 1) Is the Property located in an unincorporated area of
the county?
9 2) If yes, and five or fewer parcels of land other than
subdivided land are being transferred, the Seller must
10 furnish the Buyer with a written Affidavit of
Disclosure [“Affidavit”] in the form required by law.
11 3) To your knowledge, is the Property within a
subdivision approved by the Arizona Department of Real
12 Estate?
13 Because he answered “yes” to the first question, the debtor
14 executed the Affidavit. In the Affidavit, the debtor represented
15 under penalty of perjury that the sale of the Property met “the
16 requirements of A.R.S. § 11-809 regarding land divisions.”5 He
17
18 5
Since the time the debtor executed the Affidavit on
19 September 13, 2004, A.R.S. § 11-809 has been amended; the current
version of A.R.S. § 11-809 addresses public works project
20 planning, not the requirements for approval of land divisions.
We thus refer to the 2004 version of A.R.S. § 11-809.
21
22 A.R.S. § 11-809 provided, in relevant part:
23 A. The board of supervisors of each county may adopt
ordinances and regulations pursuant to this section for
24
staff review and approval of land divisions of five or
25 fewer lots, parcels or fractional interests, any of
which is ten acres or smaller in size. The county may
26 not deny approval of any land division that meets the
27 requirements of this section. If review of the request
is not completed within thirty days after receiving the
28 (continued...)
3
1 answered “no” to the third question.
2 After they purchased the Property, the Donovans discovered
3 that the legal requirements for land division had not been met
4 and an approved subdivision plat from the county had not been
5 obtained for the Property. As a result, they were unable to
6 obtain building permits for the Property.
7 Meanwhile, the Arizona Department of Real Estate (“ADRE”)
8 commenced an investigation into certain alleged violations of
9 state land acquisition, division and transfer/sale laws by the
10 debtor and Aruba Holdings, among others. Its investigation
11 culminated in a consent order (“Consent Order”), dated
12 February 5, 2008, binding the debtor and Aruba Holdings, along
13 with other parties.
14 The Consent Order set forth factual findings and legal
15 conclusions concerning the debtor and Aruba Holdings’ violations
16 of state land division laws. It outlined the division of the
17
18 5
(...continued)
19 request, the land division is considered to be
approved. At its option, the board of supervisors may
20 submit a ballot question to the voters of the county to
allow the voters to determine the application of
21 subsections B and C to qualifying land divisions in
22 that county.
. . .
23 F. It shall be unlawful for a person or group of
persons acting in concert to attempt to avoid the
24
provisions of this section or the subdivision laws of
25 this state by acting in concert to divide a parcel of
land into six or more lots or sell or lease six or more
26 lots by using a series of owners or conveyances. This
27 prohibition may be enforced by any county where the
division occurred or by the state real estate
28 department pursuant to title 32, chapter 20.
4
1 Tract through various transfers, including the sale of the
2 Property to the Donovans.
3 Citing A.R.S. § 32-2181(D), the Consent Order then stated
4 that the debtor and Aruba Holdings tried to circumvent state
5 subdivision laws by acting in concert with others to divide the
6 land within Moqui Ranchettes by using a series of owners and/or
7 conveyances.6 Specifically, the Consent Order stated that the
8 debtor and Aruba Holdings “planned, arranged, adjusted, agreed on
9
10 6
The 2004 version of A.R.S. § 32-2181 provided, in relevant
11 part:
12 A. Before offering subdivided lands for sale or lease,
the subdivider shall notify the commissioner in writing
13 of the subdivider’s intention. The notice shall
14 contain . . . .
. . .
15 D. It is unlawful for a person or group of persons
acting in concert to attempt to avoid the provisions of
16
this article by acting in concert to divide a parcel of
17 land or sell subdivision lots by using a series of
owners or conveyances or by any other method which
18 ultimately results in the division of the lands into a
19 subdivision or the sale of subdivided land. The plan
or offering is subject to the provisions of this
20 article. Unlawful acting in concert pursuant to this
subsection with respect to the sale or lease of
21 subdivision lots requires proof that the real estate
22 licensee or other licensed professional knew or with
the exercise of reasonable diligence should have known
23 that property which the licensee listed or for which
the licensee acted in any capacity as agent was
24
subdivided land subject to the provisions of this
25 article.
26 E. A creation of six or more lots, parcels or
27 fractional interests in improved or unimproved land,
lots or parcels of any size is subject to this article
28 except when . . . .
5
1 and settled” between themselves and others “acting together
2 pursuant to some design or scheme” to subdivide the land in such
3 a way as to circumvent the state land division laws.
4 The debtor signed the Consent Order on his and Aruba
5 Holdings’ behalf. The Consent Order provided that, by signing
6 it, he admitted to the factual findings and legal conclusions set
7 forth therein and agreed to be bound by it. He also agreed to
8 waive his rights to an administrative hearing and to appeal the
9 factual findings and legal conclusions set forth in the Consent
10 Order.
11 The debtor further consented to entry of the Consent Order.
12 He also acknowledged that his and Aruba Holdings’ acceptance of
13 the Consent Order “[was] to settle the specific allegations by
14 the [ADRE] in this matter and [did] not preclude any other agency
15 or officer of this State, or subdivision thereof, from
16 instituting other civil or criminal proceedings as may be
17 appropriate in the future.” Id. at 101-02. The debtor did not
18 challenge the Consent Order.
19 On March 31, 2008, the debtor and Aruba Holdings entered
20 into a settlement agreement (“Settlement Agreement”) with the
21 Donovans. The Settlement Agreement set forth several recitals,
22 including:
23 1) [The Donovans] purchased their lot in reliance upon
representations made by the [debtor and Aruba Holdings]
24 that Moqui Ranchettes had been legally subdivided, that
all the legal requirements for land division had been
25 met, and that building permits could be obtained for
immediate construction of homes;
26 2) After purchasing the [Property, the Donovans]
learned that the legal requirements for land division
27 had not been met and an approved subdivision plat from
Coconino County had not been obtained. Consequently,
28 [the Donovans] have been denied building permits, have
6
1 incurred costs, and have been denied the use and
enjoyment of their [Property] as anticipated since the
2 date of purchase; and
3) [The debtor and Aruba Holdings] den[ied] knowingly
3 engaging in any wrongdoing with respect to the sale of
the [Property to the Donovans].
4
5 The Settlement Agreement further provided that the debtor and the
6 Donovans agreed that the recitals were “true, correct and not
7 subject to dispute.”
8 Under the Settlement Agreement, the debtor and Aruba
9 Holdings were to obtain subdivision status for the Property
10 within 24 months. If the debtor and Aruba Holdings were unable
11 to obtain subdivision status within 18 months, they were required
12 to pay the Donovans $5,000, plus an additional $5,000 each month
13 thereafter, up to 180 days maximum, until the debtor and Aruba
14 Holdings obtained subdivision status for the Property. If the
15 debtor and Aruba Holdings were unable to obtain subdivision
16 status for the Property within 24 months, the Donovans could
17 choose to sell the Property back to the debtor and Aruba
18 Holdings.
19 Alternatively, the Donovans could choose to continue
20 receiving $5,000 per month, up to an additional 6 months past the
21 24-month period, until the debtor and Aruba Holdings obtained
22 subdivision status. If the debtor and Aruba Holdings failed to
23 obtain subdivision status for the Property within the 24-month
24 period through their acts or omissions, the Donovans retained all
25 rights and causes of action against the debtor and Aruba Holdings
26 for any and all damages arising out of their purchase of the
27 Property or breach of the Settlement Agreement.
28 When the debtor and Aruba Holdings failed to perform under
7
1 the Settlement Agreement, the Donovans initiated a state court
2 action against them on May 3, 2010. The Donovans alleged in
3 their state court complaint that the debtor and Aruba Holdings
4 breached the Settlement Agreement by failing to make all payments
5 when due, to timely obtain subdivision status for the Property
6 and to repurchase the Property from the Donovans.
7 On December 2, 2010, the state court issued a judgment
8 (“State Court Judgment”) against the debtor on the Donovans’
9 motion for summary judgment. Under the State Court Judgment, the
10 Donovans were awarded a total of $174,866.80 (which included
11 attorney’s fees and costs) plus interest. The Donovans also were
12 to reconvey the Property to the debtor once they received payment
13 from him on the State Court Judgment.
14 On December 12, 2010, the debtor filed his chapter 7
15 bankruptcy petition. On March 14, 2011, the Donovans filed a
16 complaint seeking to except the State Court Judgment from
17 discharge under § 523(a)(2)(A).
18 The Donovans referenced the State Court Judgment in their
19 complaint. They then went on to allege that the debtor knowingly
20 and falsely represented that the Property was subdivided properly
21 with the intent to induce them to purchase it. The Donovans
22 asserted that they reasonably relied on the debtor’s
23 misrepresentation when they purchased the Property. As a result
24 of the debtor’s misrepresentation, they incurred damages.
25 After the debtor filed his answer, the Donovans moved for
26 summary judgment (“Summary Judgment Motion”). They contended
27 that no genuine issues of material fact existed because they had
28 established all of the necessary elements of § 523(a)(2)(A).
8
1 The Donovans relied on the Consent Order to establish the
2 debtor’s knowledge of the falsity of his representation about the
3 subdivision status of the Property and his intent to deceive
4 them.7 They asserted that the debtor admitted in the Consent
5 Order that he acted with reckless disregard for the truth of the
6 representation about the subdivision status of the Property.
7 Specifically, he admitted in the Consent Order that he acted in
8 concert with others to subdivide land within Moqui Ranchettes by
9 using a series of owners and/or conveyances in an attempt to
10 circumvent state land division laws. The Donovans further
11 contended that the debtor could not collaterally attack the
12 Consent Order as to these two elements because he consented to
13 its factual findings and legal conclusions and waived all rights
14 to challenge them on appeal.
15 The debtor opposed, arguing that genuine issues of material
16 fact existed as to these two elements because his admissions in
17 the Consent Order did not rise to the level of knowledge and
18 intent required under § 523(a)(2)(A). He claimed that his
19 admissions in the Consent Order merely involved a general
20 negligence standard; at most, the admissions showed that the
21 debtor “knew or with the exercise of reasonable diligence should
22 have known” that the Property was subject to A.R.S. § 32-2181(D).
23 The debtor’s admissions in the Consent Order did “not support a
24 finding that [his] actions constitute[d] reckless disregard,
25 which requires an extreme departure from the standards of
26
7
27 We only focus on two of the five elements of
§ 523(a)(2)(A) as the debtor does not contest on appeal the
28 bankruptcy court’s determinations on the other three elements.
9
1 ordinary care and more than simple or even inexcusable neglect.”
2 In support of his opposition to the Summary Judgment Motion, the
3 debtor submitted his own statement of facts, which included
4 copies of the Affidavit and the SPDS and a portion of a
5 transcript of the February 28, 2012 deposition of Mr. Donovan.
6 (At his deposition, Mr. Donovan testified that he thought that
7 the Affidavit indicated that the Property was buildable.)
8 Notably, the debtor did not provide any declarations in support
9 of his opposition to the Summary Judgment Motion.
10 At the August 8, 2013 hearing on the Summary Judgment
11 Motion, the bankruptcy court told counsel for the Donovans and
12 the debtor that it wished to focus on their arguments concerning
13 intent.
14 Counsel for the Donovans contended that the Consent Order
15 had preclusive effect as to the debtor’s intent under
16 § 523(a)(2)(A). He focused on the Consent Order, asserting
17 that again is an administrative proceeding in an agreed
order that the [debtor] agreed to all those findings of
18 fact and agreed that they would not be disputed in a
court or any tribunal. And that include[d] this Court,
19 Judge.
20 Tr. of Aug. 8, 2013 hr’g, 5:11-15. Counsel for the Donovans
21 proceeded to highlight the factual findings in the Consent Order
22 that established that the debtor acted “in a conspiracy with the
23 other land owners to illegally subdivide the property.” Tr. of
24 Aug. 8, 2013 hr’g, 6:17-18. He emphasized that the debtor had
25 admitted to these factual findings.
26 Counsel for the Donovans also pointed out that A.R.S. § 32-
27 2181(D) contained the elements of knowledge and intent necessary
28 for a § 523(a)(2)(A) claim in that it provides that a person
10
1 violates the statute if he knew or had reason to know that he was
2 subdividing lands illegally.8 Counsel for the Donovans again
3 stressed that the debtor had agreed to this statement in the
4 Consent Order. Counsel for the Donovans concluded that,
5 by admitting to his violation of [A.R.S. § 32-2181(D)]
since [A.R.S. § 32-2181(D)] has a specific knowledge
6 standard in it and that knowledge standard meets the
standards of [§] 523(a)(2)[(A)], then that again means
7 that there is no – it – no issue of fact on his
fraudulent intent because it’s now an adjudicated fact
8 under the ADRE consent order.
9 Tr. of Aug. 8, 2013, 8:4-9.
10 Counsel for the debtor countered that the debtor’s
11 statements in the Consent Order did not satisfy the elements of
12 intent and knowledge under § 523(a)(2)(A). Specifically, counsel
13 for the debtor argued that the standards for intent and knowledge
14 in A.R.S. § 32-2181(D) were not the same as those in
15 § 523(a)(2)(A). A.R.S. § 32-2181(D) requires that a person “knew
16 or with the exercise of reasonable diligence should have known of
17 the problems with the subdivision . . . .” Tr. of Aug. 8, 2013,
18 12:4-5. However, within the Ninth Circuit, fraudulent intent
19 must involve more than simple or even inexcusable
negligence. It requires such an extreme departure from
20 the standards of ordinary care that it presents a
danger of misleading those who rely on the truth of the
21 representation.
22 Tr. of Aug. 8, 2013 hr’g, 12:10-14. Counsel for the debtor
23 argued that because the two standards for intent under A.R.S.
24
8
25 Counsel for the debtor and the Donovans both seemed to
conflate the knowledge and intent elements in their arguments
26 before the bankruptcy court and before us. The bankruptcy court
27 also appeared to have merged these two elements in its analysis.
We have tried to distinguish to the extent possible the arguments
28 and analysis concerning each of these two elements.
11
1 § 32-2181(D) and § 523(a)(2)(A) were not the same, a genuine
2 issue of material fact existed. He contended that the Settlement
3 Agreement, the State Court Judgment and the Consent Order did not
4 conclusively establish that the debtor acted with fraudulent
5 intent.
6 The bankruptcy court asked counsel for the debtor that if it
7 were to conduct a trial, what evidence would he submit that was
8 not already before it? Counsel for the debtor answered that he
9 would present evidence of the debtor’s transactions and the way
10 in which the sale occurred through witness testimony.
11 Counsel for the debtor acknowledged that he did not provide
12 an affidavit of the debtor in his opposition to the Summary
13 Judgment Motion. Counsel for the debtor believed that he did not
14 need to provide an affidavit because he thought that the Donovans
15 failed to show in the Summary Judgment Motion that no genuine
16 issue of material fact existed. He contended that it was
17 up to this Court to listen to the testimony, listen to
witness testimony, establish credibility and determine
18 whether [the debtor] either intended to defraud the
Donovans or acted – you know his conduct was reckless
19 and that it involved more than simple or even
inexcusable neglect or negligence. And it had to be an
20 extreme departure from the standards of ordinary care.
And that’s what testimony we’d put on.
21
22 Tr. of Aug. 8, 2013 hr’g, 13:6-12.
23 Counsel for the debtor further explained that he did not
24 “put forth a lot of evidence of what [the debtor’s] intent [was]
25 because [the Donovans] haven’t shown his intent.” Tr. of Aug. 8,
26 2013 hr’g, 19:18-19. He claimed that
27 [the] documents don’t prove [the debtor] committed
fraud. Those documents show [the debtor] knew or he
28 should’ve known, simple as that. And to [counsel for
12
1 the debtor] fraud carries a much higher burden. And
until, you know, the moving party presents sufficient
2 evidence that there was no genuine issue of material
fact, and they are entitled to a judgment as a matter
3 of law, we don’t have an obligation to put forth, you
know, contradictory evidence of intent . . . .
4
5 Tr. of Aug. 8, 2013 hr’g, 19:20-25, 20:1-2. Counsel for the
6 debtor informed the bankruptcy court that if the matter went to
7 trial, he would present witness testimony as to the elements of
8 intent and knowledge under § 523(a)(2)(A).
9 Counsel for the Donovans returned that, when he opposed the
10 Summary Judgment Motion, the debtor should have “step[ped] up
11 with admissible evidence to the [bankruptcy court] and put it in
12 the record and not speculate upon what the evidence might or
13 might not be at a later date.” Tr. of Aug. 8, 2013 hr’g,
14 14:7-10. But counsel for the Donovans asserted that such
15 evidentiary presentation would have been futile, given that the
16 Consent Order had issue preclusive effect. Counsel for the
17 Donovans further countered that the Consent Order included
18 sufficient language concerning intent; he argued that it
19 contained “intent-type language.” Tr. of Aug. 8, 2013 hr’g,
20 20:25.
21 He also argued that the Consent Order included sufficient
22 language concerning knowledge in that it confirmed that the
23 debtor had “agree[d], planned, and he schemed.” Tr. of Aug. 8,
24 2013 hr’g, 22:3. The Consent Order cited A.R.S. § 32-2181(D)
25 which “has got the specific level of knowledge and intent that is
26 involved.” Tr. of Aug. 8, 2013 hr’g, 22:4-5. Counsel for the
27 Donovans argued that “knowing that it’s wrong or having good
28 reason to know it’s wrong, that clearly meets the standard of
13
1 reckless disregard [which is] not a negligence standard as . . .
2 suggested [by the debtor.” Tr. of Aug. 8, 2013 hr’g, 22:8-11.
3 At the conclusion of argument at the hearing, the bankruptcy
4 court took the Summary Judgment Motion under advisement. On
5 September 18, 2013, the bankruptcy court issued an order granting
6 summary judgment (“Summary Judgment Order”) in favor of the
7 Donovans. The bankruptcy court set forth its factual findings
8 and legal conclusions in the Summary Judgment Order.
9 The bankruptcy court essentially incorporated in the Summary
10 Judgment Order the factual findings set forth in the Settlement
11 Agreement and the Consent Order. It also referenced the
12 Affidavit, pointing out that the debtor represented in the
13 Affidavit that the Property was subdivided properly. The
14 bankruptcy court mentioned that the debtor and Aruba Holdings
15 breached the Settlement Agreement by failing to make liquidated
16 damages payments and refusing to repurchase the Property. It
17 also noted that the debtor and Aruba Holdings consented to the
18 factual findings and legal conclusions in the Consent Order. The
19 bankruptcy court highlighted the language in the Consent Order
20 that stated that the debtor and Aruba Holdings, through their
21 conduct, “acted in concert to divide parcels of land within Moqui
22 Ranchettes, as defined by A.R.S. § 32-2101(1) and in violation of
23 A.R.S. § 32-2181(D).”
24 The bankruptcy court excepted the State Court Judgment from
25 discharge under § 523(a)(2)(A). With respect to the elements of
26 knowledge and intent, it determined that the Consent Order
27 established that 1) the debtor knew or with the exercise of
28 reasonable diligence should have known that the representation
14
1 about the subdivision of the Property was false, and 2) he made
2 the representation with reckless indifference or disregard for
3 its truth. The bankruptcy court based its determination on the
4 Consent Order, pointing out that it was binding on the debtor.
5 The Consent Order stated that the debtor acted in concert to
6 violate A.R.S. § 32-2181(D), which requires that “the real estate
7 licensee or other licensed professional knew or with the exercise
8 of reasonable diligence should have known that the property which
9 the licensee listed or for which the licensee acted in any
10 capacity as agent was subdivided land subject to [the statute].”
11 Citing Cal. State Emps. Credit Union No. 6 v. Nelson
12 (In re Nelson), 561 F.2d 1342 (9th Cir. 1977), and Houtman v.
13 Mann (In re Houtman), 568 F.2d 651 (9th Cir. 1978), the
14 bankruptcy court determined that, within the Ninth Circuit,
15 “making a false statement with reason to know of its falsity
16 suffices to demonstrate fraudulent intent.”
17 The bankruptcy court reasoned that “the ‘know or should have
18 known’ standard [in A.R.S. § 32-2181(D)] is akin to [the]
19 recklessness [standard in § 523(a)(2)(A)].” Within the Ninth
20 Circuit, the “reckless disregard” standard requires that the
21 debtor have “reckless indifference to his actual circumstances”
22 when he made the representation. Here, the bankruptcy court
23 determined, at the time he executed the Affidavit averring that
24 the Property was subdivided properly, the debtor knew or should
25 have known that it was false. But the debtor recklessly
26 disregarded the truth by going forward in signing the Affidavit.
27 The bankruptcy court concluded that the debtor could not present
28 credible evidence showing that he was negligent when the
15
1 Affidavit stated that the Property was subdivided properly. Id.
2 The debtor timely appealed the Summary Judgment Order.
3 However, while this appeal was pending, the debtor passed away.
4 JURISDICTION
5 The bankruptcy court had jurisdiction under 28 U.S.C.
6 §§ 1334 and 157(b)(2)(I). We have jurisdiction under 28 U.S.C.
7 § 158, subject to the jurisdictional issue below.
8 ISSUES
9 (1) In granting summary judgment to the Donovans, did the
10 bankruptcy court err in giving issue preclusive effect to the
11 Consent Order?
12 (2) In granting summary judgment to the Donovans, did the
13 bankruptcy court err in determining that they had established the
14 debtor’s knowledge of the falsity of the representation and his
15 intent to deceive under § 523(a)(2)(A)?
16 STANDARDS OF REVIEW
17 We review de novo the bankruptcy court’s grant of summary
18 judgment. Diamond v. Kolcum (In re Diamond), 285 F.3d 822, 826
19 (9th Cir. 2002). The question of whether a claim is excepted
20 from discharge presents mixed issues of law and fact, which we
21 also review de novo. Id. (citing Peklar v. Ikerd (In re Peklar),
22 260 F.3d 1035, 1037 (9th Cir. 2001)). Under de novo review, we
23 review the bankruptcy court’s decision independently, giving no
24 deference to its determinations. First Avenue West Building, LLC
25 v. James (In re Onecast Media, Inc.), 439 F.3d 558, 561 (9th Cir.
26 2006).
27 ///
28 ///
16
1 DISCUSSION
2 A. Constitutional mootness
3 As a preliminary matter we note the potential that this
4 appeal is moot. We cannot exercise jurisdiction over a moot
5 appeal. Felster Publ’g v. Burrell (In re Burrell), 415 F.3d 994,
6 998 (9th Cir. 2005). If an appeal becomes moot while it is
7 pending before us, we must dismiss it. U.S. v. Pattullo
8 (In re Pattullo), 271 F.3d 898, 900 (9th Cir. 2001).
9 A moot case is one where the issues presented are no longer
10 live, and no case or controversy exists. Burrell, 415 F.3d at
11 998. See also City Ctr. W., LP v. Am. Modern Home Ins. Co.,
12 749 F.3d 912, 913 (9th Cir. 2014)(“‘Constitutional mootness
13 doctrine is grounded in the Article III requirement that federal
14 courts may only decide actual ongoing cases or controversies.’”)
15 (quoting Prier v. Steed, 456 F.3d 1209, 1212 (10th Cir. 2006)).
16 The test for mootness is whether an appellate court still can
17 grant effective relief to the appealing party if it decides the
18 merits in his favor. Burrell, 415 F.3d at 998. “Federal courts
19 may hear a dispute only when its resolution ‘will have practical
20 consequences to the conduct of the parties.’” City Ctr. W., LP,
21 749 F.3d at 913 (quoting Columbian Fin. Corp. v. BancInsure,
22 Inc., 650 F.3d 1372, 1376 (10th Cir. 2011)).
23 On appeal, the debtor sought to vacate the Summary Judgment
24 Order and remand to the bankruptcy court so that it could conduct
25 a trial on the Donovans’ § 523(a)(2)(A) claim where he could
26 present evidence as to his knowledge and intent. Counsel for the
27 debtor admitted that he did not provide much evidence in support
28 of the debtor’s opposition to the Summary Judgment Motion because
17
1 he believed that the Donovans failed to bear their burden of
2 proof to demonstrate that no genuine issues of material fact
3 existed. But, as he explained at the hearing, counsel for the
4 debtor planned to provide witness testimony at trial.
5 However, as we noted earlier, the debtor has passed away; he
6 cannot provide any testimony at trial, either in person or by
7 affidavit, as to his knowledge and intent. We also wonder: What
8 other evidence can the debtor’s estate provide to support his
9 position? Given that he is deceased, the debtor cannot locate
10 and provide any additional documentation.
11 If the bankruptcy court simply is going to review the same
12 documents already submitted by the Donovans in support of their
13 Summary Judgment Motion, how will the result be any different?
14 What effective relief can we grant to the debtor in these
15 circumstances? However, potential mootness issues aside,
16 considering this appeal on its merits, we affirm for the
17 following reasons.
18 B. Consent Order as Evidentiary Admission
19 On appeal, the debtor asserts that the bankruptcy court
20 erred in giving the Consent Order issue preclusive effect because
21 the Consent Order did not meet certain due process requirements.
22 He maintains that, in order for an administrative order to have
23 issue preclusive effect, the following conditions must have been
24 satisfied: 1) the administrative agency acted in a judicial
25 capacity; 2) the administrative agency resolved the disputed
26 factual issues before it; and 3) the parties involved had an
27 adequate opportunity to litigate. The debtor argues that none of
28 these conditions were met when the debtor entered into the
18
1 Consent Order.
2 Specifically, the debtor argues that: the ADRE did not prove
3 its case, even admitting that it only “believed” it had
4 sufficient grounds to prove its case; no administrative law judge
5 actually oversaw the proceedings; and the underlying allegations
6 charged by the ADRE had not been litigated. The debtor further
7 contends that the Donovans submitted no evidence to show that he
8 had a full and fair opportunity to litigate the findings and
9 conclusions in the Consent Order.
10 As noted above, the bankruptcy court applied issue
11 preclusion to the Consent Order. However, we apply a different
12 principle: we construe the Consent Order as including statements
13 against interest (a.k.a., admissions against interest).9
14 “Relevant admissions of a party, whether consisting of oral
15 or written assertions . . ., are admissible when offered by an
16 opponent.” Hon. Barry Russell, Bankruptcy Evidence Manual,
17 Vol. 2, § 801.12 (2013 ed.). Admissions constitute substantive
18 evidence. Id. However, “as is the case with most evidence, an
19 admission under Rule 801 is generally not conclusive. It is
20 entitled to whatever weight the trier of fact gives it.” Id.
21 See also, e.g., In re Harris, 279 B.R. 254, 264 (9th Cir. BAP
22 2002)(Klein, J., dissenting)(determining that “every fact [the
23 debtor’s lawyer] asserted that could be used to support a finding
24 of ‘substantial abuse’ [under § 707(b)] is a non-hearsay
25
26 9
Evidence Rule 801(d)(2) provides, in relevant part, that a
27 statement is not hearsay if it “is offered against a party and is
(A) the party’s own statement, in either an individual or a
28 representative capacity . . . .”
19
1 evidentiary admission under Rule 801(d)(2).”)(citation omitted).
2 Here, the debtor explicitly admitted to the factual findings
3 and legal conclusions in the Consent Order and agreed to be bound
4 by them. He also agreed to waive his rights to an administrative
5 hearing and to appeal the factual findings and legal conclusions
6 set forth in the Consent Order. Moreover, the debtor did not
7 provide evidence to counter the admissions he made in the Consent
8 Order. As the trier of fact, the bankruptcy court could and did
9 give the Consent Order due weight in making its determination.
10 It did not err in doing so.
11 C. Knowledge and intent under § 523(a)(2)(A)
12 Summary judgment is appropriate “‘if the pleadings,
13 depositions, answers to interrogatories and admissions on file,
14 together with the affidavits, if any, show that there is no
15 genuine issue as to any material fact and that the moving party
16 is entitled to a judgment as a matter of law.’” Ilko v. Cal.
17 State Bd. of Equalization (In re Ilko), 651 F.3d 1049, 1052 (9th
18 Cir. 2011)(quoting Celotex Corp. v. Catrett, 477 U.S. 317, 322
19 (1986)). “An issue is ‘genuine’ only if there is a sufficient
20 evidentiary basis on which a reasonable fact finder could find
21 for the nonmoving party, and a dispute is ‘material’ only if it
22 could affect the outcome of the suit under the governing law.”
23 Barboza v. New Form, Inc. (In re Barboza), 545 F.3d 702, 707 (9th
24 Cir. 2008)(citation omitted). The moving party bears the burden
25 of showing that no genuine issue of material fact exists. Id.
26 The bankruptcy court must view all evidence in the light most
27 favorable to the nonmoving party. Id.
28 “In response to a properly submitted summary judgment
20
1 motion, the burden shifts to the [nonmoving] party to set forth
2 specific facts showing that there is a genuine issue for trial.
3 The nonmoving party may not rely on denials in the pleadings but
4 must produce specific evidence, through affidavits or admissible
5 discovery material, to show that the dispute exists.” Id.
6 (citations and internal quotation marks omitted).
7 The bankruptcy court cannot grant summary judgment based on
8 its assessment of the credibility of the evidence presented. Id.
9 (quoting Agosto v. INS, 436 U.S. 748, 756 (1978)). At the
10 summary judgment stage, the bankruptcy court cannot weigh the
11 evidence and determine the truth of the matter. Id. (quoting
12 Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249 (1986)). It
13 must limit itself to determining whether there is a genuine issue
14 for trial. Barboza, 545 F.3d at 707 (quoting Anderson, 477 U.S.
15 at 249).
16 Under § 523(a)(2)(A), a bankruptcy court may except from
17 discharge any debt for money, property, services or credit
18 obtained by false pretenses, a false representation or actual
19 fraud. To prevail on a claim under § 523(a)(2)(A), a creditor
20 must establish the following five elements: 1) misrepresentation,
21 fraudulent omission or deceptive conduct by the debtor;
22 2) knowledge of the falsity or deceptiveness of the debtor’s
23 statement or conduct; 3) an intent to deceive; 4) justifiable
24 reliance by the creditor on the debtor’s statement or conduct;
25 and 5) damage to the creditor proximately caused by its reliance
26 on the debtor’s statement or conduct. Turtle Rock Meadows
27 Homeowners Ass’n v. Slyman (In re Slyman), 234 F.3d 1081, 1085
28 (9th Cir. 2000). The creditor must prove each element of
21
1 § 523(a)(2)(A) by a preponderance of the evidence. Grogan v.
2 Garner, 498 U.S. 279, 287 (1991).
3 On appeal, the debtor contends that the bankruptcy court
4 erred in granting summary judgment because two elements under
5 § 523(a)(2)(A) had not been met. Specifically, he argues that
6 the Donovans failed to meet their burden of proof to establish
7 the elements of knowledge and intent.
8 1. Knowledge of falsity and intent to deceive
9 When analyzing knowledge and intent, reckless disregard for
10 the truth of the representation or reckless indifference to the
11 debtor’s actual circumstances may support a § 523(a)(2)(A) claim.
12 Arm v. A. Lindsay Morrison, M.D., Inc. (In re Arm), 175 B.R. 349,
13 354 (9th Cir. BAP 1994)(citations omitted). See also Houtman v.
14 Mann (In re Houtman), 568 F.2d 651, 656 (9th Cir. 1978),
15 overruled in part on other grounds by Grogan v. Garner, 498 U.S.
16 279 (1991)(holding that “either actual knowledge of the falsity
17 of a statement, or reckless disregard for its truth, satisfies
18 the scienter requirement for nondischargeability of a debt under
19 § 17(a)(2) [predecessor to § 523(a)(2)(A)].”); Gertsch v. Johnson
20 & Johnson Fin. Corp. (In re Gertsch), 237 B.R. 160, 167-68 (9th
21 Cir. BAP 1999)(quoting Houtman, 568 F.2d at 656). Within the
22 Ninth Circuit, the phrase “reckless indifference to his actual
23 circumstances” is used interchangeably with the phrase “reckless
24 disregard for the truth of a representation.” Advanta Nat’l Bank
25 v. Kong (In re Kong), 239 B.R. 815, 826 (9th Cir. 1999)(citations
26 omitted). Both the knowledge and intent elements under
27 § 523(a)(2)(A) may be established by circumstantial evidence and
28 inferences drawn from a course of conduct. See Tallant v.
22
1 Kaufman (In re Tallant), 218 B.R. 58, 66 (9th Cir. BAP 1998).
2 When determining the knowledge element, “[a] representation
3 may be fraudulent, without knowledge of its falsity, if a person
4 making it is conscious that he has merely a belief in its
5 existence and recognizes that there is a chance, more or less
6 great, that the fact may not be as it is represented.” Gertsch,
7 237 B.R. at 168 (quoting Restatement (Second) of Torts § 526
8 cmt. e (1977)(internal quotation marks omitted)). In such
9 circumstances, the person makes the representation “without
10 [believing] in its truth or recklessly, careless of whether it is
11 true or false.” Kong, 239 B.R. at 827 (quoting Restatement
12 (Second) of Torts § 526 cmt. e).
13 When determining the intent element, recklessness alone does
14 not equate to fraudulent intent; it is probative of intent only.
15 See Khalil v. Developers Sur. & Indem. Co. (In re Khalil),
16 379 B.R. 163, 174 (9th Cir. BAP 2007). Reckless conduct must
17 involve more than simple or inexcusable negligence. Kong,
18 239 B.R. at 826. “The essential point is that there must be
19 something about the adduced facts and circumstances which suggest
20 that the debtor intended to defraud creditors of the estate.”
21 Khalil, 379 B.R. at 175 (quoting Garcia v. Coombs (In re Coombs),
22 193 B.R. 557, 565-66 (Bankr. S.D. Cal. 1996)(internal quotation
23 marks omitted)). That is, “the focus must be on ‘the totality of
24 the circumstances and whether they create the overall impression
25 of a deceitful debtor.’” Nwas Okla., Inc. v. Kraemer
26 (In re Kraemer), 2011 WL 3300360 at * 6 (9th Cir. BAP 2011)
27 (quoting Wolf v. McGuire (In re McGuire), 284 B.R. 481, 493
28 (Bankr. D. Colo. 2002)).
23
1 a. Knowledge of falsity
2 The debtor argues that there is no evidence that he knew or
3 had reason to know that the Property was not subdivided properly
4 at the time he sold it to the Donovans. He claims that the
5 factual findings in the Consent Order are not determinative as to
6 his knowledge concerning the subdivision of the Property because
7 the issue had not been actually litigated. Instead, the debtor
8 simply signed the Consent Order following negotiations with the
9 ADRE. He further contends that nothing in the Settlement
10 Agreement indicated that the debtor knew that the statement
11 regarding the requirements of A.R.S. § 11-809 in the Affidavit
12 was incorrect.
13 The debtor complains that there is no evidence showing that
14 he knew or should have known that the Property was not subdivided
15 properly. The Donovans provided the SPDS, the Affidavit and the
16 Consent Order as evidence demonstrating the debtor’s knowledge of
17 the falsity of his representation concerning the Property’s
18 subdivision status. And the debtor did not proffer his own
19 evidence to counter the Donovans’ evidence.
20 Although the debtor denied “knowingly engaging in any
21 wrongdoing with respect to the sale of the [Property]” in the
22 Settlement Agreement, he nonetheless showed reckless disregard
23 for the truth of his representation about the Property’s
24 subdivision status. This reckless disregard is discernable in
25 his inconsistent statements in the SPDS and the Affidavit. In
26 the SPDS, the debtor represented that, to his knowledge, the
27 Property was not within a subdivision approved by the ADRE. But
28 in the Affidavit, he stated, under penalty of perjury, that the
24
1 sale of the Property met “the requirements of A.R.S. § 11-809
2 regarding land divisions.” (Mr. Donovan even testified at his
3 deposition that he thought the Affidavit indicated that the
4 Property was buildable.) These inconsistent statements show that
5 the debtor was careless as to whether the Property was subdivided
6 properly. The debtor’s careless disregard for the truth of the
7 representation regarding the Property’s subdivision status
8 satisfies the knowledge element under § 523(a)(2)(A). Based on
9 the evidence before it, the bankruptcy court did not err in
10 deciding in the Donovans’ favor on the knowledge element under
11 § 523(a)(2)(A).
12 b. Intent to deceive
13 The debtor further contends that there is no evidence
14 demonstrating that he intended to deceive the Donovans at the
15 time he sold the Property to them. He stresses that there is no
16 independent evidence that he fraudulently or recklessly made the
17 inaccurate statement about the Property’s subdivision status in
18 the Affidavit to induce the Donovans to purchase the Property.
19 However, the debtor did not provide any evidence of his own,
20 through affidavit or other admissible discovery material, showing
21 that he lacked intent to deceive under § 523(a)(2)(A), even
22 though he bore the production burden in his opposition to the
23 Summary Judgment Motion. See Barboza, 545 F.3d at 707. If he
24 had evidence (including his own declaration or affidavit) to
25 raise a genuine issue of material fact as to his intent, the
26 debtor should have presented it to the bankruptcy court. He
27 presented no such evidence.
28 The debtor also argues that the bankruptcy court erroneously
25
1 relied on “an incorrect interpretation of state law [i.e., A.R.S.
2 § 32-2181(D)] and the non-litigated findings contained in the
3 Consent Order to establish that [the debtor] intended to deceive
4 the Donovans when he filled out the [Affidavit].” Appellant’s
5 Opening Brief at 25.
6 For the first time on appeal, the debtor argues that the
7 intent element in A.R.S. § 32-2181(D) does not apply to him. He
8 points out that A.R.S. § 32-2181(D) specifically provides that,
9 Unlawful acting in concert pursuant to this subsection
with respect to the sale or lease of subdivision lots
10 requires proof that the real estate licensee or other
licensed professional knew or with the exercise of
11 reasonable diligence should have known that property
which the licensee listed or for which the licensee
12 acted in any capacity as agent was subdivided land
subject to this article.
13
14 According to the debtor, under A.R.S. § 32-2181(D), only
15 real estate licensees or other licensed professionals are subject
16 to the intent element. The debtor maintains that he is not a
17 real estate licensee or other licensed professional. Because the
18 intent element under A.R.S. § 32-2181(D) only applies to real
19 estate licensees, which he is not, the bankruptcy court erred in
20 relying on the Consent Order to find that the debtor
21 intentionally deceived the Donovans within the meaning of
22 § 523(a)(2)(A).
23 We deem this argument waived because the debtor did not
24 raise it before the bankruptcy court. O’Rourke v. Seabord Sur.
25 Co. (In re E.R. Fegert, Inc.), 887 F.2d 955, 957 (9th Cir. 1989).
26 Moreover, even if he raised this argument before the bankruptcy
27 court, whether or not the debtor was a real estate licensee is
28 immaterial. The debtor explicitly admitted and agreed to be
26
1 bound by the findings in the Consent Order, including the finding
2 that he conspired with others (at least one of whom held a real
3 estate salesperson’s license) to violate A.R.S. § 32-2181(D).
4 Further, as we explained above, the debtor showed reckless
5 disregard for the truth of his representation concerning the
6 Property’s subdivision status based on his inconsistent
7 representations in the Affidavit and the SPDS. The bankruptcy
8 court thus did not err in granting summary judgment in the
9 Donovans’ favor on the intent element under § 523(a)(2)(A).
10 CONCLUSION
11 For the foregoing reasons, we AFFIRM.
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
27
| {
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} |
142 F.Supp.2d 117 (2001)
John GARRETT, Plaintiff
v.
TANDY CORPORATION d/b/a Radio Shack, Defendant
No. CIV. 00-384-PH.
United States District Court, D. Maine.
June 12, 2001.
Jeffrey Neil Young, McTeague, Higbee, MaCadam, Case, Watson & Cohen, Topsham, ME, for John Garrett, plaintiffs.
*118 Jonathan Shapiro, Melinda J. Caterine, Moon, Moss, McGill, Hayes & Shapiro, P.A., Portland, ME, for Tandy Corporation dba Radio Shack, defendants.
MEMORANDUM DECISION AND ORDER ON DEFENDANT'S MOTION TO DISMISS COUNTS I AND III OF THE AMENDED COMPLAINT
HORNBY, Chief Judge.
Racial profiling or stereotyping is highly objectionable. But when a private retailer engages in the practice, it does not create a basis for a federal claim by a customer unless the retailer deprives the customer of a right or interest protected by federal statute. Here, the customer tries to fit his complaint under two old civil rights statutes (one of them more recently amended), 42 U.S.C. §§ 1981 & 1982, that protect primarily contractual relations and property. I conclude that no property or contract interests of the customer were affected here. I also conclude that a store employee's report to the police that he "suspects" a customer of theft is a statement of opinion that does not imply any defamatory facts; it therefore is not actionable under Maine's defamation law.
BACKGROUND
Jurisdiction is based upon federal question, 28 U.S.C. § 1331 (1993), and diversity of citizenship. 28 U.S.C. § 1332 (1993 & West Supp.2000). The matter is before me on a motion to dismiss Count I (the federal count charging racial discrimination) and Count III (a state defamation charge) of the Amended Complaint for failure to state a claim upon which relief can be granted. See Fed.R.Civ.P. 12(b)(6). Accordingly, I treat as true all facts alleged in the Amended Complaint.[1]
The plaintiff, John Garrett, a disabled black Vietnam veteran, shopped at the Cook's Corner Radio Shack store in Brunswick on December 21, 1998. He was looking for a police scanner, but ultimately could not find his desired model in that store. He ended up purchasing a telephone/answering machine, a book, and batteries. After giving his name and address in connection with the purchase, he left the store. Up until this point, nothing objectionable had happened. It is what occurred later that evening that prompts Garrett's lawsuit.
The store manager and two other employees on duty that night were white. After Garrett left the store, the store manager discovered that a $2,000 computer was missing. He had the names of three or four white shoppers who had been there at about the same time as Garrett. The store manager informed the Brunswick Police Department that he suspected Garrett of stealing the computer. The Brunswick Police called the nearby Bath Police Department; the Bath police visited Garrett and obtained his verbal consent to search his house and car. They did not find the computer. Garrett then called the Radio Shack store manager and complained that he felt he was being singled out because he was black. The store manager assured Garrett that he had reported white shoppers as well. In fact, that was untrue. Radio Shack has made no other efforts to locate the missing computer. Garrett would like to return the telephone/answering machine but is now reluctant to go to any Radio Shack store for fear of being accused of shoplifting.
*119 ANALYSIS
(1) Discrimination
The relevant federal civil rights statutes provide:
§ 1981. Equal rights under the law
(a) Statement of equal rights
All persons within the jurisdiction of the United States shall have the same right in every State and Territory to make and enforce contracts ... as is enjoyed by white citizens....
(b) "Make and enforce contracts" defined
For purposes of this section, the term "make and enforce contracts" includes the making, performance, modification, and termination of contracts, and the enjoyment of all benefits, privileges, terms, and conditions of the contractual relationship.
42 U.S.C.A. § 1981 (1994) (as amended by the Civil Rights Act of 1991).
§ 1982. Property rights of citizens
All citizens of the United States shall have the same right, in every State and Territory, as is enjoyed by white citizens thereof to inherit, purchase, lease, sell, hold, and convey real and personal property.
42 U.S.C.A. § 1982 (1994).
Garrett claims that Radio Shack singled him out because of his race in calling the police, and that this conduct interfered with his "right to enter into, enforce, and enjoy the benefits and privileges of a contractual relationship" with Radio Shack; his "prospective contractual relations" with Radio Shack; and his "ability to purchase personal property" from Radio Shack.
If Garrett was singled out because he was black, that is reprehensible.[2] But his federal claim depends on whether he was denied any contractual rights or property rights within the meaning of the two statutes. On the allegations of the Amended Complaint, no such disruption occurred. Specifically, Garrett consummated his contractual relationship with Radio Shack: he purchased his supplies and went home, without any interference based upon his race. The objectionable conduct all occurred thereafter, and did not have anything to do with the purchase Garrett made. As a result of what happened, Garrett may be personally fearful of risking racially unfair treatment on another visit to Radio Shack, but there is no suggestion in his Amended Complaint that Radio Shack wants to discourage him from further purchases. That is the focus of these two statutes: restrictions on the ability to contract or purchase property, not general mistreatment related to race. Radio Shack's store manager may have treated Garrett badly, but on the allegations here, he did not interfere with contract or property rights based upon Garrett's race.[3]
*120 (2) Defamation
According to the Amended Complaint, Radio Shack defamed Garrett when it reported him to the police as a suspect in the computer theft. Am. Compl. ¶ 18 (alleging that the store manager informed the police that he "suspected ... Garrett of the theft"); Am. Compl. ¶ 25 (alleging that Radio Shack reported Garrett's name to the police "as the suspect in the alleged theft"); Am. Compl. ¶ 33 (alleging that Radio Shack defamed Garrett when it reported him "of suspected theft"). The nub of the dispute is the word "suspected": The Amended Complaint does not allege that Radio Shack told the police that Garrett committed a crime, but that the manager suspected him of committing a crime. On its face, that is a statement of opinion, not fact.
An opinion that "cannot reasonably be understood as implying unstated defamatory facts" is not actionable. True v. Ladner, 513 A.2d 257, 262 (Me.1986); see also Fortier v. Int'l Bhd. of Elec. Workers, Local 2327, 605 A.2d 79, 80 (Me. 1992). An opinion can be actionable, however, if it "could reasonably be understood by the ordinary person as implying unstated defamatory facts." True, 513 A.2d at 262; see also Fortier, 605 A.2d at 80.[4] In that event, the jury is asked to determine whether it is a statement of fact or opinion. True, 513 A.2d at 262. Otherwise, it is a question of law for the court. Caron v. Bangor Publ'g Co., 470 A.2d 782, 785 (Me. 1984).
In this case, the store manager's statement to the police officer that he "suspected" Garrett of taking the computer explicitly stops short of asserting that Garrett actually committed the crime. Nor does it assert that the manager personally believed that Garrett committed the crime: "I suspect" connotes less certainty than "I *121 believe," or "I think."[5] Indeed, "suspect" connotes only that the manager had some suspicion that Garrett was the culprit. To suspect is to surmise, based on little or no evidence.[6] The statement's very uncertainty stops it from implying anything defamatory (for example, it does not imply that the manager actually saw Garrett stealing the computer). Rather, if it implies any factual assertions at all, they are not defamatory (for example, it might imply underlying assertions such as that Garrett was at the store before the computer was discovered missing, or, more seriously but still not defamatory, that Garrett had behaved in some way the manager deemed suspicious.) Therefore, I conclude that the statement is nonactionable opinion.
(3) Injunctive Relief
On his remaining count for violation of the Maine Human Rights Act Garrett seeks both damages and a permanent injunction enjoining Radio Shack from engaging in any policy or practice that discriminates against him on the basis of race. Radio Shack has moved to dismiss the claim for injunctive relief, arguing that the complaint does not allege a real and immediate threat of present or future harm.
The Maine Human Rights Act directs that if a court finds unlawful discrimination, "its judgment must specify an appropriate remedy or remedies for that discrimination." 5 M.R.S.A. § 4613(2)(B) (West Supp.2000). One of the statute's suggested remedies is: "(1) An order to cease and desist from the unlawful practices specified in the order." 5 M.R.S.A. § 4613(2)(B)(1) (West Supp.2000). It is premature to decide at this point that no such relief is available. Radio Shack's motion to dismiss the claim for injunctive relief is DENIED.
CONCLUSION
Accordingly, the defendant's motion to dismiss Counts I and III of the Amended Complaint is GRANTED and the motion to dismiss the claim for injunctive relief is DENIED.
SO ORDERED.
NOTES
[1] In its reply memorandum on the motion to dismiss, the defendant makes factual assertions, which it supports with documents attached to the reply. The assertions and the documents are not properly before me on a motion to dismiss, and I do not consider them.
[2] I will pass over the fact that the Amended Complaint does not actually allege that Garrett was similarly situated to the white shoppers except for his race i.e., it does not allege that the store manager had no reason, but for race, to focus on Garrett. The Amended Complaint does allege that the store manager later lied about reporting white shoppers, and I will treat that, for purposes of this motion, as sufficient to make out a jury question on discrimination. (This point has not been argued.)
[3] Most of the caselaw involving section 1981 has developed in the employment context. Morris v. Office Max, 89 F.3d 411, 413 (7th Cir.1996). The First Circuit has not had occasion to apply it (or its companion section 1982) in the retail shopping context. Other Circuits have. The Seventh Circuit applies section 1981 strictly and requires that a complaint "allege the actual loss of a contract interest, not merely the possible loss of future contract opportunities." Id. at 414-15. Under section 1982, the fact that an incident might discourage people from patronizing a store is also not enough. Id.; accord Hampton v. Dillard Dep't Stores, Inc., 247 F.3d 1091, 1118 (10th Cir.2001) (stating that "`[w]e are aligned with all the courts that have addressed the issue that there must have been interference with a contract beyond the mere expectation of being treated without discrimination while shopping,'" and rejecting an "expansive interpretation that § 1981 broadens the scope of relevant civil rights and protects customers from harassment upon entering a retail establishment"). But cf. Hall v. Pa. State Police, 570 F.2d 86, 92 (3d Cir. 1978) (allegation that bank had policy of photographing only black patrons was enough to withstand motion to dismiss). Garrett also cites the Sixth Circuit case of Watson v. Fraternal Order of Eagles, 915 F.2d 235 (6th Cir.1990), as supporting his argument. In Watson, however, the defendant allegedly asked the plaintiffs to leave the premises in order to prevent them from purchasing. That is enough under any reading of the statute. As the Watson court observed, "[w]ere it otherwise, commercial establishments could avoid liability merely by refusing minorities entrance to the establishment before they had the chance to order." Id. At 243. In any event, whether a strict or more generous reading of the two statutes is followed, Count I of this Amended Complaint does not survive.
[4] Other jurisdictions have intimated that only fairly certain statements of opinion can imply defamatory facts. See Gray v. St. Martin's Press, Inc., 221 F.3d 243, 248 (1st Cir.2000) (quoting Judge Posner, in Haynes v. Alfred A. Knopf, Inc., 8 F.3d 1222, 1227 (7th Cir.1993), for the proposition that when a speaker is plainly expressing conjecture or surmise (among other things) "`rather than claiming to be in possession of objectively verifiable facts, the statement is not actionable'" under either New Hampshire or Virginia law, whichever applied); Lee v. Bankers Trust Co., 166 F.3d 540, 546-47 (2nd Cir.1999) (finding that an employer's investigation of an employee, where there was no accusatory statement, was not defamatory under New jersey law because it only intimated a suspicion, was nonspecific and therefore nonverifiable, and was contingent and subjective).
[5] Garrett cites language in Packard v. Cent. Me. Power Co., 477 A.2d 264 (Me.1984) to support his argument that his claim is actionable. The language in Packard was stronger, however: there the defendant apparently asserted that it actually believed that the defendant had committed the crime. Id. at 266. Moreover, Packard makes no holding on the issue; it merely states in dictum that a trial justice had properly given a privilege instruction on a defamation claim. Id. at 267-68.
[6] The American Heritage Dictionary of the English Language (4th ed.2000) defines "suspect" variously as "[t]o surmise to be true or probable; imagine," "[t]o have doubts about; distrust," "to think (a person) guilty without proof," and "[t]o have suspicion." Webster's Revised Unabridged Dictionary (1996) defines "suspect" as "[t]o imagine to exist; to have a slight or vague opinion of the existence of, without proof, and often upon weak evidence or no evidence; to mistrust; to surmise." And the Oxford English Dictionary defines it as "[t]o imagine something evil, wrong, or undesirable ... on slight or no evidence; to believe or fancy to be guilty or faulty, with insufficient proof or knowledge; to have suspicions or doubts about," "[t]o imagine ... something wrong ... with slight or no proof," "to imagine ... (something) to be possible or likely; to have a faint notion or inkling of; to surmise."
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DISTRICT COURT OF APPEAL OF THE STATE OF FLORIDA
FOURTH DISTRICT
ROBERT BLECHMAN and CATHY BLECHMAN CHERMAK,
Appellants,
v.
ESTATE OF BERTRAM BLECHMAN,
Appellee.
No. 4D13-4801
[April 1, 2015]
ON MOTION FOR REHEARING
Appeal from the Circuit Court for the Fifteenth Judicial Circuit, Palm
Beach County; John L. Phillips, Judge; L.T. Case No.
502011CP001529XXXXMB.
Laura Bourne Burkhalter of Hark|Burkhalter|Yon, PL, Boca Raton, for
appellants.
Katherine S. Dely of Law Offices of Katherine S. Dely, P.L., Lighthouse
Point, for appellee.
GROSS, J.
We grant the motion for rehearing in part, withdraw our previous
opinion, and reissue the following opinion.1
In this probate administration case, the children of Bertram Blechman
(“the Decedent”)—Robert Blechman and Cathy Blechman Chermak—
challenge an order determining their father’s ownership interest in a
limited liability company to be part of his probate estate. By virtue of a
provision in the operating agreement of the limited liability company, the
Decedent’s membership interest immediately vested with his children
1We agree with appellee that, in applying New Jersey law, we should not have
applied an unpublished appellate opinion that New Jersey courts would not rely
upon as binding authority. The reissued opinion eliminates the citation to the
unpublished opinion.
upon his death, so that the interest was not a part of the probate estate.
Accordingly, we reverse.
Factual Background
This dispute arises from the Decedent’s testamentary devise of his 50%
ownership interest in Laura Investments, LLC, a limited liability company
created in New Jersey. In August 2009, the Decedent and his sister formed
the LLC and executed an operating agreement (“the Agreement”), which
outlined the business’s basic structure and gave each sibling—as an
owner—a 50% “Membership Interest” in the company. As defined by the
Agreement, this “interest” consisted of “rights to distributions (liquidating
or otherwise), allocations and information, and the right to vote on matters
coming before the Members.”
In addition to providing a managerial framework, the Agreement
imposed restrictions upon each member’s ability to convey his or her
interest in the company. The Agreement’s Section 6, which governs the
“transferability of membership interests,” conditions each member’s ability
to transfer “all or any portion of his or her Membership Interest in the
Company” on obtaining “the prior written consent of all of the other
Members,” unless limited exceptions applied. One such exception arises
where the member transfers, “during lifetime or at death, all or any portion
of his or her Membership Interest outright or in trust to or for the benefit
of any member and/or any person or persons who are a member of the
immediate family of the Member.” The member’s “immediate family,” in
this context, is comprised of his or her “living children and issue of any
deceased child,” not parents, spouses, stepchildren, or paramours.
Upon a member’s death, the Agreement’s Section 6.3 controls the
disbursement of a membership interest. As amended on April 30, 2010,2
section 6.3(a) provides:
2In its original incarnation, Section 6.3 provided as follows:
(a) Unless (i) a Member shall Transfer all or a portion of his or her
Membership Interest in accordance with 6.1 or 6.2 hereof, or (ii) a
Member bequeaths the Membership Interest in the Member’s last
will and testament to members of the Immediate Family of the
respective Member, or (iii) all such Membership Interests of a
deceased Member are inherited, or succeeded to, by Members of the
Immediate Family of the deceased Member, then in the event of a
death of a Member during the duration of this Agreement, the
legal representative of the deceased Member’s estate shall be
-2-
6.3 Death of Member
(a) Unless (i) a Member shall Transfer all or a portion of his or
her Membership Interest in accordance with 6.1 or 6.2 hereof,
or (ii) a Member bequeaths the Membership Interest in the
Member’s last will and testament to members of the
Immediate Family of the respective Member, or (iii) all such
Membership Interests of a deceased Member are inherited, or
succeeded to, by Members of the Immediate Family of the
deceased Member, then in the event of a death of a Member
during the duration of this Agreement, the Membership
Interest of the deceased Member shall pass to and
immediately vest in the deceased Member’s then living
children and issue of any deceased child per stirpes.
Under this section, if a member fails to transfer his or her interest in one
of the three ways enumerated in Section 6.3(a)(i)-(iii), then ownership
“immediately” vests in the deceased member’s children.
The Litigation in the Circuit Court
On February 25, 2011, the Decedent passed away, leaving behind his
estranged wife of sixty years and two adult children—appellants Robert
Blechman and Cathy Blechman Chermak. Two months after the
Decedent’s death, the trial court admitted his will3 into probate, which
appointed his son, Robert, as personal representative and directed that
the residue of his estate be marshaled into “The Bertram Blechman
Revocable Living Trust, dated December 12, 2000.” (the “Trust”). Since
the will contained no provision pertaining to the Decedent’s 50%
ownership interest in the LLC, if that interest were part of the probate
estate, it would have “poured over” pursuant to Article V of the will into
the Decedent’s previously unfunded Trust.
obligated to sell the deceased Membership Interest pursuant to
the provisions and in accordance with the order set forth in 6.2
hereof.
(Emphasis added).
3The decedent’s will consisted of his last will and testament and a later-dated
codicil.
-3-
As originally crafted in December 2000, the Trust was silent regarding
the LLC and provided only for the Decedent’s children and their issue.
However, on August 20, 2010, the Decedent amended the Trust to provide
a “specific gift” of his residence and “one half of the distributions from the
LLC, to” a trustee for the benefit of Arlene Roogow—the Decedent’s
girlfriend since 2003. Pursuant to the amendment, Roogow could remain
in the residence “for as long as she shall live or until she cohabitates with
another male for six (6) months.” To pay for the residence’s expenses,
$5,000 was to be deposited from the Laura Investments, LLC distributions
into “an account designed by . . . [R]oogow.”4 All remaining distributions
from the company—either at the year’s end or at the close of Roogow’s
interest—would be disbursed to the Decedent’s children.
Following the Decedent’s death, Robert—in his capacity as personal
representative—transferred the Decedent’s monthly distributions from the
LLC to the estate, depositing them into the estate’s restricted account to
be used for estate expenses. Relying on the Trust amendment, Roogow
moved to compel Robert to transfer the funds to her account for the
maintenance of her residence. The trial court agreed with Roogow in part,
entering a November, 2011 written order stating:
4Specifically, the amendment provided:
A specific gift of the final residence of Grantor currently located
at 10198 Noceto Way, Boynton Beach, FL 33437 and one half of the
distributions from Laura Investments, LLC, to Daniel G. Gass,
Esquire, as trustee, if surviving; otherwise to Robert Blechman as
successor trustee for the below certain Beneficiaries.
Upon the death of grantor, the trustee of this specific gift shall
make the following gifts:
(a) Arlene S. Roogow shall remain in the house for as long as she shall
live or until she co-habitates with another male for six (6) months.
...
(b) While Arlene S. Roogow is alive and has not co-habitated with
another maile [sic] for six (6) months resides [sic] in the house,
$5,000.00 shall be deposited in an account designated by Arlene
[R]oogow for her to pay for the monthly maintenance of the grantor’s
final personal residence, including but not limited to, mortgage
payments, homeowner’s association fees, assessments, repairs,
utilities, taxes, homeowner’s insurance and appliance agreements.
...
-4-
C. The Personal Representative shall obey the directions of
Article V of the Last Will & Testament of Bertram Blechman
until such time as this Court orders otherwise.
D. The provisions of the Amendment to the Bertram
Blechman Revocable Living Trust, Dated August 20, 2010,
shall be complied with until such time as this Court orders
otherwise.
The following week, Robert submitted an inventory for the estate, listing
the Decedent’s “50% membership interest in Laura Investments, LLC” as
an estate asset.
In July, 2012, Roogow moved for an order to show cause, asserting that
Robert violated the November 2011 order by failing to transfer the LLC
distributions pursuant to the Trust amendment. The trial court issued an
order to show cause and set a hearing. On the advice of counsel, Robert
did not personally appear at the scheduled hearing and, as a result, the
trial court removed him as personal representative. This Court has since
reversed that decision, remanding with instructions that Robert be
reinstated to his prior post. See Blechman v. Dely, 138 So. 3d 1110, 1115
(Fla. 4th DCA 2014).
After being removed, Robert submitted a final accounting, in which he
noted that the Decedent’s 50% interest in Laura Investments, LLC had
been “incorrectly listed” as an estate asset. In line with this belief, Robert
and his sister, Cathy, filed a petition seeking reimbursement of the
$89,500.00 in LLC distributions deposited into the estate’s restricted
account. According to their petition, since the Decedent’s Trust
amendment did not “convey all of his Membership Interest to his
Immediate Family,” the Decedent’s interest in the LLC immediately vested
in his children upon his death, placing the asset outside of his probate
estate.
Following a hearing, the trial court entered a written order confirming
the Decedent’s interest in the LLC as an estate asset, articulating the
following findings:
2. The Operating Agreement (OA) for [Laura Investments,
LLC (“LI”)] shows Decedent owned a 50% Membership Interest
in LI at his death. The OA and its Amendment are valid and
enforceable.
-5-
3. The Decedent bequeathed his interest in LI to members
of his immediate family in his will, admitted to probate on
April 7, 2011. Under the terms of that will, Decedent’s
residual probate estate passes to the Trust executed by the
Decedent December 12, 2000.
4. Decedent’s Membership Interest in LI is an asset of
Decedent’s probate estate. That interest does not, and never
did, automatically pass to or vest in Decedent’s children at the
time of his death (See Amendment to OA Section 6.3 [a],
executed April 30, 2010). This Court makes no ruling as to
the extent or value of this Membership Interest at this time.
5. Distributions of money from LI since the Decedent’s
death should have gone to the Decedent’s estate. Any
distributions taken or received by any other person or entity
had been wrongfully received and are to be replaced into the
Estate immediately. . . .
It is this order that the Blechman children challenge on appeal.
Standard of Review
Like articles of incorporation and corporate bylaws, operating
agreements for limited liability companies are construed applying
principles of contract interpretation. See Berkowitz v. Delaire Country
Club, Inc., 126 So. 3d 1215, 1218 (Fla. 4th DCA 2012). Accordingly, since
there is no disagreement regarding this case’s historical facts, the trial
court’s interpretation of the Agreement—and its effect on the Decedent’s
probate estate—is a legal matter, subject to de novo review. See Chipman
v. Chipman, 975 So. 2d 603, 607 (Fla. 4th DCA 2008) (“The trial court’s
interpretation of a contract is a matter of law subject to a de novo standard
of review.” (citations omitted)); cf. SPCA Wildlife Care Ctr. v. Abraham, 75
So. 3d 1271, 1275 (Fla. 4th DCA 2011) (“Where the trial court’s decision
is based on the interpretation of the language of a will, the standard of
review is de novo.” (citing Timmons v. Ingrahm, 36 So. 3d 861, 864 (Fla.
5th DCA 2010)).
Analysis
The Decedent’s children—Robert and Cathy—assert the trial court
erred in confirming their father’s 50% membership interest in the LLC as
an estate asset because that interest passed to them outside of probate
upon his death. As below, the children argue that the Decedent’s “failure
to specifically devise his Membership Interest as mandated by the
-6-
Operating Agreement activated a default provision in the Operating
Agreement, which vested [his] Member Interest in [Laura Investments,
LLC] immediately at death” to his children. The appellee counters that the
Operating Agreement did not effectuate a transfer of the Decedent’s
membership interest because the Decedent “owned a fifty percent . . .
interest in Laura Investments at the time of his death.” Additionally, the
appellee contends the Decedent complied with the Agreement by
bequeathing his membership interest to his children as vested residual
beneficiaries.
The Florida Probate Code broadly defines the probate “estate” as
encompassing the decedent’s property “that is the subject of
administration.” § 731.201(14), Fla. Stat. (2011). In deciphering a probate
estate’s parameters, the deciding factor is the decedent’s ownership
interest in property. § 731.201(32), Fla. Stat. (2011). If the subject
property will pass either intestate or by way of a will, then it is part of the
decedent’s probate estate. Cf. In re Estate of Riggs, 643 So. 2d 1132, 1134
(Fla. 4th DCA 1994) (noting that an “estate” does not include property
passing outside of probate).
Estate planners frequently use non-probate mechanisms to transfer a
decedent’s property outside of the probate system. This can be
accomplished in a myriad of ways, such as: “inter vivos gifts . . . , Totten
trusts, joint tenancy, life insurance, employee benefit and other annuity
beneficiary designations, payable on death or transfer on death accounts,
and” any other contractual means. Nathaniel W. Schwickerath, Public
Policy and the Probate Pariah: Confusion in the Law of Will Substitutes, 48
Drake L. Rev. 769, 798 (2000) (quoting Jeffrey N. Pennell, Minimizing the
Surviving Spouse’s Elective Share, 32 Inst. on Est. Plan. (MB) 900, 904
(1998)). The common thread of such non-probate mechanisms is that the
assets to which they apply are “distributed to the designated beneficiaries
immediately upon the transferor’s death” without the need for judicial
intervention. Roberta Rosenthal Kwall, The Superwill Debate: Opening the
Pandora’s Box? 62 Temp. L. Rev. 277, 278 (1989).
In contrast with property transferred outside of probate, property
transferred from a “pour-over” will to a trust constitutes part of the
decedent’s probate estate, albeit briefly, since the property is devised by
way of a will.
The question before us, therefore, is whether the Decedent’s
membership interest in the LLC was subject to the Decedent’s will or
whether the Agreement’s provisions immediately passed the interest to the
Decedent’s children upon his death. Answering this inquiry involves
-7-
interpretation of the Agreement. Since, under Florida’s choice-of-law
rules, the “laws of the jurisdiction where [a] contract was executed govern
interpretation of the substantive issues regarding the contract,”
Lumbermens Mut. Cas. Co. v. August, 530 So. 2d 293, 295 (Fla. 1988),
interpretation of the Agreement is governed by New Jersey law. See
Walling v. Christian & Craft Grocery Co., 27 So. 46, 49 (Fla. 1899)
(“[M]atters bearing upon the execution, interpretation, and validity of a
contract are determined by the law of the place where it is made.”).
In New Jersey, parties may provide by contract that ownership of, or a
designated right in, property may pass according to the terms of the
contract at the promisor’s death. See Michaels v. Donato, 67 A.2d 911,
913 (N.J. Super. Ct. Ch. Div. 1949). Thus, for example, in Minoff v.
Margetts, 81 A.2d 369, 372-73 (N.J. Super. Ct. App. Div. 1951), a
partnership agreement controlled the transfer of the decedent’s interest in
a partnership. Inferentially, New Jersey permits the members of an LLC
to include a provision in an operating agreement that will be followed upon
the death of a member. Cf. Kuhn v. Tumminelli, 841 A.2d 496, 501 (N.J.
Super. Ct. App. Div. 2004) (“The LLC Act is . . . quite flexible and permits
the LLC members great discretion to establish the company structure and
procedures . . . . ”); N.J. Stat. Ann. § 42:2B-66(a) (2011) (stating that New
Jersey’s Limited Liability Act must be “liberally construed to give the
maximum effect to the principle of freedom of contract and to the
enforceability of operating agreements”).
Where supported by adequate consideration, such contracts
transferring a property interest upon death are neither testamentary nor
subject to the Statute of Wills, but are instead evaluated under contract
law. Bower v. The Estaugh, 369 A.2d 20, 23 (N.J. Super. Ct. App. Div.
1977). As one court has explained, the justification for enforcing such
contractual provisions lies in the differing characteristics of wills and
contracts:
A contract operates immediately to create a property interest
in the premises while a will is revocable, or, more properly
speaking, inoperative or ambulatory until the death of the
testator, at which time it operates to create a property interest
in the beneficiary.’ . . . The undertaking of a party under a
contract is made in consideration of something to be paid or
done by or on behalf of the other party, so that the obligation
to and the right to require performance are reciprocal. A
contract creates a present, enforceable and binding right over
which the promisor has no control without the consent of the
promisee, while a testamentary disposition operates
-8-
prospectively. . . . An instrument which does not pass any
interest until after the death of the maker is essentially a will.
But not every instrument which provides for performance at
or after death is testamentary in character. If the instrument
creates a right in the promisee before the death of the testator,
it is a contract. . . . [T]here is nothing in the statute of wills
that prevents the creation by contract of a bona fide equitable
interest in property and its enforcement after the death of a
contracting party, even though the date of death is agreed
upon as the time for transfer.
Michaels, 67 A.2d at 913 (internal citations omitted); see also Bendit v.
Intarante, 175 A.2d 222, 228 (N.J. Super. Ct. App. Div. 1961). Under New
Jersey law, transfers of property upon death are thus permissible in LLC
operating agreements, as members of a limited liability company “are free
to restrict and expand the rights, responsibilities and authority of its
managers and members.” Kuhn, 841 A.2d at 501.
As to the construction of the Agreement, the parties have provided no
New Jersey law to contradict the general principle that express language
in a contractual agreement “specifically addressing the disposition of
[property] upon death” will defeat a testamentary disposition of said
property. Murray Van & Storage, Inc. v. Murray, 364 So. 2d 68, 68 (Fla.
4th DCA 1978).
To that end, Section 6 of the Agreement expressly limited the
Decedent’s ability to devise or otherwise transfer his membership interest.
In Section 6.3(a), the agreement sets forth three circumstances permitting
disposition of a membership interest: (i) where the member transfers
during his lifetime “all or a portion of his or her Membership Interest in
accordance with 6.1 or 6.2,” (ii) where the member “bequeaths the
Membership Interest in the Member’s last will and testament to members
of the Immediate Family of the respective Member,” or (iii) where “all such
Membership Interests of a deceased Member are inherited, or succeeded
to, by Members of the Immediate Family of the deceased Member.” Should
none of these three scenarios occur prior to a member’s death, the
member’s interest passes to and “immediately vest[s] in the deceased
Member’s then living children and issue of any deceased child per stirpes.”
By providing for such “immediate vesting,” the April 30, 2010 amendment
to Article 6.3 explicitly steered the membership interest away from the
probate estate, unlike the earlier iteration of that provision.
Conceding that neither the first nor third situations contemplated by
Section 6.3(a) occurred, appellee argues that the second condition was
-9-
satisfied “by the Decedent bequeathing his membership interest in Laura
Investments through his Last Will and Testament” to his children as the
residual beneficiaries of his Trust. Furthermore, the appellee contends
Roogow’s life interest renders her “a contingent beneficiary” whose
“interest is certain to terminate,” leaving the Decedent’s children as the
only vested beneficiaries of his Trust.
However, once the Decedent died, Roogow’s interest under the will and
the amended trust was not a contingent one. A trust beneficiary’s interest
is contingent where such interest is “conditioned upon the happening of
an event in the future, which may never happen and which lies entirely
outside the control of the [beneficiary] to bring about with certainty.”
Hexter v. Gautier, 143 So. 2d 695, 697 (Fla. 3d DCA 1962). Here, Roogow’s
interest was conditioned upon outliving the Decedent. Once the Decedent
died, her interest in the $5,000 monthly distributions vested, exclusive of
the children.
The clear intent of the Agreement was to place limitations on a
member’s ability to transfer his or her interest in the LLC, so as to keep
the company within the family bloodlines. Section 6.3(a)(ii) serves this
goal by ensuring that unless the member “bequeaths” his or her
membership interest via will “to members of the Immediate Family,” the
interest vests immediately with the member’s children. See Black’s Law
Dictionary 168 (8th ed. 2004) (defining “bequeath” as “[t]o give property
(usu[ally] personal property) by will”). Here, the Decedent through the
Trust amendment “bequeathed” his membership interest to a trustee for
the benefit of Roogow, contravening not only the Agreement’s terms but
also its intent. While it is true that the Decedent’s children maintain a
vested remainder interest in the property, enforcing the Trust would make
Roogow the present transferee of a significant aspect of the Decedent’s
membership “interest,” as defined in the Agreement—his right to
distributions. Since the Decedent thus “bequeathed” his interest to
Roogow, rather than to his immediate family, the Decedent’s death
triggered Section 6.3(a)’s default provision, immediately vesting his
membership interest with his children, his “immediate family” within the
meaning of the Agreement.
The situation here is analogous to our decision in Murray Van &
Storage, where we held that the specific provisions of a “buy-sell”
agreement between corporate stockholders trumped a conflicting
disposition of corporate shares through a will. 364 So. 2d at 69. In
Murray, the deceased was a principal stockholder who died without a
spouse and left the residue of his estate to his two surviving sons. Id.
Prior to his death, the deceased executed a “buy-sell” agreement with his
- 10 -
fellow stockholders, obligating him to provide the corporation with a right
of first refusal of his corporate shares. Id. Adhering to the majority rule
“that any restriction on the alienation of stock is to be strictly construed
and testamentary disposition thereof will not be defeated in the absence of
express language in a stockholders agreement specifically addressing the
disposition of the stock upon death,” we found the stockholder’s
testamentary disposition inferior to the “buy-sell” agreement’s provisions
requiring that the shares be first offered to the corporation. Id. at 68-69.
Accordingly, the remaining stockholders and executives were permitted
the first chance at purchasing the deceased’s stocks, notwithstanding the
deceased’s attempted testamentary disposition. Id. at 69.
In this case, by virtue of Section 6.3(a)’s default provision, the
Deceased’s membership interest immediately passed outside of probate to
his children upon his death, thus nullifying his testamentary devise as an
attempted disposition of property not subject to his ownership. See In re
Estate of Corbitt, 454 S.E.2d 129, 130 (Ga. 1995) (“The effect of the
invalidity of a bequest (or the ademption thereof) would be to render the
bequest void, but not to invalidate the will and it is no ground of caveat to
the probate of a will that a devise to a particular person may be void.”
(internal quotation omitted)).
Based on the foregoing, since the children are the rightful owners of
their father’s membership interest in the LLC, we reverse the trial court’s
order and remand with instructions that the Decedent’s membership
interest not be considered an estate asset.
WARNER, J., and LINDSEY, NORMA SHEPARD, Associate Judge, concur.
* * *
Not final until disposition of timely filed motion for rehearing.
- 11 -
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962 F.2d 10
NOTICE: Seventh Circuit Rule 53(b)(2) states unpublished orders shall not be cited or used as precedent except to support a claim of res judicata, collateral estoppel or law of the case in any federal court within the circuit.Ruldolph L. LUCIEN, Plaintiff/Appellant,v.Howard A. PETERS, III and William C. Goskie, asSuperintendent, Defendants/Appellees.
No. 91-2063.
United States Court of Appeals, Seventh Circuit.
Submitted April 22, 1992.*Decided May 18, 1992.
Before BAUER, Chief Judge, and COFFEY and KANNE, Circuit Judges.
ORDER
1
Pro se petitioner-appellant, Ruldolph Lucien, appeals from the district court's order granting summary judgment in favor of the defendants. Lucien brought suit under 42 U.S.C. § 1983 and claimed that the defendants placed him in controlled segregation in violation of prison regulations, the Eighth Amendment, due process, and equal protection. Upon review of the district court's order, we have determined that the district court properly identified and resolved the issues presented on appeal; therefore, we affirm for the reasons stated in the attached district court order.1
UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF ILLINOIS
2
RUDOLPH LUCIEN, Plaintiff,
3
vs.
4
HOWARD A. PETERS, et al., Defendants.
No. 90-2202
5
April 30, 1991.
ORDER
6
The plaintiff, a state prisoner, has brought this civil rights action pursuant to 42 U.S.C. § 1983. He claims that the defendants, various correctional officials, violated the plaintiff's constitutional rights by subjecting him to "cruel and unusual" conditions of confinement and by denying him equal protection. This matter is before the court for consideration of the parties' cross-motions for summary judgment. For the reasons stated in this order, summary judgment will be granted in favor of the defendants.
7
Summary judgment "shall be rendered forthwith if the pleadings, depositions, answers to interrogatories, and admissions on file, together with affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Fed.R.Civ.P. 56(c); Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986); Herman v. National Broadcasting Co., Inc., 744 F.2d 604, 607 (7th Cir.1984), cert. denied, 470 U.S. 1028 (1985). "[I]n determining whether factual issues exist, a reviewing court must view all the evidence in the light most favorable to the non-moving party." Black v. Henry Pratt Co., 778 F.2d 1278, 1281 (7th Cir.1985). However, Rule 56(c) "mandates the entry of summary judgment, after adequate time for discovery and upon motion, against a party who fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial." Celotex, 477 U.S. at 322. "Where the record taken as a whole could not lead a rational trier of fact to find for the non-moving party there is no 'genuine' issue for trial." Mechnig v. Sears, Roebuck & Co., 864 F.2d 1359 (7th Cir.1988).
8
The following facts are undisputed: On May 4, 1990, the plaintiff was placed in segregation pending investigation and hearing on various disciplinary offenses. The defendants placed the plaintiff in a cell with a solid door and vision panel rather than a cell with bars. The plaintiff calls the chamber a "control isolation cell." An Adjustment Committee found the plaintiff guilty of the charges on June 7, 1990. As a result, he received one year in segregation, as well as one year loss of good conduct credits.
9
The plaintiff remained in the so-called "control" cell for at least five months, until he was transferred to the Menard Correctional Center. The plaintiff maintains that prison regulations prohibit placement in control segregation for more than two consecutive three-day periods. The plaintiff (who is black and professes not to be a gang member) further charges that white prisoners and gang members are not subjected to the same "unconstitutional" treatment.
10
The plaintiff mischaracterizes or is mistaken about his segregation status. Both defendants deny that the plaintiff's placement in control segregation was ordered. Control segregation procedures are employed to isolate and control inmates who manifest "violent, bizarre or self-destructive behavior," and who have not been determined to be mentally ill. See Ill.Admin.Code, Tit. 20, Section 504.650 (1988). Here, nothing in the record indicates that control segregation procedures were initiated. Prison regulations concerning control segregation are inapplicable to the case at bar.
11
In fact, the affidavits of Defendant Goskie and Peters establish that the Pontiac Correctional Center does not have control segregation cells. The plaintiff was simply assigned to a cell in the segregation unit equipped with a solid door and vision panel, rather than bars. The defendants further declare that the solid-door cells are otherwise no different from other cells in the segregation unit, and that the plaintiff was afforded all privileges granted to other inmates in that unit. The plaintiff's mere placement in a cell with a solid door instead of a door with bars does not implicate the Constitution.1 Because the court finds that the plaintiff was not placed in control segregation, there is no need to address his equal protection argument regarding this "unconstitutional practice."
12
Even assuming that the plaintiff had made a triable showing of a constitutional violation, he alleged no facts establishing the direct, personal involvement of either defendant, as required by Duncan v. Duckworth, 644 F.2d 653, 655 (7th Cir.1981). Nor has the plaintiff shown that the alleged violation of his constitutional rights occurred at their direction or with their knowledge and consent. See Crowder v. Lash, 687 F.2d 996, 1005 (7th Cir.1982). The mere fact that Peters is the Warden and Goskie the Segregation Unit superintendent is insufficient to establish liability, as the doctrine of respondeat superior (supervisory liability) does not apply to actions filed under 42 U.S.C. § 1983. See Wolf-Lillie v. Sonquist, 699 F.2d 864, 869 (7th Cir.1983); Adams v. Pate, 445 F.2d 105 (7th Cir.1972). Both defendants attest, without contradiction, that they were uninvolved with the plaintiff's cell assignment in the segregation unit. Regardless of whether the plaintiff made a showing that his constitutional rights were violated, he has failed to show that the named defendants were personally involved in the alleged circumstances giving rise to the complaint.
13
In conclusion, no material facts are in dispute, and the court finds that the defendants are entitled to judgment as a matter of law. No reasonable trier of fact could find that the plaintiff was subjected to five months' placement in "control" segregation; rather, the plaintiff was placed in a cell that happened to have a solid door rather than a door with bars. It is plain that the plaintiff simply misunderstood his segregation status. Consequently, the defendants' motion for summary judgment will be granted, and the plaintiff's cross-motion for summary judgment will be denied.
14
IT IS THEREFORE ORDERED that the defendants' motion for summary judgment (docket # 18) is allowed pursuant to Fed.R.Civ.P. 56. The Clerk of the court is directed to enter judgment in favor of the defendants and against the plaintiff. The parties are to bear their own costs.
15
IT IS FURTHER ORDERED that the plaintiff's motion for summary judgment (docket # 21) is denied.
16
/s/ HAROLD A. BAKER
CHIEF U.S. DISTRICT JUDGE
*
After preliminary examination of the briefs, the court notified the parties that it had tentatively concluded that oral argument would not be helpful to the court in this case. The notice provided that any party might file a "Statement as to Need of Oral Argument." See Fed.R.App.P. 34(a); Circuit Rule 34(f). No such statement having been filed, the appeal has been submitted on the briefs
1
Lucien argues that the district court abused its discretion in refusing to appoint him counsel before it granted summary judgment in favor of the defendants. He claims that counsel was necessary to aid him in conducting discovery because the defendants engaged in "evasive discovery tactics." There is no evidence of this in the record. Furthermore, upon review and considering the factors set forth in Maclin v. Freake, 605 F.2d 885, 887-89 (7th Cir.1991), we hold that the district court did not abuse its discretion in denying Lucien's request for appointment of counsel
1
In his affidavit opposing the defendants' motion for summary judgment (a page of which is missing), the plaintiff insists that the defendants are lying and that there is, in fact, a control segregation area in the segregation unit. However, the plaintiff's mere say-so is insufficient to defeat summary judgment. See Fed.R.Civ.P. 56(e). The only alleged difference between the plaintiff's cell and other cells is the mostly solid door. The plaintiff has not articulated a basis for a finding that the slightly different cells are actually "control isolation" cells
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NUMBER 13-10-00170-CR
COURT OF APPEALS
THIRTEENTH DISTRICT
OF TEXAS
CORPUS CHRISTI – EDINBURG
GREGORY MICHAEL CELESTINE, Appellant,
v.
THE STATE OF TEXAS,
Appellee.
On appeal from the Criminal
District Court
of Jefferson County, Texas.
MEMORANDUM OPINION
Before Justices
Garza, Benavides, and Vela
Memorandum Opinion by
Justice Garza
A jury convicted
appellant, Gregory Michael Celestine, of possession of a controlled substance, specifically,
phencyclidine (“PCP”), a second-degree felony. See Tex. Health & Safety Code Ann. § 481.115(d)
(Vernon 2010). The trial court found appellant to be a repeat felony offender
and sentenced him to ten years’ imprisonment. See Tex. Penal Code Ann. §§ 12.32, 12.42(b)
(Vernon Supp. 2010).
I. Anders
Brief
Celestine’s appellate
counsel has filed a motion to withdraw and a brief in support thereof in which
he states that he has diligently reviewed the entire record and has concluded
that there is no reversible error. See Anders v. California, 386 U.S.
738 (1967); High v. State, 573 S.W.2d 807, 813 (Tex. Crim. App. [Panel
Op.] 1978). Counsel has informed this Court that he has (1) examined the
record and has found no arguable grounds to advance on appeal, (2) served
copies of the brief and motion to withdraw on Celestine, and (3) informed Celestine
of his right to review the record and to file a pro se response.[1]
See Anders, 386 U.S. at 744; Stafford v. State, 813 S.W.2d 503, 510
n.3 (Tex. Crim. App. 1991). Celestine filed a pro se response. See In re
Schulman, 252 S.W.3d 403, 409 n.23 (Tex. Crim. App. 2008).
II.
Independent Review
Upon receiving an Anders brief,
we must conduct a full examination of all the proceedings to determine whether
the appeal is wholly frivolous. Penson v. Ohio, 488 U.S. 75, 80 (1988).
We have reviewed the entire record, counsel’s brief, and appellant’s pro se
response, and find that the appeal is wholly frivolous and without merit. See
Bledsoe v. State, 178 S.W.3d 824, 827-28 (Tex. Crim. App. 2005) (“Due to
the nature of Anders briefs, by indicating in the opinion it considered
the issues raised in the brief and reviewed the record for reversible error but
found none, the court of appeals met the requirements of Texas Rule of
Appellate Procedure 47.1.”); Stafford, 813 S.W.2d at 509. Accordingly,
we affirm the judgment of the trial court.
III. Motion
to Withdraw
In accordance with Anders,
Celestine’s counsel has filed a motion to withdraw as his appellate counsel. See
Anders, 386 U.S. at 744; see also In re Schulman, 252 S.W.3d at 408
n.17 (citing Jeffery v. State, 903 S.W.2d 776, 779-80 (Tex. App.–Dallas
1995, no pet.) (“If an attorney believes the appeal is frivolous, he must
withdraw from representing the appellant. To withdraw from representation, the
appointed attorney must file a motion to withdraw accompanied by a brief
showing the appellate court that the appeal is frivolous.”) (citations omitted)).
We grant the motion to withdraw.
We order that counsel
must, within five days of the date of this opinion, send a copy of the opinion
and judgment to Celestine and advise him of his right to file a petition for
discretionary review.[2]
See Tex. R. App. P. 48.4;
see also In re Schulman, 252 S.W.3d at 412 n.35; Ex parte Owens,
206 S.W.3d 670, 673 (Tex. Crim. App. 2006).
________________________
DORI CONTRERAS GARZA
Justice
Do
not publish.
Tex. R. App. P.
47.2(b)
Delivered
and filed the
10th
day of February, 2011.
[1]
The Texas Court of Criminal Appeals has held that “the pro se response need
not comply with the rules of appellate procedure in order to be considered. Rather,
the response should identify for the court those issues which the indigent
appellant believes the court should consider in deciding whether the case
presents any meritorious issues.” In re Schulman, 252 S.W.3d 403, 409
n.23 (Tex. Crim. App. 2008) (quoting Wilson v. State, 955 S.W.2d 693,
696-97 (Tex. App.–Waco 1997, no pet.)).
[2]
No substitute counsel will be appointed. Should Celestine wish to seek further
review by the Texas Court of Criminal Appeals, he must either retain an
attorney to file a petition for discretionary review or file a pro se petition
for discretionary review. Any petition for discretionary review must be filed
within thirty days from the date of either this opinion or the last timely
motion for rehearing that was overruled by this Court. See Tex. R. App. P. 68.2. Any petition
for discretionary review must be filed with this Court, after which it will be
forwarded to the Texas Court of Criminal Appeals. See Tex. R. App. P. 68.3, 68.7. Any
petition for discretionary review must comply with the requirements of Rule
68.4 of the Texas Rules of Appellate Procedure. See Tex. R. App. P. 68.4.
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271 S.W.2d 279 (1954)
Grady MARTIN, Appellant,
v.
The STATE of Texas, Appellee.
No. 26992.
Court of Criminal Appeals of Texas.
June 2, 1954.
L. W. Pollard, Kerrville, for appellant.
Jim Nugent, County Atty., Kerrville, Morriss, Morriss, Boatwright & Lewis, by Will A. Morris, Jr., San Antonio, Sp. Prosecutors, Wesley Dice, State's Atty., Austin, for the State.
MORRISON, Judge.
The offense is aggravated assault; the punishment, a fine of $100. The grounds of aggravation alleged were that the assault was committed with a deadly weapon, *280 with premeditated design, and that serious bodily injury was inflicted.
The trial was before the court without the intervention of a jury. The judgment is a general finding of guilty as charged.
Appellant was the gatekeeper at the entrance to a girl's camp. There seems to have been some dispute among the local residents as to whether the gate which he guarded was at the entrance to a public or a private road. At any rate, the injured party and his wife, enroute to a family party at a ranch beyond the gate, had failed to stop at appellant's command. When they returned that night after the party they found the road blocked with a chain. The injured party attempted to remove the chain, and when he did the appellant hit him one blow on the head and one on the shoulder with a club, which necessitated his going to the hospital for treatment.
Appellant did not testify, and no evidence was introduced in his behalf
We shall discuss appellant's contentions in the order raised by able counsel in his brief.
Bill of exception No. 1 relates to the argument of the special prosecutor which was a direct reference to the appellant's failure to testify in his own behalf.
This is the second time, so far as we can ascertain, that this question has been before this Court. In Widener v. State, Tex.Cr.App., 262 S.W.2d 401, we declined to discuss several bills of exception to indirect references to the accused's failure to testify contained in the prosecutor's argument before the court, saying that it would be presumed that the court ignored any improper argument.
The State cites us People v. Corry, 349 Ill. 122, 181 N.E. 603, 86 A.L.R. 828. It would appear from the opinion in that cause that Illinois has a statute very similar to our Article 710, Vernon's Ann. C.C.P. The argument complained of in that case was a direct reference to the failure of the accused to testify. The Supreme Court of Illinois said, in sustaining the conviction, that they would not presume that the trial court was influenced by the argument. The reason for such holdings is bottomed upon the presumption that a trial court did not consider anything that was improperly presented before him. We think that there is still another practical reason to be considered. If the court had granted the motion for mistrial, there would be no reason why the same judge could not immediately start over in the retrial of the cause. Having heard the evidence and the argument once would not disqualify him, assuming that no jury was demanded from again passing on the facts, as it would a juror. To require a judge to go through such a fruitless gesture would be without reason. In the case at bar the trial court qualified appellant's bill by certifying that he disregarded the argument and did not consider it for any purpose. We think that we should accept the court's qualification and hold no reversible error reflected by the bill.
Appellant next complains that the State was permitted to reopen its case and prove venue.
Article 643, V.A.C.C.P., provides:
"The (trial) court shall allow testimony to be introduced at any time before the argument of a cause is concluded, if it appear that it is necessary to a due administration of justice."
This Court has held that this statute authorized a court to permit the State to reopen after a motion for instructed verdict and after the charge had been presented to the accused. Tarver v. State, 108 Tex. Cr.R. 655, 2 S.W.2d 439, and Fullbright v. State, 131 Tex.Cr.R. 640, 101 S.W.2d 571.
Appellant attacks the sufficiency of the evidence to support the conviction and limits his discussion to the evidence as to the seriousness of the injury.
We find, however, that Dr. Gregg, in answering a hypothetical question concerning the weapon, based upon the evidence, said that a club, six or seven pounds in weight with rough and jagged surface *281 which had been held in two hands raised above the head and used to strike a heavy blow to the head of the person assaulted, would be reasonably calculated to inflict wounds which would give apprehension of danger to life.
We think the court might have also based his judgment on the count charging that the assault was committed with premeditated design and by use of means calculated to inflict great bodily injury.
The appellant was shown to have been angered at the injured party's failure to stop at the gate earlier in the day and sometime before the assault stated, "Well I'm going to wait here all night * * * if it takes all night and I'm going to get him when he comes out."
Finding no reversible error, the judgment of the trial court is affirmed.
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RECORD IMPOUNDED
NOT FOR PUBLICATION WITHOUT THE
APPROVAL OF THE APPELLATE DIVISION
This opinion shall not "constitute precedent or be binding upon any court." Although it is posted on the
internet, this opinion is binding only on the parties in the case and its use in other cases is limited. R. 1:36-3.
SUPERIOR COURT OF NEW JERSEY
APPELLATE DIVISION
DOCKET NO. A-4733-16T2
NEW JERSEY DIVISION
OF CHILD PROTECTION
AND PERMANENCY,
Plaintiff-Respondent,
v.
S.B.,
Defendant-Appellant.
__________________________
IN THE MATTER OF THE
GUARDIANSHIP OF S.M.B.,
a Minor.
__________________________
Submitted September 21, 2018 – Decided October 25, 2018
Before Judges O'Connor and DeAlmeida.
On appeal from Superior Court of New Jersey,
Chancery Division, Family Part, Essex County,
Docket No. FG-07-0113-17.
Joseph E. Krakora, Public Defender, attorney for
appellant (Stephania Saienni-Albert, Designated
Counsel, on the briefs).
Gurbir S. Grewal, Attorney General, attorney for
respondent (Jason W. Rockwell, Assistant Attorney
General, of counsel; Erika C. Callejas, Deputy
Attorney General, on the brief).
Joseph E. Krakora, Public Defender, Law Guardian,
attorney for minor (Lisa M. Black, Designated
Counsel, on the brief).
PER CURIAM
Defendant S.B. (mother) appeals from a Family Part judgment
terminating her parental rights to her daughter, S.M.B. (Sarah), presently three
years of age.1 The identity of Sarah's biological father is not known.
The mother contends the Division of Child Protection and Permanency
(Division) failed to prove by clear and convincing evidence the four-prong
standard set forth in N.J.S.A. 30:4C-15.1(a).2 After reviewing the record and
1
We employ initials to protect the mother's and the child's privacy, and use a
pseudonym to refer to the child for ease of reference.
2
These four prongs are:
(1) The child's safety, health, or development has been or will
continue to be endangered by the parental relationship;
(2) The parent is unwilling or unable to eliminate the harm facing
the child or is unable or unwilling to provide a safe and stable
home for the child and the delay of permanent placement will add
to the harm. Such harm may include evidence that separating the
child from his resource family parents would cause serious and
enduring emotional or psychological harm to the child;
2
A-4733-16T2
the applicable legal principles, we reject the arguments she advances and
affirm substantially for the reasons expressed by Judge Wayne J. Forrest in his
comprehensive written opinion. In lieu of reciting at length the evidence
presented by the Division in support of terminating the mother's parental
rights, we incorporate by reference Judge Forrest's factual findings because
they are supported by competent evidence presented at trial. 3 N.J. Div. of
Youth & Family Servs. v. F.M., 211 N.J. 420, 448-49 (2012). We highlight
some of the key evidence.
Sarah was born in July 2015. While she and the mother were still in the
hospital following her birth, the hospital staff noted the mother did not have
"full cognitive capacity to care for an infant," and contacted the Division. The
Division immediately effectuated an emergency removal of the child and
___________________
(3) The division has made reasonable efforts to provide services to
help the parent correct the circumstances which led to the child's
placement outside the home and the court has considered
alternatives to termination of parental rights; and
(4) Termination of parental rights will not do more harm than
good.
[N.J.S.A. 30:4C-15.1(a).]
3
The mother neither attended nor introduced any evidence at trial.
3
A-4733-16T2
placed her in a resource home. Shortly thereafter, the Division obtained
temporary custody of Sarah, who has never been in her mother's custody.
During the guardianship trial, a Division caseworker testified to the
following. Although she submitted to various evaluations and completed
parenting classes, the mother did not submit to a substance abuse assessment
or participate in psychological therapy, as had been recommended by one of
the evaluators. The mother was appropriate when she visited the child, yet for
many months failed to see the child at all. The mother was not able to secure
housing or employment and depended upon her own mother for financial
support. However, her own mother was herself unable to maintain stable
housing for any appreciable length of time. All of the relatives the mother
suggested as potential caregivers were ruled out and none appealed the
Division's rule-out determination. Finally, the caseworker noted Sarah was
doing well in the home of her resource mother, who wanted to adopt the child.
The Division called psychologist Mark Singer, Ed. D., as its expert
witness. Dr. Singer conducted a psychological evaluation of the mother, as
well as a bonding evaluation of the child with both the mother and resource
mother. Dr. Singer noted documents he reviewed about the mother's
background indicated she had significant cognitive deficits in the frontal lobe,
4
A-4733-16T2
which control decision-making, long-term planning, and logical thinking. The
objective tests he performed and his clinical evaluation were consistent with
the background information provided in the documents.
While there is no indication the mother would deliberately harm a child,
Singer found she did not have the emotional or cognitive resources to create
stability in her life and thus could not do the same for Sarah. Because of her
poor psychological functioning, she was "not a viable parenting option" for the
child and not likely to become one. Her frontal lobe deficit was "not subject to
. . . remediation" and thus was "not likely to change over time."
As for the bonding evaluation between the mother and child, Singer did
find the mother conducted herself appropriately and the child appeared
comfortable in her presence. However, the child did not view the mother as a
significant parental figure. By contrast, when with the resource mother, the
child exhibited behavior revealing she was far more attached to the latter, who
Singer found was her psychological parent.
Singer opined that, if removed from the resource mother's care, there is a
significant risk the child will suffer "feelings of loss, low self-esteem, [and]
insecurity" and will have "difficulty forming meaningful attachments later in
life," and the mother will not be able to mitigate the harm the child would
5
A-4733-16T2
endure. Given the child's attachments to the resource mother, Singer found the
child will not likely have a significant or enduring reaction to the termination
of the mother's parental rights. In fact, he was of the opinion the termination
of the mother's parental rights and the child's adoption by the resource mother
was the "only viable option" for the child.
Following the trial, the judge issued a thorough, forty-page opinion in
which he addressed the four factors in N.J.S.A. 30:4C-15.1(a), setting forth his
findings of fact and conclusions of law as to each. The mother contends there
is insufficient evidence to support the judge's findings and conclusions that the
Division met all four prongs in this statute by clear and convincing evidence.
In reviewing a case in which the termination of parental rights has been
ordered, we remain mindful of the gravity and importance of our review. See
N.J. Div. of Youth & Family Servs. v. I.S., 202 N.J. 145, 151 (2010) ("[T]he
process for terminating parental rights is a difficult and intentionally rigorous
one that must be satisfied by a heightened burden of proof . . . ."). Parents
have a constitutionally protected right to enjoy a relationship with their
children and to raise them without State interference. N.J. Div. of Youth &
Family Servs. v. E.P., 196 N.J. 88, 102 (2008).
6
A-4733-16T2
However, this right is not absolute, as it is limited by the "State's parens
patriae responsibility to protect children whose vulnerable lives or
psychological well-being may have been harmed or may be seriously
endangered by a neglectful or abusive parent." F.M., 211 N.J. at 447. The
State has a strong public policy that favors placing children in a permanent,
safe, and stable home. See generally In re Guardianship of K.H.O., 161 N.J.
337, 357-58 (1999).
In addition, a reviewing court should not disturb the factual findings of
the trial court if they are supported by "adequate, substantial and credible
evidence. . . ." N.J. Div. of Youth & Family Servs. v. M.M., 189 N.J. 261, 279
(2007) (quoting In re Guardianship of J.T., 269 N.J. Super. 172, 188 (App.
Div. 1993)). We defer to the trial court's credibility findings and, in particular,
its fact findings because of its expertise in family matters, see N.J. Div. of
Youth & Family Servs. v. M.C. III, 201 N.J. 328, 342-43 (2010), unless the
trial court's findings are "so wide of the mark that the judge was clearly
mistaken." N.J. Div. of Youth & Family Servs. v. G.L., 191 N.J. 596, 605
(2007) (citing J.T., 269 N.J. Super. at 188-89).
We note that providing proof a parent has in fact harmed a child is not
essential to showing the first prong of N.J.S.A. 30:4C-15.1(a) has been
7
A-4733-16T2
satisfied. N.J. Div. of Youth & Family Servs. v. A.W., 103 N.J. 591, 604-05,
(1986). When no actual harm is proven, the first prong will be satisfied by
evidence showing a parent will endanger the child's health, safety, or welfare.
See In re Guardianship of D.M.H., 161 N.J. 365 (1999). A court does not have
to wait until a child is "irreparably impaired by parental inattention or neglect"
before it acts. Id. (quoting A.W., 103 N.J. at 616 n.14).
We have examined the mother's arguments the Division failed to satisfy
the four prongs of N.J.S.A. 30:4C-15.1(a). After perusing the record, we
conclude these arguments are without sufficient merit to warrant discussion in
a written opinion. See Rule 2:11-3(e)(1)(E). Judge Forrest's thorough opinion
analyzes these prongs, and his findings are amply supported by substantial and
credible evidence, mandating our deference. N.J. Div. of Youth & Family
Servs. v. F.J., 211 N.J. 420, 448-49 (2012); Cesare v. Cesare, 154 N.J. 394,
413 (1998).
Affirmed.
8
A-4733-16T2
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375 Mass. 274 (1978)
376 N.E.2d 558
COMMONWEALTH
vs.
KEVIN HICKS.
Supreme Judicial Court of Massachusetts, Suffolk.
January 5, 1978.
May 17, 1978.
Present: HENNESSEY, C.J., QUIRICO, BRAUCHER, KAPLAN, & ABRAMS, JJ.
Susan J. Baronoff for the defendant.
Terrence D. Garmey, Legal Assistant to the District Attorney (Michael J. Traft, Special Assistant District Attorney, with him) for the Commonwealth.
HENNESSEY, C.J.
These are appeals pursuant to G.L.c. 278, §§ 33A-33G, from the defendant's convictions on indictments charging him with murder in the first degree, *275 armed robbery, and unlawfully carrying a firearm. We affirm the convictions.
A short time before midnight on September 28, 1975, security guard Philip Landick drove Shannon Harrell, the assistant manager of a McDonald's restaurant to a bank on Temple Place in Boston to make a night deposit for McDonald's. Before Harrell had alighted from the security guard's marked car, two men approached the car on the driver's side. Shots were exchanged between one of the men and Landick. The other man opened the car door on the passenger's side, took a bag of money from the front seat, and fled. Harrell also fled, back to McDonald's. Arriving at the scene moments later, police found the security guard dead of a gunshot wound and the defendant lying near the car bleeding. About six inches to one foot from the defendant's outstretched hand was a pistol. Partially underneath the defendant was a shoulder bag, and, nearby, police found various items later used in evidence to link the defendant to the shooting.
The Commonwealth presented a circumstantial case, primarily through the testimony of three eyewitnesses, none of whom could positively identify the defendant as the gunman who had shot Landick. The Commonwealth also presented police testimony and various exhibits tending to corroborate details observed by the eyewitnesses and link the defendant to the shooting. The defendant maintained that he had been merely a bystander. No issue is raised on appeal as to the sufficiency of the evidence supporting the verdict, and we are satisfied that the defendant's motion for directed verdicts was properly denied. We therefore proceed directly to a consideration of the four assigned errors, detailing the evidence in the case only in so far as it becomes relevant to the arguments advanced by the defendant.
1. The defendant first maintains that the judge erred in refusing to allow the defendant to recall the witness Mark Conley (Conley), whom defense counsel had cross-examined previously. Counsel had deliberately refrained from impeaching Conley at that time, although it appears that *276 Conley may have made a prior inconsistent statement concerning his opportunity to observe the incident in question.
Conley was called as a witness for the prosecution. He testified that on the night of the shooting he was driving through downtown Boston and had stopped his car at a traffic light on Washington Street at the intersection of Temple Place. He heard two noises that sounded like firecrackers exploding, followed within a few seconds by a large bang. Looking down Temple Place, Conley saw one man fall backward near the driver's side of a car and another man run to the passenger side of the car, reach in, and run away. Conley indicated that he could not identify the defendant as someone he had seen on Temple Place, but that he had not noticed anyone on the street other than the two men he had mentioned. Defense counsel cross-examined Conley, inquiring into Conley's opportunity to observe, but decided not to impeach Conley, because, as he later explained on the record, Conley had not identified the defendant.
After the Commonwealth had rested, the defendant transmitted a note to the trial judge objecting to his lawyer's decision not to use the inconsistent statement. In deference to the defendant's wishes, defense counsel moved to recall Conley. The prosecution raised no objection, except to the delay that was expected to ensue, since Conley could not be reached that day. The judge denied the motion, and the defendant, who has new counsel for these appeals, argues that the judge's decision constitutes reversible error. There is no merit in this contention.
Whether or not a witness should be recalled in a criminal case is a matter entrusted to the sound discretion of the trial judge. Commonwealth v. Williams, 5 Mass. App. Ct. 809, 809-810 (1977). See Perrott v. Leahy, 302 Mass 318, 322-323 (1939). See also United States v. Ritchie, 128 F.2d 798 (3d Cir.1942). Courts have found an abuse of discretion where the refusal to permit recall of a witness unreasonably deprives the defendant of an opportunity to present newly *277 discovered information material to the defense,[1] but those cases are not applicable here, where, because of the relative unimportance of the supposed inconsistencies, defense counsel made a tactical choice not to impeach the witness. Moreover, we can conceive of no benefit that would arise from impeaching this witness; on the contrary, defense counsel could have justifiably concluded that this evidence might hurt more than help. In the circumstances, the defendant has no cause to fault the representation afforded by trial counsel. See United States v. Moore, 554 F.2d 1086, 1091-1092 (D.C. Cir.1976); ABA Standards Relating to the Defense Function § 5.2(b) (Approved Draft 1971).
2. The defendant took the stand at trial, and he now argues that the judge erroneously deprived him of the opportunity to offer an innocent explanation for his possession of a knotted woman's nylon stocking found in his possession at the time of the shooting. The stocking had been put in evidence by the prosecution during the testimony of a police witness. There was no error.
In all, defense counsel asked the defendant three questions pertaining to the stocking. After establishing that the defendant might have had a stocking in his possession, counsel asked, "What would you have done with that [the stocking]?" The judge sustained an objection. Counsel then asked, "If you had it, where would it have been on your person?" The judge again sustained an objection, and defense counsel moved on to another line of inquiry. No offer of proof was made, and it appears from the context that the objections went to the form of the questions, not to the substance of the inquiry. There was no error.
A criminal defendant may not be prevented from explaining seemingly incriminating evidence offered by the prosecution. See, e.g., Commonwealth v. Fatalo, 345 Mass. 85, *278 86-88 (1962); Commonwealth v. Smith, 329 Mass. 477, 479-481 (1952); Commonwealth v. Goldberg, 212 Mass. 88, 91 (1912). In each of those cases, the trial judge precluded relevant testimony even after defense counsel had made an offer of proof. Here, however, the judge did not bar any line of testimony. On the contrary, counsel appears to have abandoned all inquiry into the matter of the stocking. The exclusion of counsel's general questions did not bar more precise inquiry tending to show a noncriminal intent. Commonwealth v. Subilosky, 352 Mass. 153, 167 (1967).
3. The prosecutor's cross-examination of the defendant included an inquiry into whether the defendant had been in the company of one Robert Thomas on the night in question. Defense counsel objected at the first reference to Robert Thomas, and at a bench conference that ensued the prosecutor represented that Thomas was "the other defendant" and that the relationship between Thomas and Hicks was material to the case. When cross-examination resumed, Hicks denied having been with Robert Thomas on the night of the shooting.
The defendant argues that evidence concerning Robert Thomas had minimal probative value which was far outweighed by its prejudicial effect on his case. On the contrary, the evidence was highly relevant to the defendant's credibility. Hicks had previously testified that he had spent the evening alone in his apartment and that he was walking by himself on Temple Place at the time of the shooting. It is axiomatic that a defendant subjects himself to cross-examination when he chooses to testify on his own behalf. E.g., Raffel v. United States, 271 U.S. 494, 496-497 (1926). The scope of that cross-examination lies within the sound discretion of the trial judge, and there was no abuse in this case. The defendant might have been entitled to a limiting instruction, if one had been requested, in order to guard against an inference of guilt by association, cf. Commonwealth v. Fancy, 349 Mass. 196, 200 (1965), but the evidence clearly was admissible on the issue for which it was offered.
*279 4. The defendant argues that the judge's charge on the difference between murder in the first and murder in the second degree was inadequate and that this court therefore should reduce the defendant's conviction of murder in the first degree to a conviction for murder in the second degree. See G.L.c. 278, § 33E. We hold that there was no error in the charge.
The judge instructed as to the common law definition of murder, then charged that, in addition to determining whether murder had been committed, the jury had the duty to determine the degree. The judge then reviewed the three kinds of murder in the first degree, see G.L.c. 265, § 1, and instructed that all other murder was murder in the second degree. The most detailed portion of the charge concerned the felony-murder rule, and the judge instructed that, "if a murder is committed in the commission or attempted commission of the crime of armed robbery, and you find that beyond a reasonable doubt, then the offense would be first degree murder and not second degree murder, and you should so find." The judge did not elaborate on the concept of deliberate premeditation, although the evidence warranted a verdict of murder in the first degree on that theory if the jury found that the defendant had fired two shots with deliberate premeditation. The judge emphasized that, "[i]f you find there was a murder, but you are uncertain as to whether or not it is first degree or second degree murder, the defendant must have the benefit of that doubt and the verdict must then be for murder in the second degree and not murder in the first degree." When the jury retired, they took into the jury room a form reminding them of the three possible murder verdicts they might return not guilty, guilty of murder in the second degree, and guilty of murder in the first degree.
The defendant asserts that the charge was erroneous, arguing that it conveyed the impression that, although a conviction of murder in the second degree was a theoretical possibility, the jury should return a murder conviction, if at all, only on the felony-murder theory. This contention is *280 based largely on a single sentence in the charge where the judge stated that lengthy instructions on the difference between murder in the first degree and murder in the second degree were unnecessary. We are concerned only with the impression left with the jury by the charge as a whole, Commonwealth v. Ramey, 368 Mass. 109, 114 (1975); Commonwealth v. Benders, 361 Mass. 704, 707 (1972), and we are satisfied that the judge instructed the jury clearly and correctly as to the possible verdicts they might return.
5. We have examined the entire record in accordance with our duties under G.L.c. 278, § 33E, and we observe nothing which in justice indicates that we should modify the result reached by the jury.
Judgments affirmed.
NOTES
[1] See United States v. Keller, 523 F.2d 1009 (9th Cir.1975); State v. Carns, 136 Mont. 126 (1959); State v. Taylor, 21 Utah 2d 425 (1968). See also Hahn v. State, 58 So.2d 188 (Fla. 1952); Sipero v. State, 41 Wis.2d 390 (1969).
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51 F.3d 475
75 A.F.T.R.2d 95-1993, 95-1 USTC P 50,232
Bernard M. BARRETT, Jr., M.D. and Plastic & ReconstructiveSurgeons, P.A., Plaintiffs-Appellants,v.UNITED STATES of America, et al., Defendants,United States of America, Defendant-Appellee.
No. 93-2280.
United States Court of Appeals,Fifth Circuit.
April 20, 1995.
Edward D. Urquhart, Silvia T. Hassell, Charles J. Escher, Urquhart & Hassell, Houston, TX, for appellants.
Sally J. Schornstheimer, Gary R. Allen, Jonathan S. Cohen, Appellate Secretary, Tax Div., Dept. of Justice, Stuart D. Gibson, Trial Atty., Washington, DC, Lawrence Finder, Acting U.S. Atty., Paula Offenhauser, Asst. U.S. Atty., Houston, TX, for appellee.
Appeal from the United States District Court for the Southern District of Texas.
Before KING and BENAVIDES, Circuit Judges, and LEE1, District Judge.
BENAVIDES, Circuit Judge:
1
In one form or another, this case has been before this Court on five prior occasions.2 This appeal is taken from the district court's judgment in favor of the Internal Revenue Service ("IRS") following a bench trial held pursuant to a prior order of remand from this Court. The district court found that the IRS did not violate sections of the tax code which prohibit the unlawful disclosure of tax return information during a civil or criminal investigation. Because we conclude that the district court erred, we reverse the judgment and remand for a determination of Dr. Barrett's damages.
I. Background and Procedural History
2
Dr. Barrett is the president of an unincorporated Houston medical practice specializing in plastic and reconstructive surgery ("PARS"). In 1979, the IRS began an audit of Dr. Barrett's personal and corporate tax returns for the years 1977 and 1978. When the initial investigation revealed a $100,000 discrepancy between Dr. Barrett's books and his bank records, the IRS transferred the case from its civil division to its criminal division.
3
IRS Agent Hanson, to whom the case was transferred, determined that it would be necessary to find out from Dr. Barrett's patients the amount each had paid and whether any part was paid in cash. Two informants who were Dr. Barrett's former employees, Dr. Michael Kelly and Beverly Redick Kelly, had informed the IRS that Dr. Barrett was "skimming" cash payments received from his patients.3
4
On June 17, 1982, Agent Hanson sent a summons to PARS, calling for PARS' books and records. Five days later, Dr. Barrett advised that PARS would not comply with the summons, asserting his constitutional rights under the Fourth and Fifth Amendments. Agent Hanson then sent summonses to the hospitals where Dr. Barrett performed surgery and one to Dr. Barrett individually. All but four of the sixteen hospitals complied with the summonses. The responses from the complying hospitals provided Agent Hanson with 386 names and addresses of Dr. Barrett's patients.
5
Nine months later, Agent Hanson sent a "circular letter" to each of the 386 patients, informing them that Dr. Barrett was being investigated by the Criminal Investigation Division of the IRS and requesting information regarding the nature and amount of the fees paid to Dr. Barrett. In addition to the years under investigation, the letters were mailed to patients treated in 1976, 1979, and 1980, years in which no IRS Examination Division work or Criminal Investigation Division work has been performed. One hundred and twenty-six letters were returned as undeliverable.
6
Six months later, on November 29, 1983, Dr. Barrett commenced this action in district court against the IRS, alleging violations of 26 U.S.C. Sec. 6103 and 26 U.S.C. Sec. 7431.4 In short, these sections authorize a taxpayer to bring suit for unlawful disclosures of tax return information during a civil or criminal investigation. Dr. Barrett alleged that the IRS violated these sections by unnecessarily informing his patients, through the circular letters, that he "is currently under investigation by the Criminal Investigation Division of the Internal Revenue Service." It is undisputed that this particular disclosure to Dr. Barrett's patients constitutes the disclosure of "tax return information."
7
In an initial attempt to dispose of Dr. Barrett's suit against the IRS, the district court granted the IRS a summary judgment. The district court concluded that the IRS was authorized to disclose this information because of its strong interest in choosing the source of information it sought and because Dr. Barrett's bank records were, as a matter of law, not a source of information "otherwise reasonably available" pursuant to the exception to the rule of nondisclosure contained in 26 U.S.C. Sec. 6103(k).
8
On appeal, this Court reversed the district court's summary judgment, holding that there was a fact issue concerning whether the disclosures in the circular letters to Dr. Barrett's patients were necessary and whether the information sought was otherwise reasonably available. See Barrett v. United States, 795 F.2d 446 (5th Cir.1986).
9
[A] genuine issue of material fact has been raised as to whether disclosure of the return information that the taxpayer was under investigation, particularly criminal investigation, was "necessary." We recognize that this may be a mixed question of law and fact; that is, the district court must interpret section 6103(k)(6) and the relevant IRS regulations in the light of the facts developed.
10
Id. at 451.
11
Consequently, the case was remanded for trial to determine whether it was necessary for Agent Hanson to disclose that Dr. Barrett was currently under criminal investigation to each, or any, of Dr. Barrett's patients and, if so, whether the disclosure might have been avoided by reviewing and analyzing the bank records. The panel emphasized that the question was not whether the information sought was necessary; rather, the question was whether the disclosure was necessary to obtain the information and, if it was, whether the information sought was "otherwise reasonably available." On this appeal, we consider Dr. Barrett's appeal from the bench trial, occasioned by our previous remand, in which the district court found that the disclosure in Agent Hanson's circular letters did not violate 26 U.S.C. Sec. 6103 and 26 U.S.C. Sec. 7431.
II. Necessity of Disclosure
12
With respect to the district court's underlying fact-findings and inferences deduced therefrom, we are bound by the clearly erroneous standard of review. Robicheaux v. Radcliff Material, Inc., 697 F.2d 662, 666 (5th Cir.1983). However, with regard to the legal conclusions reached by the district court based upon factual data, we review these conclusions de novo, as an issue of law. Id.
13
In regard to the question of whether it was necessary to disclose in the circular letters the fact that Dr. Barrett was currently under investigation by the Criminal Investigation Division of the Internal Revenue Service, the district court concluded:
14
It was "necessary" for Mr. Hanson to identify himself, his title and his division, the name of the taxpayer about whom he was requesting information, the nature of his inquiry, and sufficient facts about the information he was seeking to permit the recipients of the letters to comply with his request, in order to obtain the information he sought by sending the letters, which was "information not otherwise reasonably available."
15
(R. Vol. 1; 3213) (emphasis added). While the district court concluded that it was necessary to provide sufficient information to permit the recipients to comply, the district court did not specifically address the question of whether it was necessary to disclose that Dr. Barrett was under criminal investigation.
16
The IRS argues that disclosing the fact of a criminal investigation is necessary to obtain meaningful responses from third parties. Without referring to any evidence adduced at trial, the IRS argues that disclosing the criminal nature of the investigation is necessary because it apprises the third parties of the potential severity of the consequences of the investigation, which may encourage them to exercise appropriate care in responding to the inquiry. To the contrary, the IRS's own expert witness, Mr. Eugene "Pete" Twardowicz, testified on cross-examination that it was not necessary to include the first paragraph in the letter which disclosed "[t]he above-named individual is currently under investigation by the Criminal Investigation Division of the Internal Revenue Service." Specifically, Twardowicz testified:
17
Q: Now isn't it true, Mr. Twardowicz, that the absence of the first paragraph in that letter would not have detracted from the effectiveness of the letter?
18
A: Well, I again, I think it would have detracted, and, you know, instead of beating around the bush here, does it need Criminal Investigation Division there, no, it doesn't need that, but I think it needs in there that he is under investigation. Now the question is does the addition of Criminal Investigation Division hurt it, and I think that's up to your Honor to decide that. In may judgment, it doesn't.
19
The IRS offered no evidence that disclosing the fact that a taxpayer is under criminal investigation is necessary to obtain the information sought by sending the letters. Cf. Diamond v. United States, 944 F.2d 431, 435 (8th Cir.1991) (as a matter of law, IRS agent did not need to identify himself in circular letters as a member of the Criminal Investigation Division to secure the desired information).
20
The IRS previously took a conflicting position on what is relevant to the proposition that disclosing the fact of a criminal investigation promotes third-party compliance. At trial, the IRS successfully objected on relevancy grounds to the admission of evidence showing how many patients actually replied or sent back information in response to the circular letters. As further evidence that the disclosure was unnecessary, the formal IRS summonses for information sent out by Agent Hanson before the circular letters did not disclose that Dr. Barrett was under criminal investigation.
21
Aside from the uncontradicted evidence presented through Mr. Twardowicz at trial, we note that there are several statutes that make it unlawful for third parties to give knowingly false information to an agent of the Internal Revenue Service, whether the investigation is civil or criminal. See, e.g., 18 U.S.C. Sec. 1001; 26 U.S.C. Sec. 7206(1); 26 U.S.C. Sec. 7207; 26 U.S.C. Sec. 7212. Certainly, the existence of these criminal penalties sufficiently encourages third parties to exercise appropriate care in responding to inquiries from an employee of the Internal Revenue Service.
22
Ordinarily, a district court's finding is clearly erroneous when, although there is evidence to support it, the reviewing court on the entire evidence is left with the definite and firm conviction that a mistake has been committed. See United States v. United States Gypsum Co., 333 U.S. 364, 395, 68 S.Ct. 525, 542, 92 L.Ed. 746 (1948); Lewis v. Timco, Inc., 736 F.2d 163, 166 n. 2 (5th Cir.1984). Here, there is no evidence to support a finding that it was necessary to state in the body of the letter that Dr. Barrett was currently under investigation by the Criminal Investigation Division of the Internal Revenue Service. In the context of our standard of review, there are not two permissible views of the evidence. See Anderson v. City of Bessemer City, N.C., 470 U.S. 564, 573, 105 S.Ct. 1504, 1511, 84 L.Ed.2d 518 (1985). Consequently, we hold that the district court's conclusion that such disclosure was necessary is clearly erroneous and must be reversed.
III. Existence of Good Faith
23
Despite our conclusion that the disclosure was not necessary, no liability attaches to any disclosure which results from a good faith, but erroneous, interpretation of 26 U.S.C. Sec. 6103. See 26 U.S.C. Sec. 7431(b).5 Thus, we must determine if Agent Hanson was acting in good faith when he wrongfully sent out the circular letters. We determine the existence of good faith under this section by applying an objective standard. Huckaby v. United States Department of Treasury, Internal Revenue Service, 794 F.2d 1041, 1048 (5th Cir.1986). Parenthetically, the district court's failure to reach the good-faith defense issue under section 7431(b) does not prevent this Court from resolving the issue by applying an objective standard, as we did in Huckaby.
24
A reasonable IRS agent can be expected to know statutory provisions governing disclosure, as interpreted and reflected in IRS regulations and manuals. Id. at 1048. An agent's contrary interpretation is not in good faith. Id. at 1049.
25
Agent Hanson admitted at trial that he did not review section 6103 or the applicable IRS manual provisions prior to mailing the circular letters. Of paramount importance, however, the Chief of the Criminal Investigation Division had not approved the content of the circular letters as required by Chapter 347.2 of the IRS "Handbook for Special Agents." The relevant version of Chapter 347.2 required:
26
To ensure proper use of this technique, mail circularization will not be undertaken in any case without the prior approval of the Chief, Criminal Investigation Division, including approval of the letters to be sent out. Care must be exercised in approving mail circularization to ensure that mail inquiries are sent only to those third parties who, in the view of the Chief, Criminal Investigation Division, are a likely source of information; the information sought is important to the investigation; and obtaining the information by other means, if at all possible, would not be practical because of either delays in investigation, costs involved, or similar reasons. Caution must be exercised not be [sic] damage the reputation of the taxpayer by making the letter either offensive or suggestive of any wrongdoing by the taxpayer. Appropriate wording could be "The Internal Revenue Service is conducting an investigation of ...". [sic] When mailing circularizations, all such letters will be signed by the special agent with prior approval of the Chief, Criminal Investigation Division, indicated on the file copy. The title "Special Agent" and Criminal Investigation Division will be included in the signature block.
27
Agent Hanson testified that he was aware of this Chapter at the time that he mailed the letters. Curiously, however, Agent Hanson further testified that he did not recall any specifics of Chapter 347.2 when he prepared and mailed out the letters. As of the date of trial, Agent Hanson had worked as a special agent in the Criminal Investigation Division of the IRS for 19 years. Yet, he provided no explanation for his complete failure to follow the mandates of Chapter 347.2. See Diamond, 944 F.2d at 438 n. 3 (IRS agent stated that a circular letter indicating in the body of the letter that the investigation was criminal would not be approved by a supervisor under Chapter 347.2). Finally, we note that the investigation that was being conducted by Agent Hanson was for the tax years 1977 and 1978. Nonetheless, Agent Hanson sent letters to patients who were treated by Dr. Barrett in 1976, 1979, and 1980. No work or investigation whatsoever had been performed for these years.6
28
Applying an objective good-faith test to the uncontroverted facts, can lead us to only one conclusion: that a reasonable IRS agent would not have violated the express provisions contained in Chapter 347.2 of the IRS manual. Agent Hanson did not act in good faith. We reverse the judgment of the district court; the IRS is liable to Dr. Barrett under 26 U.S.C. Sec. 6103.
IV. Conclusion
29
Because the district court erred in concluding that the IRS was not liable, it made no findings on the issue of Dr. Barrett's damages. We acknowledge that Dr. Barrett presented uncontradicted evidence of his damages during trial, and he urges this Court to assess damages. We believe, however, that the trial level is the appropriate site for the factual determination of the amount of damages to be awarded to Dr. Barrett as a result of Agent Hanson's mailing of the circular letters. Accordingly, we REVERSE the judgment of the district court and REMAND for a determination of damages.
1
District Judge of Southern District of Mississippi, sitting by designation
2
United States v. Barrett, 837 F.2d 1341 (5th Cir.1988); United States v. Barrett, 804 F.2d 1376 (5th Cir.1986); Barrett v. United States, 795 F.2d 446 (5th Cir.1986); United States v. Barrett, 787 F.2d 958 (5th Cir.1986); United States v. Texas Heart Institute, 755 F.2d 469 (5th Cir.1985)
3
In the 1989 joint pretrial order, the IRS admitted that Dr. Barrett was no longer the target of any criminal investigation involving the IRS or Agent Hanson and that no criminal charges or indictment were ever brought against Dr. Barrett as the result of the IRS investigation. Agent Hanson also testified that Dr. Barrett was no longer under any type of criminal investigation and had never been charged or indicted
4
26 U.S.C. Sec. 6103(k)(6) provides: An internal revenue officer or employee may, in connection with his official duties relating to any audit, collection activity, or civil or criminal tax investigation or any other offense under the internal revenue laws, disclose return information to the extent that such disclosure is necessary in obtaining information, which is not otherwise reasonably available, with respect to the correct determination of tax, liability for tax, or the amount to be collected or with respect to the enforcement of any other provision of this title. Such disclosures shall be made only in such situations and under such conditions as the Secretary may prescribe by regulation
26 U.S.C. Sec. 7431(a)(1) provides: If any officer or employee of the United States knowingly, or by reason of negligence, discloses any return or return information with respect to a taxpayer in violation of any provision of section 6103, such taxpayer may bring a civil action for damages against the United States in a district court of the United States.
5
26 U.S.C. Sec. 7431(b) provides: No liability shall arise under this section with respect to any disclosure which results from a good faith, but erroneous, interpretation of section 6103
6
Interestingly, Agent Hanson also testified that he knew that the relationship between Dr. Barrett and his patients was personal and confidential. Directly contradicting his prior sworn testimony during a related proceeding, Agent Hanson stated that he did not think that Dr. Barrett's patients who had undergone plastic or reconstructive surgery would be embarrassed, humiliated, or otherwise distressed by receiving the letters which would harm Dr. Barrett's relationship with his patients. While this evidence does not directly impact the question of objective, as opposed to subjective, good faith, it is indicative of Agent Hanson's willfulness or gross negligence
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479 N.W.2d 872 (1992)
CITY OF GRAND FORKS, Plaintiff and Appellee,
v.
John SOLI, Defendant and Appellant.
Cr. No. 910088.
Supreme Court of North Dakota.
February 4, 1992.
*873 Thomas Carl Wilson, Asst. City Atty., Grand Forks, for plaintiff and appellee.
Moosbrugger, Ohlsen, Dvorak & Carter, Grand Forks, for defendant and appellant. Submitted on briefs.
VANDE WALLE, Justice.
John Soli has appealed from a judgment of conviction for driving under the influence of intoxicating liquor in violation of Grand Forks City Code § 8-0205(1)(B)[1] and from an order denying his motion for a new trial. We affirm.
After Soli was involved in a motor vehicle accident he was transported by ambulance to a hospital, where he was arrested for driving under the influence or with a blood alcohol concentration of .10 percent or more. At his request, Soli was permitted to telephone his attorney from a hospital examining room. The police officers remained in the room and could hear Soli's part of the conversation with his attorney. After that telephone conversation, Soli allowed a hospital technician to withdraw blood for analysis.[2]
Soli unsuccessfully moved to strike the testimony of the police officers on the ground that they failed to allow him to speak to his attorney in private. Soli unsuccessfully objected to the admission of the blood test result on the ground that the blood sample was withdrawn more than two hours after his driving. The trial court convicted Soli of driving under the influence and denied his motion for a new trial. Soli argues on appeal that the trial court erred in permitting the police officers to testify[3] and in admitting the blood test result into evidence.
In Kuntz v. State Highway Comm'r, 405 N.W.2d 285 (N.D.1987), a majority of this court held "that a person arrested for driving under the influence of intoxicating liquor *874 has a qualified statutory right to consult with an attorney before deciding whether or not to submit to a chemical test." Id., at 285. The majority recognized that the right was a qualified one that could not be used to interfere with chemical testing: "We hold that if an arrested person asks to consult with an attorney before deciding to take a chemical test, he must be given a reasonable opportunity to do so if it does not materially interfere with the administration of the test." Id., at 290.
In Bickler v. North Dakota State Highway Comm'r, 423 N.W.2d 146 (N.D.1988), an attorney for an arrested driver requested a conference with the driver "in a private setting" and the arresting officer "refused to allow a conference out of his view." Id., at 147. We recognized that the degree of privacy to be afforded an arrested driver's consultation with an attorney "must be balanced against the need for an accurate and timely chemical test." Id., at 147. We noted our belief that "out-of-earshot consultation adequately protects both the confidentiality of attorney-client consultation and the integrity of chemical tests." Id., at 148. We held: "[W]hen an arrested person asks to consult with counsel before electing to take a chemical test he must be given the opportunity to do so out of police hearing, and law enforcement must establish that such opportunity was provided." Id., at 148.
Although police officers are required to keep suspects under surveillance to protect the integrity of the testing process, this does not mean they are entitled to seek excuses to deny confidentiality to conversations between arrested persons and their attorneys. As we recognized in State v. Red Paint, 311 N.W.2d 182, 185 (N.D.1981), "there is a legitimate public interest in protecting confidential communications between an attorney and his client made for the purpose of facilitating the rendition of professional legal services." That public interest ought not be undercut by unwarranted denial of an opportunity for an arrested person to have a confidential conversation with an attorney.
The trial court found that Soli "was given his qualified right to speak with counsel and that the police officers did not interfere with that right while guarding the integrity of the testing procedures." Here, unlike Bickler, where the conversation would have been held in a jail, the telephone conversation took place in a hospital examining room. There is no evidence in the record showing that Soli requested an "out-of-earshot consultation" with his attorney. Soli did not request that either the officers or the hospital personnel present leave the room and did not object to their presence. Here, unlike Bickler, there was no evidence that the officers' presence within earshot of Soli's telephone conversation with his attorney had any effect on his decision to submit to the blood test. Under these circumstances, we will not upset the trial court's finding on this matter.
Soli contends that the trial court erred in admitting the blood test result because the sample was obtained more then two hours after Soli drove his vehicle.
If a chemical test is not performed within two hours of driving, a driver cannot be convicted of violating § 39-08-01(1)(a), N.D.C.C. State v. Kimball, 361 N.W.2d 601 (N.D.1985). "Section 39-08-01(1)(b), as opposed to (a), does not necessitate a chemical test as a prerequisite for conviction." Kimball, at 603. We held in Kimball that the result of a chemical test is admissible to prove that a driver violated § 39-08-01(1)(b), N.D.C.C., even if the State could not establish that the test was performed within two hours of the driving. We declined an invitation to overrule Kimball in State v. Allery, 371 N.W.2d 133 (N.D. 1985). In State v. Pitman, 427 N.W.2d 337, 342 (N.D.1988), we again held: "[A]ssuming arguendo that the State could not prove that Pitman drove a vehicle within two hours of the intoxilyzer test, results of the intoxilyzer test would nevertheless be admissible in a case involving a charge of driving under the influence." We adhere to those decisions.
Section 39-20-07, N.D.C.C., provides for the admissibility of chemical tests to determine one's blood alcohol concentration:
*875 "Upon the trial of any civil or criminal action or proceeding arising out of acts alleged to have been committed by any person while driving or in actual physical control of a motor vehicle while under the influence of intoxicating liquor, drugs, or a combination thereof, evidence of the amount of alcohol, drugs, or a combination thereof in the person's blood at the time of the act alleged as shown by a chemical analysis of the blood, breath, saliva, or urine is admissible. For the purpose of this section:
* * * * * *
"5. The results of the chemical analysis must be received in evidence when it is shown that the sample was properly obtained and the test was fairly administered, and if the test is shown to have been performed according to methods and with devices approved by the state toxicologist, and by an individual possessing a certificate of qualification to administer the test issued by the state toxicologist...."
Section 39-20-07, N.D.C.C., eases the evidentiary requirements for admissibility of chemical test results while assuring that the tests are fairly administered. State v. Schwalk, 430 N.W.2d 317 (N.D.1988). "[T]he State Toxicologist has drafted Form 104 to be used when a blood sample is drawn for blood alcohol testing." Id., at 322. Fair administration of a blood test may be shown "through proof that the Form 104 methods for collection and preservation of the blood sample were scrupulously complied with or through expert testimony establishing the scientific accuracy of the test." Id., at 324. Soli has not challenged the methods used in collecting and preserving the blood sample. Soli stipulated at trial that Form 104, issued by the state toxicologist, was followed. Soli stipulated that the chemist who tested the blood sample followed all the proper procedures and followed the law. Thus, the sample was properly obtained, and the test was fairly administered and performed according to methods and with devices approved by the state toxicologist, in accordance with § 39-20-07, N.D.C.C., and our decisions on fair administration under the statute.
Soli's only challenge to the fair administration requirement for admissibility of the blood test result is the fact that the blood sample was obtained more than two hours after he drove a vehicle. Soli contends that the fair administration requirement of § 39-20-07(5), N.D.C.C., includes adherence to the two-hour limit contained in § 39-08-01(1)(a), N.D.C.C. The two-hour limit contained in that statute is merely a partial description of one of the prohibited acts constituting a violation. The two-hour limit of § 39-08-01(1)(a), N.D.C.C., has nothing to do with admissibility of chemical test results. Admissibility of chemical test results is governed by § 39-20-07, N.D.C.C., which does not condition admissibility of a chemical test result upon the test's performance within two hours of an arrested person's driving of a motor vehicle. In construing the fair administration requirement of § 39-20-07(5), N.D.C.C., we will not incorporate a time limit that the Legislature has not chosen to require. Thus, evidence of the result of a blood test taken more than two hours after driving is not inadmissible. It is insufficient evidence upon which to convict a defendant charged with violating § 39-08-01(1)(a), N.D.C.C. It may be sufficient evidence for the trier of fact to convict a defendant for violating § 39-08-01(1)(b), (c) or (d), N.D.C.C.
The judgment and the order denying Soli's motion for new trial are affirmed.
ERICKSTAD, C.J., LEVINE and MESCHKE, JJ., concur.
Justice GIERKE, a member of the Court when this case was heard, resigned effective November 20, 1991, to accept appointment to the United States Court of Military Appeals and did not participate in this decision.
NOTES
[1] The Grand Forks code provision is the same as § 39-08-01(1), N.D.C.C., which provides in part:
"1. A person may not drive or be in actual physical control of any vehicle upon a highway or upon public or private areas to which the public has a right of access for vehicular use in this state if any of the following apply:
"a. That person has a blood alcohol concentration of at least ten one-hundredths of one percent by weight at the time of the performance of a chemical test within two hours after the driving.
"b. That person is under the influence of intoxicating liquor."
[2] The blood test result showed that Soli had a blood alcohol concentration of .25 percent by weight.
[3] The officers did not testify about anything they might have heard Soli say in the telephone conversation with the attorney.
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535 N.W.2d 825 (1995)
Linus KATZNER, Respondent,
v.
KELLEHER CONSTRUCTION, Defendant and Third-Party Plaintiff, Respondent,
Ellerbe Becket Construction Services, Inc., a Delaware Corporation, Defendant and Third-Party Plaintiff, Appellant,
Gresser, Inc., and Spancrete Midwest Co., Third-Party Defendants, Respondents.
No. C4-95-555.
Court of Appeals of Minnesota.
August 15, 1995.
Review Granted October 19, 1995.
*826 David G. Moeller, Robert M. Gardner, Minneapolis, for respondent Katzner.
Daniel A. Haws, Murnane, Conlin, White & Brandt, St. Paul, for respondent Kelleher Const.
Robert H. Peterson, Andrea E. Reisbord, Cousineau, McGuire & Anderson, Chartered, Minneapolis, for appellant Ellerbe Becket Const. Services, Inc.
Kevin P. Keenan, Charles E. Lundberg, Bassford, Lockhart, Truesdell & Briggs, P.A., Minneapolis, for respondent Gresser, Inc.
Lawrence J. Skoglund, Erstad & Reimer, Minneapolis, for respondent Spancrete.
Considered and decided by NORTON, P.J., and HUSPENI and FOLEY,[*] JJ.
OPINION
DANIEL F. FOLEY, Judge.
Linus Katzner brought an action against Ellerbe Becket Construction Services, Inc. (Ellerbe), and Kelleher Construction (Kelleher) alleging negligence resulting in his injury while in the course of his employment at a construction site. Ellerbe and Kelleher brought cross-claims against each other and brought third-party complaints against Gresser, Inc. (Gresser), Katzner's employer, and Spancrete Midwest Co. (Spancrete). Ellerbe, the general contractor, tendered its defense to Spancrete and Kelleher based on contracts existing between Ellerbe and said *827 subcontractors. Kelleher refused Ellerbe's tender of defense, and Spancrete did not respond. The court approved Katzner's settlement with Gresser and its workers' compensation carrier and dismissed Gresser from the case.
Ellerbe brought a motion for summary judgment against Kelleher and Spancrete on the ground that they were contractually obligated to defend and indemnify Ellerbe against claims of negligence. Kelleher and Spancrete brought cross-motions for summary judgment, denying any such obligation. Ellerbe's motion was denied, and Kelleher's and Spancrete's motions were granted. The matter thereafter proceeded to trial.
The jury returned a verdict apportioning fault among the various parties and awarding damages to Katzner. Ellerbe's post-trial motion requesting a collateral source reduction of damages was denied. Ellerbe appeals the trial court's denial of its motions for summary judgment against Kelleher and Spancrete and the trial court's refusal to order a collateral source reduction of the damages awarded to Katzner.
FACTS
Ellerbe was the designer and builder of a construction project. Ellerbe executed contracts with Spancrete and Kelleher for construction work on the project. Kelleher in turn executed a contract with Gresser to provide services at the site.
Katzner was an employee of Gresser and was injured while at work. Katzner received workers' compensation benefits from Gresser's carrier and sued Kelleher and Ellerbe to recover damages allegedly caused by their negligence in maintaining an unsafe worksite. Ellerbe and Kelleher brought cross-claims against each other and brought third-party complaints against Gresser, Katzner's employer, and Spancrete. Ellerbe, the general contractor, tendered its defense to Spancrete and Kelleher based on contracts existing between Ellerbe and said subcontractors. Kelleher refused Ellerbe's tender of defense, and Spancrete did not respond.
The court approved Katzner's settlement with Gresser and its workers' compensation carrier and dismissed Gresser from the case. Ellerbe brought a motion for summary judgment against Kelleher and Spancrete on the ground that they were contractually obligated to defend and indemnify Ellerbe against claims of negligence. Kelleher and Spancrete brought cross-motions for summary judgment, denying any such obligation. The contracts between Ellerbe, Kelleher, and Spancrete contain the following language:
2.17 Indemnification Against Injury or Damage. The Contractor [Kelleher; Spancrete] shall indemnify and hold harmless the Owner, the Design/Builder [Ellerbe], the Design/Builder's Architect and Consultants, and their agents and employees from and against all claims, damages, losses and expenses (including Attorneys' fees) arising out of or resulting from the performance of the Work, provided that any such claim, damage, loss or expense (a) is attributable to bodily injury, sickness, disease or death * * * and (b) is caused in whole or in part by any negligent act or omission of the Contractor, any Subcontractor or Sub-subcontractors, anyone directly or indirectly employed by any of them or anyone for whose acts any of them may be liable, regardless of whether or not it is caused in part by a party indemnified hereunder.
* * * * * *
10.1.1 The Contractor shall purchase and maintain comprehensive general liability insurance as will protect himself, the Design/Builder * * * from claims * * * which may arise out of or result from the Contractor's operations under the Contract * * * whether such operations be by himself or by any Subcontractor or by anyone directly or indirectly employed by any of them or by anyone for whose acts any of them may be liable.
* * * * * *
10.1.3 The insurance required by subparagraph 10.1.1 shall be written for not less than any limits of liability specified below or required by law, whichever is greater, and shall include contractual liability insurance as applicable to the Contractor's obligations under paragraphs * * * 2.17.
Ellerbe's motion was denied, and Kelleher's and Spancrete's motions were granted, the *828 court finding no entitlement in Ellerbe to a defense or indemnity under the terms of the contracts for liability predicated upon its own negligence. The trial court wrote:
[Ellerbe] has entered into contracts with Spancrete and Kelleher in which Spancrete and Kelleher have agreed to insure [Ellerbe] against claims which result from either their own acts, or acts which are arguably "downstream" of them acts which, through their choice of employees, procedures, or subcontracting policies they may have an effect upon. This clause does not spell out that Kelleher and Spancrete will insure against claims which have no relation to their operations.
The matter thereafter proceeded to trial. The jury returned a verdict apportioning fault among the various parties and awarding damages to Katzner in the total amount of $351,532. The verdict of $351,532 was apportioned as follows: Katzner 5%, Kelleher 0%, Gresser 65%, Ellerbe 20%, and Spancrete 10%. Ellerbe brought a posttrial motion to reduce the damages awarded Katzner by the amount received in workers' compensation benefits. This motion was denied. Ellerbe now appeals.
ISSUES
I. Do Ellerbe's contracts with Kelleher and Spancrete require Kelleher and Spancrete to defend and indemnify Ellerbe against claims based on Ellerbe's negligence?
II. Did the trial court err in not ordering a collateral source reduction in the amount of the damages awarded to Katzner?
ANALYSIS
Standard of Review
Summary judgment is an extraordinary remedy a "blunt instrument" to be used only where it is clearly applicable. See Donnay v. Boulware, 275 Minn. 37, 45, 144 N.W.2d 711, 716 (1966). On appeal from a grant of summary judgment, we determine whether any genuine issues of material fact exist and whether the trial court erred in its application of the law. Minn.R.Civ.P. 56.03; Offerdahl v. University of Minn. Hosps. & Clinics, 426 N.W.2d 425, 427 (Minn.1988). We must view the evidence in the light most favorable to the nonmoving party, but we need not defer to the trial court's application of the law. Offerdahl, 426 N.W.2d at 427; Frost-Benco Elec. Ass'n v. Minnesota Pub. Utils. Comm'n, 358 N.W.2d 639, 642 (Minn. 1984).
I.
Construction of a contract is a question of law for the court. Hunt v. IBM Mid America Employees Fed. Credit Union, 384 N.W.2d 853, 856 (Minn.1986). Construction of the contracts at issue reveals that neither Kelleher nor Spancrete has a duty to defend or indemnify Ellerbe against claims based on Ellerbe's own negligence, since neither has agreed to procure insurance which would cover such negligence claims.
An indemnification agreement contained in, or executed in connection with, a building and construction contract is unenforceable except to the extent that the underlying injury or damage is attributable to the negligent or otherwise wrongful act or omission, including breach of specific contractual duty, of the promisor or the promisor's independent contractors, agents, employees, or delegatees.
Minn.Stat. § 337.02 (1992). "Sections 337.01 to 337.05 do not affect the validity of agreements whereby a promisor agrees to provide specific insurance coverage for the benefit of others." Minn.Stat. § 337.05, subd. 1 (1992). In short, when an indemnitor's obligations are covered by insurance, then the invalidation language of section 337.02 does not apply. Seifert v. Regents of the Univ. of Minn., 505 N.W.2d 83, 86 (Minn.App.1993) (citing Holmes v. Watson-Forsberg Co., 488 N.W.2d 473, 475 (Minn.1992)), pet. for rev. denied (Minn. Oct. 28, 1993).
The statutory provisions were examined in the recent case of Hurlburt v. Northern States Power, 524 N.W.2d 546 (Minn.App. 1994), pet. for rev. granted (Minn. Feb. 14, 1995). In that case, the court held that the contractor was entitled to judgment because the contract in question contained a provision clearly requiring the subcontractor to provide insurance benefits to the contractor, even for claims based on the contractor's own negligence. See id. at 549-50.
*829 Oster v. Medtronic, Inc., 428 N.W.2d 116 (Minn.App.1988), upon which Ellerbe relies, does not control decision here. The decision in that case was based on facts which occurred before enactment of the applicable statutes.
Although the language in section 2.17 indicates that Kelleher and Spancrete agree to indemnify Ellerbe against claims based on Ellerbe's own negligence, without an accompanying agreement to procure insurance against such claims, the agreement is unenforceable under Minn.Stat. § 337.02. Under the insurance procurement provision here, Kelleher and Spancrete must procure insurance only against claims arising from their own operations. Hurlburt is thus distinguishable on its facts, rendering any agreement on the part of Kelleher and Spancrete to indemnify Ellerbe against claims arising from Ellerbe's own negligence unenforceable as a matter of law.
In view of the fact that we affirm the trial court on the question of indemnification of Ellerbe, we do not address Gresser's claim with respect to its duty to indemnify Kelleher.
II.
Arguing that Katzner has received a windfall recovery, Ellerbe claims the trial court erred in failing to apply a collateral source reduction to the total damages awarded him.
The collateral source statute provides:
Subd. 2. Motion. In a civil action, * * * when damages include an award to compensate the plaintiff for losses available to the date of entry of the verdict by collateral sources, a party may [move for a] determination of collateral sources. If the motion is filed, * * * the court shall determine:
(1) amounts of collateral sources that have been paid for the benefit of the plaintiff or are otherwise available to the plaintiff as a result of losses except those for which a subrogation right has been asserted; and (2) amounts that have been paid * * * [by] the plaintiff * * * to secure the right to a collateral source benefit * * *.
Subd. 3. Duties of the court. (a) The court shall reduce the award by the amounts determined under subdivision 2, clause (1), and offset any reduction in the award by the amounts determined under subdivision 2, clause (2).
Minn.Stat. § 548.36, subds. 2, 3(a) (1992). The statute includes workers' compensation benefits in its definition of collateral sources. Id., subd. 1(1). The statute is designed to prevent plaintiffs from enjoying a windfall recovery at the expense of defendants. Buck v. Schneider, 413 N.W.2d 569, 572 (Minn. App.1987).
In exchange for his promise to save Gresser and the workers' compensation carrier harmless from Lambertson[1] claims, to discontinue his claim to workers' compensation benefits and to terminate his employment with Gresser, Katzner was assigned Gresser's and the carrier's subrogation rights and obtained Gresser's and the carrier's promise to pay certain outstanding medical bills related to his injury. By the terms of the assignment of subrogation rights, Katzner agreed that he would continue to assert such rights for purposes of the collateral source statute. Thus, the resolution of this issue turns on whether Katzner asserted the subrogation rights he acquired as part of his settlement with Gresser and the carrier. Since this case is indistinguishable from Kohn v. La Manufacture Francaise Des Pneumatiques Michelin, 476 N.W.2d 184 (Minn.App.1991), pet. for rev. denied (Minn. Dec. 13, 1991), we hold that he did. See id. at 189-90 (plaintiff obligated by terms of settlement to assert fully assigned subrogation rights deemed to have asserted them). Additionally, the trial court's Findings of Fact, Conclusions of Law and Order for Entry of Judgment, dated June 22, 1994, confirms that "[d]uring the trial, plaintiff asserted Gresser's and [its carrier]'s subrogation rights." A collateral source reduction would thus be inappropriate in this case.
The trial court properly denied Ellerbe's motion for a collateral source reduction of the damages awarded Katzner.
*830 DECISION
The trial court's order denying Ellerbe's motion for summary judgment and granting Kelleher's and Spancrete's motions for summary judgment is affirmed. The trial court's denial of Ellerbe's motion for a collateral source reduction of the damages awarded Katzner is affirmed.
Affirmed.
NOTES
[*] Retired judge of the Minnesota Court of Appeals, serving by appointment pursuant to Minn. Const. art. VI, § 2.
[1] See Lambertson v. Cincinnati Corp., 312 Minn. 114, 257 N.W.2d 679 (1977).
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932 F.2d 318
UNITED STATES of America, Plaintiff-Appellee,v.George Clinton ETHERIDGE, Defendant-Appellant.
No. 90-5835.
United States Court of Appeals,Fourth Circuit.
Argued Feb. 8, 1991.Decided April 30, 1991.
Paul Henderson Ray, Virginia Beach, Va., for defendant-appellant.
Laura Marie Everhart, Asst. U.S. Atty., argued (Henry E. Hudson, U.S. Atty., on brief), Norfolk, Va., for plaintiff-appellee.
Before HALL and CHAPMAN, Circuit Judges, and MULLEN, District Judge for the Western District of North Carolina, sitting by designation.
CHAPMAN, Circuit Judge:
1
Following a jury trial, appellant was convicted of one count of being a convicted felon in possession of a firearm in violation of 18 U.S.C. Sec. 922(g)(1). Appellant's sentence was enhanced under 18 U.S.C. Sec. 924(e)(1) because he had previously been convicted of at least four violent felonies.1 Appellant appeals his conviction and enhancement of sentence and claims that the trial judge erred (1) in excluding evidence that he had relied upon judicial advice given to him by a state court judge that he could continue to possess shotguns for hunting purposes, (2) that the predicate offenses relied upon to enhance his sentence were more than 20 years old at the date of sentence and violated the ex post facto clause, and (3) that since his civil rights had been restored by the Commonwealth of Virginia it was not unlawful for him to possess a firearm. We find no merit in these exceptions, and we affirm.
2
* On March 27, 1990, agents of the Bureau of Alcohol, Tobacco and Firearms obtained and executed a search warrant for the home of appellant, George Clinton Etheridge, located in Chesapeake, Virginia. The validity of the search warrant is not challenged. Appellant was present at the time the search was conducted, and after receiving proper Miranda warnings, he advised the agents that he owned two shotguns and the guns were located in the back room of the residence. The shotguns were found at the place indicated by appellant and they were seized. The agents also seized 197 rounds of ammunition. It is undisputed that the firearms were manufactured outside the Commonwealth of Virginia and had traveled in interstate commerce.
3
A written stipulation was entered into between the United States and the defendant in which the defendant admitted that he had four prior violent felony convictions: November 16, 1956 in the Circuit Court for the City of Chesapeake, Virginia of voluntary manslaughter; July 29, 1964 in the Circuit Court for the City of Chesapeake, Virginia of unlawful shooting; July 28, 1967 in the Circuit Court for the City of Chesapeake, Virginia of second degree murder; and September 13, 1983 in the Circuit Court for the City of Virginia Beach, Virginia, of unlawful wounding, and use of a firearm in the commission of a felony. All of these convictions were for violent felonies and punishable by imprisonment for terms exceeding one year.
4
Prior to trial, the United States filed a motion in limine to prevent the appellant from introducing evidence including his Virginia hunting license, photographs of his hunting dogs, defense witnesses attesting to the fact that the two shotguns were only used for hunting, and the defendant's claim that he had relied upon advice by a state court judge that he could continue to possess the two shotguns for hunting despite his prior felony convictions. On the issue of the judicial advice given to him, Etheridge presented only a certified copy of a warrant for his arrest on a charge of carrying a concealed weapon on his person after having been convicted of a felony involving the use of a firearm. This warrant had been dismissed April 3, 1985 with the words "Nolle Prosequi" written on the back of the warrant. The district court granted the government's motion and excluded the evidence. The court found that this proffered evidence was irrelevant and did not present a valid defense to the charges contained in the indictment, because the evidence related only to his use of the firearms while the statute only required proof of possession.
II
5
Appellant claims that he was entitled to rely upon the affirmative advice of a state trial judge that he could use the firearms for hunting purposes only, and that his conduct had conformed to the state judge's statement of the law. He claims that he could have proved conformance by four witnesses, who had been subpoenaed and who would have testified that he used the firearms only for hunting, but the court excluded this evidence in response to the motion in limine. Etheridge asserts that the due process clause allows such a defense, and he relies upon United States v. Brady, 710 F.Supp. 290 (D.Colo.1989), and United States v. Tallmadge, 829 F.2d 767 (9th Cir.1987). We do not find these decisions persuasive. In Tallmadge, the defendant had been told by a federally licensed firearms dealer that he could purchase firearms, despite his prior conviction of a felony possession of a machine gun, after that charge had been reduced under California law to a misdemeanor. The court found that Tallmadge had been misled by the representations of the federally licensed firearms dealer and the court adopted a theory of entrapment by estoppel over a very persuasive dissenting opinion. In Brady, a state judge had advised the defendant that he could "utilize a firearm specifically for hunting and trapping within the confines of his occupation." Brady's federal charge was for possession of a firearm known as a "Coyote Getter," which is not fired by an individual, but fired by a baited coyote trap. The weapon is buried under the bait and when the animal bites the bait, this trips a firing mechanism which propels a cyanide capsule into the animal's mouth. The court found that it would be a violation of due process to convict Brady in light of the fact that his conduct conformed to the state judge's advice as to the law. Brady relied heavily upon Cox v. Louisiana, 379 U.S. 559, 85 S.Ct. 476, 13 L.Ed.2d 487 (1965), and Raley v. Ohio, 360 U.S. 423, 79 S.Ct. 1257, 3 L.Ed.2d 1344 (1959). These two cases involved the reliance of a defendant charged with the violation of state law upon a prior interpretation of state law by a state official.
6
We find the reasoning of United States v. Bruscantini, 761 F.2d 640 (11th Cir.), cert. denied, 474 U.S. 904, 106 S.Ct. 271, 88 L.Ed.2d 233 (1985), more persuasive. Bruscantini had entered a nolo contendere plea to a Florida burglary charge. The state judge had withheld adjudication of guilt and placed him on probation, and he contended that the state judge and the state prosecutor told him that his case did not constitute a conviction. Eight years later he obtained two firearms and was subsequently charged with violating 18 U.S.C. Sec. 922(b) as a convicted felon receiving the firearms. He argued that Cox and Raley allowed him to reasonably rely upon the interpretation of the law given to him by authoritative state officials, and that the government was estopped from prosecuting him.
The Eleventh Circuit held:
7
The facts of this case do not warrant application of the rule of Cox and Raley. Here, while state officials provided the interpretation upon which appellant relied, federal officials indicted and convicted him for a violation of federal law. On the other hand, in both Supreme Court decisions, state officials had interpreted state law and subsequently convicted the defendants under that law. This distinction is important here, particularly where the analysis of the federal law, Sec. 922, does not depend on state practice, see Dickerson v. New Banner Institute, Inc., supra [460 U.S. 103, 103 S.Ct. 986, 74 L.Ed.2d 845 (1983) ], and where knowledge of one's status as a convicted felon is not an element of the offense of receiving firearms. See U.S. v. Goodie, 524 F.2d 515 (5th Cir.1975), cert. denied, 425 U.S. 905, 96 S.Ct. 1497, 47 L.Ed.2d 755 (1976).
8
The rule of Cox and Raley is a narrow exception to the general principle that ignorance of the law is no defense. It was prompted by the Court's observation that permitting the government to prosecute individuals who reasonably rely upon that government's interpretation of the law would constitute a kind of entrapment. Where, however, the government that advises and the government that prosecutes are not the same, the entrapment problem is different. Moreover, if one benefit of the estoppel defense is that it encourages government officials to better know and articulate the law, that benefit is not present where application of the defense would penalize the wrong government--the government that prosecuted appellant rather than the government that mistakenly and misleadingly interpreted the law. Appellant, therefore, is not insulated from prosecution.
9
761 F.2d at 641-42.
III
10
Etheridge argues that Virginia state law, as it is interpreted by a state judicial official, exempts him from prosecution in the United States District Court. This exception was raised at oral argument when a member of the panel asked the attorneys if the appellant could be prosecuted in the federal court under Sec. 922(g) if, under the circumstances of the case, state law exempted him from prosecution.
Title 18 U.S.C. Sec. 922(g) states:
11
(g) It shall be unlawful for any person--
12
(1) who has been convicted in any court of, a crime punishable by imprisonment for a term exceeding one year;
13
....
14
to ship or transport in interstate or foreign commerce, or possess in or affecting commerce, any firearm or ammunition; or to receive any firearm or ammunition which has been shipped or transported in interstate or foreign commerce.
Section 921(a)(20) provides:
15
What constitutes a conviction of such a crime shall be determined in accordance with the law of the jurisdiction in which the proceedings were held. Any conviction which has been expunged, or set aside or for which a person has been pardoned or has had civil rights restored shall not be considered a conviction for purposes of this chapter, unless such pardon, expungement, or restoration of civil rights expressly provides that the person may not ship, transport, possess, or receive firearms.
16
(Emphasis added.)
17
Appellant claims that under Virginia law he has had his civil rights restored by three different actions of the Commonwealth or its agents. First, he contends that the conditions of his probation dated July 6, 1966 allowed him, as a convicted felon, to possess firearms. Second, he claims that the Virginia state judge in dismissing firearm charges against him in 1985 gave him permission to possess shotguns for hunting and, third, he claims that in purchasing his local and state hunting licenses from the Circuit Court of the City of Chesapeake or its agent, he was found to be qualified to carry a weapon for hunting purposes.
18
These claims can not stand in light of the clear language of the statutes of Virginia preventing possession of a firearm by a convicted felon and which establish the only procedure by which a felon may have his right to possess a firearm restored. Section 18.2-308.2 of the Code of Virginia provides in pertinent part:
19
It shall be unlawful for any person who has been convicted of a felony under the laws of this Commonwealth, or any other state, the District of Columbia, the United States or any territory thereof, to knowingly and intentionally possess or transport any firearm....
20
Appellant argues that he comes within an exception found in Sec. 18.2-308(B)(7) of the Code of Virginia, but his position is not well taken. Such section deals only with concealed weapons and the exception allows one while hunting in inclement weather the "temporary protection of his firearm from these conditions." This section allows a person to place his firearm under his coat, hunting jacket or other outer garment to protect it from the weather, but it has no application to a convicted felon who has not had his rights to possess a weapon restored. Appellant is covered by Sec. 18.2-308.2, and Sec. 18.2-308 has no application to the facts of this case.
21
The application for and obtaining of a hunting license in the Commonwealth of Virginia does not restore the right of a convicted felon to possess a firearm. Hunting licenses are sold in most sporting goods and hardware stores, and although the merchant may be considered an agent of the Commonwealth in the issuance of such licenses, he is not empowered to restore the rights of a convicted felon to possess a firearm. The issuance of a hunting license does nothing to restore a felon's civil rights.
22
The conditions of appellant's probation in July 1966 did not restore his rights to possess a firearm. Section 18.2-308.2(C) of the Virginia Code provides the method by which a convicted felon may receive a permit to possess a firearm. The procedure requires that a petition be filed with the circuit court of the jurisdiction in which the felon resides requesting a permit to possess or carry a firearm. The court may in its discretion and for good cause shown grant the petition.2 Removal of a felon's impediment under federal law is provided in 18 U.S.C. Sec. 925(c) and requires a petition to the Secretary of the Treasury for relief from the disabilities imposed by federal law. Etheridge did not proceed under the Commonwealth statute or the federal statute to remove his disability, and his claims that the disability has been removed by the Virginia Parole Board, the purchase of a hunting license, or statements by a Virginia state court judge are unavailing.
IV
23
Appellant claims that the enhancement of his sentence under 18 U.S.C. Sec. 924(e)(1) based upon his convictions which occurred more than 20 years ago3 is a violation of the ex post facto clause, and also offends the proportionality requirement expressed in Solem v. Helm, 463 U.S. 277, 103 S.Ct. 3001, 77 L.Ed.2d 637 (1983).
Title 18 U.S.C. Sec. 924(e) provides:
24
In the case of a person who violates section 922(g) of this title and has three previous convictions by any court referred to in section 922(g)(1) of this title for a violent felony or a serious drug offense, or both, committed on occasions different from one another, such person shall be fined not more than $25,000 and imprisoned not less than fifteen years, and, notwithstanding any other provision of law, the court shall not suspend the sentence of, or grant a probationary sentence to, such person with respect to the conviction under section 922(g), and such person shall not be eligible for parole with respect to the sentence imposed under this subsection.
25
Appellant was convicted in the present action of a violation of Sec. 922(g) and his previous convictions were by courts referred to in Sec. 922(g)(1). He had more than three violent felony convictions. The stipulation is to four prior convictions of violent felonies, two of which involved homicides and the other convictions were unlawful woundings. Each of these convictions involved the use of a firearm. Etheridge must be the type of repeat offender of violent crimes that Congress had in mind when it adopted the sentence enhancement provisions contained in Sec. 924(e)(1).
26
As applied to Etheridge, the enhancement does not violate the ex post facto clause of Article 1, Section 9 of the Constitution. This clause prohibits any statute "which makes more burdensome the punishment of a crime, after its commission." Beazell v. Ohio, 269 U.S. 167, 169, 46 S.Ct. 68, 70 L.Ed. 216 (1925). The date of the present offense is determinative, and this date is March 27, 1990, well after 1984, the year in which 18 U.S.C. Sec. 924(e)(1) was enacted in its present form.
27
Etheridge also argues that his enhanced sentence of 15 years without parole is disproportionate to the offense of which he stands convicted. His argument is unpersuasive because we have held that successful proportionality challenges are extremely rare in non-capital cases, and that Solem requires extensive proportionality analysis only in cases involving life sentences without parole. Sutton v. Maryland, 886 F.2d 708, 712 (4th Cir.1989) (en banc), cert. denied, --- U.S. ----, 110 S.Ct. 1493, 108 L.Ed.2d 628 (1990). Accordingly, we need not address proportionality on the present facts.
28
AFFIRMED.
MULLEN, District Judge, dissenting:
29
I agree with the conclusions of the majority in all portions of the opinion except Part II, which holds that the trial court did not err in preventing Etheridge from presenting to the jury evidence that a state judge told him that he could use firearms for hunting purposes only. Accordingly, I respectfully dissent.
30
I believe that the trial court should have allowed Etheridge to present the proffered evidence to the jury that he used the guns only for hunting and Etheridge's own proffered testimony that a state judge told him upon a prior arrest that he could possess firearms for the limited purpose of hunting. I find the reasoning in United States v. Brady, 710 F.Supp. 290 (D.Colo.1989), persuasive in concluding that reliance upon a state trial judge's statement of the law, even federal law, can be a defense under the due process clause to prosecution for conduct conforming to the judge's statement of the law. Therefore, I conclude that Etheridge should have been permitted to present evidence on the issue to the jury. Refusal to permit evidence on this issue was error, which necessitates a reversal of the conviction in this case.
31
United States v. Bruscantini, 761 F.2d 640 (11th Cir.), cert. denied, 474 U.S. 904, 106 S.Ct. 271, 88 L.Ed.2d 233 (1985), relied upon by the majority, held that the rule in Cox v. Louisiana, 379 U.S. 559, 85 S.Ct. 476, 13 L.Ed.2d 487 (1965), and Raley v. Ohio, 360 U.S. 423, 79 S.Ct. 1257, 3 L.Ed.2d 1344 (1959), did not apply to a case such as this one, in which a state judge allegedly furnished advice about a federal law, and limited the due process protection to cases in which the government that advises and the government that prosecutes are the same.
32
As explained in Brady, the holdings in Cox and Raley were intended to prevent fundamental unfairness and injustice. Brady, 710 F.Supp. at 295-96. The focus on the due process inquiry should be upon the unfairness of punishing an individual who conforms his actions to advice given by a judge acting within his jurisdiction. Because a state judge is required to honor both state and federal law in state court proceedings, a person is entitled to rely upon a state judge's statement of federal law as well as state law.
33
I make no judgment as to the quality or credibility of the evidence offered by Etheridge. The court records showing the dismissal of an arrest warrant are certainly less than compelling. However, Etheridge stood ready to testify as to what the state judge told him. I think that the jury was entitled to hear that evidence and other evidence and make its own credibility determinations.
34
Because the trial judge erroneously prevented Etheridge from presenting evidence on a matter that, if believed, could have constituted a defense to the charge, I would reverse. Therefore, I respectfully dissent.
1
Only three such convictions are necessary for enhancement under the statute
2
If appellant had successfully completed this process, he would have been able to claim under 18 U.S.C. Sec. 921(a)(20) that his civil rights had been restored
3
Three of the convictions are more than 20 years old, but the latest conviction was in 1983
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IN THE SUPREME COURT OF APPEALS OF WEST VIRGINIA
January 2018 Term FILED
_______________ April 26, 2018
released at 3:00 p.m.
EDYTHE NASH GAISER, CLERK
No. 17-0174 SUPREME COURT OF APPEALS
_______________ OF WEST VIRGINIA
PAT REED, COMMISSIONER OF THE WEST VIRGINIA DIVISION OF MOTOR
VEHICLES,
Respondent Below, Petitioner,
v.
BRIAN A. BOLEY,
Petitioner Below, Respondent.
____________________________________________________________
Appeal from the Circuit Court of Pleasants County
The Honorable Timothy L. Sweeney, Judge
Civil Action No. 15-P-21
REVERSED AND REMANDED
____________________________________________________________
Submitted: March 6, 2018
Filed: April 26, 2018
Patrick Morrisey, Esq. George J. Cosenza, Esq.
Attorney General GEORGE J. COSENZA, PLLC
Janet E. James, Esq. Parkersburg, West Virginia
Assistant Attorney General Counsel for the Respondent
Charleston, West Virginia
Counsel for the Petitioner
JUSTICE WALKER delivered the Opinion of the Court.
JUSTICE KETCHUM dissents and reserves the right to file a dissenting opinion.
SYLLABUS BY THE COURT
1. “‘On appeal of an administrative order from a circuit court, this Court
is bound by the statutory standards contained in W.Va. Code § 29A-5-4(a) and reviews
questions of law presented de novo; findings of fact by the administrative officer are
accorded deference unless the reviewing court believes the findings to be clearly wrong.’
Syl. Pt. 1, Muscatell v. Cline, 196 W. Va. 588, 474 S.E.2d 518 (1996).” Syllabus Point 1,
Straub v. Reed, 239 W. Va. 844, 806 S.E.2d 768 (2017).
2. “In cases where the circuit court has amended the result before the
administrative agency, this Court reviews the final order of the circuit court and the
ultimate disposition by it of an administrative law case under an abuse of discretion
standard and reviews questions of law de novo.” Syllabus Point 2, Muscatell v. Cline, 196
W. Va. 588, 474 S.E.2d 518 (1996).
3. “On appeal to the circuit court from an order of the Office of
Administrative Hearings affirming the revocation of a party’s license to operate a motor
vehicle in this State, when the party asserts that his or her constitutional right to due process
has been violated by a delay in the issuance of the order by the Office of Administrative
Hearings, the party must demonstrate that he or she has suffered actual and substantial
prejudice as a result of the delay. Once actual and substantial prejudice from the delay has
i
been proven, the circuit court must then balance the resulting prejudice against the reasons
for the delay.” Syllabus Point 2, Reed v. Staffileno, 239 W. Va. 538, 803 S.E.2d 508 (2017).
ii
WALKER, JUSTICE:
After he was arrested for driving under the influence of alcohol (DUI), Brian
Boley’s driver’s license was revoked by the Commissioner of the West Virginia Division
of Motor Vehicles (DMV) in August 2011. Mr. Boley challenged the revocation by appeal
to the Office of Administrative Hearings (OAH), which conducted a hearing in May 2013
but then took no action for two and a half years; eventually, the OAH affirmed the
revocation in November 2015. The circuit court subsequently reversed the revocation on
the grounds that Mr. Boley suffered actual and substantial prejudice as a result of the long
delay by the OAH and that the DMV had offered no justifiable reason for the delayed
decision. The DMV contends, among other things, that the circuit court erred in finding
that Mr. Boley suffered actual and substantial prejudice as a result of the post-hearing delay
by the OAH. We agree and reverse the circuit court’s order and remand this case for the
reinstatement of the DMV’s revocation order.
I. FACTUAL AND PROCEDURAL BACKGROUND
On August 11, 2011, Mr. Boley failed to stop at a stop sign and was pulled
over by Sr. Trooper B. L. Meeks of the West Virginia State Police. While speaking with
Mr. Boley, Trooper Meeks noticed the odor of alcohol on Mr. Boley’s breath and observed
that Mr. Boley’s speech was slurred and hesitant and that his eyes were bloodshot and
glassy. Mr. Boley admitted that he had consumed “a few beers.” Trooper Meeks
administered three field sobriety tests and a preliminary breath test upon Mr. Boley. Mr.
Boley failed each test and was arrested for DUI. After his arrest, Mr. Boley consented to
1
a secondary chemical test of the breath, which showed a blood alcohol content of .097. Mr.
Boley held a Class A commercial driver’s license at the time of his arrest.
On August 16, 2011, the DMV received the DUI information sheet related
to Mr. Boley’s arrest, and on August 23, 2011, the DMV issued an order of revocation.
Mr. Boley requested a hearing with the OAH. In his written objection to the revocation
order, Mr. Boley argued that Trooper Meeks did not have articulable reasonable suspicion
to stop Mr. Boley’s vehicle or probable cause to arrest him. Mr. Boley further argued that
Trooper Meeks failed to administer the field sobriety tests in strict compliance with
standard criminal procedure and that the standard chemical test administered to Mr. Boley
was not done in accordance with Department of Health regulations or West Virginia law.
Mr. Boley’s hearing was initially set for January 11, 2012. However, at the request of Mr.
Boley’s counsel, the hearing before the OAH was continued and rescheduled twice, once
for a scheduling conflict of Mr. Boley’s counsel and once due to the unavailability of a
necessary witness. Mr. Boley’s counsel made a third request for continuation of the
hearing, which was denied by the OAH.
The OAH hearing ultimately took place on May 9, 2013. Mr. Boley testified
that his preliminary and secondary chemical breath tests were affected because he had
smokeless tobacco in his mouth at the time of the vehicle stop and did not remove the
tobacco until he was at the regional jail. On November 10, 2015, the OAH entered its
2
decision affirming the revocation of Mr. Boley’s driver’s license finding that “[Mr. Boley],
while the holder of a commercial driver’s license, drove a motor vehicle in this state under
the influence of alcohol.” The OAH found that the reliability of Mr. Boley’s testimony
regarding his use of smokeless tobacco at the time of the vehicle stop was “questionable at
best,” but even if accurate, “would not affect the disposition of the case” as the remainder
of the evidence was sufficient to prove that Mr. Boley was driving under the influence.
Mr. Boley appealed the OAH decision to the Circuit Court of Pleasants
County. At his hearing on October 28, 2016, Mr. Boley’s counsel asserted that as a
commercial truck driver with limited education and limited alternative employment
opportunities, he was prejudiced by the two-and-a-half year delay in the issuance of the
OAH’s order. He also asserted that due to the delay, Mr. Boley did not make any
contingency plans, such as attempting to find a job that would not require him to drive,
because he believed that the OAH had forgotten about his case and would not revoke his
license. The DMV countered that under the decisions of this Court, Mr. Boley was required
to show that the delay prejudiced him in his ability to defend himself in the license
revocation proceedings in order to prove actual and substantial prejudice. The DMV also
asserted that the OAH, which was not joined as a party, was a separate entity responsible
for the delay in entering the order. The circuit court stayed the revocation of Mr. Boley’s
driver’s license for a period of 150 days.
3
By order dated January 17, 2017, the circuit court vacated the OAH’s
revocation order and reinstated Mr. Boley’s driver’s license. Noting Mr. Boley’s limited
education and limited alternative employment offers, the circuit court held that such delay
was actually and substantially prejudicial to Mr. Boley “due to the uncertainty created by
such delay upon one’s ability to avoid prejudice as a result of a prospective suspension”
and that any revocation “has and will cause [Mr. Boley] and his family to suffer
considerable hardship.” The circuit court also found that the DMV offered “no explanation
or justifiable reason for [the two and one-half year] delay in” the issuance of the OAH’s
decision and presented no evidence contesting the court’s findings regarding Mr. Boley’s
limitations and resulting hardship. It is from the circuit court’s order that the DMV now
appeals.
II. STANDARD OF REVIEW
With respect to the applicable standard of review, we recently confirmed
that:
“On appeal of an administrative order from a circuit court, this
Court is bound by the statutory standards contained in W.Va.
Code § 29A-5-4(a) and reviews questions of law presented de
novo; findings of fact by the administrative officer are
accorded deference unless the reviewing court believes the
findings to be clearly wrong.” Syl. Pt. 1, Muscatell v. Cline,
196 W. Va. 588, 474 S.E.2d 518 (1996).[1]
1
Syl. Pt. 1, Straub v. Reed, 239 W. Va. 844, 806 S.E.2d 768 (2017).
4
Moreover, “[i]n cases where the circuit court has amended the result before the
administrative agency, this Court reviews the final order of the circuit court and the
ultimate disposition by it of an administrative law case under an abuse of discretion
standard and reviews questions of law de novo.”2 With these standards in mind, we review
the parties’ arguments.
III. ANALYSIS
We first address the DMV’s assertion that the circuit court erred in finding
that the OAH’s two-and-a-half year delay in issuing a final decision was prejudicial to Mr.
Boley. While the statutes governing revocation proceedings before the OAH do not impose
time constraints on the issuance of decisions by that agency following an administrative
hearing,3 this Court has long recognized the constitutional mandate that “‘justice shall be
administered without . . . delay.’ W. Va. Const. Art. III, § 17.”4 We further have recognized
that “administrative agencies performing quasi-judicial functions have an affirmative duty
to dispose promptly of matters properly submitted.”5
2
Syl. Pt. 2, Muscatell v. Cline, 196 W. Va. 588, 474 S.E.2d 518 (1996).
3
See W. Va. Code §§17C-5C-1 through 17C-5C-5 (2017), and W. Va. C.S.R. §§ 1-
1 through 1-18.
4
Frantz v. Palmer, 211 W.Va. 188, 192, 564 S.E.2d 398, 402 (2001).
5
Syl. Pt. 7, in part, Allen v. State Human Rights Comm’n, 174 W.Va. 139, 324
S.E.2d 99 (1984).
5
In Miller v. Moredock,6 an appeal by the DMV from a circuit court order
reversing the suspension of the respondent’s driver’s license for DUI following a
seventeen-month delay between the administrative hearing and entry of the final order of
revocation, the circuit court had found that such a delay was “presumptively” prejudicial.
In that case, the DMV argued “that the circuit court failed to find that [respondent] suffered
any actual prejudice as a result of the delay and that, absent such a finding, the revocation
order should have been affirmed.”7 We set out the following standard in Miller for
determining prejudice from a delay in the issuance of a revocation order after a hearing had
been held:
On appeal to the circuit court from an order revoking a party’s
license to operate a motor vehicle in this State, when the party
asserts that his constitutional right to due process has been
violated by a delay in the issuance of the revocation order by
the Commissioner of the Division of Motor Vehicles, he must
demonstrate that he has suffered actual and substantial
prejudice as a result of the delay. Once actual and substantial
prejudice from the delay has been proven, the circuit court
must then balance the resulting prejudice against the reasons
for the delay.[8]
6
229 W. Va. 66, 70, 726 S.E.2d 34, 38 (2011).
7
Id.
8
Id. at Syl. Pt. 5.
6
Subsequently, in Reed v. Staffileno,9 we addressed the issue of whether the
petitioner suffered actual and substantial prejudice as a result of a post-hearing delay of
three years before a decision was issued. Because Miller was decided under the prior
administrative review system controlled by the DMV10, we modified Syllabus Point 5 of
Miller to reflect the current administrative system and held that:
On appeal to the circuit court from an order of the Office of
Administrative Hearings affirming the revocation of a party’s
license to operate a motor vehicle in this State, when the party
asserts that his or her constitutional right to due process has
been violated by a delay in the issuance of the order by the
Office of Administrative Hearings, the party must demonstrate
that he or she has suffered actual and substantial prejudice as a
result of the delay. Once actual and substantial prejudice from
the delay has been proven, the circuit court must then balance
the resulting prejudice against the reasons for the delay.[11]
In rejecting the DMV’s assertion that the respondent in Staffileno was entitled to relief only
if he established that his ability to defend himself was compromised, we determined that
the application of such a standard was only appropriate when a party challenges a pre-
hearing delay.12 In so finding, we reasoned:
In the context of a delay in issuing an order after a hearing had
been held, the issue of prejudice necessarily involves prejudice
9
239 W. Va. 538, 803 S.E.2d 508 (2017).
10
The OAH was created to hear appeals of DUI matters pursuant to West Virginia
Code § 17C-5C-5, effective June 11, 2010.
11
Syl. Pt. 2, Staffileno, 239 W. Va. 538, 803 S.E.2d 508.
12
Id. at __, 803 S.E.2d at 513.
7
to a party that occurred after the hearing was held. As a
general matter, under Miller the standard for post-hearing
prejudice will ordinarily involve some type of change in a
party’s circumstances that may have been substantially
prejudiced because of the delay in issuing a final order by
OAH.[13]
In Staffileno, we determined that an accountant who retired following his
revocation hearing and became a bus driver had suffered actual and substantial prejudice
as a result of the delay. We concluded that the circuit court had properly determined that
the petitioner would not have retired and changed his employment if OAH had issued a
timely decision.14 As required by Miller, we then balanced the resulting prejudice to
respondent against the reason for the delay by the OAH and held that “[i]n light of the
evidence establishing prejudice from the delay in issuing the order and the absence of any
evidence showing the reason for the delay, we find no basis to disturb the circuit court’s
decision on that . . . issue.”15
13
Id. (emphasis added).
14
Id. at __, 803 S.E.2d at 513-14.
15
Id. at __, 803 S.E.2d at 514. The DMV made the same arguments in Staffileno
that it does here, asserting that it is a separate entity from OAH and thus not responsible
for the delay. However, we stated that “while we can appreciate DMV’s efforts to
disassociate itself with causing the delay, ultimately the burden was upon it to inform the
circuit court and this Court of the possible reason for the delay.” Id. (emphasis added).
8
In concluding that prejudice existed in Staffileno, we specifically
distinguished our prior decision in Warner v. Reed,16 where one of the issues raised by the
driver, who maintained a CDL license, was that he was prejudiced by a two-year delay
between the time that his administrative hearing was held and the issuance of the order
revoking his license.17 We rejected the driver’s argument in Warner because he failed to
present any evidence of prejudice from the delay in issuing the revocation order:
Finally, the Court similarly finds no violation of petitioner’s
due process rights in the approximately two-year delay
between the administrative hearing and the issuance of the
order revoking petitioner’s license. In support of this
assignment of error, petitioner alleges only that this delay
caused him prejudice because the matter was transferred from
the hearing examiner who actually presided over his hearing
to another hearing examiner who later entered the order
revoking his license. According to petitioner, even if the
original examiner had drafter [sic] the order, the delay likely
would have caused her to be unable to recall crucial elements
of his case. We note, however, that petitioner provides no
evidence to support this claim. We further find that, while the
DMV did engage in an unnecessarily long delay in issuing the
order, there is no evidence in the record that the hearing
examiner would have made different findings if the order had
been entered sooner. For these reasons, given the specific facts
of this case, we find that the delay between the hearing and the
issuance of the order revoking petitioner’s license did not
constitute a violation of his due process rights.[18]
16
No. 15-0229, 2016 WL 870614 (W. Va. Mar. 7, 2016) (memorandum decision).
17
Staffileno, 239 W. Va. at __, 803 S.E.2d at 514.
18
Warner, 2016 WL 870614, at *6 (emphasis added).
9
Subsequently, in Straub v. Reed,19 we held that that a pharmaceutical sales
representative failed to establish that an eleven-month delay in the issuance of his license
revocation order by the OAH resulted in actual and substantial prejudice. In that case, the
petitioner testified that his employer regularly issued notices of potential layoffs and that,
although he kept his job during the course of the proceedings, he attempted to secure other
employment but was denied jobs based upon his potential license revocation.20 The DMV
made the same arguments it makes in this case regarding its lack of control over the delay
by the OAH. Citing our holding in Staffileno, we rejected the DMV’s argument on this
issue and instead focused our analysis on whether the driver demonstrated actual and
substantial prejudice.21 We declined to grant the petitioner relief because he could identify
“no actual and substantial prejudice, e.g., some type of detrimental change in his
circumstances, related to the delay in OAH issuing its final order.”22
DMV asserts, and we agree, that the facts of this case are akin to Straub with
respect to the issue of whether the circuit court erred in finding that Mr. Boley has
established actual and substantial prejudice as a result of the delay.23 Here, Mr. Boley has
19
239 W. Va. 844, __, 806 S.E.2d 768, 775 (2017).
20
Id. at __, 806 S.E.2d at 771.
21
Straub, 239 W. Va. at __, 806 S.E.2d at 775.
22
Id. (emphasis added).
23
During oral argument, DMV asserted that the circuit court’s finding of prejudice
as a result of the delay was erroneous under our recent decision in Straub, which was filed
10
not actually alleged “some type of detrimental change in his circumstances, related to the
delay in OAH issuing its final order.”24 Rather, before the circuit court, Mr. Boley simply
asserted that as a commercial truck driver with limited education and limited employment
opportunities other than driving in the construction or trucking industry, he was prejudiced
by the two and a half year delay in the issuance of the OAH’s order. When the circuit court
asked Mr. Boley’s counsel whether he would still suffer the same prejudice even if the
OAH had entered the order in a timely fashion, Mr. Boley’s counsel stated:
He might have but the point is when he did not hear from them
for so long he then – again, there was no reason for him to
believe that he had to make a contingency plan for that
ultimately happening. Two and a half years go by and the facts
in the Moredock case are kind of similar to this, so, yeah. . . .
he might have lost his license and he could have appealed that
decision here just like he did now, but again, his case is
dismissed in magistrate court so the charges are dropped.
There’s no DUI.
....
[W]hat I’m trying to do is get you into his head. In other words,
“Look, okay. The case against me in magistrate court is
dismissed. I don’t have a DUI. Now I don’t hear from these
guys for two and a half years. I’m not going to worry about it.
I’m not going to have my wife try to find a job or me try to find
another job that does not require me driving or try to find some
way to support my family. My guess is they’ve forgotten about
me. They are not going to take my license. I’m not going to
make those contingency plans and, bang, here it comes in the
mail and I’m suspended.
after DMV submitted its brief to the Court in this case. We agree with the DMV that Straub
is instructive with respect to the circumstances before us now.
24
Id.
11
Mr. Boley’s assertion that he did not make any contingency plans, such as
attempting to find a job that would not require him to drive, because he believed that the
OAH had forgotten about his case and would not revoke his license is unavailing. Mr.
Boley has not specifically identified some type of detrimental change in his circumstances
that was related to the delay in OAH issuing its final order itself, like the circumstances
before us in Staffileno, and thus, we conclude that the circuit court’s finding of prejudice
was erroneous. Accordingly, we reverse the circuit court’s order.25
IV. CONCLUSION
For these reasons, we reverse the Circuit Court of Pleasants County’s January
17, 2017 order and remand for reinstatement of the DMV’s order revoking Mr. Boley’s
driver’s license.
Reversed and Remanded.
25
Because we reverse the circuit court’s order on this basis, we need not address
DMV’s remaining assignments of error.
12
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861 F.2d 266Unpublished Disposition
NOTICE: Fourth Circuit I.O.P. 36.6 states that citation of unpublished dispositions is disfavored except for establishing res judicata, estoppel, or the law of the case and requires service of copies of cited unpublished dispositions of the Fourth Circuit.UNITED STATES of America, Plaintiff-Appellee,v.Leon JACKSON, Sr., Defendant-Appellant.
No. 88-5021.
United States Court of Appeals, Fourth Circuit.
Argued: July 14, 1988.Decided: Oct. 24, 1988.
Douglas Michael Nabhan (Williams, Mullen, Christian & Dobbins, on brief), for appellant.
William Graham Otis, Assistant United States Attorney (Henry E. Hudson, United States Attorney; N.G. Metcalf, Assistant United States Attorney, on brief), for appellee.
Before CHAPMAN, WILKINSON and WILKINS, Circuit Judges.
CHAPMAN, Circuit Judge:
1
Leon Jackson appeals his convictions at a bench trial of conspiracy to commit wire fraud in violation of 18 U.S.C. Sec. 371; wire fraud and aiding and abetting in violation of 18 U.S.C. 1353 and 2. His claims of error are: (1) a prejudicial delay in his trial; (2) a refusal to allow him to withdraw his waiver of a jury trial; (3) the insufficiency of the evidence to support his convictions; and (4) the failure of the government to produce a document bearing his name, address, date of birth, and social security number prior to the morning of trial. We find no merit to these claims and we affirm.
2
* Appellant was originally indicted on March 23, 1987 in the Eastern District of Virginia. This indictment arose out of a large wire fraud scheme involving approximately forty individuals, who had worked through one Harvey Bland, who was a mail room clerk employed by the Credit Bureau of Richmond, in having bad credit information removed from the Credit Bureau files. Bland and Jackson became acquainted because Jackson was employed in the Main Street Post Office and Bland picked up the mail for the Credit Bureau. Bland had seen Jackson on several visits to the office of the Credit Bureau when Jackson was attempting to have prejudicial information removed from his credit record and file. After several meetings Jackson paid $200 to Bland to have the bad references removed. Immediately after the payment Jackson received a credit printout showing the removal of the bad references, and he applied for a credit card with a Richmond clothing store. Jackson had given Bland a piece of paper containing his name, date of birth, address, and social security number so that his file could be properly identified.
3
At trial the appellant admitted that he had been to the Credit Bureau and gone over his credit report in detail. He was aware of several bad credit references, he was behind on a bank loan and Western Auto was about to obtain a judgment against him on an account due. He stated that this information would stay in his file for seven years, and although he was aware of procedures that could be used to challenge incorrect information, he had not resorted to such procedures. He had also made a statement to a U.S. Secret Service Agent in which he acknowledged that he knew that his credit report had been altered so as to remove the bad credit references.
4
Due to the large number of persons involved in similar schemes, and the shortage of Assistant United States Attorneys in the Richmond office, the attorney handling this case for the government met with attorneys representing all of the defendants in the latter part of March, 1987 and advised them that he would make the same plea bargain offer to all defendants. This offer was to accept a plea as to one felony count, with the understanding that all other felony counts would be dismissed. He advised that there would be no retreat from the requirement of a plea to one felony count, and those who did not plead would be reindicted and possibly new counts would be added to the new indictment. A number of pleas of guilty resulted from this offer, but the appellant elected to plead not guilty. The original indictment as to him was dismissed on April 7, 1987, and on October 28, 1987 he was indicted on three counts. At that time he entered a plea of not guilty and signed a waiver of his right to a jury trial. He and his attorney was advised at the time that his trial would commence on December 22, 1987.
5
Shortly after the new indictment, appellant's attorney made a motion to dismiss the indictment on the grounds of delay. This motion was argued on December 4 and it was denied. During the discussion of this motion the judge stated that he was familiar with these cases because he had tried several of them. On December 16, a Thursday, appellant made a motion to withdraw his waiver of a trial by jury. This motion was heard and denied on Friday, December 17.
6
In denying the motion to withdraw the waiver for a trial by jury the court stated:
7
The defendant's motion for leave to withdraw his waiver of a trial by jury is denied. The waiver was knowingly and voluntarily executed on October 28, 1987. The motion for leave to withdraw was filed less than a week before the actual trial is to commence.
8
I have no difficulty at all in stating that the logistics of trial by jury are vastly different from a bench trial, and that I would be obligated to grant the government's motion for a continuance if I now set the case for trial by jury. Because I have arranged my docket in such a fashion that this would be inconvenient for the court, and it would mess up the system to continue the case, that is one of the reasons that I am denying the motion.
9
There is no doubt in my mind that demonstrative evidence and things of that nature are vastly different in a trial to a jury than one to the bench. While I have some background in this case, I want the record to show that I rather suspect that Mr. Jackson's motion was precipitated by the fact that I have presided over a bench trial about a week ago, one of the people involved in this case, and found that individual guilty. I have no predilections about the case at all, because in that case the defendant didn't put up any evidence or didn't testify. So there was no basis for making the finding of anything but guilt.
10
I can concede that on a bench trial or a jury trial that you can marshal evidence here by a defendant if you want to testify that would put grave doubts on whether the government has proven some elements of the crime that he is charged with.
11
In any event, I don't think that lawyers and intelligent people, like Mr. Jackson, ought to be able to play games with the court and run the trial balloon by waiving a trial by jury and then sandbag the court and the government by coming in at the last minute and saying, we don't like the way things have been going, and even though we knowingly, willfully, and voluntarily waived that right to trial by jury and everybody else relied upon that, that we now want to play games and we are withdrawing that waiver. The system would break down if you permit that sort of looseness by litigant and their lawyers. I am not of the mind to do it.
12
An order denying the motion will be entered and counsel will receive a copy of it, and we will go to trial on a bench trial on Tuesday as scheduled. App. at 79-80.
II
13
Appellant claims that there was an unreasonable delay in reindicting him and in bringing him to trial. He claims that under Federal Rule of Criminal Procedure 48(b)1 the trial court should have dismissed the superseding indictment. He does not claim that the length of the delay violated his Sixth Amendment right to a speedy trial.
14
Under Rule 48(a) the U.S. Attorney had the right to dismiss the indictment with the leave of court. Jackson and his attorney were advised in March 1987 that if the plea bargain offer was refused, the government would dismiss the original one count indictment and thereafter seek a superseding indictment containing additional counts. This was done. The district court denied the motion by the appellant to dismiss under Rule 48 and found that the delay was not unreasonable and that the action of the United States Attorney's office in trying to dispose of the entire group of cases by plea bargain was an option available to the prosecutor, and the use of this option was not unlawful.
15
Since the appellant does not claim a violation of his constitutional right to a speedy trial, and since he does not claim, and the facts would not support a violation of the Speedy Trial Act, 18 U.S.C. Sec. 3161 et seq., his motion to dismiss is addressed to the sound discretion of the district court, and on the present facts we find no abuse of discretion.
16
Appellant also claims that substituting a three count indictment for one count indictment made the second indictment multiplicious. The superseding indictment charged a conspiracy plus two substantive wire fraud counts. In United States v. Ponder, 522 F.2d 941 (4th Cir.1975), we held that the prosecution may elect to charge defendant under one or more statutes for a single offense if the offense overlaps or involves more than one statute. It is also necessary that each offense require proof of some fact that the other does not. Under the superseding indictment the first count required a proof of a conspiracy of which the appellant was a member, while the additional counts charged violations of 18 U.S.C. Sec. 1343 on two separate dates. As a result the charges are not multiplicious.
III
17
The appellant knowingly and voluntarily waived his right to a trial by jury. This waiver was in writing and was signed by Jackson, his attorney, the Assistant United States Attorney and the trial judge. Appellant is intelligent and he understood the consequences of his action. He was aware that there were a number of other people charged with the same type of wire fraud, and that some of these persons had entered pleas of guilty and that others had gone to trial or were in preparation for trial.
18
On October 28, 1987, when he and his attorney agreed to a bench trial, they were advised that the trial date was December 22, 1987, and they knew the identity of the trial judge. On November 9, 1987, appellant filed a motion to dismiss the superseding indictment based upon pre-accusatory delay, prosecutorial vindictiveness and a multiplicious indictment. There was no mention in this motion, or in the argument of it on December 4, 1987, of any second thoughts by the appellant on his decision to have a bench trial. The motion to dismiss was denied immediately following argument, but there was nothing said at that time about a desire to withdraw the waiver of a jury trial. It was not until twelve days later, and only a few days before the trial date, that the motion to withdraw the waiver was made. The motion was heard the following day and denied.
19
In Wyatt v. United States, 591 F.2d 260 (4th Cir.1979), we held that the motion to withdraw a waiver of trial by jury is committed to the discretion of the district judge. Upon the examination of the record in this case, we cannot find an abuse of discretion. The reasons given by the district judge are set forth above. While we feel that the right to a trial by jury should take precedence over the convenience of the court and the normal concern of the judge in moving the court's docket with dispatch, these are not the only reasons given by the trial judge for refusing the motion. He was convinced from his familiarity with this case and the other cases arising on similar facts, that the appellant was trying to take advantage of the court by asking for a bench trial, and then after seeing the results of some of the bench trials, changing his position and asking for a jury trial. The trial judge was on the scene and his observations and conclusions are entitled to deference. On the present record we cannot find that he abused his discretion in refusing to allow the appellant to withdraw his waiver of a trial by jury.
IV
20
We find no merit to the remaining claims. There was abundant evidence to prove all of the essential elements of the crimes charged and upon which Jackson was convicted.
21
The exhibit containing the name, address, date of birth and serial number of Jackson was not identified by the government witness until the night before the trial, and it was produced to the appellant's attorney prior to trial the next morning. We find no error or abuse of discretion in the trial judge allowing this exhibit to be admitted.
22
AFFIRMED.
WILKINSON, Circuit Judge, dissenting:
23
I respectfully dissent. I believe the district court abused its discretion in denying defendant's motion to withdraw his waiver of a trial by jury.
24
On October 19, 1987, Leon Jackson was indicted for his alleged participation in a wire fraud scheme. On October 28, 1987, he pleaded not guilty and waived his right to trial by jury. He subsequently moved to dismiss the indictment based on prosecutorial delay. During the argument of this motion, the district judge stated that he was familiar with the facts of the case because he had presided over "twenty or thirty" of them. After hearing this, Jackson appeared to believe that a jury of his peers would better understand his position. The prospect that a jury may bring a fresh pair of eyes to a case a judge believes he has seen many times before is implicit in the Sixth Amendment guarantee. Jackson therefore moved to withdraw his waiver.
25
The government did not oppose the motion, but requested a continuance if the court were to allow Jackson to withdraw his jury trial waiver. In response to Jackson's motion, the district judge stated that he would feel obligated to grant the government a continuance if he allowed withdrawal of the waiver and set the case for trial by jury. Because he had arranged his docket in such a fashion that it would be "inconvenient" for the court and would "mess up the system" to continue the case, he denied Jackson's motion.
26
The effect of the withdrawal motion on the district court's docket, however, is not alone dispositive. Jackson's motion was filed nearly a week before the scheduled trial date. The government did not oppose the motion and there is no indication in the record that the government would have been prejudiced by granting it. The trial would have been a straightforward proceeding; it included the testimony of only six witnesses including appellant; and it consumed no more than a day of the district court's calendar. While I do not minimize concerns for convenience, such considerations here do not override the vindication of the constitutional right.
27
I would reverse the judgment of the district court and remand this case for trial by jury.
1
Rule 48. Dismissal
(a) By Attorney for Government. The Attorney General or the United States Attorney may by leave of Court file a dismissal of an indictment, information or complaint and the prosecution shall there upon terminate. Such a dismissal may be filed during the trial without the consent of the defendant.
(b) By Court. If there is unnecessary delay in presenting the charge to a grand jury or in filing an information against a defendant who has been held to answer to the district court, or if there is unnecessary delay in bringing the defendant to trial, the court may dismiss the indictment, information or complaint.
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239 F.Supp. 465 (1965)
UNITED STATES of America, Libellant,
v.
ARTICLES OF DRUG Consisting of Undetermined Quantities of Vitamin, Mineral, and Other Dietary Preparations * * *, FOODS PLUS, INC., (Claimant), Defendant.
Civ. A. No. 79-62.
United States District Court D. New Jersey.
March 4, 1965.
*466 David M. Satz, Jr., U. S. Atty., by Vincent J. Commisa, Asst. U. S. Atty., and Salvatore Franchino, Washington, D. C., for the Government.
Herbert Alterman, Passaic, N. J., Bass & Friend, by Milton Bass, New York City, of counsel, for claimant.
WORTENDYKE, District Judge:
In its libel of information praying seizure and condemnation of certain articles of drug therein particularized, in the possession of Foods Plus, Inc., (hereinafter Foods Plus or claimant) in this District, the United States of America charges that the articles described were misbranded when introduced into, while in, and while held for sale after such shipment in interstate commerce, within the meaning of 21 U.S.C. § 352(a)[1] and § 352(f) (1).[2] Seizure was effected on January 30, 1962, under appropriate process, and notice of claim to the articles seized was filed by Foods Plus, Inc. Claimant denies the misbranding charged. This Court has jurisdiction of the subject matter of the cause and of the parties in interest therein. 21 U.S.C. § 334(a).
Libelant charges that the articles seized were misbranded under § 352(a) in that their labeling, i. e., the labels upon their containers and the booklet entitled "Foods Plus 1962 Vitamin Catalog" (hereinafter catalog) which accompanied the articles, contain statements which represent and suggest that the articles are superior to similar products available on the market because they were formulated by one Carlton Fredericks, Ph. D., who is alleged in the catalog to be an internationally prominent nutritionist; that vitamins are more effective in combination with each other and with minerals; and that the nutritional requirements of old people differ from those of adults generally.
The Government further charges that eight of the seized articles of drug were misbranded under § 352(a) in that their labeling (the catalog) represented them to be effective to promote a healthy, vigorous feeling; to promote growth in children; to convert fatty tissues into energy; to prevent tiredness and poor appetite, and the like.
Finally, the libel alleges that all of the seized articles were misbranded under § 352(f) (1) because Foods Plus, through its intimate relationship with Carlton Fredericks, a radio commentator in the field of nutrition, represented the various articles to be effective in the prevention and mitigation of disease conditions, but that neither he nor any labeling (the catalog included) prescribed "adequate directions for use" of the articles as required by § 352(f) (1).
Claimant stipulated that the products seized were received after shipment in *467 interstate commerce, and that its catalog constitutes labeling of the seized articles as defined in § 321(m) of the Act[3], within the meaning of §§ 352(a) and 352 (f) (1). Claimant also concedes that some of the seized articles are drugs as defined in § 321(g) of the Act. Claimant denies, however, that the statements made in its catalog amount to the representations charged by the Government, or lack the directions for use of its products required by § 352(f) (1). More specifically, claimant insists that its catalog does not state that its products are superior to similar products available on the market, but that it merely discloses that Carlton Fredericks is claimant's consultant; that he has prescribed the formulas for certain of claimant's products offered in the catalog; and that he endorsed those products. Claimant does admit that its catalog states that there are no finer quality vitamins at any price, and that claimant's vitamins are the finest quality vitamins at lowest possible prices. The catalog admittedly characterizes Fredericks as an internationally prominent nutritionist, but it does not state that he is internationally and prominently recognized as an authority on nutrition. Claimant also denies that its catalog states that the nutritional requirements of people of old age are different from those of adults generally, but insists that the statement therein that vitamin and mineral deficiencies may become more common as we grow older because of restricted diets, digestive disturbances, difficulties in chewing and limited taste preferences is a true statement of fact. In sum, claimant contends that every statement set forth in its catalog is true and correct.
With regard to the Government's charge that the claimant's products are misbranded under § 352(f) (1) of the Act, claimant denies (1) that the radio broadcasts of Fredericks were advertising for or representations in behalf of claimant's products; (2) that said broadcasts recommended the use of claimant's products in the treatment of various diseases; and (3) that claimant's labeling fails to list those diseases or conditions. Although the Government's contentions based upon § 352(a) may be valid, V. E. Irons, Inc. v. United States, 1 Cir. 1957, 244 F.2d 34, cert. den. 1957, 354 U.S. 923, 77 S.Ct. 1383, 1 L.Ed.2d 1437; United States v. "Vitasafe Formula M", D.C.N.J.1964, 226 F.Supp. 266, since the articles in question are clearly misbranded under § 352(f) (1), the question as to their misbranding under § 352(a) has not been further considered.
Shortly after issue was joined, claimant moved for summary judgment in favor of the libellant, upon the ground that claimant recognized that an honest difference of opinion could exist as to whether the articles were misbranded under § 352(a). For this reason claimant sought a decree holding that the articles seized were misbranded under § 352(a) but authorizing their release from seizure for the purpose of relabeling by claimant in conformity with the requirements of the section. In support of this motion, claimant represented that its previous contractual relationship with Carlton Fredericks had by then terminated. Claimant persisted, however, in contending that the articles were not misbranded under § 352(f) (1), and refused to consent that the suggested decree so adjudicate. Claimant's motion was denied, and libellant's cross-motion for leave to amend the libel by including a prayer for injunctive relief prevailed.
*468 The Government's charge of misbranding under § 352(f) (1) of the Act is predicated upon its assertion that the seized vitamins, minerals and dietary supplements are drugs and that their "labeling" failed to disclose adequate directions for their use "for the many disease conditions for which Carlton Fredericks represented them as being effective in his radio broadcasts, which were merely disguised advertisements for the Foods Plus products." The Government does not claim that Fredericks' broadcasts should be treated as incorporated by reference in or forming a part of the "labeling" of the drug. Nevertheless, oral representations, such as these broadcasts, may be considered in determining the intended use of the vitamins. United States v. El Rancho Adolphus Products, 3 Cir. 1957, 243 F.2d 367, cert. den. 1957, 353 U.S. 976, 77 S.Ct. 1058, 1 L.Ed.2d 1136, reh. den. 1957, 354 U.S. 927, 77 S.Ct. 1376, 7 L. Ed.2d 1441; V. E. Irons, Inc. v. United States, supra; Nature Food Centres, Inc. v. United States, 1 Cir. 1962, 310 F.2d 67, cert. den. 1963, 371 U.S. 968, 83 S.Ct. 552, 9 L.Ed.2d 539. The reasoning upon which this claim of misbranding rests may be outlined as follows:
(1) the Food and Drug Act [specifically 21 U.S.C. § 352(f) (1)] requires that "adequate directions for use" of a drug be borne by its "labeling";
(2) the articles seized, which comprise various quantities of some 43 different formulas of vitamin, mineral and other dietary preparations, are drugs; and
(3) the labeling associated with the formulations does not contain adequate directions for the use of the articles seized. Therefore, argues the Government, these articles are misbranded, and were subject to seizure under 21 U.S.C. § 334.
The initial question here presented is whether the seized articles are drugs under the Act and so within the proscription of § 352(f) (1). In § 321 (g) (2) the term drug is defined as "articles intended for use in the diagnosis, cure, mitigation, treatment, or prevention of disease in man or other animals." The Government conceded that it was required to show by the evidence that "(a) during the course of his radio programs, Carlton Fredericks made certain claims for the preventive, curative, and therapeutic properties of vitamins, minerals and proteins for use in certain disease conditions [and] (b) these claims were in reality representations or * * * advertisements for all the Foods Plus products, including those under seizure * * *." The crux of the Government's case is that Carlton Fredericks' radio broadcasts, his reputation, and his listening audience were exploited by Foods Plus in such a way as to implant in the mind of a person listening to these broadcasts (especially that of a regular listener), the idea that many of the ills of man, from simple malaise to a great number of diseases, could be prevented, mitigated, or cured by the ingestion of Foods Plus vitamins and dietary supplements.
Concededly accurate transcripts of radio broadcasts by Carlton Fredericks over Stations KGMC, Englewood, Colorado, WOR, New York City, and KLZ, Denver, Colorado, clearly disclose that, despite occasional admissions, that only medical people could advise a person on the therapeutic use of vitamins, Carlton Fredericks extolled the value of vitamin and mineral supplementation for use by the layman in the prevention, treatment and cure of disease.
On November 23, 1961, during a broadcast over Station KLZ in Denver, Fredericks said:
"Greetings, my friends, this is Carlton Fredericks, the program is Living Should be Fun. * * * This radio nutrition class [a weekly item on his daily programs] is on the air every Thursday on this station at this time. And the course is continuous so that the lessons you missed will be repeated * * * we are now discussing the subject of Vitamin E. You've missed the *469 discussion of Vitamin B Complex and Vitamin C and Vitamin A and D and the bioflavonoids. But those will be repeated as I said in the next session * * *. In the interim you can catch up with some of what you missed by reading my Vitamin Guide which is a publication I wrote really to answer a specific question * * * what kind of a vitamin supplement did you put together to take care of your children when * * * you were dissatisfied with the vitamin drop preparations which were on the market at that time?
"Well, I'm still dissatisfied * * and the formula I put together for my children has been placed on the market by several companies. And the vitamin supplements which Mrs. Fredericks and I use are on the market from dozens of companies. I'm concerned [,] you see [,] with formula not with brand. * * *
"Now today we're continuing the discussion of Vitamin E which we began last week. * * * So because I know that such prejudice exists and because there are many commercial motivations for depressing the importance * * * of Vitamin E * * * I am therefore documenting every statement made * * *.
"Now we start with a disorder and please remember we study the medical use of a vitaminthe medicinal use so that you may learn from what nutrition cures, how to prevent by shaping your diet properly. Vitamin E has been used in the treatment of arithro blastosis betallis * * *. * * * The outlook the prognosis of the infant seems to be definitely improved.
"It is advisable to administer substantial amounts of Vitamin E to every pregnant Rh negative woman whose husband is Rh positive * * and to start the treatment by the end of the third month of pregnancy.
"Now that came from an article in Progressive Medicine * * *.
"Our next abstract comes from the proceedings for the Society of Experimental Biology and Medicine, 1940 * * * [the author] speaks of two patients with dermatomyocitis who were given * * * roughly 4 ounces of wheat germ daily and then he reports definite clinical improvement * * *.
"Now there is a disorder called fibrositis * * *. Primary fibrositis is sometimes diagnosed as lumbago or torticollis, which is rye [sic] neck, a muscular rheumatism or colds in a muscle or whatever.
"This is what the doctor said, writing in the American Journal of Medical Science 1941, volume 201. Thirty patients with primary fibrositis were treated with Vitamin E either as wheat germ oil or as a mixed natural Vitamin E concentrate. Complete relief was obtained by all patients.
* * * * *
"Now you may say, well why is it that the American physician is so cynical about Vitamin Elook, I cannot explain why a professional man will accept digitalis from foxglove but will not accept Vitamin E from vegetable oil, like wheat germ oil. Nor is it the province of the program to explain that. There is quite a long story to it and the story has very little to do with the merits of Vitamin E. It's a story of rivalry and dissention among politicians in medical circles and some other things which really have very little bearing on what we're trying to accomplish here.
"And what we're trying to accomplish is to get more Vitamin E into your diet. So let me close our journey today * * * by suggesting that you * * * get * * * any vacuum-packed brand of wheat germ * * * that you add it to cereal [and] white flour. * * * Let me *470 suggest that you * * * buy white bread with wheat germ added * * and then you're on the pathway toward decent Vitamin E intake. And this is Carlton, at your ease, Fredericks, wishing you a very good day and very good health to you all."
This recorded advertisement in Carlton Fredericks' voice then followed immediately:
"Greetings friends, this is Carlton Fredericks speaking. I believe as you do that the best advertising is by word of mouth and today that word is Foods Plus Vitamins from coast to coast because I think almost everybody knows about the money they save by buying direct from Foods Plus Vitamins. You too can save on vitamins up to 75%, tremendous savings made possible because Foods Plus Vitamins are sold direct to you and in the big Foods Plus catalog you'll find over 150 famous vitamin formulas compiled, formulated under my direction and you'll find big savings on vitamins, drugs and household remedies for every member of the family. This Foods Plus is the only vitamin house in America to carry my personal endorsement. Now when you buy from Foods Plus even the tiniest order is shipped out the same day and there are no extra charges ever. Do write to me for the catalog."
(Announcer) "To get your 64 page Foods Plus Vitamin catalog, write to Vitamin Catalog, care of Carlton Fredericks, KLZ, Denver 17, Colorado. That's Vitamin Catalog, care of Carlton Fredericks, KLZ, Denver 17, Colorado."
On the previous day, Fredericks' program over the same station included answers to some of the mail inquiries from his listeners. His remarks with respect to one letter were as follows:
"Another question: `Do you have any special data on the treatment of arthritis with vitamin therapy? * * *' Yes, I have a good deal of data on the treatment of arthritis with vitamin therapy and good diet. This is available to the physician on request. I can't send it to the public. I am going to write a booklet on the subject with broad general outlines because actually the diet for arthritis is simply a good diet with the exception of the diet in gout, where there may be individual sensitivities reactions to certain foods which will require individual management and where incidentally the medical man should not issue a printed diet either.
"The vitamin therapy however for arthritis being a therapy is given to the medical man only. My correspondent closes: `I've been listening to your broadcasts wherever possible for the past six months. If everyone would heed the advice given on your program, we'd have a much healthier nation.'"
Altogether, in a succession of radio broadcasts from the stations above mentioned, during a period commencing on and with October 26th and terminating December 18th, 1961, Carlton Fredericks recommended to his listeners various vitamins and dietary supplements as remedies and/or preventives for human ailments which included the following: Respiratory diseases, circulatory diseases, cystic mastitis, club feet, paradentosis, neuritis, lowered thyroid activity, disturbed elimination, high blood pressure, strokes, rheumatic fever, tooth decay, allergies, damaged brain and nerve cells in children, multiple sclerosis, hardening of the arteries, lack of mental resistance to house-to-house salesmen, varicose veins, vertigo, mental disorders, lack of resistance to cancer, epilepsy, shingles, Bell's palsy, amyotrophic lateral sclerosis, lack of resistance to radiation, arthritis, gray hair, rheumatoid arthritis, mongolian idiotism, lupus erythematosus, sexual frigidity, heart disease, muscular dystrophy, coronary thrombosis, cerebral palsy, nervous system diseases, *471 Peyronie's disease, angina, diminished vigor, nervousness, glossitis, tartar on teeth, infertility in women, lack of mental alertness, for longer life, for tightening loose teeth, for pain and discomfort in glandular cycles, scleraderma, bursitis, and premenstrual tension, back ache and cramps.
This Court is impelled to the conclusion that these radio broadcasts of Carlton Fredericks, in which he presented abstracts of articles on nutrition together with his own comments thereon, were intended to urge or encourage the regular ingestion of vitamins as medicaments for the prevention, mitigation or cure of diseases in man. The question remains whether Foods Plus was a party to such intention. As the claimant notes, Carlton Fredericks had been presenting his radio series on nutrition for some years before he became connected with Foods Plus, and it was a radio station, not a drug or food manufacturer that had first syndicated these broadcasts. However, a finding that Foods Plus intended its vitamins to be used for the numerous disorders and conditions alluded to by Fredericks does not require that Foods Plus be shown to have conceived the idea of such radio broadcasts as those of Fredericks. Such a finding merely requires that it be shown that claimant acted in such a way as to avail itself of Carlton Fredericks' admonitions by identifying itself with the vitamins, etc., discussed on Fredericks' programs. Several facts indicate that Carlton Fredericks' broadcasts were so related to Foods Plus products. Advertisements by Carlton Fredericks of Foods Plus vitamin products were adjacent to (i. e., immediately succeeded) several of his programs. Whenever a listener responded to one of his offers to send the listener nutritional literature on sugar, menopause, gray hair, vitamins, protein deficiency, Vitamin E, or any of a host of other subjects alluded to in the course of Fredericks' radio broadcasts, the listener received a catalog from Foods Plus. (Claimant had acquired the mailing list resulting from responses to those broadcasts under a contract with Fredericks.) This catalog left no doubt that Foods Plus and Carlton Fredericks were very closely related. It disclosed that he was claimant's "Chief Consultant." His picture, name and title appeared in the upper right hand corner of the first page of the catalog, which expressly and emphatically exhorted the inquiring radio listener in the following vein:
"Surely you will agree your health is your most valuable asset. Insure your nutritional health confidently and economically with vitamin and mineral supplements manufactured by FOODS PLUS. Like millions of people, you too can have complete confidence in FOODS PLUS products and save by buying direct from the manufacturer.
"Carlton Fredericks, Ph.D., internationally prominent nutritionist, is FOODS PLUS' Chief Consultant. He has scientifically formulated the exclusive formulas in this catalog. The most popular of these formulas are FOODS PLUS Combinations 303, 305, 306 and 307 (Page 3).
"Today, Carlton Fredericks' devoted following numbers in the many millions. As his fans know, Carlton Fredericks lends his name and endorsement only to products in which he has complete confidence. They know that products bearing his name are produced in strict accordance with his high standards and specifications.
"Yes, you too can be confident when you buy FOODS PLUS products. There are no finer quality vitamins * * * at any price.
"FOODS PLUS is the only vitamin company privileged to carry Carlton Fredericks' name and receive his endorsement."
Once this catalog was read, especially by someone sufficiently interested in Carlton Fredericks' views to write to him for the material, a close relationship between Fredericks and Foods Plus became *472 a natural inference in the listener's mind.
Such a relationship was more than purely inferential; it was actually contractual, as appears from the following evidence.
A written agreement, dated August 1, 1960, between Foods Plus, Inc. and Carlton Fredericks recites that Foods Plus is engaged in the manufacturing and selling of vitamins, minerals and vitamin-mineral combinations. Fredericks is represented therein to be the author of various books and periodicals dealing with the subject of nutrition, and a writer and lecturer on that subject. It also recites that Fredericks is employed by Foods Plus as its consultant to approve, recommend, endorse and generally aid in the sale and promotion of the products of Foods Plus. The agreement continues that employment relationship and provides, inter alia, that Fredericks grants to Foods Plus the exclusive license, throughout the United States and Canada, to use his name and photograph in connection with the advertisement, promotion and sale of its products and to quote from or reproduce any of his copyrighted, trade-marked and other material in connection with such promotion and sale. Fredericks agrees not to grant any similar rights to or perform any of the specified types of services for any person or corporation other than Foods Plus. He also agrees to turn over to Foods Plus all mail received by him resulting from his radio, television or other public appearances, and authorizes Foods Plus to use the names obtained from such mail in connection with the advertisement, promotion and sale of its products within the territory described therein. Foods Plus agrees to pay Fredericks, as compensation for all services to be performed by him under the agreement and for the rights and privileges granted by him to Foods Plus, the sum of $200.00 per week. The agreement, by its terms, was to be effective during a period commencing August 1, 1960 and terminating July 31, 1975, but Foods Plus was accorded the privilege to terminate the agreement earlier in a specified manner, under certain conditions. Provision was also made, in the event of the death of Fredericks during the period of the agreement, for the continued enjoyment by Foods Plus of the rights acquired from him under the agreement, including the use of the name Fredericks, but at a reduced compensation of $100.00 per week. The contract was expressly nonassignable, and Foods Plus undertook to indemnify Fredericks against all actions and claims brought against Fredericks in connection with the advertisement and sale of products of Foods Plus. By a subsequent agreement between the same parties, dated February 9, 1962, 10 days after execution of the monition in this case, the agreement of August 1, 1960 was terminated, in consideration of the payment of $5,000 by Foods Plus to Fredericks. This terminating agreement provides that Foods Plus shall forthwith cease to use the name and likeness of Fredericks, and to make reference to him in its labeling, and that, for a period of five years from the date of the agreement, Fredericks shall refrain from publicly or otherwise endorsing or recommending vitamins and minerals, vitamin and mineral combinations and/or supplements, food supplements, pharmaceuticals and drug products of any manufacturer or distributor, excepting, however, "normal foods and foods enriched with vitamins proteins and/or minerals." Fredericks also agrees not to furnish or permit the use of the names or mail received by him from radio, television or other public appearances by any manufacturer or distributor of the articles above stated.
On January 8, 1960 Foods Plus entered into an advertising agency agreement with Curtis Advertising Co., Inc., and on September 10, 1960, Carlton Fredericks, as producer, and C. F. Productions Inc., as distributor, entered into an agreement for the taped broadcasting by radio of a series of programs known as "Living Should Be Fun". The agreement provided that each radio show should *473 be 25 minutes in duration, and should be produced for broadcast five times a week. The editorial content of each show and its suitability for broadcast was made subject to the exclusive supervision and control of Fredericks. This agreement was for a period of five years from the date thereof, but it was terminable by the producer (Fredericks) if the prescribed minimal gross billings had not been made, i. e., during the first year in the amount of $100,000, the second year $125,000, the third year $150,000, and the fourth and subsequent years $175,000 each. The agreement, by its terms, was not applicable to broadcasts over Radio Station WOR in New York, or to live broadcasts over any station, and was signed in behalf of C. F. Productions, Inc. by Robert Dave Nathan and Lawrence R. Curtis. Curtis was then president of Curtis Advertising Co., Inc., the advertising agency for Foods Plus. In Curtis Advertising Co., Inc. orders of November 11, 1960, May 3, 1961 and May 18, 1961, respectively, to Radio Station KLZ, Denver, Colorado, for advertising Foods Plus vitamins, it is stated that "It is firmly understood that no Foods Plus commercials will be heard within the body of the Carlton Fredericks Show" and that "This contract [for broadcasting, is] only valid as long as KLZ carries the Carlton Fredericks Show." Each of these orders contained the further instructions that "All mail received for Foods Plus is to be sent to Foods Plus, 62 West 45th Street, New York, N. Y. Att: Milton Rosenfeld. A daily count [is] to be sent to the above [Curtis] Agency." Similar directions and provisions are contained in an order to Radio Station KGMC, Englewood, Colorado, dated March 2, 1962 by the advertising agency of Roberts and Rogers, Inc., a wholly owned subsidiary of Foods Plus. I find, from the foregoing evidence, that Foods Plus adopted Carlton Fredericks' programs, and his claims for vitamins as efficacious for the prevention and treatment of human disease, as its own representations, and that claimant intended its products to be used for the purposes recommended by Fredericks, i. e., for the cure, mitigation, treatment, or prevention of disease in man. Because constituents of all the articles seized were similarly treated by Fredericks at some time during his close relationship with Foods Plus, I also find that all of the articles seized were drugs.
The remaining issue is whether the labeling of the seized articles satisfied the required "adequate directions for use." This phrase has been considered by the courts before and an excellent explanation of its meaning is included in United States v. Various Quantities of Articles of Drug, etc., D.C.D.C.1949, 83 F.Supp. 882, at page 885, as follows:
"The words, `adequate directions for use,' necessarily relate to some purpose which is to be served by the use, and that purpose must be consistent with the intent of the Act as a whole to protect the public health. For what purpose are drugs used? Obviously, as a remedy for some ailment of the body. It seems equally obvious that no drug can be said to contain in its labeling adequate directions for its use, unless every ailment of the body for which it is, through any means, held out to the public as an efficacious remedy be listed in the labeling, together with instructions to the user concerning the quantity and frequency of dosage recommended for each particular ailment. * * *"
Another construction of the meaning of this statute is given in Alberty Foods Products v. United States, 9 Cir. 1952, 194 F.2d 463, 464:
"In order for the labeling of a drug to bear `adequate directions for use' within the meaning of 21 U.S.C.A. § 352(f) (1) it must, among other things, state the purposes and conditions for which the drug was intended and sufficient information to enable a layman to intelligently and safely attempt self medication. * * *"
*474 The relevant regulations under § 352 (f) (1) which were in effect at the time this seizure was made (January 30, 1962) are found at 21 C.F.R. 1.106(a) (1) and read:
"Drugs and devices; directions for use
"(a) Directions for use may be inadequate by reason (among other reasons) of omission, in whole or in part, or incorrect specification of:
"(1) Directions for use in all conditions for which such drug or device is prescribed, recommended, or suggested in its labeling, or in its advertising disseminated or sponsored by or on behalf of its manufacturer, packer, or distributor, or in such other conditions, if any there be for which such drug or device is commonly and effectively used."
All of these interpretations indicate that adequate directions within the meaning of the statute require at the very least a recitation of the diseases or conditions for which the drug is prescribed. Since the labeling of the seized articles did not contain this information the Government's case is complete.
The articles seized under the monition in this case are condemned for misbranding, and claimant will be enjoined in accordance with the Government's prayer for injunctive relief in the amended libel. Carlton Fredericks is not a party to this proceeding nor did he testify upon on the trial. Moreover, his contract to promote the sale of claimant's products has been terminated. The scope of the injunctive relief to be granted to the Government in this case shall not, by its terms, extend to Carlton Fredericks or any of his activities.
This opinion shall constitute this Court's Findings of Fact and Conclusions of Law as required by F.R.Civ.P. 52(a).
Libelant may present a draft of decree conforming with the views herein expressed.
NOTES
[1] "A drug or device shall be deemed to be misbranded(a) [i]f its labeling is false or misleading in any particular."
[2] "A drug or device shall be deemed to be misbranded(f) [u]nless its labeling bears (1) adequate directions for use."
[3] "The term `labeling' means all labels and other written, printed or graphic matter (1) upon any article or any of its containers or wrappers, or (2) accompanying such article." Section 321(m).
"The term `label' means a display of written, printed, or graphic matter upon the immediate container of any article; and a requirement made by or under authority of this chapter that any word, statement, or other information appear on the label shall not be considered to be complied with unless such word, statement, or other information also appears on the outside container or wrapper, if any there be, of the retail package of such article, or is easily legible through the outside container or wrapper." Section 321(k).
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IN THE COURT OF APPEALS OF IOWA
No. 13-1060
Filed April 16, 2014
STATE OF IOWA,
Plaintiff-Appellee,
vs.
AARON MICHAEL HERMEN,
Defendant-Appellant.
________________________________________________________________
Appeal from the Iowa District Court for Cerro Gordo County, Karen
Kaufman Salic, District Associate Judge.
Aaron Hermen appeals from the sentences imposed following his guilty
pleas. AFFIRMED.
Mark C. Smith, State Appellate Defender, and Melinda Nye, Assistant
Appellate Defender, for appellant.
Thomas J. Miller, Attorney General, Mary Triick, Assistant Attorney
General, and Carlyle D. Dalen, County Attorney, for appellee.
Considered by Vogel, P.J., and Tabor and McDonald, JJ.
2
MCDONALD, J.
Aaron Hermen appeals from the sentences imposed following his guilty
pleas to domestic abuse assault by strangulation, OWI third offense, and child
endangerment. He contends his trial counsel was ineffective in not objecting to
the State’s breach of the plea agreement and the trial court abused its discretion
in sentencing. We affirm the sentences.
I.
Pursuant to a plea agreement, Hermen entered written guilty pleas to the
charges listed above and also participated in an oral colloquy with the court
concerning the pleas. As part of the plea agreement, the State agreed to dismiss
all other charges and to recommend one year in jail with all but thirty days
suspended on the domestic assault charge, a five-year sentence with all but
thirty days suspended on the OWI, and sixty days in jail on the child
endangerment charge. The State was also to recommend the two thirty-day
sentences be served consecutive to each other but concurrent with the sixty-day
sentence. A presentence investigation report was prepared, which
recommended concurrent sentences of five years for domestic assault, five years
for OWI, and two years for child endangerment.
At sentencing, the prosecutor said:
Your Honor, the—going through each of the three counts, for
Count I, the Domestic Assault of Impeding Air Flow, as an
aggravated misdemeanor, the State’s recommendation is a one
year in jail, with all but thirty days suspended, credit for time served,
that he be placed on probation for a period of two years, receive a
suspended minimum fine, and be required to—be required to
complete the batterer’s education program. For—we ask that that
sentence be consecutive to Count II and concurrent to Count III.
Count II the recommendation for an O.W.I., Third, is a term in
3
prison not to exceed five years, with all but thirty days being
suspended, credit for time served, the minimum fine, and be placed
on probation for three years, and also be required to complete a
substance abuse evaluation, if he’s not already done so and follow
through on any recommended treatment. We ask that that be
consecutive to Count I and concurrent with Count III.
And then for Count III, the Child Endangerment, the
recommendation is sixty days and a $625.00 fine, which is the
minimum fine, as well as credit for time served. And as I already
stated that is to be concurrent with the other two counts. We’ve
already dismissed Count IV, so no recommendation is needed
there
The history as stated in the PSI and so the Court can review
that as well as in the court file. The State’s requesting restitution as
stated in their statement of pecuniary damages that they’ve already
filed for the utility pole that Defendant hit in this case, and that’s to
be paid to Alliant Energy in the amount of $2,947.39. I’m not aware
of any other restitution.
So in light of that, these recommendations seem very
reasonable considering the severity of the charges and the facts
that are behind them such as getting in an accident, he was very
uncooperative with the police saying—using language like, FU; and
so in light of that, this recommendation seems reasonable and we
ask the Court to adopt it.
The State’s sentencing recommendation was in accord with paragraph
twelve of the written plea agreement. Hermen’s counsel did not object to the
prosecutor’s recommendation. Hermen’s attorney said, “We are also asking the
Court to adopt the recommendations as set forth in the plea agreement.” The
attorney then enumerated several mitigating factors before closing with, “So we
would ask that you accept the State’s recommendations set forth in the plea
agreement.”
The district court rejected the parties’ joint recommendation:
Mr. Hermen, the law requires that I take a number of factors into
account when deciding what an appropriate sentence is for
someone. One of those things obviously is your rehabilitation, not
just your need for it but also your potential for it. Also protecting the
community. In this particular case, you have specific victims, but
4
the protection of the community as a whole. And also deterring
others from committing similar offenses.
Some of the things that are kind of subcategories of those
considerations, your age, your family situation, your criminal
history, the nature of this offense, and anything that I considered in
reading the Pre-Sentence Investigation Report and what I have
learned about you in the hearing today both through your
statements as well as the argument of your counsel.
And as I’m sure you understand and even Ms. Turner has
alluded to it, you have a horrible criminal history for someone who’s
twenty-five years of age. In November of 2006, you were convicted
of a weapons charge. While you were still on probation for that
offense, you—and an O.W.I. sorry; while you were on probation for
those offenses, you were charged with Assault Causing Bodily
Injury in June of 2007. Because of that offense you had a
probation revocation proceeding on the first two charges where
there was a contempt finding. You were placed on probation for
the assault charge which has now been revoked apparently. In
October of 2007, you have a new charge of Possessing a Firearm
as a Felon, there was a prison term on that which was suspended
but has since been revoked. 2009 you had an Eluding charge,
given probation and that has also been revoked, along with an
O.W.I., Second Offense, that occurred at the same time.
And as I’m sure you’ve noticed this pattern of weapons, of
alcohol violations of driving, of assaulting people, and that’s
unacceptable. Obviously, it’s illegal and we’re here today on
charges of you strangling your wife, of endangering your child and
of you driving drunk for the third time. Every attempt to have you
on probation has failed. And I have no reason to believe given your
history that we’re going to have any other result on this—these
charges. And so I’m not going to adopt the recommendations of
the parties. I will adopt the recommendation of the pre-sentence
investigator.
....
In light of your recent employment and other compliance with
the Department of Human Services, I am going to order that these
sentences be served concurrently with hopes that when you do
return from prison, that you will start on the right path.
II.
Hermen contends his trial counsel was ineffective in failing to object to the
State’s breach of the plea agreement. Our review is de novo. See State v.
Bearse, 748 N.W.2d 211, 214 (Iowa 2008). He argues the State did not truly
5
“recommend” the sentences agreed upon because it mentioned the presentence
investigation report, the severity of the charges, and that the recommendation
was “reasonable.” He contends the State’s recommendation was really a “wink
and a nod” and “can only be characterized as insincere.” We disagree.
The circumstances before us are not like those in the cases cited by
Hermen: Bearse and State v. Horness, 600 N.W.2d 294 (Iowa 1999), where the
court found the State breached the plea agreement by not recommending the
agreed-upon sentences. See Bearse, 748 N.W.2d at 216 (“Not only did the State
in this case mistakenly recommend incarceration at the outset, but it clearly
suggested incarceration should be imposed by referring to the presentence
investigation report (which recommended incarceration) and reminding the court
that it was not bound by the plea agreement. The State clearly breached the
plea agreement by suggesting more severe punishment than it was obligated to
recommend.”); Horness, 600 N.W.2d at 300 (“[T]he county attorney breached the
plea agreement by failing to commend the recommended sentences to the court
or otherwise inform the court that the State supported the suggested sentencing
of the defendant. . . . The prosecutor also breached the plea agreement by
informing the court of an “alternative recommendation” and making statements
implying that the alternative recommendation was more worthy of acceptance.”).
The State here recommended the agreed-upon sentences, assured the court the
sentences were reasonable, and explicitly asked the court to adopt the
recommendation. The passing reference to the presentence investigation was in
the context of restitution, not, as Hermen suggests by omitting the restitution
discussion from his quote, in reference to the sentencing recommendation. We
6
conclude the State properly fulfilled its obligation to “recommend” the agreed-
upon sentences and ask the court to adopt the recommendation.
Because there was no breach of the plea agreement, Hermen’s attorney
had no duty to object, and Hermen was not prejudiced by the lack of objection.
See Bearse, 748 N.W.2d at 214-15 (setting forth the two elements of ineffective
assistance and noting, “If the State did not breach the plea agreement, defense
counsel could not have been ineffective”). Hermen’s trial attorney was not
ineffective in not objecting to the State’s sentencing recommendation.
III.
Hermen also contends the court abused its discretion in sentencing
because it relied “solely on Hermen’s criminal history when determining the
appropriate sentence.” Because the sentences imposed fall within the statutory
limits, we review the trial court’s sentencing decision for an abuse of discretion.
See State v. Thomas, 547 N.W.2d 223, 225 (Iowa 1996).
“In exercising its discretion, the district court is to weigh all pertinent
matters in determining a proper sentence, including the nature of the offense, the
attending circumstances, the defendant’s age, character, and propensities or
chances for reform.” State v. Johnson, 513 N.W.2d 717, 719 (Iowa 1994).
Although “a sentencing court has a duty to consider all the circumstances of a
particular case,” it is not “required to specifically acknowledge each claim of
mitigation urged by a defendant.” State v. Boltz, 542 N.W.2d 9, 11 (Iowa Ct.
App. 1995). Furthermore, “the failure to acknowledge a particular sentencing
circumstance does not necessarily mean it was not considered.” Id.
7
The sentencing court considered the statements and recommendations of
counsel, the defendant’s statements, and the presentence investigation report.
The court expressly noted mitigating factors in determining to order concurrent
sentences. Although the court recited much of Hermen’s criminal history, it was
in the context of determining his “propensities or chances for reform” and how
best to protect society. See Johnson, 513 N.W.2d at 719; see also Iowa Code
§ 907.5(1) (2013). The trial court did not rely solely on Hermen’s criminal history
and did not fail to consider mitigating circumstances. We find no abuse of
discretion.
IV.
Having determined trial counsel was not ineffective in not objecting to the
State’s sentencing recommendation and the court did not abuse its discretion in
determining the appropriate sentence, we affirm.
AFFIRMED.
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320 F.Supp.2d 542 (2004)
Charlene H. SALGE, Plaintiff,
v.
EDNA INDEPENDENT SCHOOL DISTRICT, Defendant.
No. CIV.A.V-02-88.
United States District Court, S.D. Texas, Victoria Division.
June 3, 2004.
*543 Bobby D. Brown, Law Offices of Bobby D. Brown, P.C., Victoria, TX, for Plaintiff.
Christopher Gilbert, Bracewell & Patterson, L.L.P., Houston, TX, for Defendant.
MEMORANDUM & ORDER
RAINEY, District Judge.
Pending before the Court is the Parties' Stipulation of Damages (Dkt. # 45). In their stipulation, the parties request a determination from the Court as to whether Plaintiff Charlene Salge's award for back and front pay should be offset by Salge's retirement income. After considering the stipulation, the parties' arguments, and applicable law, the Court is of the opinion that the back and front pay damage awards should NOT be offset.
Factual and Procedural Background
This action was brought by Plaintiff Charlene H. Salge concerning alleged violations of the Age Discrimination in Employment Act, 29 U.S.C. § 626, et seq. ("ADEA") and the First Amendment to the United States Constitution via 42 U.S.C. § 1983. Salge was employed by the Edna Independent School District ("EISD") for 33 years. At the time of her discharge, Salge was 66 years of age and worked as the high school's secretary.
On May 31, 2002, Bob Wells, Superintendent of EISD, informed Salge that she was being discharged. Salge filed this action on September 10, 2002, alleging her termination violated her free speech rights and constituted age discrimination. Salge filed a motion for partial summary judgment on her First Amendment claim on May 9, 2003. EISD responded on May 29, 2003, and filed a cross-motion for summary judgment on the same issue. On September 19, 2003, EISD filed a motion for summary judgment on Salge's age discrimination claim. On November 12, 2003, the Court granted EISD's motion for summary judgment as to Salge's age discrimination claim, denied EISD's motion for partial summary judgment as to Salge's First Amendment claim, and granted Salge's motion for partial summary judgment *544 as to her First Amendment claim. The parties' subsequently submitted a stipulation of damages. The Court now considers the issue of offset presented in the stipulation.
Discussion
Under the facts of this case, an appropriate measure of damages for a First Amendment claim would be essentially the same as for an age discrimination claim. The ADEA allows the district court to grant "such legal or equitable relief as may be appropriate" to discourage age discrimination and to compensate persons affected by violations of the statute. 29 U.S.C. § 626(b); Guthrie v. J.C. Penney Co., Inc., 803 F.2d 202, 209-10 (5th Cir.1986). When compensating a plaintiff, it is within the district court's discretion to deduct social security and similar benefits from a back or front pay award. Guthrie, 803 F.2d at 209. "Whether retirement benefits should be offset from an award of lost wages depends on whether the benefits were provided or funded by the employer or the employee." Johnson v. Chapel Hill Independent School Dist., 853 F.2d 375, 382 (5th Cir.1988) (citing Guthrie, 803 F.2d at 209-10).
In the present case, EISD insists that allowing Salge to recover both her salary and her Teacher Retirement System ("TRS") benefits would provide her with a financial windfall.[1] Salge argues that she funded her retirement income and EISD did not pay into her retirement fund. According to Salge, EISD should not receive credit for her contributions.
To support her claim, Salge provided the Court with a copy of her August 27, 2002, paycheck showing her contribution to TRS.[2] Salge also provided the Court with a copy of the TRS Benefits Handbook, which states in relevant part, "TRS pension benefits are funded by member and state contributions to the Teacher Retirement System trust fund, and by earnings on the investments of the fund."[3] The handbook also notes that in some cases, the employer may pay part of the state contribution.[4] EISD, however, provided no evidence indicating that it paid any part of the state's contribution. In fact, EISD failed to show that it made any financial contribution to Salge's retirement. See Johnson, 853 F.2d at 382 (declining to hold that the trial court erred in refusing to deduct retirement benefits where the defendant failed to provide evidence showing the source of those benefits). Therefore, the Court declines to reduce Salge's front and back pay awards by the amount of retirement income she has received from TRS.
Conclusion
For the foregoing reasons, the Court is of the opinion that EISD should NOT receive an offset or credit for retirement income Salge received since her termination. A final judgment will be entered on even date herewith.
It is so ORDERED.
FINAL JUDGMENT
In accordance with the Court's Memorandum & Order signed on this date, the Court now believes that final judgment should be entered for Plaintiff Charlene Salge. It is, therefore, ORDERED that Plaintiff recover the following from the Defendant:
1. Back pay damages in the amount of $28,937.00;
2. Front pay damages in the amount of $40,000.00;
*545 3. Mental anguish and emotional damages in the amount of $50,000.00;
4. Attorney fees in the amount of $36,243.75;
5. Costs in the amount of $3,500.00; and
6. Postjudgment interest on all sums awarded at a rate of 1.82% per annum from the date of this judgment until the above damages are paid in full.
This is a FINAL JUDGMENT.
NOTES
[1] Dkt. # 47, pg. 1.
[2] Dkt. # 46, Plaintiff's Exhibit 1.
[3] Dkt. # 46, Plaintiff's Exhibit 2, pg. 2.
[4] Dkt. # 46, Plaintiff's Exhibit 2, pg. 2.
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United States Court of Appeals
For the Eighth Circuit
___________________________
No. 13-1246
___________________________
United States of America
lllllllllllllllllllll Plaintiff - Appellee
v.
Rebecca Miller
lllllllllllllllllllll Defendant - Appellant
____________
Appeal from United States District Court
for the Western District of Arkansas - Texarkana
____________
Submitted: September 19, 2013
Filed: September 25, 2013
[Unpublished]
____________
Before LOKEN, GRUENDER, and BENTON, Circuit Judges.
____________
PER CURIAM.
After a jury found Rebecca Miller guilty of several drug charges, the district
1
court sentenced her to 188 months in prison. On appeal, we affirmed the convictions
1
The Honorable Harry F. Barnes, United States District Judge for the Western
District of Arkansas.
but remanded for resentencing. See United States v. Miller, 698 F.3d 699, 707-10
(8th Cir. 2012). On remand, the district court imposed a sentence of 120 months in
prison. Miller appeals, and in a brief filed under Anders v. California, 386 U.S. 738
(1967), counsel argues that the court abused its discretion in imposing the sentence.2
Miller has not filed a pro se brief.
After careful review, we affirm the sentence, because the district court
complied with our decision, see United States v. Kendall, 475 F.3d 961, 963-64 (8th
Cir. 2007), and imposed a sentence that was stipulated to by both parties and that is
not unreasonable, see United States v. Feemster, 572 F.3d 455, 461 (8th Cir. 2009)
(en banc). Further, we have reviewed the record independently under Penson v. Ohio,
488 U.S. 75 (1988), and we find no non-frivolous issues for appeal. Accordingly, we
grant counsel’s motion to withdraw, and we affirm.
______________________________
2
We decline to consider counsel’s argument that the district court also abused
its discretion in failing to grant safety-valve relief. See United States v. Kress, 58
F.3d 370, 373 (8th Cir. 1995) (where party could have raised issue in prior appeal but
did not, court later hearing same case need not consider matter).
-2-
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114 Ill. App.3d 695 (1983)
449 N.E.2d 164
THE PEOPLE OF THE STATE OF ILLINOIS, Plaintiff-Appellee,
v.
THOMAS A. TESTA, Defendant-Appellant.
No. 82-392.
Illinois Appellate Court First District (2nd Division).
Opinion filed June 7, 1983.
*696 Sam L. Amirante, of Park Ridge, for appellant.
Richard M. Daley, State's Attorney, of Chicago (Michael E. Shabat and Raymond Brogan, Assistant State's Attorneys, of counsel), for the People.
Judgment affirmed.
PRESIDING JUSTICE DOWNING delivered the opinion of the court:
Following a bench trial, defendant, Thomas A. Testa, was found guilty of attempt (rape). (Ill. Rev. Stat. 1981, ch. 38, par. 8-4(a).) The following post-trial defense motions were denied: (1) in arrest of judgment; (2) for a directed finding; (3) for a new trial; and (4) for a modification of the finding of guilt and a request for a finding of guilty but mentally ill. Defendant was sentenced to 15 years' imprisonment.
The appeal presents the following issues: (1) whether the information charging defendant with attempt (rape) was fatally defective and therefore void; (2) whether the sufficiency of the information may be challenged for the first time by a post-trial motion; (3) whether defendant was proved guilty of attempt (rape) beyond a reasonable doubt; (4) whether the trial court abused its discretion by sentencing defendant to the maximum term of 15 years; and (5) whether the trial court erred when it denied defendant's motion to modify the finding *697 of guilt and refused to grant a hearing pursuant to section 5-2-6 of the Unified Code of Corrections (Ill. Rev. Stat. 1981, ch. 38, par. 1005-2-6), treating defendant as being guilty but mentally ill.
The facts elicited at trial show that on January 9, 1980, the 19-year-old victim[1] was returning to her apartment in Chicago, Illinois, after visiting her mother. She was being dropped off at her apartment building by a friend when she noticed another car pull into the parking lot and a man get out. The man, later identified as defendant, held the door to the apartment building as the victim passed and began a conversation with her as they entered the elevator. She pushed the elevator button for the second floor, and defendant indicated that he wanted the second floor. She exited on the second floor and was approaching her apartment door when grabbed from behind by defendant. Defendant spun her around and grabbed her by the throat, preventing her from screaming. She said: "He told me if I didn't do what he said, he would kill me, and he told me to shut up." She was told to lie on her back, which she did while defendant continued to hold her by the throat. Defendant unzipped her pants and ordered her to remove her pants and underwear from her right leg. Defendant began to lower his pants and got on top of her. Although she did not see defendant's genitals, she could feel his skin against her.
As defendant made several attempts to kiss her, she managed to use a chemical defense spray on defendant which she carried in a leather pouch attached to her key chain. After being sprayed with the chemical, defendant got up and ran down the hall and out the stairway door. She could see that defendant's pants were down to a point just above his knees. She went into her apartment and contacted a neighbor and the building security guards. Using a description of defendant and his car provided by the victim, the security guards apprehended defendant in the building parking lot and held him until police arrived. She identified defendant as the attacker when the Chicago police arrived. Defendant was then arrested.
The information charging defendant with the crime stated:
"* * * on January 9, 1980 in Cook County, Illinois Thomas A. Testa a male person of the age of fourteen years and upwards committed the offense of attempt in that he, with the intent to commit the offense of rape attempted to compel one [name omitted] a female not the wife of said Thomas A. Testa to submit to an act of sexual intercourse by force and against her will, in violation of chapter 38, section 8-4 Illinois Revised *698 Statutes * * *."
At the close of the State's case in chief, defendant moved for a directed finding, arguing that the State failed to meet its burden of proof. The motion for a directed finding was denied. Defendant offered no defense. The trial court found defendant guilty of attempt (rape) and entered judgment on that finding.
Prior to sentencing, defendant filed a motion in arrest of judgment which challenged the sufficiency of the charging instrument, a motion for a new trial and a motion to modify the finding of guilt. Following argument, the motions were denied and defendant was sentenced to 15 years' imprisonment.
I
Initially, defendant contends, as he did in his motion in arrest of judgment, that the information lacked the specificity necessary to charge him with attempt (rape) and was therefore fatally defective. It is well established in Illinois that where the sufficiency of a charge is attacked in a motion in arrest of judgment, the standard for determining whether the information is deficient is whether the elements of the offense are set out in the information as required by section 111-3(a) of the Code of Criminal Procedure of 1963. (Ill. Rev. Stat. 1981, ch. 38, par. 111-3(a); People v. Simmons (1982), 93 Ill.2d 94, 99, 442 N.E.2d 891, citing People v. Lutz (1978), 73 Ill.2d 204, 211, 383 N.E.2d 171.) Section 111-3(a) demands that the charging instrument be in writing, stating the name of the offense and the relevant statutory provisions violated; setting forth the nature and elements of the offense and the date and county in which the offense occurred, and naming the accused if known or a reasonably certain description. (See People v. Phelan (1981), 99 Ill. App.3d 925, 929, 426 N.E.2d 925.) "Section 111-3 is designed to inform the accused of the nature of the offense with which he is charged so that he may prepare a defense and to assure that the charged offense may serve as a bar to subsequent prosecution arising out of the same conduct." (People v. Simmons (1982), 93 Ill.2d 94, 99-100.) An information which charges an offense in the language of the statute "is deemed sufficient when the words of the statute so far particularize the offense that by their use alone an accused is apprised with reasonable certainty of the precise offense with which he or she is charged." People v. Dickerson (1975), 61 Ill.2d 580, 582, 338 N.E.2d 184, quoting People v. Patrick (1967), 38 Ill.2d 255, 258, 230 N.E.2d 843.
1 Defendant relies upon our decision in People v. Mack (1974), 24 Ill. App.3d 455, 321 N.E.2d 446. Mack is distinguishable due to its *699 peculiar facts. The charging instrument in Mack was hand-written and was filed in court the day defendant was brought to trial. The charging instrument read as follows:
"`[T]hat Leonard J. Mack has, on Sept. 22, 1968 at 5502 South Everette, Chi. Ill. committed the offense of Attempt-rape in that on September 22, 1968 the defendant gained entrance to the victim's apartment. The defendant then awakened the victim * * * who was asleep in her bed. He held a knife in his hand and told the victim that he wanted to suck her titties. He then got into the bed with the victim, holding the knife to her throat. He then fondled the victim. During this period of time the victim was able to dissuade the offender from having relations with her. Before leaving the apt. the defendant took from the victim $10.00 U.S.C. On Oct. 9, 1968 the defendant returned. The complainant called the police and the offender was arrested while fleeing from her apartment. In violation of Chapter 38 Section 8-4 Illinois Revised Statute and Against the Peace and Dignity of The People of the State of Illinois.'" (24 Ill. App.3d 455, 458.)
That hand-written charging instrument clearly failed to meet the requirements of section 111-3. It was upon this document that defendant was convicted.
The State also submitted a "form" to the trial court in Mack for "attempt rape" which was read to the jury. The form, which was not in the record on appeal but was verbally set forth in the trial court proceeding, was:
"`In essence, it says, "Leonard J. Mack, a male person of the age of 14 years and upwards committed the offense of attempt in that he, with the intent to commit the offense of rape, attempted to compel one * * *, not the wife of said Leonard J. Mack, to submit to an act of sexual intercourse by force and against her will, in violation of Chapter 38, Section 8-4, of the Illinois Revised Statutes in 1967, contrary to the Statute, and against the peace and dignity of the same People of the State of Illinois."'" (People v. Mack (1974), 24 Ill. App.3d 455, 458-59.)
We held that under the peculiar circumstances of the trial in Mack the charge was fatally defective. We also stated that the "form" language was sufficient to allege that Mack had the specific intent to commit the offense of rape. (People v. Mack (1974), 24 Ill. App.3d 455, 459.) The peculiar and confusing record which existed in Mack does not exist in the instant case. To the extent that Mack disagrees with the supreme *700 court's decision in People v. Bonner (1967), 37 Ill.2d 553, 562, 229 N.E.2d 527, cert. denied (1968), 392 U.S. 910, 20 L.Ed.2d 1368, 88 S.Ct. 2067, we hold that the record in this case mandates our following Bonner. Based on the record in this case, Mack will not be followed.
2 Here, defendant was charged in the language of the statute with the elements of the offense: (1) attempt with the intent to commit rape and (2) a substantial step taken in that direction - the use of force against the complainant's will. (People v. Bonner (1967), 37 Ill.2d 553, 562.) The information was, therefore, sufficient to allow defendant to prepare his defense and to serve as a bar to future prosecution arising from the same conduct.
II
3 The State contends that defendant should not be allowed to challenge the sufficiency of the charging instrument after the pretrial stage of the prosecution, absent a showing of a violation of defendant's constitutional rights. However, Illinois courts have consistently held that a challenge to the sufficiency of a charging instrument is not so limited. (People v. Lutz (1978), 73 Ill.2d 204, 209, 383 N.E.2d 171, where the court explained that historically, a motion in arrest of judgment opened the entire record, reaching any defect apparent upon its face.) The State's reliance upon People v. Pujoue (1975), 61 Ill.2d 335, 339, 335 N.E.2d 437, in support of its contention is misplaced. The court in Pujoue did not establish a requirement that a constitutional violation must be shown in a post-trial challenge to the sufficiency of the charging instrument. The Pujoue court agreed that the requirements of section 111-3 must be complied with, subscribing to the standard of reviewing the sufficiency of a charging instrument as we have discussed in section I, above. People v. Pujoue (1975), 61 Ill.2d 335, 339.
III
Defendant argues that his conviction cannot stand since the State failed to show beyond a reasonable doubt that he possessed the specific intent to have sexual intercourse with the victim. Defendant contends that there was no evidence that a substantial step was taken toward the commission of the act of rape.
In People v. Pitts (1980), 89 Ill. App.3d 145, 147, 411 N.E.2d 586, as in this case, the pivotal issue was whether defendant intended to have sexual intercourse with the victim. The court in Pitts pointed out that the utterances and acts of defendant at the time of the incident *701 must be analyzed to determine if he intended to have sexual intercourse with the victim. (People v. Pitts (1980), 89 Ill. App.3d 145, 147.) Even though an attacker may seek sexual gratification from a victim, he may not be possessed with the intent to commit the specific offense of rape. (People v. Pitts (1980), 89 Ill. App.3d 145, 147.) The court in Pitts determined that the circumstances did not establish such an intent since defendant made no overt movements toward the victim's genital area; he was satisfied during the attack with his victim fully clothed and he remained fully clothed during the attack. Although Pitts threatened to kill the victim if she screamed, he made no reference to sexual intercourse.
4 However, the fact that defendant may not have performed a substantial step toward the completion of the rape will not preclude a finding by a court that he intended to commit rape. (People v. Tackett (1980), 91 Ill. App.3d 410, 413, 414 N.E.2d 748.) Acts such as those performed by the defendant in the instant case have been found to support a conviction of attempted rape. (People v. Bonner (1967), 37 Ill.2d 553, 562, 229 N.E.2d 527, cert. denied (1968), 392 U.S. 910, 20 L.Ed.2d 1368, 88 S.Ct. 2067, where the court found defendant guilty of attempted rape in spite of the fact that he did not voice his intentions; see also People v. Hornbuckle (1972), 7 Ill. App.3d 328, 331, 287 N.E.2d 294, where the court concluded that defendant's act of ripping off the victim's halter top along with the defendant's attempts to remove the victim's shorts constituted a substantial step toward the commission of the offense.) Here, defendant's intention to rape the victim was demonstrated by his actions and his commands. Defendant ordered the victim to remove her pants, touched her genital area and pulled his pants down, then attempted to pull her pants off and ordered her onto her back. Defendant threatened to kill her if she did not obey him. He continued to choke her as he got on top of her. These facts establish beyond a reasonable doubt that defendant intended to rape the victim. To suggest otherwise is ludicrous. Our purpose is to insure that the record established that defendant knew the nature of the charges, received a fair trial and was guilty beyond a reasonable doubt. We are not to throw away our common sense when the record clearly demonstrates that the trial court's finding of guilt is supported by the evidence beyond any reasonable doubt. See People v. Almond (1975), 31 Ill. App.3d 374, 378, 333 N.E.2d 236.
IV
Defendant next contends that the trial court abused its discretion by imposing the maximum sentence for this conviction, 15 years. (Ill. *702 Rev. Stat. 1981, ch. 38, par. 1005-8-1(a)(4).) Defendant argues that the severe sentence is inappropriate in light of the mitigating factors and defendant's potential for rehabilitation. He does not contend the sentence violates any constitutional or statutory guidelines. It is well settled in Illinois that a sentence should be imposed so as to protect society from an offender while also providing for the possibility of his rehabilitation. (People v. Perruquet (1977), 68 Ill.2d 149, 155, 368 N.E.2d 882.) The trial court is in a better position to assess the circumstances of each case and the appropriate sentence to be imposed. It is not the function of a court of review, absent an abuse of discretion, to substitute its judgment for that of the trial court merely because a different sentence could have been imposed. People v. Perruquet (1977), 68 Ill.2d 149, 156.
5 Here, the record reveals that the sentence imposed was the result of thorough and reasoned judgment based upon the particular circumstances. The trial court felt that, in light of defendant's character and past conduct, coupled with the seriousness of the present offense, he was a danger to the public. Based on our review of the record, we find no abuse of discretion by the trial court in sentencing defendant.
V
Finally, defendant urges that the trial court erred when it failed to modify its finding of guilt and to order a hearing regarding defendant's mental condition, pursuant to section 5-2-6 of the Unified Code of Corrections. Ill. Rev. Stat. 1981, ch. 38, par. 1005-2-6.
6 Initially, we note that defendant relies upon the provisions of section 68.1 of the Civil Practice Act (Ill. Rev. Stat. 1981, ch. 110, par. 68.1) in support for his motion to modify the finding of guilt. However, section 68.1 is not applicable to a criminal case. Section 1 of the Civil Practice Act provides that the Act applies to civil proceedings except those regulated by separate statute. Ill. Rev. Stat. 1981, ch. 110, par. 1.
Section 5-2-6 of the Unified Code of Corrections involves those cases where a defendant has entered a plea of guilty but mentally ill, or has been found guilty but mentally ill. Here, defendant did not enter such a plea, nor was he found guilty but mentally ill. Defense counsel explained during the sentencing hearing that, as a matter of trial strategy, an insanity defense was not presented. A pretrial examination had been conducted pursuant to section 104-13 of the Code of Criminal Procedure of 1963 (Ill. Rev. Stat. 1981, ch. 38, par. 104-13), when it was determined that defendant was mentally fit to stand *703 trial, to assist in his defense, and that he understood the nature of the charge against him. When defendant presented his motion to modify the finding of guilt, he also included extensive documentation regarding his psychiatric history. However, defendant did not present any authority in the trial court, or this court, to support his belief that the trial court should have proceeded in accordance with section 5-2-6. Additionally, defendant did not respond in his reply brief to the State's contention that defendant's motion was inappropriate under these circumstances.
We agree with the State's position and have found no authority which would support defendant's contention that he is among the class of persons intended by the legislature to invoke the procedures of section 5-2-6. Therefore, the trial court properly denied defendant's motion to modify the finding of guilt.
For the above-stated reasons, the judgment of the circuit court of Cook County is affirmed.
Affirmed.
STAMOS and PERLIN, JJ., concur.
NOTES
[1] The name set forth in the information is omitted in deference to the victim.
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Filed 4/21/16 Adler v. City of National City CA4/1
NOT TO BE PUBLISHED IN OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for
publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication
or ordered published for purposes of rule 8.1115.
COURT OF APPEAL, FOURTH APPELLATE DISTRICT
DIVISION ONE
STATE OF CALIFORNIA
BENJAMIN ADLER, D067885
Plaintiff and Appellant,
v. (Super. Ct. No. 37-2013-00077889-
CU-WM-CTL )
CITY OF NATIONAL CITY,
Defendant and Respondent.
APPEAL from a judgment of the Superior Court of San Diego County,
Richard E. L. Strauss, Judge. Affirmed.
Law Offices of Donald D. Beury and Donald D. Beury for Plaintiff and Appellant.
Daley & Heft, Lee H. Roistacher, Mitchell D. Dean and Heather E. Paradis for
Defendant and Respondent.
Benjamin Adler appeals a judgment of dismissal following National City's (City)
successful motion for judgment on the pleadings. We affirm.
FACTUAL AND PROCEDURAL BACKGROUND
McDini's Restaurant Corporation does business as McDini's Irish Cantina
(McDini's) and is located at 105 E. 8th Street in National City (Property). Charlton Adler
is the president, secretary and stockholder of McDini's. The Howard Adler Trust owns
the Property.
Prior to 2010, McDini's was operating under conditional use permit (CUP)
2009-09, which allowed McDini's to operate as a restaurant and bar under certain
conditions, including limiting live entertainment to Thursday through Saturday before
midnight with professional security provided.
In 2010, the City brought a nuisance abatement action in San Diego County
Superior Court against Adler, Charlton Adler, McDini's, and the Adler Howard Trust,
entitled People v. Adler, San Diego Superior Court Case No. 37-2010-00092488-CU-
MC-CTL (Abatement Action). The Abatement Action was based, in part, on the
defendants' failure to comply with CUP 2009-09's live entertainment conditions.
On December 17, 2010, the court in the Abatement Action entered a stipulated
judgment requiring McDini's to immediately cease all operations. The judgment was
conditionally stayed provided, among other things, that McDini's applied for a new CUP
within 60 days and in the interim ceased all live entertainment. The stipulated judgment
provided that the City could seek enforcement of it by ex parte application for failure to
comply with its terms.
McDini's applied for and was granted CUP 2010-33 by National City's planning
commission, which the City Council approved in February 2012 through City council
2
resolution 2012-49, and live entertainment was again allowed at McDini's subject to a
number of specific conditions. McDini's permission to have live entertainment was
subject to revocation by the City, if, among other things, the chief of police determined
that the reinstatement of live entertainment resulted in or significantly contributed to a 10
percent increase in the demand for police services at McDini's between the hours of
5:00 p.m. and 3:00 a.m.
On March 27, 2012, the December 17, 2010 stipulated judgment in the Abatement
Action was amended to allow for live entertainment at McDini's provided McDini's
operated in compliance with resolution 2012-49's conditions. The March 27, 2012
amended stipulated judgment further allowed the City to proceed by ex parte application
to reinstitute the December 17, 2010 stipulated judgment's prohibition of live
entertainment for McDini's failure to comply with resolution 2012-49's conditions.
In March 2013, the planning commission undertook an annual review of CUP
2010-33. After concluding that McDini's failed to comply with resolution 2012-49's
conditions, and finding there was more than a 10 percent increase in the demand for
police services, the planning commission set a revocation hearing. A public revocation
hearing was held on June 17, 2013, after which the planning commission revoked CUP
2010-33, which had the effect of barring live entertainment at McDini's. The planning
commission's decision was appealed and upheld by the City council pursuant to
resolution 2013-132.
3
Based on McDini's failure to comply with resolution 2012-49's conditions and the
resulting revocation of CUP 2010-33, the City applied ex parte on September 12, 2013 to
reinstate the prohibition of live entertainment at McDini's.
On September 12, 2013, over Adler's opposition, the court in the Abatement
Action ordered the immediate reinstitution of the stipulated judgment's prohibition of live
entertainment at McDini's. Adler did not appeal this order.
On December 2, 2013, Adler filed a petition for writ of administrative mandamus
under Code of Civil Procedure section 1094.5. Alleging McDini's compliance with
resolution 2012-49's live entertainment conditions, Adler sought a court order
overturning resolution 2013-132, which affirmed the planning commission's preclusion
of live entertainment at McDini's through revocation of CUP 2010-33. In essence, Adler
sought a court order allowing live entertainment at McDini's.
The City moved for judgment on the pleadings, which included a request for
judicial notice. The City argued Adler lacked standing because the Howard Adler Trust,
as the owner of the Property, was the proper party to challenge the City council's
affirmation of the planning commission's revocation of CUP 2010-33. The City
additionally argued that the stipulated judgment and order in the Abatement Action
precluding live entertainment at McDini's was res judicata to the issues Adler raised in
his writ petition.
On February 6, 2015, the trial court granted the City's request for judicial notice as
well as the City's motion for judgment on the pleadings without leave to amend. Adler
timely appealed the ensuing judgment.
4
DISCUSSION
On appeal, the judgment of the trial court is presumed to be correct. (Denham v.
Superior Court (1970) 2 Cal.3d 557, 564 (Denham).) All intendments and presumptions
are made to support the judgment on matters as to which the record is silent. (Ibid.)
An appellant has the burden to provide an adequate record and affirmatively show
reversible error. (Ballard v. Uribe (1986) 41 Cal.3d 564, 574.) Further, it is the
appellant's duty to support arguments in his or her briefs by references to the record on
appeal, including citations to specific pages in the record. (Duarte v. Chino Community
Hospital (1999) 72 Cal.App.4th 849, 856 (Duarte).) "Appellate briefs must provide
argument and legal authority for the positions taken. 'When an appellant fails to raise a
point, or asserts it but fails to support it with reasoned argument and citations to
authority, we treat the point as waived.' " (Nelson v. Avondale Homeowners Assn. (2009)
172 Cal.App.4th 857, 862 (Nelson).) "We are not bound to develop appellants' argument
for them. [Citation.] The absence of cogent legal argument or citation to authority
allows this court to treat the contention as waived." (In re Marriage of Falcone & Fyke
(2008) 164 Cal.App.4th 814, 830.)
As a threshold matter, we observe that Adler's opening brief is not a model of
clarity. He begins by telling us he is appealing "the granting of a Motion for Summary
Judgment holding that an Ex-Parte Motion being granted in a companion case barred a
subsequent evidentiary hearing." However, the instant appeal actually concerns a
judgment of dismissal following a successful motion for judgment on the pleadings.
Thus, from the outset, Adler does not even properly frame the issues before us.
5
An appellant's opening brief must provide "a summary of significant facts limited
to matters in the record." (Cal. Rules of Court, rule 8.204(a)(2)(C).1) Here, Adler has
included a section entitled "Statement of the Facts" in his opening brief, but he fails to
cite to the record to support any of the facts. This is improper. (Duarte, supra, 72
Cal.App.4th at p. 856.)
Also, the superior court granted the City's motion for judgment on the pleadings
on the grounds that Adler lacked standing and the petition was barred by res judicata.
Adler does not address these issues adequately. He ignores the res judicata issue, and
argues that he is the appropriate person to appear on behalf of McDini's. Unfortunately,
this argument is not supported by citations to the record or any legal authority. Adler
therefore has waived this argument. (Nelson, supra, 172 Cal.App.4th at p. 862.)
Moreover, Adler's contention misses the mark. The court found that Adler lacked
standing because he is not the owner of the Property. Here, Adler does not dispute this
fact, but instead, insists that he "will move this court to designate McDini's Restaurant
Corp. as the real party in interest." Again, Adler fails to address the reasoning of the
court's order and does not explain why the court's finding that he lacked standing was in
error. These shortcomings also are fatal to Adler's appeal. (See In re Marriage of
Falcone & Fyke, supra, 164 Cal.App.4th at p. 830.)
Further, Adler did not file a proper appellant's appendix in the instant matter. Rule
8.124(b)(1)(B) requires an appellant to include in the appendix any document filed in the
1 Further citation to the rules or rule are to the California Rules of Court.
6
trial court necessary for this court to resolve the issues raised on appeal. Because Adler's
argument is that the superior court erred in granting the City's motion for judgment on the
pleadings, it logically follows that Adler would include the City's motion, Adler's
opposition to the motion, and any other pleadings the court considered in ruling on the
motion. However, Adler did not include any of the briefing on the motion he now claims
was improperly granted. He thus cannot establish error. (Hernandez v. California
Hospital Medical Center (2000) 78 Cal.App.4th 498, 502 [appellant failed to meet
burden to establish error in granting respondent's motion to strike by omitting the motion
to strike, opposition, and the court's order].)
Although all the above deficiencies are sufficient grounds on which to affirm the
judgment, even if we were to reach the merits of this appeal, we would affirm the
judgment in any event.
Judgment on the pleadings is similar to a demurrer and is properly granted when
the "complaint does not state facts sufficient to constitute a cause of action against [the]
defendant." (Code Civ. Proc., § 438, subd. (c)(1)(B)(ii); Shea Homes Limited
Partnership v. County of Alameda (2003) 110 Cal.App.4th 1246, 1254.) We
independently review the superior court's ruling on a motion for judgment on the
pleadings to determine whether the complaint states a cause of action. In so doing, we
accept as true the plaintiff's factual allegations and construe them liberally. (Rolfe v.
California Transportation Com. (2002) 104 Cal.App.4th 239, 242-243.) If a judgment on
the pleadings is correct upon any theory of law applicable to the case, we will affirm it
7
regardless of the considerations used by the superior court to reach its conclusion.
(Schabarum v. California Legislature (1998) 60 Cal.App.4th 1205, 1216.)
In his petition for writ of administrative mandamus, Adler asks the court to order
the City to set aside resolution 2013-132, which affirmed the planning commission's
revocation of CUP 2010-33. In other words, Adler wants the court to reinstate CUP
2010-33 that would allow live entertainment at McDini's. However, he lacks standing to
request such relief.
A CUP is not a personal interest. Instead, it runs with the land upon which the use
is allowed. (Anza Parking Corp. v. City of Burlingame (1987) 195 Cal.App.3d 855, 858.)
Logically, the owner of the subject property would be the party with standing to
challenge the revocation of the CUP. It is not disputed that Adler does not own the
Property. He makes no such allegation in his petition. Accordingly, we agree with the
superior court that Adler lacks standing to bring the petition to reinstate CUP 2010-33.2
In addition, we conclude that Adler's petition was barred by res judicata. The
doctrine of res judicata gives preclusive effect to a prior, final judgment involving the
same controversy between the same parties or those in privity. (Boeken v. Philip Morris
USA, Inc. (2010) 48 Cal.4th 788, 797 (Boeken).) It consists of two related aspects: claim
preclusion and issue preclusion. Claim preclusion provides that "a valid, final judgment
on the merits precludes parties or their privies from relitigating the same 'cause of action'
in a subsequent suit." (Le Parc Community Assn. v. Workers' Comp. Appeals Bd. (2003)
2 We note Adler offered no argument in his opening brief addressing the standing
issue.
8
110 Cal.App.4th 1161, 1169.) Issue preclusion, or collateral estoppel, " 'precludes
relitigation of issues argued and decided in prior proceedings.' " (Mycogen Corp. v.
Monsanto Co. (2002) 28 Cal.4th 888, 896.)
"For purposes of collateral estoppel, an issue was actually litigated in a prior
proceeding if it was properly raised, submitted for determination, and determined in that
proceeding." (Hernandez v. City of Pomona (2009) 46 Cal.4th 501, 511.) Thus, " ' "the
prerequisite elements for applying the doctrine to either an entire cause of action or one
or more issues are the same: (1) A claim or issue raised in the present action is identical
to a claim or issue litigated in a prior proceeding; (2) the prior proceeding resulted in a
final judgment on the merits; and (3) the party against whom the doctrine is being
asserted was a party or in privity with a party to the prior proceeding." ' " (Boeken,
supra, 48 Cal.4th at p. 797; Pitzen v. Superior Court (2004) 120 Cal.App.4th 1374,
1381.)
In the Abatement Action, the parties (which included Adler) entered into a
stipulated judgment on December 17, 2010 requiring McDini's to cease all operations,
including live entertainment. The stipulated judgment was amended on March 27, 2012
to allow live entertainment provided McDini's complied with certain conditions. In
addition, the amended stipulated judgment provided: "In the events Defendants do not
comply with any terms of this Amendment to the Stipulated Judgment, the City can
proceed by Ex Parte Application to reinstitute the prohibition of live entertainment at
McDini's . . . ." By way of the amendment to the stipulated judgment, the parties
(including Adler) agreed to a quick, efficient mechanism to revoke the allowance of live
9
entertainment if the defendants did not comply with certain terms. That mechanism was
an ex parte application. Adler does not dispute that the amended stipulation provided that
expedited process.
"In a stipulated judgment . . . litigants voluntarily terminate a lawsuit by assenting
to specified terms, which the court agrees to enforce as a judgment." (California State
Auto. Assn. Inter-Ins. Bureau v. Superior Court (1990) 50 Cal.3d 658, 663.) A stipulated
judgment has the same effect as if the action were tried on the merits. (Avery v. Avery
(1970) 10 Cal.App.3d 525, 529; Villacres v. ABM Industries, Inc. (2010) 189 Cal.App.4th
562, 596.) A stipulated judgment is res judicata as to those issues it embraces,
(California State Auto., supra, at p. 664; Villacres, supra, at p. 596), including those that
were raised or could have been raised (Gates v. Superior Court (1986) 178 Cal.App.3d
301, 309; Avery, supra, at p. 529).
Here, it is undisputed that the City applied ex parte, under the amended stipulation,
to reinstitute the prohibition of live entertainment at McDini's. Over Adler's opposition,
the court entered the City's requested order. Adler did not appeal that order.
Instead, over two months later, Adler brought the instant petition, contending that
live entertainment must be permitted at McDini's. Moreover, he argues that the reasons
supporting the City's decision to reinstate the prohibition of live entertainment are false.
In doing so, however, Adler is seeking to relitigate the exact same issue that was resolved
in the Abatement Action, in which he was a party. Thus, res judicata precludes Adler
from relitigating the same issues in his writ proceeding. (See O'Hagen v. Board of
Zoning Adjustment (1971) 19 Cal.App.3d 151, 155-157 [judgment in nuisance abatement
10
action brought by City against permitee for violations of a CUP precludes relitigating
same issues in writ proceeding by permitee challenging revocation of use permit].)3
DISPOSITION
The judgment is affirmed. The City is awarded its costs on appeal.
HUFFMAN, J.
WE CONCUR:
McCONNELL, P. J.
McDONALD, J.
3 In his opening brief, Adler maintains his due process rights were violated because
he was not permitted to have a full hearing on the issues. However, his argument is
aimed at the amended stipulation allowing the City to seek an ex parte order to reinstate
the prohibition of live entertainment. Put differently, Adler is attempting to challenge the
ex parte order in the Abatement Action. He needed to do so in that action by writ or
appeal. In addition, Adler specifically agreed to the expedited procedure and now cannot
modify that procedure through his petition. (Cf. Bernardi v. City Council (1997) 54
Cal.App.4th 426, 440.)
11
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327 F.2d 640
Anthony J. CELEBREZZE, Secretary of Health, Education andWelfare, Appellant,v.Max E. TOWNSEND, Appellee.
No. 20862.
United States Court of Appeals Fifth Circuit.
Jan. 29, 1964.
Sherman L. Cohn, David J. McCarthy, Jr., Robert V. Zener, Attys., Dept. of Justice, John W. Douglas, Asst. Atty. Gen., William Wayne Justice, U.S. Atty., Morton Hollander, Atty., Dept. of Justice, Washington, D.C., for appellant.
Before TUTTLE, Chief Judge, and HUTCHESON and GEWIN, Circuit Judges.
PER CURIAM.
1
This Court has, in the case of Celebrezze v. O'Brient, 5 Cir., 323 F.2d 989, fully discussed the application of Section 216(i), 42 U.S.C.A. 416(i), of the Social Security Act, and Section 223 of the Act, 42 U.S.C.A. 423, under which the appellee sought recovery here. Section 205(g) of the Act, 42 U.S.C.A. 405(g), provides, 'The findings of the Secretary as to any fact, if supported by substantial evidence shall be conclusive * * *.' Within the principles laid down in the O'Brient case, it is clear that there was substantial evidence to support the Secretary's findings. It is also plain that the Secretary applied the correct legal principles. The district court's conclusion to the contrary was in error.
2
The judgment is reversed and the case is remanded for disposition in the light of this order.
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} |
53 Cal.4th 945 (2012)
137 Cal. Rptr. 3d 595
269 P.3d 1160
TERRY QUARRY et al., Plaintiffs and Appellants,
v.
DOE I, Defendant and Respondent.
No. S171382.
Supreme Court of California.
March 29, 2012.
*950 Zalkin & Zimmer, The Zalkin Law Firm, Irwin M. Zalkin, Michael H. Zimmer, Devin M. Storey and Michael J. Kinslow for Plaintiffs and Appellants.
Jeff Anderson & Associates, Michael Finnegan and Sarah Odegaard for The National Association for the Prevention of Sexual Abuse of Children, the *951 National Center for Victims of Crime and the Survivors Network of those Abused by Priests as Amici Curiae on behalf of Plaintiffs and Appellants.
Nancy O'Malley, District Attorney (Alameda); Furtado, Jaspovice & Simons, Bill Lockyer and Richard J. Simons as Amici Curiae on behalf of Plaintiffs and Appellants.
Reed Smith, Margaret M. Grignon; Foley & Lardner, Stephen A. McFeely, Tami S. Smason, Courtney R. Henning, Leila Nourani and Michael B. McCollum for Defendant and Respondent.
Lombardi, Loper & Conant, Peter O. Glaessner and Lori A. Sebransky for The Ordinary Mutual as Amicus Curiae on behalf of Defendant and Respondent.
Quinn Emanuel Urquhart Oliver & Hedges, Daniel H. Bromberg; Burke, Warren, MacKay & Serritella, James C. Geoly and Nora Flaherty Couri for The Order of Carmelites, Province of the Most Pure Heart of Mary, The Order of the Friar Servants of Mary, USA Province and The Greek Orthodox Archdiocese of America as Amici Curiae on behalf of Defendant and Respondent.
Hennigan, Bennett & Dorman, J. Michael Hennigan and Lee W. Potts for the Roman Catholic Archbishop of Los Angeles as Amicus Curiae on behalf of Defendant and Respondent.
Sweeney & Greene, James F. Sweeney, Stephen J. Greene, Jr., and Laura Borden Riddell for California Association of Private School Organizations as Amicus Curiae on behalf of Defendant and Respondent.
Sedgwick, Detert, Moran & Arnold and Nicholas W. Heldt for Boy Scouts of America and Masonic Homes of California, Inc., as Amici Curiae on behalf of Defendant and Respondent.
Neumiller & Beardslee, Paul N. Balestracci, Lisa Blanco Jimenez; McNamara Law Firm and Gary A. Watt for the Roman Catholic Bishop of Stockton and the Roman Catholic Bishop of Sacramento as Amici Curiae on behalf of Defendant and Respondent.
OPINION
CANTIL-SAKAUYE, C. J.
Plaintiffs brought an action against the Roman Catholic Bishop of Oakland, alleging that defendant bore responsibility for sexual abuse committed during the 1970's by a priest then assigned to the *952 Oakland diocese. Plaintiffs allege that in 2006 they discovered for the first time that the cause of their adult psychological injuries was the sexual abuse inflicted by this priest when they were children. It is our task to determine whether their claims are timely within the limitations period established by Code of Civil Procedure section 340.1.[1]
Section 340.1 governs the period within which a plaintiff must bring a tort claim based upon childhood sexual abuse. The statute must be understood in an historical context. Over the years, the limitations period for claims alleging sexual abuse against children continually was expanded as to actions that were brought against those persons who were the direct perpetrators of the sexual abuse. Moreover, in 1990 the Legislature elected to specify that such causes of action against direct perpetrators could be brought within eight years of majority or within three years of the time the plaintiff discovered that psychological injury was caused by childhood abuse. It was only in 1998, however, that the statute was amended to include third party defendants within its purview, and as to such defendants the Legislature elected not to embrace the open-ended discovery provision past the plaintiff's 26th birthday. On the contrary, drawing a clear distinction between direct perpetrators and third party defendants, in 1998 the Legislature provided that claims against third party defendants must be brought prior to the plaintiff's 26th birthday. The claims of plaintiffs in the present case clearly were lapsed by 1998, because by that date plaintiffs all had passed their 26th birthdays.
In a 2002 amendment, the Legislature removed the strict age 26 cutoff for claims against a subcategory of third party defendants. Pursuant to the 2002 amendment, this subcategory of responsible third party defendants was swept within the provision that previously governed claims against actual perpetrators, meaning that even after the plaintiff reached the age of 26, a cause of action against these third party defendants could be brought within three years after the plaintiff discovered his or her psychological injury was caused by childhood abuse.
But what of causes of action against the subcategory of third party defendants that already had lapsed under the law as it existed in 1998? As we shall explain, in our view a specific subdivision added by the 2002 amendment provides the sole basis for the revival of such lapsed claims. Because plaintiffs did not bring their action within the one-year revival period prescribed by the 2002 amendment, their claims are barred. Our conclusion rests upon three points: The 1998 amendment under which claims against *953 persons or entities other than the direct perpetrator of the abuse[2] could not be brought once a plaintiff reached the age of 26; the usual rule of construction that lapsed claims are not considered revived without express legislative language of revival; and the expressbut limitedlanguage of revival contained in the 2002 amendment to section 340.1.
For the reasons discussed below, the judgment of the Court of Appeal is reversed.
I. FACTS
Plaintiffs are six brothers born respectively in 1957, 1958, 1959 (twins), 1962, and 1963. Their ages ranged from 43 to 49 when they filed suit. Defendant is the Roman Catholic Bishop of Oakland.[3] In a complaint filed in March 2007 and amended in July 2007, plaintiffs alleged they suffered injury as adults as a consequence of sexual abuse by a Catholic priest in the 1970's. In their first amended complaint, plaintiffs alleged that they were members of the St. Joachim parish in Hayward in 1972 and 1973, during the period Father Donald Broderson was an associate pastor of the parish. The complaint alleged that Father Broderson, who is not a defendant in this action, "sexually abused and molested the altar boys at St. Joachim's parish ... by grabbing, fondling, kissing on the mouth, and engaging in other inappropriate sexual conduct with the boys, including Plaintiffs .... Fr. Broderson sexually abused each of the Plaintiffs in 1972 and/or 1973, while he was assigned as an associate pastor at St. Joachim's parish."
The complaint alleged that defendant should be held responsible for Father Broderson's actions because the priest was "under its direct supervision, employ and control." The complaint named additional Doe defendants, alleging that persons belonging to the diocese, knowing or having reason to know that Father Broderson had committed unlawful sexual conduct in the past, failed to execute their duty to take reasonable steps to avoid future acts of unlawful sexual conduct on the part of Father Broderson, including by preventing him from working in contact with children.
The complaint alleged that plaintiffs did not discover until 2006 that the sexual abuse was the cause of their adult psychological problems. In support, the complaint alleges that the sexual abuse resulting from defendant's alleged *954 breach of duty caused psychological damage to plaintiffs, damage that rendered them unable to recognize either as children or well into adulthood the wrongfulness of Father Broderson's actions and the causal connection between the abuse and the emotional and psychological damage they suffered throughout their lives. Specifically, "[plaintiffs] did not discover, and reasonably could not discover, the wrongfulness of Father Broderson's conduct until the second half of the 2005 calendar year, when Father Broderson was deposed in connection with a civil lawsuit, admitted to sexually abusing Plaintiffs, and Plaintiffs were contacted by an attorney representing other victims of Father Broderson. Plaintiff[s] ... did not discover, and could not reasonably have discovered that injuries occurring during [their] adulthood were caused by the molestation at the hands of Fr. Broderson, until on or after March 6, 2006, when Plaintiff[s] met with a mental health practitioner. As a result, within the one calendar year preceding the filing of this action, Plaintiff[s] ... discovered that the psychological injury occurring after the age of majority was caused by the sexual abuse."
The first amended complaint alleged 14 causes of action, primarily including claims for negligence in hiring, retaining, and supervising Father Broderson despite knowledge of his prior acts of sexual abuse, and negligent failure to protect plaintiffs or warn them of their peril.
The trial court sustained defendant's demurrer to the first amended complaint without leave to amend on the ground that the limitations period established by section 340.1 barred the action, and the action was not revived by the 2002 amendment to that provision. The court entered judgment dismissing the complaint with prejudice.
The Court of Appeal reversed, agreeing with plaintiffs that, pursuant to the 2002 amendment to section 340.1 "their claims did not even begin to run until 2006, when they first discovered their `psychological injury or illness occurring after the age of majority was caused by the sexual abuse.'"
This court granted defendant's petition for review. "Because this appeal arises from a judgment of dismissal following the sustaining of demurrers without leave to amend, we `"give[] the complaint a reasonable interpretation, and treat[] the demurrer as admitting all material facts properly pleaded."' [Citation.]" (Doe v. City of Los Angeles (2007) 42 Cal.4th 531, 543 [67 Cal.Rptr.3d 330, 169 P.3d 559].)
*955 II. DISCUSSION
A. Prospective and Retrospective Application of Enlarged Limitations Periods
Before we analyze the application of section 340.1 to plaintiffs' case, we must consult the general rules concerning the application of enlarged limitations periods to claims involving conduct that occurred prior to the enlarging amendment.
(1) The Legislature has authority to establishand to enlarge limitations periods. As we shall explain, however, legislative enlargement of a limitations period does not revive lapsed claims in the absence of express language of revival. This rule of construction grows out of an understanding of the difference between prospective and retroactive application of statutes.
(2) Our decisions have recognized that statutes ordinarily are interpreted as operating prospectively in the absence of a clear indication of a contrary legislative intent. (Californians for Disability Rights v. Mervyn's, LLC (2006) 39 Cal.4th 223, 230 [46 Cal.Rptr.3d 57, 138 P.3d 207] (Disability Rights); DiGenova v. State Board of Education (DiGenova) (1962) 57 Cal.2d 167, 174 [18 Cal.Rptr. 369, 367 P.2d 865]; see also § 3 ["No part of [this code] is retroactive, unless expressly so declared."].) In construing statutes, there is a presumption against retroactive application unless the Legislature plainly has directed otherwise by means of "`express language of retroactivity or... other sources [that] provide a clear and unavoidable implication that the Legislature intended retroactive application.'" (McClung v. Employment Development Dept. (2004) 34 Cal.4th 467, 475 [20 Cal.Rptr.3d 428, 99 P.3d 1015] (McClung); see also Disability Rights, supra, at p. 230; Myers v. Philip Morris Companies, Inc. (2002) 28 Cal.4th 828, 841 [123 Cal.Rptr.2d 40, 50 P.3d 751] (Philip Morris).) Ambiguous statutory language will not suffice to dispel the presumption against retroactivity; rather "`a statute that is ambiguous with respect to retroactive application is construed ... to be unambiguously prospective.'" (Philip Morris, supra, at p. 841; see id. at p. 843; see also Disability Rights, supra, at pp. 229-230; Evangelatos v. Superior Court (1988) 44 Cal.3d 1188, 1209, fn. 13 [246 Cal.Rptr. 629, 753 P.2d 585].)
(3) The terms "retroactive" and "prospective," however, are not always easy to apply to a given statute. (See Disability Rights, supra, 39 Cal.4th at pp. 230-231.) We must consider "`"the nature and extent of the change in the law and the degree of connection between the operation of the new rule and a relevant past event" [citation]. In exercising this judgment, "familiar considerations of fair notice, reasonable reliance, and settled expectations *956 offer sound guidance." [Citation.]' [Citation]." (In re E.J. (2010) 47 Cal.4th 1258, 1273 [104 Cal.Rptr.3d 165, 223 P.3d 31].)
(4) In general, a law has a retroactive effect when it functions to "`"change[] the legal consequences of past conduct by imposing new or different liabilities based upon such conduct"'" that is, when it "`"substantially affect[s] existing rights and obligations."'" (Disability Rights, supra, 39 Cal.4th at p. 231; see also In re E.J., supra, 47 Cal.4th at p. 1273 ["`In general, application of a law is retroactive only if it attaches new legal consequences to, or increases a party's liability for, an event, transaction, or conduct that was completed before the law's effective date.'"].) Ordinarily, considerations of basic fairness militate against such retroactive changes. (McClung, supra, 34 Cal.4th at p. 475; Philip Morris, supra, 28 Cal.4th at pp. 840-842.)
(5) Changes to the law, however, are not necessarily considered retroactive even if their application "involve[s] the evaluation of civil or criminal conduct occurring before enactment." (Elsner v. Uveges (2004) 34 Cal.4th 915, 936 [22 Cal.Rptr.3d 530, 102 P.3d 915].) In a principle of significance to the present case, changes to rules governing pending litigation, for example, frequently have been designated as prospective, because they affect the future; that is, the future proceedings in a trial. The prospective label applies even though the trial concerns conduct that occurred prior to the enactment of the new law. (Id. at pp. 936-937; see also Disability Rights, supra, 39 Cal.4th at pp. 231-232.)
(6) Enlargement of the statutory period in which civil actions may be brought constitutes a special category within the general topic of the prospective or retroactive application of statutes. An extensive line of authority on this subject has developed and we assume that the Legislature was mindful of such existing law when it enacted legislation. (See, e.g., Estate of McDill (1975) 14 Cal.3d 831, 839 [122 Cal.Rptr. 754, 537 P.2d 874]; see also Mercy Hospital & Medical Center v. Farmers Ins. Group of Companies (1997) 15 Cal.4th 213, 221 [61 Cal.Rptr.2d 638, 932 P.2d 210].)
(7) As long as the former limitations period has not expired, an enlarged limitations period ordinarily applies and is said to apply prospectively to govern cases that are pending when, or instituted after, the enactment took effect. This is true even though the underlying conduct that is the subject of the litigation occurred prior to the new enactment. (See Douglas Aircraft Co. v. Cranston (1962) 58 Cal.2d 462, 465 [24 Cal.Rptr. 851, 374 P.2d 819] (Douglas Aircraft); Mudd v. McColgan (1947) 30 Cal.2d 463, 468 [183 P.2d 10] (Mudd).)
*957 For example, in Society of Cal. Pioneers v. Baker (1996) 43 Cal.App.4th 774, 784-785 [50 Cal.Rptr.2d 865], a case involving a damage claim arising from the misappropriation of a work of art, the court held that because the prior three-year limitations period had not expired by the time the statute was amended, it was proper to apply an enlarged limitations period that added a delayed accrual provision to permit the plaintiff's damage claim to go forward. (See also Mojica v. 4311 Wilshire, LLC (2005) 131 Cal.App.4th 1069, 1072-1073 [31 Cal.Rptr.3d 887] [enlargement of the period in which to bring personal injury claim applied to a claim that had not lapsed for state law purposes because, prior to the amendment's effective date, the plaintiff filed an action in federal court]; Andonagui v. May Dept. Stores Co. (2005) 128 Cal.App.4th 435, 439-440 [27 Cal.Rptr.3d 145] (Andonagui) [examining a 2002 enactment extending the limitations period from one year to two years for personal injury actions, and concluding the new law applied because the plaintiff's claim had not lapsed].)
(8) However, when it comes to applying amendments that enlarge the limitations period to claims as to which the limitations period has expired before the amendment became lawthat is, claims that have lapsedthe analysis is different. Once a claim has lapsed (under the formerly applicable statute of limitations), revival of the claim is seen as a retroactive application of the law under an enlarged statute of limitations. Lapsed claims will not be considered revived without express language of revival. (Douglas Aircraft, supra, 58 Cal.2d at p. 465 ["`It has been held that unless the statute expressly provides to the contrary any such enlargement applies to matters pending but not already barred.'"]; see also 58 Cal.Jur.3d (2004) Statutes, § 38, pp. 418-419 [amendments that enlarge a limitations period ordinarily do not apply "where the claim was not properly made within the statutory time limit ... and thus expired prior to the change"].)
For example, in Douglas Aircraft, supra, 58 Cal.2d 462, Douglas Aircraft sought a declaratory judgment to determine whether it had a duty to remit to the State Controller certain unclaimed wages that had been earned by its employees. It needed the judgment to determine whether the wages, as to which the claims limitation period had lapsed, nonetheless were subject to a new statute providing that the statute of limitations would not be a defense to the duty to remit unclaimed property to the State Controller. Because the former limitations period had run before the effective date of the new statute, we found the new statute inapplicable to Douglas Aircraft. We explained that "until the statute of limitations has run it may be extended, whereas after it has run, [defendants] may rely upon it in conducting their affairs." (Id. at p. 465; see also Mudd, supra, 30 Cal.2d at p. 468.) Another example is found in Moore v. State Bd. of Control (2003) 112 Cal.App.4th 371, 378-379 [5 Cal.Rptr.3d 116] (Moore), in which a claim upon a crime victim's restitution fund had lapsed and was not revived by a subsequently enlarged limitations *958 period, because the new enactment contained no "clear indication" of legislative intent to revive lapsed claims. The reviewing court commented that "when the Legislature intends to revive time-barred claims it does so expressly." (Id. at p. 379; see also David A. v. Superior Court (1993) 20 Cal.App.4th 281, 286-287 [24 Cal.Rptr.2d 537] (David A.) [interpreting former § 340.1, as amended by Stats. 1990, ch. 1578, § 1, pp. 7550-7552, and pointing out that lapsed claims are not revived in the absence of express language of revival]; Gallo v. Superior Court (1988) 200 Cal.App.3d 1375, 1378 [246 Cal.Rptr. 587] (Gallo) [in the absence of express language of retroactivity, the enlargement of the period in which to sue for damages arising from commission of a felony does not revive claims that had "already expired" under prior law]; id. at pp. 1379, 1383; Krupnick v. Duke Energy Morro Bay (2004) 115 Cal.App.4th 1026, 1028-1029 [9 Cal.Rptr.3d 767] (Krupnick) [an enlargement of the limitations period for personal injury actions did not apply, because the prior period had lapsed, and the amendment's express revival clause for one class of plaintiffs did not encompass the plaintiff's class]; Maldonado v. Harris (9th Cir. 2004) 370 F.3d 945, 955 [same; "Under California law, an extension of a statute of limitations will not apply to claims already barred under the prior statute of limitations unless the Legislature explicitly provides otherwise."].)
The rule is based upon the defendant's interest in repose. "The reason for this rule is a judicial perception of unfairness in reviving a cause after the prospective defendant has assumed its expiration and has conducted his affairs accordingly." (Gallo, supra, 200 Cal.App.3d at p. 1378.) As one court commented, "a statute of limitations grants prospective defendants relief from the burdens of indefinite exposure to stale claims. By reviving lapsed claims, the Legislature may appear to renege on this promise. As Judge Hand wrote, there may be something `unfair and dishonest' in after-the-fact withdrawal of this legislative assurance of safety." (David A., supra, 20 Cal.App.4th at p. 285.) Individuals, as well as businesses and other enterprises ordinarily rely upon the running of the limitations period: "The keeping of records, the maintenance of reserves, and the commitment of funds may all be affected by such reliance .... To defeat such reliance ... deprives [enterprises] of the ability to plan intelligently with respect to stale and apparently abandoned claims." (Douglas Aircraft, supra, 58 Cal.2d at pp. 465-466.) It is for this reason that we have expressed confidence that "the Legislature would have expressed itself in unmistakable terms had it rejected the established rules governing the interpretation of statutes of limitations." (Id. at p. 466.)
Plaintiffs contend that, notwithstanding the Douglas Aircraft decision, the modern view is that a statute may be applied retroactively if statutory terms merely suggest or imply retroactivity, or if legislative history or the overall context of the statute suggests a retroactive application was intended. The decisions of this court plaintiffs cite in support do not concern revival of *959 lapsed claims. Contrary to plaintiffs' claim that People v. Frazer (1999) 21 Cal.4th 737 [88 Cal.Rptr.2d 312, 982 P.2d 180], overruled in Stogner v. California (2003) 539 U.S. 607 [156 L.Ed.2d 544, 123 S.Ct. 2446], concerned whether a lapsed claim may be revived in the absence of express or unmistakable language of revival, in that case there was express language of revival (see People v. Frazer, supra, 21 Cal.4th at p. 747) and we were required to decide whether this provision constituted a violation of ex post facto principles or of due process. Plaintiffs have not referred us to a decision by this court that consulted extrinsic sources or found a claim revived in the absence of express language of revival.
Indeed, even the decisions plaintiffs claim are closely analogous afford scant support for their apparent view that a lapsed claim may be revived by ambiguous language or reliance upon legislative history materials. For example, in Philip Morris, supra, 28 Cal.4th 828, in rejecting the claim that the repeal of statutory immunity for products liability based upon exposure to tobacco was retroactive to the immunity period, we observed that the "time-honored presumption against retroactive application of a statute ... would be meaningless if the vague phrases relied upon by plaintiff and the dissent were considered sufficient to satisfy the test of a `clear[] manifest[ation]' [citation] or an `"`"unequivocal and inflexible"'"' assertion [citation] of ... retroactivity." (Id. at p. 843.) We continued: "Although we agree with the dissent that `no talismanic word or phrase is required to establish retroactivity' [citation], we do not agree there is language in the Repeal Statute of the unequivocal and inflexible statement of retroactivity that [is] require[d]." (Ibid.; see also McClung, supra, 34 Cal.4th 467 [holding that a statute imposing personal liability on nonsupervisory workers for harassment of coworkers would not apply retroactively to conduct occurring prior to the enactment, and noting the potential constitutional implications of a contrary view; although we responded to the plaintiff's claim based upon legislative history materials, we did not suggest that legislative history materials alone, in the absence of supporting statutory language, would establish retroactivity].)
(9) Plaintiffs assert that in practice, courts have examined various materials apart from express language of retroactivity to determine whether a lapsed claim has been revived. They rely upon Krupnick, supra, 115 Cal.App.4th 1026. In that case, the plaintiff contended that an extension of the limitations period for personal injury should apply to revive his lapsed claim. The Court of Appeal disagreed. It did not cite the Douglas Aircraft decision, but relied on its principle: "`[A]s a rule of statutory construction, it is established that an enlargement of limitations operates prospectively unless the statute expressly provides otherwise.'" (Krupnick, supra, 115 Cal.App.4th at p. 1029, quoting Gallo, supra, 200 Cal.App.3d at p. 1378.) The Krupnick court added that, contrary to the plaintiff's claim that the expansion was retroactive to *960 lapsed claims, the Legislature's express revival of a limited class of claims was proof that other classes of claims would not be revived. Although it offered evidence from the legislative history to assist in its interpretation of the express revival clause, the court did not suggest that legislative history materials could demonstrate that claims could be revived in the absence of unmistakable language in the statute itself.
B. Plaintiffs' Claims Lapsed Prior to 2002
We have demonstrated how important it is, for the purpose of deciding whether a legislatively enlarged limitations period applies to a given case, to determine whether the claim had lapsed prior to the effective date of the new enactment, and to determine what effect the Legislature decided to accord to the lapsing of a claim. Accordingly, as to section 340.1 we review the Legislature's treatment of questions of accrual and lapsing of claims, ultimately concluding that plaintiffs' claims expired by 1998 at the latest.
(10) A cause of action accrues, and the limitations period begins to run, when "`the cause of action is complete with all of its elements'" (Fox v. Ethicon Endo-Surgery, Inc. (2005) 35 Cal.4th 797, 806 [27 Cal.Rptr.3d 661, 110 P.3d 914]). Under certain circumstances, however, the accrual of the action may be postponed and the running of the limitations period tolled "until the plaintiff discovers, or has reason to discover, the cause of action. [Citations.] [¶] A plaintiff has reason to discover a cause of action when he or she `has reason at least to suspect a factual basis for its elements.' [Citations.] Under the discovery rule, suspicion of one or more of the elements of a cause of action, coupled with knowledge of any remaining elements, will generally trigger the statute of limitations period." (Id. at p. 807; see also Grisham v. Philip Morris U.S.A., Inc. (2007) 40 Cal.4th 623, 634 [54 Cal.Rptr.3d 735, 151 P.3d 1151].)
The Legislature handled the timeliness of claims relating to childhood sexual abuse in a number of ways during the period in which it enacted and amended section 340.1. We review the applicable limitations periods to determine when, if at all, plaintiffs' claims lapsed, and to illustrate how the Legislature has handled the problems of lapsed claims and delayed discovery of claims.
1. At the Time of the Alleged Abuse Former Section 340 Applied
In 1972 and 1973, when it is alleged that the abuse occurred, the applicable limitations period for claims alleging sexual abuse of a child was one year from the time the cause of action accrued (former § 340, par. 3, as amended by Stats. 1968, ch. 150, § 1, p. 373; DeRose v. Carswell (1987) 196 Cal.App.3d *961 1011, 1015, 1018 [242 Cal.Rptr. 368] (DeRose)), and ordinarily the cause of action accrued at the time of the alleged abuse. (John R. v. Oakland Unified School Dist. (1989) 48 Cal.3d 438, 443 [256 Cal.Rptr. 766, 769 P.2d 948]; see also Shirk v. Vista Unified School Dist. (2007) 42 Cal.4th 201, 210 [64 Cal.Rptr.3d 210, 164 P.3d 630] (Shirk).) For persons who were minors when the alleged abuse occurred, the limitations period was tolled until one year after the time the plaintiffs reached the age of majority, that is, until the age of 19. (§ 352, subd. (a); Hightower v. Roman Catholic Bishop of Sacramento (2006) 142 Cal.App.4th 759, 765 [48 Cal.Rptr.3d 420] (Hightower); Tietge v. Western Province of the Servites, Inc. (1997) 55 Cal.App.4th 382, 385 [64 Cal.Rptr.2d 53]; DeRose, supra, at p. 1015.)
Thus the claim of the youngest of the plaintiffs, who was born in 1963,[4] lapsed in 1982 when he turned 19 years of age. At the time of the alleged abuse and subsequently there was some authority for applying the common law discovery rule under certain circumstances to delay the accrual of a cause of action based upon childhood sexual abuse.[5] As we shall see, however, even if this authority were applied to third party defendants it would not assist *962 plaintiffs' claim that accrual of their cause of action was delayed until they discovered that their adult injuries were caused by the childhood abuse. This is because ultimately the Legislature substituted its own rules for the common law discovery rule, and in 1998 restricted claims against third parties to plaintiffs who had not yet reached the age of 26even if they could allege a delay in discovery that their adult psychological injuries were caused by childhood abuse.
2. 1986Section 340.1 Enacted to Extend to Three Years the Statute of Limitations for Claims Against a Member of the Minor's Household
Section 340.1 was enacted in 1986, and it extended to three years the limitations period for actions alleging sexual abuse of a minor when the perpetrator was a member of the minor's household. (Former § 340.1, added by Stats. 1986, ch. 914, § 1, pp. 3165-3166.) Because of this limitation, it would not have applied to plaintiffs' claims.[6]
Although the 1986 statute did not apply to third party claims such as plaintiffs', we believe it is significant to our understanding of the Legislature's intent regarding delayed discovery to note that the statute specifically referred to common law delayed discovery principles, providing that "[n]othing in this bill is intended to preclude the courts from applying delayed discovery exceptions to the accrual of a cause of action for sexual molestation of a minor." (Former § 340.1, subd. (d), added by Stats. 1986, ch. 914, § 1, pp. 3165, 3166.)
As further evidence that the Legislature provides expressly for the revival of lapsed claims even when a statute embraces a delayed discovery rule, we observe that the 1986 enactment provided: "This section shall apply to both of the following: [¶] (1) Any action commenced on or after January 1, 1987, including any action which would be barred by application of the period of limitation applicable prior to January 1, 1987. [¶] (2) Any action commenced prior to January 1, 1987, and pending on January 1, 1987." (Former § 340.1, subd. (e), added by Stats. 1986, ch. 914, § 1, pp. 3165, 3166.)
*963 3. 1990 Amendment to Section 340.1 Enlarged the Statute of Limitations to Eight Years Following the Age of Majority and Created Its Own Statutory Delayed Discovery Rule
In 1990, section 340.1 was amended to extend beyond members of the minor's household to reach any perpetrator of sexual abuse against a child. (Stats. 1990, ch. 1578, § 1, p. 7550 et seq.) Although the amended statute applied to direct perpetrators and not third party defendants such as those involved in the present case, the Legislature's expansion of the limitations period, along with its treatment of the delayed discovery rule and the revival of claims again is relevant to our inquiry.
The Legislature amended section 340.1 to significantly enlarge the limitations period from three to eight years following the age of majority (i.e., to age 26). (Stats. 1990, ch. 1578, § 1, p. 7550 et seq.) The amendment also created its own statutory delayed discovery rule, evidencing intent to provide a new rule that would extend delayed discovery principles beyond what had been recognized in the case law. (See DeRose, supra, 196 Cal.App.3d at pp. 1017-1018 [delayed discovery principles did not extend to the plaintiff's failure to recognize that adult psychological injury was caused by childhood abuse]; see also Evans, supra, 216 Cal.App.3d at pp. 1618-1620 [same].) As amended, subdivision (a) of section 340.1 provided: "(a) In any civil action for recovery of damages suffered as a result of childhood sexual abuse, the time for commencement of the action shall be within eight years of the date the plaintiff attains the age of majority or within three years of the date the plaintiff discovers or reasonably should have discovered that psychological injury or illness occurring after the age of majority was caused by the sexual abuse, whichever occurs later." (Former § 340.1, subd. (a), as amended by Stats. 1990, ch. 1578, § 1, p. 7550, italics added.) As one court commented, "The obvious goal of amended section 340.1 is to allow sexual abuse victims a longer time period in which to become aware of their psychological injuries and remain eligible to bring suit against their abusers." (Debbie Reynolds Prof. Rehearsal Studios v. Superior Court (1994) 25 Cal.App.4th 222, 232 [30 Cal.Rptr.2d 514] (Debbie Reynolds); see id. at p. 231 [also confirming that the 1990 amendments did not apply to claims against third parties].)
Further, the language of the original 1986 statute that had embraced common law delayed discovery principles"[n]othing in this bill is intended to preclude the courts from applying delayed discovery exceptions to the accrual of a cause of action for sexual molestation of a minor" (former § 340.1, subd. (d), added by Stats. 1986, ch. 914, § 1, pp. 3165, 3166)was deleted. However, for actions brought prior to the effective date of the 1990 amendment, common law delayed discovery principles were maintained: "Nothing in the amendments specified in subdivision (k) [(making the *964 amendments applicable to actions commenced on or after Jan. 1, 1991)] shall be construed to preclude the courts from applying equitable exceptions to the running of the applicable statute of limitations, including exceptions relating to delayed discovery of injuries, with respect to actions commenced prior to January 1, 1991." (Former § 340.1, subd. (l), added by Stats. 1990, ch. 1578, § 1, pp. 7550, 7552.)
The 1990 amendment also provided that "[t]he amendments to this section enacted at the 1990 portion of the 1989-90 Regular Session shall apply to any action commenced on or after January 1, 1991." (Former § 340.1, subd. (k), added by Stats. 1990, ch. 1578, § 1, pp. 7550, 7552.) Because this language did not constitute express language of revival, it was held to be insufficient to revive lapsed claims. (David A., supra, 20 Cal.App.4th at p. 286; see also Lent v. Doe (1995) 40 Cal.App.4th 1177, 1183 [47 Cal.Rptr.2d 389].)
4. 1994 Amendment to Section 340.1 Expressly Revised Lapsed Claims and Deleted the Remaining Reference to Common Law Delayed Discovery Principles
Section 340.1 was amended for a second time in 1994, and again, although the amendments did not render the statute applicable to third party defendants, the amendments are of interest because of the Legislature's efforts to use express and unmistakable language to govern revival of lapsed claims, as well as for the Legislature's elimination of the remaining reference to common law delayed discovery principles. (Stats. 1994, ch. 288, § 1, pp. 1928-1931.) The 1994 amendment added express language of revival, responding to the David A. decision that had determined that the 1990 amendments had not revived lapsed claims. (Legis. Counsel's Dig., Assem. Bill No. 2846 (1993-1994 Reg. Sess.) 5 Stats. 1994, Summary Dig., p. 111; see Sen. Com. on Judiciary, Analysis of Assem. Bill No. 1651 (1997-1998 Reg. Sess.) as amended July 16, 1998, p. 8; see also David A., supra, 20 Cal.App.4th at pp. 286-287.)
Thus the Legislature added to the language previously providing that "[t]he amendments to this section enacted at the 1990 portion of the 1989-90 Regular Session shall apply to any action commenced on or after January 1, 1991," the additional phrase "including any action otherwise barred by the period of limitations in effect prior to January 1, 1991, thereby reviving those causes of action which had lapsed or technically expired under the law existing prior to January 1, 1991." (Former § 340.1, subd. (o), added by Stats. 1994, ch. 288, § 1, pp. 1928, 1930, italics added.) With respect to its own 1994 amendments, the Legislature declared its intent "in enacting the amendments to this section enacted at the 1994 portion of the 1993-94 Regular *965 Session, that the express language of revival added to this section by those amendments shall apply to any action commenced on or after January 1, 1991." (Former § 340.1, subd. (p), added by Stats. 1994, ch. 288, § 1, pp. 1928, 1930-1931.)
At the same time, the Legislature deleted former subdivision (l), with its reference to the equitable exceptions to the statute of limitations and common law delayed discovery principles. (See Stats. 1994, ch. 288, § 1, pp. 1928, 1930; Historical and Statutory Notes, 13C West's Ann. Code Civ. Proc. (2006 ed.) foll. § 340.1, p. 173.)
5. 1998 Amendment to Section 340.1 for the First Time Authorized Actions Against Third Party Defendants but Barred Such Actions by Plaintiffs Who Had Attained 26 Years of Age
(11) We now reach the 1998 amendments that for the first time included certain third party defendants within the scope of the enlarged limitations period that was established by the 1990 amendmentsthat is, by former section 340.1, subdivision (a), providing that the time to bring an action for childhood sexual abuse may be extended until three years after the plaintiff recognized the connection between adult psychological injury and the childhood abuse (Stats. 1990, ch. 1578, § 1, p. 7550). The 1998 amendment stipulated that the limitations period of subdivision (a) applied "for any of the following actions: [¶] (1) An action against any person for committing an act of childhood sexual abuse. [¶] (2) An action for liability against any person or entity who owed a duty of care to the plaintiff, where a wrongful or negligent act by that person or entity was a legal cause of the childhood sexual abuse which resulted in the injury to the plaintiff. [¶] (3) An action for liability against any person or entity where an intentional act by that person or entity was a legal cause of the childhood sexual abuse which resulted in the injury to the plaintiff." (Former § 340.1, subd. (a), as amended by Stats. 1998, ch. 1032, § 1, p. 7785.)
Although the 1998 amendments now included certain third party defendants within the scope of the provision recognizing that the limitations period for child sexual abuse claims could run from the discovery that psychological injury was caused by the childhood abuse, at the same time the amendments provided a separate subdivision directing that no claim against a third party covered by subdivision (a) could be brought once the plaintiff reached the age of 26. Specifically, the 1998 amendment added a new subdivision (b), *966 providing that "[n]o action described in paragraph (2) or (3) of subdivision (a) may be commenced on or after the plaintiff's 26th birthday." (Former § 340.1, subd. (b), added by Stats. 1998, ch. 1032, § 1, p. 7785.)[7]
Finally, the amendments also declared that the 1998 enactment lengthening the limitations period for claims against third parties did not create "a new theory of liability." (Former § 340.1, subd. (r), added by Stats. 1998, ch. 1032, § 1, pp. 7785, 7788.)
(12) For a number of reasons, we are confident that the 1998 amendment imposed an absolute bar against instituting a lawsuit against third party defendants once the plaintiff reached the age of 26. Contrary to the suggestion of Justice Liu's dissent that undiscovered claims were not subject to the age 26 cutoff (dis. opn. of Liu, J., post, at p. 998), the 1998 amendment expressed the limit in absolute terms. It did not distinguish between discovered and undiscovered claims, but rather made plain that no third party action brought under section 340.1, subdivision (a)a provision that itself provided a limitation period that could be measured from the time of discoverymay be brought once the plaintiff reaches the age of 26. Absent from subdivision (b)'s absolute language is any reference to delayed discovery once a plaintiff with a third party claim reached age 26despite the Legislature's evident familiarity with the problem of delayed discovery in the 1990 and 1994 versions of the statute and its awareness of the need for express revival provisions. The Legislature made an obvious choice to use language for claims against third party defendants that differed markedly from the language it still used for claims against direct perpetrators. (See Moore, supra, 112 Cal.App.4th at p. 382 ["An express legislative provision for circumstances which will toll a statute [of limitations] excludes, by necessary implication, all other exceptions."].) As to plaintiffs with claims against these third party defendants, the Legislature elected to toll the limitations period to age 26, but no longer.
Our interpretation was shared by the court in Hightower (Hightower, supra, 142 Cal.App.4th at p. 767; see also Shirk, supra, 42 Cal.4th at p. 208), and indeed, the Court of Appeal in the present case interpreted the 1998 amendments as we have done. Describing the law prior to the 2002 amendments, it observed that unlike for claims against direct perpetrators, "as against third parties, ... the outside limit was age 26. [Citation.] Thus, under the prior law, any person discovering after age 26 that childhood abuse was the cause of his or her adulthood injuries was barred from suing responsible third parties." *967 Plaintiffs' brief on the merits describes the effect of the 1998 amendments in the same way. Finally, legislative history supports the same interpretation. Attempting to "strike a balance between the interests of the victims and the purpose behind the statute of limitations," the original bill was narrowed to carefully define the third party claims to which it applied and "to require commencement of the action before the plaintiff's 26th birthday." (Sen. Com. on Judiciary, Analysis of Assem. Bill No. 1651 (1997-1998 Reg. Sess.) as amended July 30, 1998, p. 4, underscoring omitted; see also Sen. Rules Com., Off. of Sen. Floor Analyses, 3d reading analysis of Assem. Bill No. 1651 (1997-1998 Reg. Sess.) as amended Aug. 19, 1998, pp. 1, 3, 4, 7.)
Plaintiffs were 26 years of age or older on the effective date of the 1998 legislation. When the 1998 amendment went into effect, it is certain that their claims had lapsed.
6. 1999 Amendment to Section 340.1 Clarified and Extended the 1998 Amendment and Its Application to Prospective and Pending Actions Filed Prior to January 1, 1999
In 1999, section 340.1 was amended for the fourth time, but these amendments did nothing to revive plaintiffs' lapsed claims. (Former § 340.1, as amended by Stats. 1999, ch. 120, § 1, pp. 1735-1739.) In language then lettered as subdivision (s) (but now appearing in subd. (u)) of the statute, the 1999 amendment extended the changes effected by the 1998 amendment to "any action commenced on or after January 1, 1999, and to any action filed prior to January 1, 1999, and still pending on that date, including any action or causes of action which would have been barred by the laws in effect prior to January 1, 1999. Nothing in this subdivision is intended to revive actions or causes of action as to which there has been a final adjudication prior to January 1, 1999." (Former § 340.1, subd. (s), added by Stats. 1999, ch. 120, § 1, pp. 1735, 1738-1739.) This language had the effect of reviving, for potential plaintiffs still under the age of 26, previously lapsed claims. There is no reference to the discovery rule or permitting claims to be made after the age of 26. Plaintiffs, having already passed the age of 26, and not having instituted an action prior to January 1, 1999, were not aided by this amendment, and their claims remained lapsed.[8]
*968 C. The 2002 Amendment to Section 340.1 Created a Subcategory of Third Party Defendants Against Whom Actions Could Be Brought Within Eight Years of Majority or Three Years of Discovery of the Injury
We come finally to the 2002 amendment of section 340.1, which, as noted, identified a new subcategory of third party defendant who henceforth would not receive the protection of the absolute cutoff of age 26. (Stats. 2002, ch. 149, § 1, pp. 752-753.) It is into this category that plaintiffs claim defendant falls. Under the 2002 amended statute, a category of third-party defendants would be exposed to liability in any action for recovery of damages suffered as a result of childhood sexual abuse for the same extended period as direct perpetrators.
The 2002 amendments did not alter section 340.1, subdivision (a), with its limitation period of eight years from majority (i.e., age 26) or three years from the time the plaintiff discovered or reasonably should have discovered that adult psychological injury was caused by childhood abusewhichever period is longer. The category of third party defendants to whom the subdivision (a) limitations period applied was not amended (see § 340.1, subd. (a)(2) & (3)), but a new subcategory of such defendants was defined. Significantly, the existing outer limitthat is, the age 26 cutoff on third party claimsremained, and the statute still provides that "[n]o action described in paragraph (2) or (3) of subdivision (a) may be commenced on or after the plaintiff's 26th birthday." (§ 340.1, subd. (b)(1).)
However, under the 2002 amendment, for the first time a special exception to the age 26 cutoff appeared and provided a longer limitations period for childhood sexual abuse claims, subject to the statutory delayed discovery rule already defined by subdivision (a) of section 340.1. (Stats. 2002, ch. 149, § 1, pp. 752-753.)
This exception was adopted to apply to claims against a subcategory of the third party defendants that already had been defined in section 340.1, subdivision (a)(2) and (3). Thus, in 2002 the Legislature added subdivision (b)(2) to section 340.1, and as relevant, the new subdivision provides: "This subdivision [(referencing subd. (b)(1), declaring third party claims to be timely solely if they are brought prior to the plaintiff's 26th birthday)] does not apply if the person or entity knew or had reason to know, or was otherwise on notice, of any unlawful sexual conduct by an employee, volunteer, representative, or agent, and failed to take reasonable steps, and to implement reasonable safeguards, to avoid acts of unlawful sexual conduct in the future by that person, including, but not limited to, preventing or avoiding *969 placement of that person in a function or environment in which contact with children is an inherent part of that function or environment." (§ 340.1, subd. (b)(2).) Instead of the general rule restricting a plaintiff's claim against third parties to a plaintiff who had not reached the age of 26, claims against such subcategory of third party defendants are governed by subdivision (a), described above, establishing, as noted, the limitations period of eight years from majority or three years from discovery, as defined.
(13) To sum up, in its 2002 amendments to section 340.1, the Legislature enlarged the limitations period applicable to childhood sexual abuse claims against a certain subcategory of third parties by extending subdivision (a)'s existing expansive limitations periodincluding its recognition of delayed discoveryto claims against these third parties, but without the age 26 cutoff. For claims against defendants falling within that subcategory of third party defendants, actions for damages suffered as the result of childhood sexual abuse would be timely even if brought beyond eight years after obtaining majority, so long as they were brought "within three years of the date the plaintiff discovers or reasonably should have discovered that psychological injury or illness occurring after the age of majority was caused by the sexual abuse, whichever period expires later ...." (§ 340.1, subd. (a).) In substance, potential plaintiffs with claims against the subcategory of third party defendants were in the position of plaintiffs with claims against perpetrators after the 1990 amendmentsthey could claim the benefit of the extended period established by section 340.1, subdivision (a).
We recall that the 1990 amendments, which created subdivision (a)'s extended discovery period, did not revive lapsed claims. (David A., supra, 20 Cal.App.4th at p. 286; see also Lent v. Doe, supra, 40 Cal.App.4th at p. 1183.) In 2002, however, the Legislature followed the requirement discussed previously that revival of lapsed claims must be accomplished expressly, but it also limited the period of revival. Thus, section 340.1, subdivision (c) now provides that "[n]otwithstanding any other provision of law, any claim for damages described in paragraph (2) or (3) of subdivision (a) that is permitted to be filed pursuant to paragraph (2) of subdivision (b) that would otherwise be barred as of January 1, 2003, solely because the applicable statute of limitations has or had expired, is revived, and, in that case, a cause of action may be commenced within one year of January 1, 2003. Nothing in this subdivision shall be construed to alter the applicable statute of limitations period of an action that is not time barred as of January *970 1, 2003." (Italics added.)[9] This language revived any lapsed claims, giving them the benefit of the new enactment, but the claims were revived for only one year.
(14) The first sentence of section 340.1, subdivision (c) refers to "any claim" that is barred. The phrase "any claim" is inclusive language that by its terms refers to any lapsed claim, whether previously discovered or not. The first sentence of the subdivision revives a claim that has lapsed by virtue of the passing of the limitations period, and "in that case"i.e., in any case that was barred but is revivedrequires the action to be brought within the one-year window period. There is no language in either sentence of subdivision (c) that permits a longer period for hitherto undiscovered claims. The subdivision quite plainly supplies an exception to the general rule against retroactive enlargement of limitations periods once claims have lapsed. We recall that lapsed claims are revived only by express language of revival. And from subdivision (c)'s expressly limited exception, we infer that other exceptions to the general rule were not intended. (15) It is a settled rule of statutory construction that "where exceptions to a general rule are specified by statute, other exceptions are not to be implied or presumed." (Wildlife Alive v. Chickering (1976) 18 Cal.3d 190, 195 [132 Cal.Rptr. 377, 553 P.2d 537].) In Moore, supra, 112 Cal.App.4th 371, for example, the court applied this rule of construction in the context of an enlarged limitations period for claims against a crime victim's restitution fund, concluding that claims not *971 noted in the statute's new language were not affected. (Id. at p. 382; see also Krupnick, supra, 115 Cal.App.4th at pp. 1029-1030 [interpreting an expansion of the limitations period for personal injury claims, the court inferred from the statute's express language of revival for victims of terrorist acts that the Legislature excluded retroactive enlargement of the statute of limitations as to other lapsed claims].)
(16) We observe, too, that the Legislature has experience with phrasing revival clauses in connection with its various amendments to section 340.1, and as discussed above, has used separate revival clauses even as it created or made changes to delayed discovery provisions in the statute (see former § 340.1, subd. (e), added by Stats. 1986, ch. 914, § 1, pp. 3165, 3166; former § 340.1, subds. (o) & (p), added by Stats. 1994, ch. 288, § 1, pp. 1928, 1930-1931; former § 340.1, subd. (s), added by Stats. 1999, ch. 120, § 1, pp. 1735, 1738-1739). We may infer from the absence of broad language of revival with respect to the 2002 enlargement of the limitations period, that the Legislature did not intend, merely because it extended a discovery provision to a new class of defendants, to authorize revival of lapsed claims except as specified in section 340.1, subdivision (c).
We have pointed out that express statutory language is required to revive lapsed claims. In the absence of any attempt by the Legislature in 2002 to add express language of revival to subdivision (a) of section 340.1, and in the absence of any language of revival in the newly added text of subdivision (b)(2), and in the presence of express but limited language of revival in subdivision (c) that purports to govern "any claim" (italics added) against the new subcategory of third party defendants that previously had lapsed, it seems evident that "any claim" against a defendant alleged to fall within the third party subcategory that had lapsed prior to January 1, 2003, was revived, but only for the period referred to in the amended statutethat is, only for one year following January 1, 2003. Here, plaintiffs' claims had lapsed prior to the 2002 enactment (because they were over 26 years of age), but they failed to bring their action during the revival period, so the trial court correctly concluded that their action is barred.
Our conclusion is consistent with the reviewing court's decision in Hightower, supra, 142 Cal.App.4th 759. There the court determined that the plaintiff's third party claims had lapsed in 1977, one year after he reached majority, and that his claims clearly were time-barred under the 1998 amendments to section 340.1 because he had then attained the age of 26. The plaintiff countered that he had not discovered the injury until 2003, and he claimed that therefore the 2002 amendments extending the statutory delayed discovery rule to certain third party defendants applied to his claims. The Court of Appeal disagreed, explaining that the circumstance that the plaintiff *972 would have been able to assert delayed discovery under the 2002 amendmentsif his claims had not previously lapseddid not alter the result. The court observed that "the Legislature revived for only one year all such claims that were already time-barred. The Legislature therefore drew a clear distinction between claims that were time-barred and those that were not. Hightower's interpretation would obliterate that distinction by allowing his time-barred claim to take advantage of the new limitations period. Therefore, the new delayed discovery rule does not revive Hightower's previously lapsed claims." (Hightower, supra, 142 Cal.App.4th at pp. 767-768.)
(17) We have established that the revival of any lapsed claims against the subcategory of defendants identified in the 2002 amendments is governed by subdivision (c). We have also established that as of 1998 plaintiffs' claims necessarily had lapsed. Plaintiffs' claims were not revived by the 1999 amendments. Thereafter, plaintiffs' lapsed claims were revived by the 2002 amendments, but for one year only. Because they did not file their claims within that year, their claims are barred under the applicable statute of limitations.
D. Analysis of Contrary Views
1. Subdivision (c)
Plaintiffs offer a contrary reading of subdivision (c) of section 340.1, contending that the first sentence, with its one-year revival of lapsed claims, applies to discovered claims that have lapsed, whereas the second sentence governs claims such as theirs that had not been discovered prior to the effective date of the 2002 amendments. Plaintiffs contend that the only plausible interpretation of the second sentence is that it refers to claims by persons who were 26 years of age or older as of January 1, 2003, but who had not yet discovered the connection between the childhood abuse and their injuries. We are not persuaded.
We have concluded that any claim by persons who were 26 years of age or older as of 1998 was time-barred prior to the 2002 amendment, whether the claims had been discovered or not. Accordingly, we disagree that the second sentence of section 340.1, subdivision (c), referring to claims that are not time-barred, applies to such claims. Rather, the language to which plaintiffs refer appears to invoke the rule we have discussed above, that an enlarged limitations period is said to apply prospectively, and properly, to claims that have not lapsed as of the effective date of the enactment.
Justice Corrigan's dissent also turns to the second sentence of section 340.1, subdivision (c), concluding that under that sentence, undiscovered claims that *973 previously were time-barred are not subject to the one-year limitation appearing in the first sentence. As noted, that sentence provides: "Nothing in this subdivision shall be construed to alter the applicable statute of limitations period of an action that is not time barred as of January 1, 2003." (Ibid.) According to Justice Corrigan's dissent, plaintiffs' claims were not time-barred "as of January 1, 2003," because on that date they benefittedfor the first timefrom the discovery provision of subdivision (a) that had been newly extended to the new subcategory of defendant. Her dissent would conclude that the second sentence of subdivision (c) means that undiscovered claims, no longer being time-barred under the newly amended statute, are revived, and are not subject to the restriction of the one-year revival clause.
We are not persuaded that the inferences drawn by Justice Corrigan's dissent are supported by the language of the enactment. Again, the first sentence of the subdivision provides that "any claim for damages [that is permitted under the 2002 amendment] to be filed ... that would otherwise be barred as of January 1, 2003, solely because the applicable statute of limitations has or had expired, is revived, and, in that case, a cause of action may be commenced within one year of January 1, 2003." (§ 340.1, subd. (c), italics added.) This sentence plainly states that any claim that is barred by the limitations period is revivedbut "in that case," i.e., the case of any barred but revived claim, the action must be brought within the one-year period. The "applicable statute of limitations period" for plaintiffs' claims lapsed no later than 1998, and the "applicable ... period" was not subject to extension by virtue of their delay in discovery that their adult injuries were caused by childhood abuse.
The conclusion of Justice Corrigan's dissent seems to depend upon an assumption that as of January 1, 2003, plaintiffs' claims were not time-barred because subdivision (a) of section 340.1 itself operates to revive claims, but we have found no such language in that provision. Prior to January 1, 2003, however, plaintiffs' claims had already become time-barred. The 2002 amendment extending the limitations period until three years after discovery did not change that fact, in the absence of express language of revival. Subdivision (a) of section 340.1 did not provide such language, nor did the new language of subdivision (b).
The dissent by Justice Corrigan points to the phrase "as of January 1, 2003," in the second sentence of section 340.1, subdivision (c). (Dis. opn. of Corrigan, J., post, at p. 992.) But the first sentence reviving lapsed claims also refers to claims that would be barred as of January 1, 2003, but for the new law. The two sentences do not seem to us to be speaking of different categories of claims requiring revival, nor does the subdivision expressly differentiate between discovered and undiscovered claims.
*974 Rather, in our view the second sentence of subdivision (c) states solely what the one-year revival period does not do. It is a savings clause that makes plain in the statute a principle that exists in the case lawthat an enlarged limitations period is considered to apply prospectively and appropriately to actions that are not already barred even if the conduct occurred prior to the enactment. (See Andonagui, supra, 128 Cal.App.4th at p. 440.) The second sentence of subdivision (c) specifies that the limited one-year revival clause should not be interpreted to cut off claims that have not lapsed and that need no revivalclaims, for example, of a plaintiff who was under age 26 when the amendment was enacted and that had not been barred under the 1998 amendment, or claims as to which the running of the statutory period may have been tolled by operation of law (see, e.g., §§ 352 [tolling during minority or insanity], 352.1 [two-year tolling beyond accrual for incarcerated persons], 354 [tolling during war]).
Similar language had been used in 2000 when the Legislature enacted a provision reviving certain otherwise time-barred insurance claims arising from the 1994 Northridge earthquake. (§ 340.9, subd. (a), added by Stats. 2000, ch. 1090, § 1, p. 8476.) The enactment revived any claim "which is barred as of the effective date of this section solely because the applicable statute of limitations has or had expired"but only for one year. (Ibid.) Like the revival clause in section 340.1, section 340.9 "did nothing more than reopen the filing window, for a one-year period, to those otherwise viable [claims] that had become time-barred." (Rosenblum v. Safeco Ins. Co. (2005) 126 Cal.App.4th 847, 858 [24 Cal.Rptr.3d 427].)
In language nearly identical to that found in the second sentence of section 340.1, subdivision (c), section 340.9 also provides: "Nothing in this section shall be construed to alter the applicable limitations period of an action that is not time barred as of the effective date of this section [(i.e., Jan. 1, 2001)]." (§ 340.9, subd. (c).) The Court of Appeal in Cordova v. 21st Century Ins. Co. (2005) 129 Cal.App.4th 89 [28 Cal.Rptr.3d 170] believed that the language of subdivision (c) of section 340.9an almost exact parallel of the language of the second sentence of section 340.1, subdivision (c)was merely intended to ensure that the one-year limit contained in the new statute's revival provision did not restrict a plaintiff who, prior to the effective date of the new enactment, already had a viable claim. (Cordova, supra, at p. 98.) More colloquially, the Cordova decision explained: "[I]t is difficult to imagine a purpose for subdivision (c) other than to say, in effect, if you could have sued your insurer without the benefit of this statute nothing in this statute limits your right to do so." (Ibid.)
Plaintiffs in the present case could not have sued defendants without the benefit of the 2002 amendments. Not only were they all over the age of 26 in *975 1998, they could not in any case have extended the limitations period on the ground now asserteda delay in discovery that their adult injuries had been caused by childhood abuse. Without the benefit of the 2002 amendments, plaintiffs did not have a defense to defendant's claim that their suit was barred by the running of the statute of limitations.
Significantly, there is evidence that the Legislature had section 340.9, subdivision (c) in mind as it drafted the 2002 amendment to section 340.1. (See Sen. Com. on Judiciary, 3d reading analysis of Sen. Bill No. 1779 (2001-2002 Reg. Sess.) as amended June 17, 2002, p. 4 [noting § 340.9 as "[p]recedent" for extending a limitations period and "reviv[ing] certain time-barred actions for a one-year window period"]; Assem. Com. on Judiciary, Analysis of Sen. Bill No. 1779 (2001-2002 Reg. Sess.) as amended June 6, 2002, p. 7 [noting that § 340.9 "provides victims of the 1994 Northridge earthquake an additional year to file claims by reviving any insurance claim for quake-related damages which would otherwise be barred"].) Even though the Legislature could not have been aware of the Cordova opinion's interpretation when it adopted the 2002 amendments to section 340.1, the court's interpretation of the meaning of the language the Legislature chose to use in both instances is quite persuasive.
In supplemental briefing filed after oral argument, plaintiffs have asserted that such an interpretation of section 340.1, subdivision (c) is inconsistent with this court's decision in Lantzy v. Centex Homes (2003) 31 Cal.4th 363 [2 Cal.Rptr.3d 655, 73 P.3d 517]. They reasoned that in that case we concluded that section 337.15, with its 10-year limit (measured from completion of construction) on latent construction defect claims, was phrased in such absolute terms as to preclude application of the doctrine of equitable tolling, By analogy, plaintiffs contended, because the age 26 cutoff contained in section 340.1 was so absolute prior to the 2002 amendment that there would be no possibility that claims prior to 2002 would have been tolled under statutory tolling provisions, accordingly the second sentence of subdivision (c) must not refer to such an eventuality. Our decision in Lantzy is inapposite. It did not speak to the issue of statutory tolling (31 Cal.4th at p. 383, fn. 17), but to the judicial rule permitting equitable tolling when the plaintiff has given notice of the claim and tolling would not prejudice the defendant. Such a tolling rule would have been inconsistent with various aspects of section 337.15 not found in section 340.1. Nor did the statute under review in Lantzy contain language such as is found in section 340.1, subdivision (c).
*976 2. Subdivision (u)
Subdivision (u) (formerly § 340.1, subd. (s)),[10] provides: "The amendments to subdivision (a) of this section, enacted at the 1998 portion of the 1997-98 Regular Session, shall apply to any action commenced on or after January 1, 1999, and to any action filed prior to January 1, 1999, and still pending on that date, including any action or causes of action which would have been barred by the laws in effect prior to January 1, 1999. Nothing in this subdivision is intended to revive actions or causes of action as to which there has been a final adjudication prior to January 1, 1999."
Plaintiffs suggest that the Legislature's 2002 inclusion of subdivision (u) demonstrates a legislative intent that subdivision (u) apply to revive any case filed after January 1, 1999, against the subcategory of third party defendants described in subdivision (b)(2). They argue that unless we adopt this interpretation, we will be left with the conclusion that subdivision (u) constitutes surplusagea conclusion that should be avoided according to standard rules of construction. We disagree with plaintiffs' analysis.
We have described the sequence of amendments that culminated in 1998 with a provision that, for the first time, supplied an enlarged limitations period for claims against parties who were not the direct perpetrators of the alleged abuse. (Ante, at pt. II.B.1.-4.) Under the 1998 amendment, a plaintiff henceforth would have until the age of 26 (not age 19, as before; see pt. II.B.5., ante) to file the action. We have explained that as of 1998, when a plaintiff reached the age of 26, the statute raised an absolute bar to a suit against a third party defendant, and, unlike cases against direct perpetrators, the 1998 enlargement would not recognize discovery that adult injury was caused by childhood abuse to delay the running of the limitations period past the age 26 cutoff.
It seems evident to us that section 340.1, subdivision (u) constituted an express revival of claims that previously had lapsed but would otherwise now be governed by the 1998 amendmentthat is, claims by persons younger than age 26. Under subdivision (s) (as the provision was designated in 1999), a claim by a person who was 20 in 1998, whose claim previously had lapsed at the age of 19, would, under the 1998 amendments, have a revived claim and would be entitled to sue a third party defendant. Far from constituting surplusage, the revival language was still relevant in 2002 when it was redesignated as subdivision (u). For example, a person who was under the *977 age of 26 in 2003 (when the 2002 amendments went into effect), who had not yet filed suit against a third party defendant (pursuant to the 1998 amendment) would still need the express revival language of subdivision (u) since these claims would have lapsed when he or she had turned 19 years of age.
The retention of the language of subdivision (u) in 2002 does not, as plaintiffs suggest, indicate that it was retained to revive any claims filed against the subcategory of third party defendants after January 1, 1999. Such an interpretation becomes all the more unlikely when we recognize that in 2002, when the Legislature adopted new subdivision (c) of section 340.1, it provided an express revival clause for any lapsed claims identified in subdivision (b)(2), but limited the revival to one year.
In support of their interpretation that subdivision (u) serves to revive any claim against these third party defendants after January 1, 1999, plaintiffs rely upon Bouley v. Long Beach Memorial Medical Center (2005) 127 Cal.App.4th 601 [25 Cal.Rptr.3d 813] (Bouley). In that case, a statute governing standing in wrongful death actions directed that "`[t]his section applies to any cause of action arising on or after January 1, 1993.'" (Id. at p. 607, quoting § 377.60, subd. (d).) Although the provision had been added in 1997 to remedy problems created by a 1996 amendment (Bouley, supra, at p. 607), the reviewing court concluded the 1997 provision nonetheless applied to render a subsequent 2002 amendment concerning standing applicable to lawsuits instituted after the new amendment took effect. The court pointed out that the Legislature must have retained the language for some purpose, concluding that the retention of the older provision was intended to make the 2002 amendments "operate retroactively." (Id. at pp. 606, 607.)
(18) The decision offers no guidance in the matter before us. Section 377.60 concerns standing, and is not a statute of limitations. As we have seen, statutes of limitations are subject to their own rules when it comes to what is seen as a retroactive applicationthat is, enlargement of the limitations period to include lapsed claims. Thus, for example, the statutory language relied upon in Bouley, supra, 127 Cal.App.4th at page 607"`[t]his section applies to any cause of action arising on or after January 1, 1993'"would not constitute sufficiently express language of revival in the context of section 340.1. (David A., supra, 20 Cal.App.4th at p. 286.) By contrast, and contrary to the analysis appearing in the Bouley decision, we have stated that to apply amended rules that concern solely the issue of standing to cases brought after the amendment ordinarily is considered a prospective application of the new rule. (Disability Rights, supra, 39 Cal.4th at p. 232.) Finally, the language in Bouley did not contain language comparable to that appearing in subdivision (u) of section 340.1, that is, language expressly tying the subdivision to the changes made in a particular year.
*978 3. Prospective Application
The Court of Appeal concluded that plaintiffs' claims were timely within the meaning of the 2002 amendment to section 340.1. The court acknowledged that the 1998 amendment imposed an absolute age limit upon claims brought against third parties. Nonetheless, in its view, the 2002 amendment applied prospectively to persons like plaintiffs, who were more than 26 years of age in 1998 but discovered their injury subsequent to the effective date of the 2002 amendment. Under the court's interpretation, "[e]ffective 2003 ... the Legislature deleted the age 26 cutoff as against a narrow category of third party defendants who had both the knowledge and the ability to protect against abusive behavior but failed to do so. Anyone discovering that childhood abuse was the cause of the injuries after 2003 could sue thesemore culpabledefendants without regard to the age 26 cutoff."
Explaining the express revival clause of subdivision (c) of section 340.1, the court added: "And, for those who had previously discovered the cause of their injuries but could not sue under the prior law because of the age 26 cutoff [citation], the Legislature offered a one-year window in which they could file their claims [citation]." (Italics added.)
The Court of Appeal relied principally upon Nelson v. Flintkote Co. (1985) 172 Cal.App.3d 727 [218 Cal.Rptr. 562] (Nelson). First, the Court of Appeal in the present case pointed out that the timeliness of plaintiffs' claims had not been adjudicated previously. The court maintained that in the absence of a judgment the claims were not "extinguished," but rather were "`still pending or potential'" when the 2002 amendments became effective and when the discovery of the cause of plaintiffs' adult injuries occurred. (Italics added.) For this reason the Court of Appeal believed it was irrelevant that under prior law, plaintiffs' claims had accrued and lapsed prior to the effective date of the 2002 enactment. The court explained: "Because no court has previously adjudicated the timeliness of plaintiffs' action, the claims are considered `still pending or potential and [are] governed by the changed rules for accrual.' [Citation.] And, the fact that prior limitations periods may have expired before section 340.1, subdivision (b)(2)'s more liberal discovery rule became effective and before any complaint was filed does not bar plaintiffs' action, because discovery of the cause of plaintiffs' psychological injuries had not yet occurred. Therefore, there was no `extinguishment [and] there is no problem of an impermissible retroactive revival of a barred cause of action impairing defendant['s] vested rights.'"
Further, according to the Court of Appeal, it was significant that the amendments to section 340.1 were merely procedural, affecting remedies but not substantive rights. Because the amendments were procedural, in the *979 court's view the law permitted them to apply prospectively to pending or future litigation, even if that litigation is based upon conduct that took place before the amendment took effect.
The Court of Appeal's reliance upon Nelson, supra, 172 Cal.App.3d 727, is misplaced. That decision concerned an enlargement of a special limitations period for asbestos-related injuries governed by section 340.2. The reviewing court held that the enlarged limitations period applied to a claim even though the claim had lapsed under the former limitations period prior to the effective date of the new enactment. As the Court of Appeal in the present case explained, the Nelson court reached this conclusion in large part because the claim had not been "extinguished" by a judgment prior to the effective date of the new enactment. The Nelson court added that applying the new enactment "does not even really involve an extension of the prior statute's one-year period of limitation. Rather, it adopts a different standard for accrual, postponing the commencement of the running of the one-year limitation." (Nelson, supra, at pp. 732-733.)
The Nelson court relied in part upon uncodified language enacted with section 340.2: "The provisions of this act shall apply to those causes of action which accrued prior to the change in the law made by this act and have not otherwise been extinguished by operation of law." (Stats. 1979, ch. 513, § 2, p. 1690, italics added.) The Nelson court, relying upon prior intermediate court authority ascertaining legislative intent, understood the specific phrase "`"extinguished by operation of law"'" to refer to a claim that had been finally adjudicated as barred by the statute of limitations. (Nelson, supra, 172 Cal.App.3d at pp. 732-733.) In the Nelson court's estimation, because the timeliness of the plaintiff's claims had not been adjudicated, the claims were "still pending or potential and [are] governed by the changed rules for accrual." (Id. at p. 732.)
The Nelson decision is distinguishable from the present case because it turned in part upon the language of the particular statute there at issuelanguage that is not found in section 340.1. Specifically, unlike the Legislature's reference to claims that are "extinguished by operation of law" in connection with section 340.2 (Stats. 1979, ch. 513, § 2, p. 1690), as we have seen, in the present case the various amendments to section 340.1 refer to "revival" of claims that have "lapsed" by virtue of the "expiration" of the statute of limitations. Given the significant differences between the language and history of sections 340.1 and 340.2, the Nelson court's analysis of the uncodified language of section 340.2 is not helpful to the present case.
(19) The Nelson court also reasoned that because statutes of limitations are procedural, they are "not subject to the general rule that statutes should *980 not be retroactive" (Nelson, supra, 172 Cal.App.3d at p. 733), a point echoed by the Court of Appeal in the present case. Both courts also relied upon their understanding that the expiration of the limitations period did not afford defendants a vested right of repose. (Nelson, supra, at pp. 732, 733-734.) But notwithstanding the emphasis placed on both these points by the Nelson court and the Court of Appeal in the present case, this court has explained that when we are called upon to determine whether a statute permissibly may apply retroactively, the distinction between procedural and substantive rules is not particularly helpful. (Disability Rights, supra, 39 Cal.4th at p. 231.) Similarly, our analysis in the present case does not depend upon identifying any vested rights on the part of defendant; indeed, we have acknowledged that ordinarily the Legislature has authority to enlarge limitations periods even as to lapsed claims, as long as it does so expressly or otherwise makes its intent unmistakably clear.
Moreover, we reject the suggestion made by the Court of Appeal in the present case that, for the purpose of deciding the applicability of a new, enlarged limitations period, the general rule is or should be that the new law applies unless there is a judgment upholding a statute of limitations defense. As we have explained, well-established case law establishes that a statute enlarging a limitations period is not interpreted to revive claims as to which the prior limitations period already had run before the effective date of the enactmentin the absence of an express statement of revival. In none of those cases had there been a prior judgment upholding a statute of limitations defense. Rather, the cases have spoken of the "lapsing" of the claim or the "running" or "expiration" of the limitations period. (See, e.g., Douglas Aircraft, supra, 58 Cal.2d at pp. 464-466; Krupnick, supra, 115 Cal.App.4th at pp. 1028-1029; Gallo, supra, 200 Cal.App.3d at p. 1378; see also David A., supra, 20 Cal.App.4th at pp. 284, fn. 4, 285-286 [explaining that a lapsed claim is one as to which the limitations period has run, giving rise to a potential defense, and objecting to the use of the term "barred" or "extinguished" to refer to lapsed or expired claims rather than claims that have been extinguished by a judgment]; 58 Cal.Jur.3d, supra, Statutes, § 38, pp. 418-419.)
Indeed, there would be little need for the Legislature to trouble itself with a revival clause at all when it decided to enlarge a limitations period, if a claim could lapse for the purpose of expanded limitations periods only after a judgment had been entered sustaining a statute of limitations defense. Even without a revival clause, ordinarily a final judgment is conclusive. (See Plaut v. Spendthrift Farm, Inc. (1995) 514 U.S. 211, 227 [131 L.Ed.2d 328, 115 S.Ct. 1447]; People v. Bunn (2002) 27 Cal.4th 1, 19 [115 Cal.Rptr.2d 192, 37 P.3d 380]; Perez v. Roe 1, supra, 146 Cal.App.4th at pp. 185-188 *981 [interpreting § 340.1, subd. (d)(1) and observing that "[o]nce the judgments. . . were upheld on appeal . . . they became final for separation of powers purposes and could not be legislatively revived"].)
We do not believe that the Nelson decision stands broadly for what would be a remarkable propositionthat in no case does a claim lapse by virtue of the running of the statute of limitations until there is a judicial determination that the claim has become untimely. Contrary to the policy in favor of repose evinced by a statute of limitations, such a rule would require defendants who wish to achieve repose and to avoid potential future expansion of the limitations period to bring actions for declaratory judgment with respect to claims no plaintiff had yet made. The policy in favor of permitting defendants to "assume" that an expired claim will not be revived would not be served by such a rule. (See Gallo, supra, 200 Cal.App.3d at p. 1378 [the reason for the rule is the "unfairness in reviving a cause after the prospective defendant has assumed its expiration and has conducted his affairs accordingly"].)
In addition, the interpretation offered by the Court of Appeal basically relies upon the discovery rule of section 340.1, subdivision (a) to renew the accrual of a lapsed claim, in conflict with the principle that we do not infer intent to revive lapsed claims from broad, general language. And as explained in the previous part, the Legislature's previous experience with the need for an express revival clause makes us confident that in 2002 the Legislature did not suppose that the delayed discovery language it extended to a certain category of claims by itself revived lapsed claims.
Nor are we persuaded by plaintiffs' position at oral argument that subdivision (a) applies prospectively to their claims because their adult psychological injuries were so separate from the original childhood injuries that a new claim accrued when they discovered the connection between their adult injuries and the childhood abuse. In essence, the claim is that plaintiffs had no need for the revival of their previously barred claims.
As we have seen, plaintiffs could have established defendant's liability for its negligence in retaining Father Broderson when the abuse occurred. (See ante, fn. 4.)
Moreover, the history and wording of section 340.1 does not support plaintiffs' argument. In 1990, the Legislature amended the statute of limitations applicable to "any civil action for recovery of damages suffered as a result of childhood sexual abuse" to recognize that a delayed awareness that adult psychological injury was caused by childhood abuse would justify tolling the limitations period for the underlying claim against the perpetrator. (Former § 340.1, subd. (a), as amended by Stats. 1990, ch. 1578, § 1, *982 p. 7550.) But the amendment did not treat adult psychological injury as an entirely separate and new injury. Rather, the new language was intended to afford victims a longer period in which to become aware of their injuries. (Debbie Reynolds, supra, 25 Cal.App.4th at p. 232.)
In 1998, when the Legislature decided that a plaintiff's delayed discovery that adult psychological injury was caused by childhood abuse also should affect the running of the limitations period for claims against certain third parties, the enactment did not recognize a new and different injury as to which a new cause of action accrued. Indeed, the enactment specified that the amendments did not "create a new theory of liability." (Former § 340.1, subd. (r), added by Stats. 1998, ch. 1032, § 1, pp. 7785, 7788, now § 340.1, subd. (t).)
Finally, we observe that section 340.1 purports to govern the limitations period for any civil action based upon damages suffered as the result of childhood sexual abuse. There is no indication in the statute itself that the Legislature viewed adult psychological injury caused by childhood abuse as a new and separate injury giving rise to a new cause of action with its own accrual and limitations period. Rather, the Legislature made a series of efforts to afford victims of childhood abuse enough time to discover the connection between their adult suffering and the abuse. If the Legislature had viewed adult psychological suffering as a separate injury giving rise to a new cause of action with a new limitations period, it would be anomalous for the Legislature to restrict the availability of the delayed discovery rule for third party claims to persons under the age of 26, as the Legislature did in 1998. Similarly, even under the statute as amended in 2002, only claims against a certain subcategory of third parties could be brought after the plaintiff reaches age 26. This seems inconsistent with the view that adult injury constitutes a separate and distinct injury giving rise to a new cause of action with its own limitations period.[11]
*983 (20) The Legislature is charged with balancing the interests of injured persons and third party defendants. Although, as we have discussed, it may revive lapsed claims, the language and history of the 2002 enactment do not plainly indicate that the Legislature in fact revived lapsed claims to any extent beyond what it provided expressly in subdivision (c) of section 340.1. In a series of enactments the Legislature carefully enlarged the limitations period applicable to direct perpetrators of sexual abuse, specified to what extent the delayed discovery rule applied, used express language to indicate when actions that had expired during the running of the statute of limitations would be revivedeven when the statute also contained a discovery rule and adopted a limitations period that plainly barred the bringing of actions against third parties by persons who had reached the age of 26. When, in 2002, the Legislature made a narrow exception to the age 26 cutoff for a subcategory of third party defendants, it carefully specified what should happen to any claim that had lapsed when the plaintiff reached the age of 26; namely, such claims could be brought, but only during the one-year revival period. Under the circumstances, we do not find a legislative intent that the extension of subdivision (a) of section 340.1 to a subcategory of third party claims also was intended to revive lapsed claims.
4. Common Law Delayed Discovery Principles
The Court of Appeal also endorsed the idea that despite the language of section 340.1 as it existed after the 1998 amendment, with its decree that plaintiffs' claims against third parties had lapsed when they reached 26 years of age, plaintiffs nonetheless had claims that were not subject to section 340.1that is, that they had claims subject solely to common law delayed discovery principles. We are not persuaded, however, that as a general matter, common law delayed discovery principles survive in parallel with the very specific and increasingly expansive discovery rules enacted as part of section 340.1.
As noted previously, the 1986 and 1990 versions of section 340.1 expressly permitted the application of common law delayed discovery principles. However, in 1994, the Legislature removed reference to common law delayed discovery principles from section 340.1.[12]
*984 (21) We may infer that the Legislature intended to supplant common law delayed discovery principles when it deleted references to these principles. "As a general rule, in construing statutes, `[w]e presume the Legislature intends to change the meaning of a law when it alters the statutory language [citation], as for example when it deletes express provisions of the prior version [citation].'" (People v. Mendoza (2000) 23 Cal.4th 896, 916 [98 Cal.Rptr.2d 431, 4 P.3d 265].) Thus we do not believe the Legislature intended that common law delayed discovery principles should apply to cases governed by section 340.1.
(22) Further evidence of legislative intent to eliminate common law delayed discovery principles appeared in 1998, when the Legislature first enlarged the limitations period for claims against third party defendants, but imposed an absolute limit of age 26 for such claims while retaining a statutory discovery rule for actual perpetrators. The deletion of the former reference to common law delayed discovery principles, along with the addition of a strict age limit for some cases but a statutory discovery rule for others, indicates to us that the Legislature intended section 340.1, not common law delayed discovery principles, to govern the application of the statute of limitations to all late-discovered claims based upon childhood sexual abuse. (See Moore, supra, 112 Cal.App.4th at p. 382 ["An express legislative provision for circumstances which will toll a statute excludes, by necessary implication, all other exceptions. [Citation.] Accordingly, the outside limit of [the relevant statute of limitations] is not subject to delayed accrual or tolling except to the extent that the Legislature has expressly so provided."]; see also Krupnick, supra, 115 Cal.App.4th at pp. 1029-1030 [an express revival clause applicable to one class of plaintiffs shows that other exceptions to the general rule were not contemplated]; Debbie Reynolds, supra, 25 Cal.App.4th at p. 233 ["When `a statute enumerates the persons or things to be affected by its provisions, there is an implied exclusion of others.'"].)[13]
In any event, plaintiffs assert that their action is timely because they were not aware that their adult psychological injuries were caused by childhood abuse. That theory was not accepted under the common law as a ground for application of the delayed discovery rule. (See ante, fn. 5.) Such an assertion is recognized solely by virtue of section 340.1.
*985 5. Legislative History and General Policy
(a) Legislative history of the 2002 amendment
The Court of Appeal turned to the legislative history of the 2002 amendment in support of its analysis, and the dissenting opinions also have cited this record.[14] As we shall demonstrate, however, the relevant portions of these materials concern what the enactment of the bill would accomplish prospectively. Succeeding paragraphs, however, demonstrate that the Legislature was well aware that the revival of lapsed claims was a separate matter that was governed by the language of section 340.1, subdivision (c)indeed, that it was a separate matter requiring both a cautious balancing of policy and express language of revival.
The Court of Appeal cited the following evidence of legislative intent that appeared in an analysis submitted to the Senate Committee on the Judiciary: "[T]his bill is essential to ensure that victims severely damaged by childhood sexual abuse are able to seek compensation from those responsible. While current law allows a lawsuit to be brought against the perpetrator within three years of discovery of the adulthood aftereffects of the childhood abuse, current law bars any action against a responsible third party entity . . . after the victim's 26th birthday. Unfortunately . . . for many victims their adulthood trauma does not manifest itself until well after their 26th birthday, when some event in their current life triggers remembrance of the past abuse and brings on new trauma. [¶] For example, a 35-year old man with a 13-year old son involved in many community and sporting events, may begin to relive his nightmare of being molested by an older authoritarian figure when he was 13 years old and about to enter puberty. While a lawsuit against the perpetrator is possible, that person may be dead, may have moved away to places unknown, or may be judgment-proof. However, any lawsuit against a responsible third party is absolutely time-barred after the victim passes this 26th birthday. [¶] This arbitrary limitation unfairly deprives a victim from *986 seeking redress, and unfairly and unjustifiably protects responsible third parties from being held accountable for their actions that caused injury to victims."[15]
This language explained why the proponents of the 2002 amendment felt the bill was necessary, but it is in a subsequent, separate four-page discussion that the analysis considers the problem of revival of lapsed claims (under the heading "Extending limitations period past age 26 and reviving time-barred actions for one-year-window period has precedent").[16] It is this second portion of the analysis that describes the one-year revival period contemplated by section 340.1, subdivision (c).
Indeed, the revival section of the analysis supports our conclusion, since it acknowledges the need for express language of revival, carefully describing the Legislature's authority to revive lapsed claims "`by express legislative provision.'" Through the following language the legislative history strongly suggests an understanding that a person with a late-discovered claim would have only the one-year revival period in which to institute an action. According to the analysis prepared for the Senate Committee on the Judiciary: "In other words, this bill would provide those victims who discovered their adulthood trauma after age 26, whose action has been barred by the current statute of limitations, a one-year window to bring a case against a third party that otherwise would be time-barred." (Italics added.)[17]
The analysis also carefully weighs policy considerations respecting the bill's language of revival, balancing the defendant's interest in repose and the victim's interest in compensation. It acknowledges that limitations periods "`are designed to promote justice by preventing surprises through the revival of claims that have been allowed to slumber until evidence has been lost, memories have faded, and witnesses have disappeared. The theory is that even if one has a just claim it is unjust not to put the adversary on notice . . . within the period of limitation and the right to be free of stale claims in time comes to prevail over the right to prosecute them.'"[18]
The Court of Appeal cited additional language from the legislative materials: "`People who discover their adulthood trauma from the molestation after *987 the effective date of the bill will have three years from the date the victim discovers or reasonably should have discovered that the adulthood trauma was caused by the childhood abuse.'"
As noted in the Court of Appeal's opinion, however, the quoted legislative statements appear under the heading "`WHO CAN SUE AFTER THE BILL PASSES AND WHEN,'" under the subheading "Prospective application." (Italics added, underscoring omitted.) However, under the same general heading, but under its own subheading, "Retroactive application and revival of lawsuits," the material recounts that "the bill would create a one-year window for victims to bring a lawsuit that would otherwise be barred by the age 26 limitation."[19] Again, the report strongly supports rather than detracts from our conclusion.
Plaintiffs refer to materials in the legislative history stating that "[t]his bill would provide that the absolute age of 26 limitation in actions against a third party does not apply, and the broader `within three years of discovery' statute of limitations in subdivision (a) applies" to defendants falling within section 340.1, subdivision (b)(2).[20]
Again, however, the quoted language merely describes the prospective effect of the bill. The language is followed by a description of how a lapsed claim may be revived: "This bill would provide that, notwithstanding any other provision of law, any action for damages against a third party as provided above which is barred as of January 1, 2003, solely because the applicable statute of limitations has expired, is revived and a cause of action thereupon may be brought if commenced within one year of January 1, 2003.[21] Thus the analysis once again identifies the language of section 340.1, subdivision (c) as covering the subject of revival of lapsed claims.
This history displays an evident understanding on the part of the Legislature that, prior to the 2002 amendment, all claims against third parties lapsed once the plaintiff reached the age of 26. These materials also indicate that the Legislature carefully considered what was to be the fate of lapsed claims and *988 intended that new section 340.1, subdivision (c) should govern such claims. The Legislature was aware of settled law expounding the distinction between prospective application and retroactive application of expanded limitations periods. In sum, we disagree with plaintiffs that "[i]n light of the Committee's description of the effect of [Senate Bill No.] 1779, it appears that the word `prospective' was used to demarcate between individuals who had made the connection contemplated by section 340.1(a) as of the effective date of [Senate Bill No.] 1779, and those who had not; as opposed to dividing individuals who were over the age of 26 on January 1, 2003 from those who were younger."
(b) General policy
The Court of Appeal believed its interpretation best served the language and purpose of the enactment, adding that as a remedial statute, section 340.1 should be construed broadly to carry out its overall purpose. The appellate court referred to Doe v. City of Los Angeles, supra, 42 Cal.4th 531, in which we characterized section 340.1, subdivision (b)(2) as remedial, and stated that "the Legislature intended [it] to be construed broadly to effectuate the intent that illuminates section 340.1 as a whole; to expand the ability of victims of childhood sexual abuse to hold to account individuals and entities responsible for their injuries." (Doe v. City of Los Angeles, supra, at p. 536.) We are urged to honor the salutary remedial purpose served by the expanding limitations period set out in section 340.1 and to give effect to an evident legislative intentin the wake of public exposure of sexual abuse by priests against children that had been condoned and covered up by the Catholic Church for so many yearsto call to account those persons and entities that committed or condoned such heinous offenses against children.
We acknowledge the important remedial purpose of section 340.1 and that the measure should be interpreted in a manner that will carry out its apparent intent. Reliance upon the general purpose of the enactment, however, does not alter the circumstance that the Legislature chose to deal with the problem of lapsed claims by offering a one-year window period reviving those claims. Moreover, the Legislature has not abolished the limitations period for childhood sexual abuse claims, and even a liberal construction does not change the general rule that an enlarged limitations period does not apply to lapsed claims in the absence of express language indicating legislative intent to revive lapsed claims. (See DiGenova, supra, 57 Cal.2d at p. 174 [a rule of liberal construction does not require that a statute should be interpreted to apply retroactively]; Davis v. Harris (1998) 61 Cal.App.4th 507, 512 [71 Cal.Rptr.2d 591] [rule of liberal construction of remedial statutes "does not mean that a court may read into the statute that which the Legislature has excluded, or read out that which it has included"]; Gallo, supra, 200 *989 Cal.App.3d at p. 1383 [Simply because the Legislature intended to afford additional protection to victims by lengthening the statute of limitations does not mean "the Legislature also intended to revive already expired causes. These are different matters."].)
Moreover, as we have seen, over the years the legislative expansion of the limitations period has been measured and deliberate, with due concern for affording adequate and reliable notice to potential defendants, and "`promot[ing] justice by preventing surprises through the revival of claims that have been allowed to slumber until evidence has been lost, memories have faded, and witnesses have disappeared'"demonstrating a recognition that "`the right to be free of stale claims in time comes to prevail over the right to prosecute them.'"[22]
The dissenting justices posit that the Legislature could not reasonably have intended to supply only a one-year revival period for claims that were, after all, unknown to potential plaintiffs. But we have not been able to identify in the language of the statute an intent to do anything else. Moreover, it would not be unreasonable or anomalous to provide only a one-year revival period for hitherto undiscovered claims. Although we are unreservedly sympathetic to the plight of persons who were subjected to childhood sexual abuse, we note that the preexisting limitations period, along with the one-year revival period created by the 2002 amendments, afforded victims a very considerable time following the abuse in which to come to maturity, or even middle age, and discover the claim.
As for the assertion that the purpose of the 2002 amendment of section 340.1 would be defeated if it were interpreted to apply prospectively to the subcategory of third party defendants identified by the 2002 amendment, we are not convinced. A prospective application of the expanded period in which to bring claims against this subcategory of third party defendants certainly has an effect in that it deters negligence on the part of third parties in the futurethe Legislature could reasonably believe such an application would encourage various entities, beginning on the effective date of the 2002 amendment, to ensure that they would always afford appropriate protection for their charges, in order to avoid the very open-ended risk that failure to protect a child could subject the entity to suit for an indefinite period.
That the Legislature has decided that from now on, third party defendants may be liable for a relatively indefinite period in the futureperhaps for a child victim's entire lifetimedoes not mean that the Legislature must have *990 intended the same extensive period of liability to apply to all third party malfeasance that occurred, for example, 60, 70, or more years in the past, without any limitation. The Legislature was aware that it was striking a balance between the strong interest of victims of abuse in redress of grievous injury and the burden on third party defendantswho may have discarded records in reliance on prior law and lost access to witnessesof being required to defend stale claims. We add that it is not unheard of for the Legislature to impose a strict limit even on undiscovered but deserving claims (see §§ 337.15 [10-year limit on latent, i.e., undiscovered, construction defect claims], 340.5 [limitations period of three years from injury or one year from discovery for medical malpractice claims]; Pen. Code, § 803, subd. (g) [for offenses committed prior to Jan. 1, 2002, a criminal complaint may be filed within one year of the date on which the identity of the suspect is established by DNA testing if the evidence was analyzed no later than Jan. 1, 2004].)
(23) Plaintiffs also ask us to consider the public policy in favor of disposing of litigation on the merits rather than on procedural grounds that would result in the forfeiture of a plaintiff's rights. We acknowledge the policy in favor of disposing of claims on the merits but must also give weight to the equally strong policy in favor of affording reposea policy also considered by the Legislature. (See Adams v. Paul (1995) 11 Cal.4th 583, 592 [46 Cal.Rptr.2d 594, 904 P.2d 1205] ["`even if one has a just claim it is unjust not to put the adversary on notice to defend within the period of limitation and . . . the right to be free of stale claims in time comes to prevail over the right to prosecute them'"]; Krusesky v. Baugh (1982) 138 Cal.App.3d 562, 566 [188 Cal.Rptr. 57] ["The policy behind statutes of limitations is as meritorious as the policy of trying cases on their merits"].)[23]
III. DISPOSITION
The judgment of the Court of Appeal is reversed and the matter is remanded to that court for further action consistent with this opinion.
Kennard, J., Baxter, J., Werdegar, J., and Chin, J., concurred.
CORRIGAN, J., Dissenting.
I respectfully dissent. The majority concludes that plaintiffs' claims had to be brought in 2003, even though they had not yet been discovered. It relies on the rule that an enlarged limitations period will not apply to lapsed claims unless the Legislature employs express *991 language of revival. However, Code of Civil Procedure section 340.1, subdivision (c) does expressly revive lapsed claims, including plaintiffs'.[1] The question before us is not whether the Legislature intended a retroactive application of the 2002 amendments. Plainly, it did. The question is whether all revived claims are subject to the one-year window period specified in section 340.1(c). The majority holds that they are. I disagree.
In 2002, all child molestation claims against third party defendants were barred after a plaintiff reached the age of 26. (Former § 340.1, subd. (b), as amended by Stats. 1998, ch. 1032, § 1, p. 7785.) The age 26 limitation is still the general rule. However, in the amendments now before us, effective January 1, 2003, the Legislature extended the limitations period by creating an exception to the age-26 cutoff for claims against some third parties. (§ 340.1, subd. (b)(2), added by Stats. 2002, ch. 149, § 1, pp. 752-753.) Plaintiffs over the age of 26 now have three years from the date they discover an adult psychological injury to bring suit against a limited class of third party defendants: those who knew or should have known about child molestation by an employee or agent and failed to take remedial action. (§ 340.1, subds. (a) & (b)(2).)[2]
The 2002 Legislature also revived lapsed claims, providing in section 340.1(c): "any claim . . . that is permitted to be filed pursuant to paragraph (2) of subdivision (b) that would otherwise be barred as of January 1, 2003, solely because the applicable statute of limitations has or had expired, is revived, and, in that case, a cause of action may be commenced within one year of January 1, 2003." The claims revived by section 340.1(c) are those held by plaintiffs who reached the age of 26 before January 1, 2003. These claims "would otherwise be barred as of January 1, 2003." (§ 340.1(c).) Although the Legislature provided a one-year window period for bringing suit, section 340.1(c) also included a savings clause: "Nothing in this subdivision shall be construed to alter the applicable statute of limitations period of an action that is not time barred as of January 1, 2003." (Italics added.)
In my view, plaintiffs' claims are exempted from the window period by the savings clause. As of January 1, 2003, they were not time-barred; "the applicable statute of limitations period" at that point was three years from *992 the date of discovery. (§ 340.1(c).) The clause imposing a one-year window period "shall [not] be construed to alter" that limitations period. (Ibid.) The claims that were time-barred as of January 1, 2003, and therefore subject to the window period, were those already discovered by plaintiffs over the age of 26. "[T]he applicable statute of limitations" for these claims was the one in effect at the time of discovery, and they were revived only for the window period. (Ibid.) Later-discovered claims, however, are "not time barred as of January 1, 2003" and the window period does not alter the limitations period in effect when they are discovered. (Ibid.) The majority suggests this analysis attributes a revival effect to section 340.1, subdivision (a). (Maj. opn., ante, at p. 973.) It does not. The first sentence of section 340.1(c) expressly revives plaintiffs' claims, and the second sentence takes them out of the window period.
The majority reasons that the first and second sentences of section 340.1(c) use the same terms, and therefore must address the same category of claims. (Maj. opn., ante, at p. 973.) However, the Legislature actually employed significantly different phrasing in the revival and savings clauses of section 340.1(c). All lapsed claims are covered by the revival clause, because they "would otherwise be barred" as of that date. (§ 340.1(c), italics added.) That is, but for the 2002 amendments, they would have been barred. However, in the savings clause the Legislature did not refer to claims "otherwise barred," or claims that would have been barred under former law.[3] Instead, it preserved claims "not time barred as of" the effective date of the new limitations period, thereby allowing claims accruing on or after that date to be brought under the new limitations scheme. (§ 340.1(c).)
Thus, plaintiffs' claims are timely under the terms of section 340.1 and the ordinary rules of accrual. The discovery rule provides that a cause of action accrues, and the statute of limitations is triggered, when the plaintiff "has, or should have, inquiry notice of the cause of action." (Fox v. Ethicon Endo-Surgery, Inc. (2005) 35 Cal.4th 797, 807 [27 Cal.Rptr.3d 661, 110 P.3d *993 914].) The Legislature was familiar with the application of the discovery rule in this context, from its experience with earlier amendments discussed in David A. v. Superior Court (1993) 20 Cal.App.4th 281 [24 Cal.Rptr.2d 537] (David A.). The David A. plaintiff tried to revive her lapsed claim under a provision stating only that the 1990 amendments applied to "any action commenced on or after January 1, 1991." (Former § 340.1, subd. (k), added by Stats. 1990, ch. 1578, § 1, p. 7552; see David A., at p. 286.) The court rejected the attempt, observing that the legislative history showed the Legislature had not meant to revive lapsed claims, and that the "oblique" statutory language could not be construed to revive lapsed claims without contravening the rule of construction requiring express language of revival. (David A., at pp. 286-288.)[4]
However, the David A. court went on to state that its holding would not apply to a claim subject to postponed accrual, and to note that the pleadings before it were insufficient to support a claim of delayed discovery. (David A., supra, 20 Cal.App.4th at p. 288.) Accordingly, in 2002 the Legislature had every reason to believe that, as in David A., future claims subject to postponed accrual would be governed by the limitations period in effect at the time of discovery. By expressly reviving lapsed claims, and limiting the one-year window period to claims that were time-barred as of January 1, 2003, the Legislature allowed the discovery rule to operate in its normal fashion on all revived claims.
Nevertheless, the majority concludes that the one-year window specified in section 340.1(c) applies to all revived claims, whether or not they were discovered in time for the plaintiff to sue. I find this reading problematic; it would make little sense for the Legislature to revive and then foreclose claims that could not be pursued because the plaintiffs were unaware of their injuries.
The majority's construction leads to anomalous results. All plaintiffs younger than 26 on January 1, 2003, are free to sue within three years of the *994 date they discover their injuries, even if they make that discovery at an advanced age. Plaintiffs over the age of 26 who had discovered their injuries before January 1, 2003, were permitted to sue within the one-year window created by section 340.1(c), no matter how long ago they were molested. Thus, a plaintiff molested in 1960 at the age of 12, who discovered his or her injury in 2002 at the age of 54, would be able to sue during the window period. Under the majority's reading, however, section 340.1(c) bars suit by a plaintiff molested in 1988 at the age of 12, who discovered his or her injury in 2004 at the age of 28. This claim is more recent and the injury was discovered at an earlier age than the hypothetical claim based on a 1960 molestation. Nevertheless, under the majority's holding the older claim would be viable and the younger claim barred. It seems unlikely that the Legislature would single out one class of plaintiffs for arbitrary treatment, depriving them of any opportunity to sue upon discovery of their injuries while allowing other plaintiffs who suffer the same kind of injury a reasonable time after discovery to seek redress.
The majority invokes the rule requiring express revival of lapsed claims, which developed from the concern that extending a limitations period to expired claims deprives defendants of their interest in repose. (Douglas Aircraft Co. v. Cranston (1962) 58 Cal.2d 462, 465-466 [24 Cal.Rptr. 851, 374 P.2d 819].) Because of the disruptive impacts of such extensions, we will not apply a newly enlarged limitations period to claims that had lapsed under the former statute unless the Legislature "expresse[s] itself in unmistakable terms." (Id. at p. 466.) Ordinarily, the question before the court is whether the Legislature intended the amended period to apply retroactively to any lapsed claims. That was the case in Douglas Aircraft Co., supra, 58 Cal.2d at page 466, in David A., supra, 20 Cal.App.4th at page 287, and in the cases cited by the majority for the general rule, with one exception that is unlike the case before us.[5]
However, in section 340.1(c) the Legislature did revive lapsed claims, in unmistakable terms. Whether it then subjected all those claims to a limited one-year window period is a separate question. In answering that question, we should keep in mind that section 340.1(c), like section 340.1, subdivision (b)(2), "is a remedial statute that the Legislature intended to be construed broadly to effectuate the intent that illuminates section 340.1 as a whole; to expand the ability of victims of childhood sexual abuse to hold to account *995 individuals and entities responsible for their injuries." (Doe v. City of Los Angeles (2007) 42 Cal.4th 531, 536 [67 Cal.Rptr.3d 330, 169 P.3d 559].)
The majority's reading of section 340.1(c) contravenes the remedial purpose of the 2002 amendments. It is not a grammatically unreasonable reading, but its effects are manifestly unreasonable. The alternative reading set out here is consistent with the language of the statute and does not lead to anomalous results. Insofar as the terms of section 340.1(c) are ambiguous, we may consult the legislative history to clarify their meaning. (Shirk v. Vista Unified School Dist. (2007) 42 Cal.4th 201, 211 [64 Cal.Rptr.3d 210, 164 P.3d 630].)
As the majority observes, the legislative history shows that the savings clause of section 340.1(c) was borrowed from another revival statute, enacted in 2000.[6] Section 340.9 revived certain lapsed insurance claims arising from the 1995 Northridge earthquake, and included the following caveat: "Nothing in this section shall be construed to alter the applicable limitations period of an action that is not time barred as of the effective date of this section." (§ 340.9, subd. (c).) In Cordova v. 21st Century Ins. Co. (2005) 129 Cal.App.4th 89 [28 Cal.Rptr.3d 170] (Cordova), the court held that this language preserved claims shielded from the statute of limitations by the doctrine of equitable estoppel. (Id. at pp. 98-100.)
The majority reasons that the parallel terms of section 340.1(c) must have the same meaning. The 2002 Legislature did not, of course, have the benefit of the Cordova decision when it adopted the terms of section 340.9, subdivision (c) for use in the savings clause before us. However, I agree with the majority that a claim subject to equitable estoppel or any other tolling mechanism would be preserved under section 340.1(c). But it does not follow that this is the only function of the savings clause: "Nothing in this subdivision shall be construed to alter the applicable statute of limitations period of an action that is not time barred as of January 1, 2003." (§ 340.1(c).) As discussed above, this language is fairly read to mean that the one-year window period does not apply to plaintiffs over the age of 26 who discover their injuries on or after January 1, 2003. "[A]s of" that date, their claims are not barred by "the applicable statute of limitations period," which is the three-year period provided in section 340.1, subdivision (a). (§ 340.1(c), italics added.)
The bill history of the 2002 amendments does not suggest the Legislature meant to restrict the savings clause of section 340.1(c) to tolled claims. In *996 Cordova, the court consulted the legislative history of section 340.9 and found it replete with indications that the statute was enacted in response to reports of rampant mishandling of claims by insurers, of the sort that would support application of the equitable estoppel doctrine. (Cordova, supra, 129 Cal.App.4th at pp. 102-107.) There is little in the legislative history of section 340.1(c) to suggest a similar concern. There is much, however, that demonstrates the Legislature's focus on the injustice of denying relief to adult survivors of childhood sexual abuse who discover their psychological injuries after the statute of limitations has run.
The history shows that the Legislature was motivated by concern that "any lawsuit against a responsible third party is absolutely time-barred after the victim passes this 26th birthday. This arbitrary limitation unfairly deprives a victim from seeking redress, and unfairly and unjustifiably protects responsible third parties from being held accountable for their actions that caused injury to victims."[7] As explained in a bill analysis, the 2002 amendments "would provide those victims who discovered their adulthood trauma after age 26, whose action has been barred by the current statute of limitations, a one-year window to bring a case against a third party that otherwise would be time-barred."[8] (Italics added.)
The majority reads this language to include all 26-year-old plaintiffs, both those who have discovered and those who will discover their injuries. (Maj. opn., ante, at pp. 985-986.) However, the bill analysis uses the past tense to describe injuries that have been discovered. It cannot fairly be read to include victims who would later discover their trauma, after the one-year window period had expired. The majority's reading of section 340.1(c) does not give such victims a one-year window, as the Legislature contemplated. They could not sue before their injuries were discovered. Under the majority's analysis, the Legislature revived their claims for nought. Upon discovery, they are subject to the absolute time bar that the Legislature meant to lift.
The majority acknowledges materials stating: "People who discover their adulthood trauma from the molestation after the effective date of the bill will have three years from the date the victim discovers or reasonably should have discovered that the adulthood trauma was caused by the childhood abuse."[9] This plain language demonstrates the Legislature's understanding that the *997 discovery rule provided in section 340.1, subdivision (a) would apply to claims arising after January 1, 2003. If the Legislature had meant to say that "people who turn 26 on or after the effective date of the bill will have three years" from the date of discovery to sue, surely it would have stated that important qualification, either here, elsewhere in the documentation of the bill history, or indeed in the statute itself. It did not. The absence of any such qualification strongly supports the conclusion that when the Legislature specified in section 340.1(c) that nothing in the revival clause should be "construed to alter the applicable statute of limitations period of an action that is not time barred as of January 1, 2003," it meant that anyone discovering a claim after 2002 would have three years to sue. (Cf. Cordova, supra, 129 Cal.App.4th at p. 106 [noting absence in legislative history of any indication that Legislature intended to exclude equitable remedies].)
The majority deflects the import of this passage in the legislative history by observing that it appears under the subheading "Prospective application." The majority notes that the same materials, under the heading "Retroactive application and revival of lawsuits," state that "the bill would create a one-year window for victims to bring a lawsuit that would otherwise be barred by the age 26 limitation." (Maj. opn., ante, at p. 987.) The majority does not quote the next sentence, however: "This is fair because the statute should not protect those responsible from being held liable."[10] The majority's reading of section 340.1(c) does protect responsible third party defendants, and arbitrarily maintains the age 26 limitation for one class of plaintiffs.[11]
In any event, the majority's distinction between prospective and retroactive application of the new limitations period does not undermine the viability of plaintiffs' claims. While in one sense any application of a new statute of limitations to a lapsed claim is "retroactive," the discovery rule makes it possible for a new limitations period to govern revived claims that accrue after the effective date of the new statute. It was entirely reasonable for the Legislature to anticipate that the 2002 amendments would apply prospectively as of January 1, 2003, to claims accruing on or after that date, and retroactively to claims discovered before that date.
*998 Accordingly, I would affirm the Court of Appeal's judgment. Plaintiffs' claims were unquestionably revived by section 340.1(c). To hold that they were alive only for the calendar year 2003, even though they had not been discovered, is inconsistent with the broadly remedial intent underlying the 2002 amendments. It leaves one class of plaintiffs without a remedy, while allowing similarly situated plaintiffs to sue. The statutory language does not compel this unfair and anomalous result. The savings clause in section 340.1(c) may reasonably be read to include plaintiffs' claims in the expanded scope of the new limitations period in effect as of January 1, 2003.
LIU, J., Dissenting.
In this case, six brothers seek compensatory relief from the Roman Catholic Bishop of Oakland for adult psychological injuries allegedly caused by childhood sexual abuse perpetrated by a priest assigned to their local parish. In their amended complaint, plaintiffs provide a disturbing and detailed account of recurring abuse by the same priest, and equally disturbing allegations of institutional avoidance and inattention. Whether those allegations are true, we will never know, as the Quarry brothers are now barred from having their day in court. Because the statute on which plaintiffs rely is a remedial statute that, properly construed, authorizes them to bring this suit, I respectfully dissent.
I agree with my dissenting colleague Justice Corrigan that Code of Civil Procedure section 340.1, subdivision (c) (all further undesignated statutory references are to this code) allowed a one-year window for alleged victims of childhood sexual abuse to sue especially culpable third parties on previously discovered claims that had lapsed, while leaving undiscovered claims against those third parties subject to the delayed discovery rule of section 340.1, subdivision (a). Assuming plaintiffs' claims lapsed no later than 1998 by virtue of the age 26 cutoff in section 340.1, subdivision (b)(1), I believe Justice Corrigan's reading of section 340.1, subdivision (c) is sound: The first sentence of that provision revived plaintiffs' claims and says revived claims must be brought "within one year of January 1, 2003." But the second sentence of that provision preserves "the applicable statute of limitations period of an action that is not time barred as of January 1, 2003." Plaintiffs' claims were "not time barred as of January 1, 2003" because they had been revived as of that date, and "the applicable statute of limitations period" for their revived claims is the delayed discovery rule of section 340.1, subdivision (a).
I write separately, however, because I am doubtful of the premise that the Legislature's 1998 enactment of the age 26 cutoff caused plaintiffs' undiscovered claims to lapse. It is true that if plaintiffs had discovered the causal connection between their alleged childhood abuse and their adult psychological injuries at any point from 1999 through 2002, then the age 26 cutoff *999 would have barred their claims. But it is well established that "statutes of limitation do not begin to run until a cause of action accrues." (Fox v. Ethicon Endo-Surgery, Inc. (2005) 35 Cal.4th 797, 807 [27 Cal.Rptr.3d 661, 110 P.3d 914] (Fox), citing Romano v. Rockwell Internat., Inc. (1996) 14 Cal.4th 479, 487 [59 Cal.Rptr.2d 20, 926 P.2d 1114].) The discovery rule "postpones accrual of a cause of action until the plaintiff discovers, or has reason to discover, the cause of action." (Fox, supra, 35 Cal.4th at p. 806, citing Norgart v. Upjohn Co. (1999) 21 Cal.4th 383, 397 [87 Cal.Rptr.2d 453, 981 P.2d 79] and Neel v. Magana, Olney, Levy, Cathcart & Gelfand (1971) 6 Cal.3d 176, 187 [98 Cal.Rptr. 837, 491 P.2d 421].) That a cause of action would have been barred by the applicable statute of limitations (the age 26 cutoff) had it accrued in 1999 does not mean that it was actually barred by that limitations period where the cause of action did not accrue until 2006. By that time, section 340.1, subdivision (b)(2) had eliminated the age 26 cutoff and put into effect a new limitations period (the three-year discovery rule) for certain third party claims. (See, e.g., Romo v. Estate of Bennett (1979) 97 Cal.App.3d 304, 307-308 [158 Cal.Rptr. 635] [where Legislature extends a statute of limitations, the new limitations period applies to causes of action that accrue after its effective date].)
The court says that if plaintiffs' claims are understood to accrue upon discovery of the connection between adult psychological injury and childhood abuse, then Shirk v. Vista Unified School Dist. (2007) 42 Cal.4th 201 [64 Cal.Rptr.3d 210, 164 P.3d 630] (Shirk) "presumably . . . should have been litigated and resolved differently." (Maj. opn., ante, at p. 982, fn. 11.) But that is entirely speculative. The plaintiff in Shirk conceded that "her cause of action . . . was extinguished in 1980" due to her failure to timely present her claim to the school district as required by the government claims statute. (Shirk, at p. 210.) She chose to argue before this court that section 340.1, subdivision (c) revived her cause of action. (Shirk, supra, at p. 210.) This court disagreed and held that the revival provision did not apply. (Id. at pp. 212-214.) Neither the majority nor the dissent in Shirk examined whether section 340.1, subdivision (b)(2) gave rise to a new accrual or whether the age 26 cutoff in subdivision (b)(1) caused any undiscovered claims to lapse in 1998. Those issues simply were not raised or considered in Shirk. "It is axiomatic, of course, that a decision does not stand for a proposition not considered by the court." (People v. Harris (1989) 47 Cal.3d 1047, 1071 [255 Cal.Rptr. 352, 767 P.2d 619].)
When the Legislature enacted the 2002 amendment adding subdivision (c) to section 340.1, the Senate Committee on the Judiciary explained that "this bill would provide those victims who discovered their adulthood trauma after *1000 age 26, whose action has been barred by the current statute of limitations, a one-year window to bring a case against a third party that otherwise would be time-barred." (Sen. Com. on Judiciary, Analysis of Sen. Bill No. 1779 (2001-2002 Reg. Sess.) as amended May 2, 2002, p. 6, italics added.) This legislative history makes clear that subdivision (c) revived discovered claims that had been barred by the age 26 cutoff. By contrast, the legislative history nowhere mentions revival of undiscovered claims. The most sensible explanation for this omission is that the Legislature did not see any need to revive undiscovered claims because those claims had not accrued and thus had not been barred. Subdivision (b)(2), which was also added to section 340.1 as part of the 2002 amendment, brought such claims against especially culpable third parties within the coverage of section 340.1, subdivision (a)'s three-year discovery rule.
This reading is further confirmed by the author of the 2002 amendment, who explained the amendment's purpose as follows: "[T]his bill is essential to ensure that victims severely damaged by childhood sexual abuse are able to seek compensation from those responsible. While current law allows a lawsuit to be brought against the perpetrator within three years of discovery of the adulthood aftereffects of the childhood abuse, current law bars any action against a responsible third party entity . . . after the victim's 26th birthday. Unfortunately . . . for many victims their adulthood trauma does not manifest itself until well after their 26th birthday, when some event in their current life triggers remembrance of the past abuse and brings on new trauma.
"For example, a 35-year old man with a 13-year old son involved in many community and sporting events, may begin to relive his nightmare of being molested by an older authoritarian figure when he was 13 years old and about to enter puberty. While a lawsuit against the perpetrator is possible, that person may be dead, may have moved away to places unknown, or may be judgment-proof. However, any lawsuit against a responsible third party is absolutely time-barred after the victim passes this 26th birthday. [¶] This arbitrary limitation unfairly deprives a victim from seeking redress, and unfairly and unjustifiably protects responsible third parties from being held accountable for their actions that caused injury to victims." (Sen. Com. on Judiciary, Analysis of Sen. Bill No. 1779, supra, p. 4.) The example of the 35-year-old man who connects his adult psychological injury to childhood sexual abuse is repeated several times throughout the legislative history of the 2002 amendments. (See also Sen. Com. on Judiciary, 3d reading analysis of Sen. Bill No. 1779 (2001-2002 Reg. Sess.) as amended Jun. 17, 2002, pp. 3-4; Sen. Rules Com., Off. of Sen. Floor Analyses, 3d reading analysis of *1001 Sen. Bill No. 1779 (2001-2002 Reg. Sess.) as amended May 15, 2002; Assem. Com. on Judiciary, Analysis of Sen. Bill No. 1779 (2001-2002 Reg. Sess.) as amended June 6, 2002, p. 3.)
Under today's decision, the 35-year-old man in the example may benefit from the three-year discovery rulebut only if he turned 35 at least nine years after January 1, 2003, the effective date of the 2002 amendments. Anyone who turned 35 within nine years of January 1, 2003 would have been 26 or older as of January 1, 2003, and the claims of those individuals are forever barred, the court holds, unless they happened to be discovered and brought within the one-year revival window. I find it hard to believe that this is what the Legislature intended. Given the repeated emphasis on the unfairness and arbitrariness of denying the three-year discovery rule to a 35-year-old victim of childhood sexual abuse, why would the Legislature have deferred for nine years the applicability of the discovery rule to any such 35 year old? Absent some indication to the contrary in the statute or legislative history, I would not attribute to the Legislature such an anomalous intent. (See also dis. opn. of Corrigan, J., ante, at pp. 993-994 [describing other anomalous and arbitrary results of the court's holding].)
The unanimous Court of Appeal was correct in its clear, straightforward reading of the statutory text: "The parties do not dispute that plaintiffs' claims for injuries from the alleged sexual abuse originally lapsed between 1976 and 1982, when each turned age 19. . . . [¶] . . . [¶] The 1998/1999 amendments to section 340.1 revived all previously lapsed, unadjudicated claims against perpetrators and third parties, and provided for two alternative limitations periods: A claim must be filed (1) within eight years after [a victim] reach[es] majority or (2) within three years of discovering that the cause of the psychological injury occurring after the age of majority was the childhood abuse, whichever occurs later ([§ 340.1], subd. (a)); as against third parties, however, the outside limit was age 26 (id., subd. (b)). Thus, under the prior law, any person discovering after age 26 that childhood abuse was the cause of his or her adulthood injuries was barred from suing responsible third parties. Effective 2003, however, the Legislature deleted the age 26 cutoff as against a narrow category of third party defendants who had both the knowledge and the ability to protect against abusive behavior but failed to do so. Anyone discovering that childhood abuse was the cause of their injuries after 2003 could sue thesemore culpabledefendants without regard to the age 26 cutoff. (Ibid.) And, for those who had previously discovered the cause of their injuries but could not sue under the prior law because of the age 26 cutoff (id., subd. (b)(1)), the Legislature offered a one-year window in which *1002 they could file their claims (id., subd. (c)). [¶] It therefore follows, and we hold, that under section 340.1 the complaint in this action is not time-barred because plaintiffs have alleged they did not discover the cause of their psychological injuries until 2006."
The Court of Appeal also correctly explained the legislative history and intent: "[T]he primary purpose of the 2002 amendments was to ameliorate the harsh result of a statute of limitations which precluded abuse victims from recovering any compensation from the most highly culpable of the responsible third partiesthose who knew of the danger and took no steps to protect children from abuse. It would not effectuate this legislative intent to read the amendments as reimposing the same harsh result on an entire class of victims over the age of 26 who did not discover the cause of their injury until after January 1, 2004, and therefore could not have filed their actions during 2003."
Finally, as mentioned at the outset, even if the Court of Appeal was wrong and the age 26 cutoff had barred plaintiffs' claims in 1998, Justice Corrigan is correct that the first sentence of section 340.1, subdivision (c) revived plaintiffs' claims and that "the applicable statute of limitations period" under the second sentence of subdivision (c) is the three-year discovery rule, not the one-year revival window.
Today's decision does not comport with our understanding that section 340.1, subdivision (b)(2), which lifted the age 26 cutoff for claims against highly culpable third parties, "is a remedial statute that the Legislature intended to be construed broadly to effectuate the intent that illuminates section 340.1 as a whole; to expand the ability of victims of childhood sexual abuse to hold to account individuals and entities responsible for their injuries." (Doe v. City of Los Angeles (2007) 42 Cal.4th 531, 536 [67 Cal.Rptr.3d 330, 169 P.3d 559].) Although the 2002 amendments to section 340.1 are readily construed to protect plaintiffs such as the Quarry brotherson either my interpretation or Justice Corrigan'sthe court holds that it is too late for them to pursue their claims.
It is not too late, however, for the Legislature to give similarly situated plaintiffs their day in court. Since 1986, when section 340.1 was first enacted, the Legislature has twice expanded access to court for childhood sexual abuse victims in response to what it saw as unduly narrow rules set forth in judicial opinions. (See maj. opn., ante, at p. 963 [noting that 1990 amendment extended delayed discovery principles, superseding DeRose v. Carswell (1987) 196 Cal.App.3d 1011 [242 Cal.Rptr. 368]]; maj. opn., ante, at p. 964 [noting that 1994 amendment expressly revived lapsed claims against direct perpetrators, *1003 superseding David A. v. Superior Court (1993) 20 Cal.App.4th 281 [24 Cal.Rptr.2d 537].) Today's unduly narrow reading of the statute may prompt the Legislature again to provide a correction that affirms the statute's remedial purpose.
I respectfully dissent.
NOTES
[1] All further statutory references are to the Code of Civil Procedure unless otherwise indicated.
[2] We refer to defendants who were not the direct perpetrators of the abuse as third party defendants and to claims against such defendants as third party claims.
[3] In accord with privacy requirements as stated in subdivision (m) of section 340.1, the amended complaint referred to defendant as Doe I. We identify defendant as the bishop because the Court of Appeal so identified that party, and defendant has used that nomenclature in this court.
[4] With respect to third party defendants, courts recognized a cause of action based upon a party's direct negligence in failing to protect the plaintiff, or for hiring, retaining, or supervising the perpetrator. (See Mark K. v. Roman Catholic Archbishop (1998) 67 Cal.App.4th 603, 611-612 [79 Cal.Rptr.2d 73] (Mark K.); Snyder v. Boy Scouts of America, Inc. (1988) 205 Cal.App.3d 1318, 1322 [253 Cal.Rptr. 156] (Snyder).) Various decisions held that respondeat superior liability was not available in similar circumstances because the sexual abuse occurred outside the scope of employment. (Rita M. v. Roman Catholic Archbishop (1986) 187 Cal.App.3d 1453, 1461 [232 Cal.Rptr. 685]; see also Mark K., supra, at p. 609 [asserting that a vicarious liability claim would have been available until 1986, when the Rita M. case was decided]; Jeffrey E. v. Central Baptist Church (1988) 197 Cal.App.3d 718, 721 [243 Cal.Rptr.128].)
[5] There was authority for the proposition that common law delayed discovery principles could apply to claims against perpetrators or third party defendants. (See Snyder, supra, 205 Cal.App.3d at p. 1324 [third party defendants]; DeRose, supra, 196 Cal.App.3d at pp. 1017-1018 [perpetrator].) Some decisions explained this was true only if the plaintiff alleged he or she had repressed all memory of the assault after it occurredbut the limitations period would not be tolled simply because, as plaintiffs in the present case alleged, the plaintiff suffered subsequent emotional harm in adulthood and experienced a delayed discovery of the connection of the harm with the earlier abuse. (DeRose, supra, at pp. 1017-1019; see also Marsha V. v. Gardner (1991) 231 Cal.App.3d 265, 271-273 [281 Cal.Rptr. 473].) Other decisions adopted a somewhat broader common law delayed discovery principle regarding plaintiffs who, for psychological reasons, were unaware of the wrongfulness of the perpetrator's acts when they were committed, although again there was no application of the delayed discovery rule permitted simply because a plaintiff failed to recognize the connection between the abuse and the adult psychological injury. (See Sellery v. Cressey (1996) 48 Cal.App.4th 538, 545 [55 Cal.Rptr.2d 706]; Evans v. Eckelman (1990) 216 Cal.App.3d 1609, 1618-1620 [265 Cal.Rptr. 605] (Evans) [direct perpetrator]; see also Mark K., supra, 67 Cal.App.4th at pp. 610-611, 612, fn. 9 [applying common law principles to a third party claim].)
We need not parse these decisions to determine whether or how they would have applied to plaintiffs' third party claims if their lawsuit had been brought during the 1970's or 1980's. As we shall see, the 1998 amendment to section 340.1 made it plain that causes of action against third parties lapsed when the plaintiff reached the age of 26, notwithstanding any alleged delay in discovery that adult psychological harm was caused by childhood abuse.
[6] The statute provided in pertinent part: "(a) In any civil action for injury or illness based upon lewd or lascivious acts with a child under the age of 14 years [or other enumerated sexual offenses], in which this conduct is alleged to have occurred between a household or family member and a child where the act upon which the action is based occurred before the plaintiff attained the age of 18 years, the time for commencement of the action shall be three years." (Former § 340.1, subd. (a), added by Stats. 1986, ch. 914, § 1, p. 3165.)
[7] The enactment also relettered the subdivisions that appeared in prior versions of the statute that referred to application of the 1990 and 1994 amendments. (Compare former § 340.1, subds. (p), (q), as amended or added by Stats. 1998, ch. 1032, § 1, pp. 7785, 7788 with former § 340.1, subds. (o), (p), added by Stats. 1994, ch. 288, § 1, pp. 1928, 1930.)
[8] As we explained in a prior decision: "In 1999, the Legislature again amended section 340.1, clarifying that its 1998 changes relating to the liability of nonabuser persons or entities were prospectivethat is, its provisions applied only to actions begun on or after January 1, 1999, or if filed before that time, actions still pending as of that date, `including any action or causes of action which would have been barred by the laws in effect prior to January 1, 1999.'" (Shirk, supra, 42 Cal.4th at p. 208.)
[9] Additional revival clauses dating from the several earlier amendments to section 340.1 survive, relettered as subdivisions (r), (s), and (u) of the statute. Subdivision (r) provides that "[t]he amendments to this section enacted at the 1990 portion of the 1989-90 Regular Session shall apply to any action commenced on or after January 1, 1991, including any action otherwise barred by the period of limitations in effect prior to January 1, 1991, thereby reviving those causes of action which had lapsed or technically expired under the law existing prior to January 1, 1991." Subdivision (s) provides that "[t]he Legislature declares that it is the intent of the Legislature, in enacting the amendments to this section enacted at the 1994 portion of the 1993-94 Regular Session, that the express language of revival added to this section by those amendments shall apply to any action commenced on or after January 1, 1991." And subdivision (u) provides that "[t]he amendments to subdivision (a) of this section, enacted at the 1998 portion of the 1997-98 Regular Session, shall apply to any action commenced on or after January 1, 1999, and to any action filed prior to January 1, 1999, and still pending on that date, including any action or causes of action which would have been barred by the laws in effect prior to January 1, 1999. Nothing in this subdivision is intended to revive actions or causes of action as to which there has been a final adjudication prior to January 1, 1999."
We also note the addition of subdivision (d), exempting from subdivision (c) claims that have been (1) litigated to finality on the merits prior to January 1, 2003, or (2) settled, as defined. Language in subdivision (d)(1)providing that termination on the basis of the statute of limitations does not constitute a claim that has been litigated to finality on the meritshas been held inconsistent with the separation of powers doctrine. (Perez v. Roe 1 (2006) 146 Cal.App.4th 171, 187-188 [52 Cal.Rptr.3d 762] [the Legislature lacks authority to revive an action resolved in a final judgment that applied a prior limitations period].)
[10] In 1999, the Legislature enacted subdivision (s) of section 340.1 (former § 340.1, subd. (s), as amended by Stats. 1999, ch. 120, § 1, pp. 1735, 1738-1739), and the language of this subdivision was relettered as subdivision (u) in the 2002 amendment (§ 340.1, subd. (u), as amended by Stats. 2002, ch. 149, § 1, pp. 752, 756).
[11] We also observe that if adult psychological injury were a separate injury giving rise to a cause of action accruing upon discovery of the connection between the adult injury and childhood abuse, presumably Shirk should have been litigated and resolved differently. (Shirk, supra, 42 Cal.4th 201.) There we pointed out that causes of action accrue for childhood sexual abuse at the same time for the purpose of claims against public entities under the government claims statute (see Gov. Code, § 911.2), and for the purpose of an ordinary civil action. (Shirk, supra, at p. 210.) The plaintiff in Shirk contended that her claim under the government claims statute was timely because she had only recently discovered that her adult psychological injury was caused by childhood sexual abuse by one of the defendant's employees. (Id. at p. 206.) We said that she could not take advantage of the revival period of section 340.1, subdivision (c) because it did not refer to claims made under the government claims statute. (Shirk, supra, at pp. 212-214.) But if the plaintiff's adult psychological injury were a separate injury giving rise to a new cause of action with its own accrual date, the plaintiff in Shirk would not have needed to rely upon the one-year revival period of subdivision (c)her claim would not have accrued at all, whether as a civil action or under the government claims statute, until she became aware of her adult injury.
[12] (See ante, at p. 965; compare former § 340.1, subd. (a), as amended by Stats. 1990, ch. 1578, § 1, p. 7550 with former § 340.1, as amended by Stats. 1994, ch. 288, § 1, pp. 1928, 1930; see also Historical and Statutory Notes, 13C West's Ann. Code Civ. Proc., supra, foll. § 340.1, p. 173.)
[13] The David A. court's reference to a possible surviving delayed discovery theory (David A., supra, 20 Cal.App.4th at p. 288) is not to the contrary, because that decision predated the 1994 amendments deleting all reference to any nonstatutory delayed discovery principles.
[14] The legislative history consists primarily of (1) an analysis prepared for the Senate Judiciary Committee for its initial hearing on the bill proposing the amendments, conducted May 2, 2002 (Sen. Com. on Judiciary, Analysis of Sen. Bill No. 1779 (2001-2002 Reg. Sess.) as amended May 2, 2002, for hearing on May 7, 2002, and (2) an Assembly Committee on Judiciary bill analysis prepared for its hearing dated June 11, 2002, concerning the bill as amended June 6, 2002, with substantial material copied from the Senate analysis noted above (Assem. Com. on Judiciary, Analysis of Sen. Bill No. 1779, supra, as amended June 6, 2002). Subsequent analyses appear to repeat the first two items in substantial part. (See, e.g., Sen. Com. on Judiciary, 3d reading analysis of Sen. Bill No. 1779, supra, as amended June 17, 2002; Sen. Rules Com., Off. of Sen. Floor Analyses, Unfinished Business Analysis of Sen. Bill No. 1779 (2001-2002 Reg. Sess.) as amended June 17, 2002.)
[15] (Sen. Com. on Judiciary, Analysis of Sen. Bill No. 1779, supra, as amended May 2, 2002, p. 4; see also Assem. Com. on Judiciary, Background Information Worksheet on Sen. Bill No. 1779 (2001-2002 Reg. Sess.) June 5, 2002, p. 1.)
[16] (Sen. Com. on Judiciary, Analysis of Sen. Bill No. 1779, supra, as amended May 2, 2002, p. 6, underscoring omitted.)
[17] (Sen. Com. on Judiciary, Analysis of Sen. Bill No. 1779, supra, as amended May 2, 2002, p. 6.)
[18] (Sen. Com. on Judiciary, Analysis of Sen. Bill No. 1779, supra, as amended May 2, 2002, p. 6.)
[19] (Assem. Com. on Judiciary, Background Information Worksheet on Sen. Bill No. 1779, supra, June 5, 2002, p. 0, italics added.)
[20] (See Sen. Rules Com., Off. of Sen. Floor Analyses, Unfinished Business analysis of Sen. Bill No. 1779, supra, as amended June 17, 2002, p. 3 [also appearing, among other places, in Sen. Rules Com., Off. of Sen. Floor Analyses, 3d reading analysis of Sen. Bill No. 1779 (2001-2002 Reg. Sess.) as amended May 15, 2002, pp. 2-3; Sen. Com. on Judiciary, Analysis of Sen. Bill No. 1779, supra, as amended May 2, 2002, p. 3].)
[21] (Sen. Rules Com., Off. of Sen. Floor Analyses, Unfinished Business analysis of Sen. Bill No. 1779, supra, as amended June 17, 2002, p. 3, italics added [also appearing, among other places, in Sen. Com. on Judiciary, Analysis of Sen. Bill No. 1779, supra, as amended May 2, 2002, p. 3].)
[22] (Sen. Com. on Judiciary, Analysis of Sen. Bill No. 1779, supra, as amended May 2, 2002, p. 6.)
[23] Plaintiffs' contention that they should be permitted to proceed against defendant upon a vicarious liability theory was not reached in the Court of Appeal and for that reason is not discussed here.
[1] Further statutory references are to the Code of Civil Procedure. Hereafter, I refer to section 340.1, subdivision (c) as section 340.1(c).
[2] Due to the exception provided in section 340.1, subdivision (b)(2), the limitations period provided in section 340.1, subdivision (a) applies to claims by plaintiffs over the age of 26 against the designated class of third party defendants: "within three years of the date the plaintiff discovers or reasonably should have discovered that psychological injury or illness occurring after the age of majority was caused by the sexual abuse."
[3] In this respect, the 2002 Legislature departed from its past practice in framing revival provisions for section 340.1(c). In 1986, 1994, and 1999, it spoke only in terms of claims that would have been barred by the previously existing statutes of limitations. (See former § 340.1, subd. (e), added by Stats. 1986, ch. 914, § 1, pp. 3165, 3166 [reviving "any action which would be barred by application of the period of limitation applicable prior to January 1, 1987" (italics added)]; former § 340.1, subd. (o), added by Stats. 1994, ch. 288, § 1, pp. 1928, 1930, now § 340.1, subd. (r) [reviving "any action otherwise barred by the period of limitations in effect prior to January 1, 1991" (italics added)]; former § 340.1, subd. (s), added by Stats. 1999, ch. 120, § 1, pp. 1735, 1738-1739, now § 340.1, subd. (u) [reviving "any action or causes of action which would have been barred by the laws in effect prior to January 1, 1999" (italics added)].)
The majority reads section 340.1(c) as if it continued the pattern of the earlier revival clauses, treating all lapsed claims alike. But because the Legislature used different terms in 2002, it is reasonable to conclude that it intended a different result.
[4] The Legislature promptly responded to David A. by amending section 340.1 to make it plain that "The amendments to this section enacted at the 1990 portion of the 1989-90 Regular Session [(i.e., the amendments at issue in David A.)] shall apply to any action commenced on or after January 1, 1991, including any action otherwise barred by the period of limitations in effect prior to January 1, 1991, thereby reviving those causes of action which had lapsed or technically expired under the law existing prior to January 1, 1991." (Former § 340.1, subd. (o), added by Stats. 1994, ch. 288, § 1, pp. 1928, 1930, now § 340.1, subd. (r).)
In my view, the majority's reading of section 340.1(c) invites a similar repudiation by the Legislature. (See 3 Witkin, Cal. Procedure (5th ed. 2008) Actions, § 464, p. 587.) For these plaintiffs, however, that would be cold comfort, as their claims will have been finally resolved. (See § 340.1, subd. (d); Perez v. Roe 1 (2006) 146 Cal.App.4th 171, 188 [52 Cal.Rptr.3d 762].)
[5] In Krupnick v. Duke Energy Morro Bay (2004) 115 Cal.App.4th 1026 [9 Cal.Rptr.3d 767], the Legislature specified that victims of the 9/11 terrorist attacks were entitled to retroactive application of an expanded limitations period for personal injury actions. The plaintiff was not a member of that class, and did not try to bring himself with the scope of the express revival provisions. (Id. at pp. 1028-1029.) Here, on the other hand, plaintiffs' claims were expressly revived.
[6] Senate Committee on the Judiciary, third reading analysis of Senate Bill No. 1779 (2001-2002 Reg. Sess.) as amended June 17, 2002, page 4; Assembly Committee on Judiciary, Analysis of Senate Bill No. 1779 (2001-2002 Reg. Sess.) as amended June 6, 2002, page 7.
[7] Senate Committee on the Judiciary, third reading analysis of Senate Bill No. 1779, supra, as amended June 17, 2002, pages 3-4 (included in Assem. Floor Analysis of Sen. Bill No. 1779 (2001-2002 Reg. Sess.); see also Assembly Committee on Judiciary, Background Information Worksheet on Senate Bill No. 1779, supra, June 5, 2002, page 1.
[8] Senate Committee on the Judiciary, Analysis of Senate Bill No. 1779 (2001-2002 Reg. Sess.) as amended May 2, 2002, for hearing on May 7, 2002, page 6.
[9] Assembly Committee on Judiciary, Background Information Worksheet on Senate Bill No. 1779, supra, page 0.
[10] Assembly Committee on Judiciary, Background Information Worksheet on Senate Bill No. 1779, supra, page 0.
[11] The majority's interpretation also creates an arbitrary limitation in the operation of the one-year window period. A discovery late in the 2003 calendar year would be difficult to bring to the attention of an attorney in time to file suit. While this is a normal aspect of statutes of limitations, section 340.1 is notable for its generous limitation periods, allowing suit within eight years of the age of 18 or three years of the date of discovery, whichever is later. (§ 340.1, subd. (a).) A one-year window period for lapsed claims operates sensibly for claims discovered before the window opens, but becomes increasingly impractical as the window period passes.
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352 P.2d 894 (1960)
KENITEX CORPORATION, a corporation, Petitioner,
v.
G. B. Chuck CORYELL, Judge of the Superior Court of Creek County, Oklahoma, and Kenneth Hughes, Judge of the District Court of Creek County, Oklahoma, Respondents.
No. 38825.
Supreme Court of Oklahoma.
April 26, 1960.
Sanders & McElroy, Tulsa, for petitioner.
WILLIAMS, Vice Chief Justice.
Kenitex Corporation, hereinafter referred to as petitioner, has filed an application requesting this court assume jurisdiction of its original action and prohibit respondents from proceeding further in three separate actions pending in the respective courts over which they preside.
Plaintiffs in said actions, the owner of and two passengers in an automobile involved in an accident, are suing defendants for damages to the car and for personal injuries resulting from such accident.
*895 This accident occurred while defendant Jones, an employee of defendants J.S. Price and Sam O. Smith, partners, was en route from Beaumont, Texas, to Tulsa, Oklahoma, to pick up a paint spraying machine being purchased from defendant Jack Nafe. Defendant General Construction of Tulsa, Inc. and its salesmen, F.C. Wilson and Art Markham, also named as defendants, and petitioner were made parties defendants on the theory that "Said defendants each and at all times material hereto were engaged in a joint and common mission and business purpose and venture for their mutual benefit and profit in promoting, selling, and applying a protective coating known as Kenitex, and related activities, said Kenitex being manufactured by defendant Kenitex Corporation (petitioner) * * *" and further allegation that each defendant was agent for the other codefendants.
Petitioner was served, by serving the Secretary of State of Oklahoma, under the nonresident motor vehicle statute, Sec. 47 O.S. 1951 § 391 et seq.
Petitioner filed a special appearance and motion to quash and plea to venue and jurisdiction, supported by an affidavit, in each of the three actions.
These affidavits were to the effect that petitioner does not manufacture or regularly sell paint applicating machines; that it does not apply the paint but only sells such paint to dealers and applicators F.O.B. Los Angeles; and that the other codefendants were not its agents, servants or employees and it was not engaged in any joint enterprise, business act or operation with such defendants. Plaintiffs offered no counter-affidavits or evidence.
Respondents overruled the petitioner's pleas to the jurisdiction in their respective courts, whereupon petitioner filed in this court a petition for writ of prohibition praying that this court assume jurisdiction and issue the writ prohibiting respondents from proceeding further in said causes.
We believe that the rule in Hayes Freight Lines v. Cheatham, Okl., 277 P.2d 664, 48 A.L.R.2d 1278, is determinative of the present case.
Since petitioner's affidavit is uncontroverted and uncontradicted, the facts set forth therein are to be taken as true. Wilkinson v. Whitworth, 169 Okl. 286, 36 P.2d 932, and Kansas, Oklahoma & Gulf Ry. Co. v. Horath, 189 Okl. 555, 118 P.2d 660.
In Hayes Freight Lines v. Cheatham, supra [277 P.2d 665], we held:
"The nonresident motorist statute of Oklahoma, 47 O.S. 1951 § 391 et seq. imposing a contractual obligation on nonresident motorists who use the highways of this State for the operation of their motor vehicles is in derogation of the common law and affects substantial rights so that the statute cannot be extended by implication but must be strictly construed.
* * * * * *
"Where an inferior court is exercising unwarranted jurisdiction in violation of a sovereign policy, the fact that a party litigant therein may have entered a general appearance does not prejudice the right of the state to protect the integrity of the administration of justice. The benefit to the litigant therefrom is but an incident to the exercise of power by the state, which power cannot be impaired by such appearance; and that by Sec. 2, Art. 7, of the Constitution the Supreme Court is given jurisdiction to exercise a general superintending control over all inferior courts, and that such jurisdiction is a separate and distinct grant from its appellate jurisdiction.
"Prohibition is the proper remedy to test validity of service of summons which trial court has upheld over objection of defendant who appeared specially."
We conclude that respondents are attempting to exercise unauthorized jurisdiction over a nonresident of this state, and that remedy by appeal is inadequate and imposes an undue burden on respondents.
*896 Writ granted.
DAVISON, C.J., and WELCH, HALLEY, JOHNSON, JACKSON and BERRY, JJ., concur.
BLACKBIRD and IRWIN, JJ., dissent.
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F I L E D
United States Court of Appeals
Tenth Circuit
UNITED STATES COURT OF APPEALS
NOV 3 1998
TENTH CIRCUIT
PATRICK FISHER
Clerk
UNITED STATES OF AMERICA,
Plaintiff-Appellant,
v. No. 97-2377
(D.C. No. CR-97-284-BB)
BARRY WES BIGGS, (D. N.M.)
Defendant-Appellee.
ORDER AND JUDGMENT *
Before BALDOCK, BRISCOE, and LUCERO, Circuit Judges.
Defendant Barry Wes Biggs pleaded guilty to assault resulting in serious
bodily injury and was sentenced to thirty months’ imprisonment. The government
appeals, contending the district court erred in not sentencing Biggs to thirty-six
months’ imprisonment as contemplated by the plea agreement. We remand the
case to the district court with directions to vacate Biggs’ sentence and conduct a
*
This order and judgment is not binding precedent, except under the
doctrines of law of the case, res judicata, and collateral estoppel. The court
generally disfavors the citation of orders and judgments; nevertheless, an order
and judgment may be cited under the terms and conditions of 10th Cir. R. 36.3.
hearing at which the court should explicitly accept or reject the plea agreement.
On May 7, 1997, Biggs was charged in Count I with assault with a
dangerous weapon with intent to do bodily harm, a violation of 18 U.S.C. §
113(a)(3), and in Count II with assault resulting in serious bodily injury, a
violation of 18 U.S.C. § 113(a)(6). Biggs and the government entered into a plea
agreement whereby Biggs agreed to plead guilty to Count II and to be sentenced
to thirty-six months’ imprisonment, and the government agreed to dismiss Count I
and to not bring additional charges. The court held a change of plea hearing on
July 25, 1997, and the court accepted Biggs’ guilty plea to Count II. On October
16, 1997, the court sentenced Biggs to thirty months’ imprisonment.
The government contends our decision in United States v. Veri , 108 F.3d
1311 (10th Cir. 1997), required the court to sentence Biggs in accordance with the
plea agreement. Biggs claims the court rejected the plea agreement and sentenced
him based on his guilty plea alone. The issue for our determination is whether the
district court accepted or rejected the plea agreement.
A court “may accept or reject the [plea] agreement or may defer its decision
as to the acceptance or rejection until there has been an opportunity to consider
the presentence report.” Fed. R. Crim. P. 11(e)(2). If the court accepts the
agreement, it “shall inform the defendant that it will embody in the judgment and
sentence the disposition provided for in the plea agreement.” Fed. R. Crim. P.
-2-
11(e)(3). If, on the other hand, the court rejects the plea agreement, the court
shall, on the record, inform the parties of this fact, advise the
defendant personally in open court . . . that the court is not bound by
the plea agreement, afford the defendant the opportunity to then
withdraw the plea, and advise the defendant that if the defendant
persists in a guilty plea or plea of nolo contendere the disposition of
the case may be less favorable to the defendant than that
contemplated by the plea agreement.
Fed. R. Crim. P. 11(e)(4).
We are unable to determine from the record whether the district court
accepted or rejected the plea agreement. At Biggs’ change of plea hearing, the
court stated:
Mr. Biggs, since you, in fact, acknowledge that you are guilty of
Count II of the complaint, and since you understand your right to a
trial, what the maximum punishment is, and since you are voluntarily
pleading guilty, I will accept your guilty plea and enter a judgment of
guilty on your behalf.
The Court will find the defendant’s plea is free and voluntary;
the defendant fully understands the charge and the penalty; and that
the plea agreement has been properly executed and signed and it will
now be filed . The Court will further find that there is a factual basis
for the plea.
Record II at 12-13 (emphasis added). This dialogue makes plain the district court
intended to accept Biggs’ guilty plea. However, acceptance of a guilty plea and
acceptance of a plea agreement are distinct matters. The only reference the court
made to the plea agreement itself is that it had been “properly executed and
signed and it will now be filed.” Id. Given the subsequent course of proceedings
in the district court, we are hesitant to assume the court by this statement was
-3-
attempting to convey acceptance of the agreement. In any event, this statement
falls short of satisfying the directive in Rule 11(e)(3) that the court “inform the
defendant that it will embody in the judgment and sentence the disposition
provided for in the plea agreement.”
Matters were not clarified at the sentencing hearing. At one point during
the hearing, defense counsel asked the court to “reject the sentencing agreement”
and allow Biggs to withdraw his guilty plea. Record III at 10. Later, the court
asked the government about its position on “withdrawing the sentencing
agreement.” Id. at 13. Finally, the court stated it was “going to permit Mr. Biggs
to withdraw his sentencing agreement.” Id. at 15. At the least, these statements
evidence an intent to withdraw the sentencing agreement. If so, the court must
have rejected the entire plea agreement because, under Veri and Rule 11(e)(1)(C)
and (3), it could not accept the plea agreement but depart from the sentence
specified therein. Notwithstanding this apparent intent to reject the plea
agreement, the court, consistent with adoption of the plea agreement, later
dismissed Count I of the indictment. See Record I, Doc. 28. The government
correctly notes it agreed to move for dismissal of Count I only if the plea
agreement was accepted. Dismissal of Count I appears to have proceeded from
the assumption of court personnel that the plea agreement had been accepted.
Although judgment entered reflects Count I was dismissed “on motion of the
-4-
United States,” the government did not move for dismissal of Count I. Id.
Further, we find no evidence in the record to indicate, as Biggs suggests, that
Count I was dismissed pursuant to Fed. R. Crim. P. 48(b) for “unnecessary delay
in bringing a defendant to trial.” See Appellee’s Br. at 11.
Considered collectively, the statements and conduct of the district court
throughout the proceedings are consistent both with acceptance and rejection of
the plea agreement. Nowhere in the record did the court explicitly and
unambiguously accept or reject the plea agreement as required under Rule
11(e)(3) and (4). We are therefore compelled to remand this case to the district
court with directions to vacate Biggs’ sentence and to reinstate Count I. The
district court should then explicitly accept or reject the plea agreement. If the
court accepts the agreement and so finds on the record in accordance with Rule
11(e)(3), then under Veri , it must sentence Biggs to thirty-six months’
imprisonment as contemplated by the plea agreement. If the court rejects the
agreement, it must so advise Biggs in accordance with Rule 11(e)(4) and proceed
accordingly.
-5-
REMANDED to the district court with directions to vacate Biggs’ sentence,
reinstate Count I, and either accept or reject the plea agreement.
Entered for the Court
Mary Beck Briscoe
Circuit Judge
-6-
97-2377, United States of America v. Biggs
LUCERO , Circuit Judge, dissenting.
I agree with the majority that “considered collectively, the statements and
conduct of the district court throughout the proceedings are consistent both with
acceptance and rejection of the plea agreement.” Maj. Op. at 5. However, the
government’s argument that the district court erred by imposing a thirty-month
sentence can only carry weight if the district court accepted, but did not reject, the
plea agreement. The reason is straightforward. If the district court rejected the
plea agreement, or never accepted it in the first place, then the only grounds for
error would be the dismissal of Count 1, which matter the government
conspicuously fails to appeal. Because the government nowhere explains how the
record supports a conclusion of acceptance only , I must respectfully dissent.
As a matter of logic, and consonant with Fed. R. Crim. P. 11(e)(2), the
district court must either have accepted the plea agreement or refused to do so. If
the plea agreement was never accepted, then the government fails to assert
correctable error on appeal. In the absence of a plea agreement, Biggs’s thirty-
month sentence is not erroneous—or, at least, not for any reason stated by the
government. In such circumstances, it might of course have been error for the
district court to dismiss Count 1. But the government fails to appeal that
dismissal; instead, it only appeals Biggs’s sentence.
The government is therefore obliged to argue that the plea agreement was
instead accepted. But the government must actually do more than that.
Specifically, it has to persuade us that the agreement was accepted but not
subsequently rejected by the district court. If the plea agreement was rejected
after its acceptance, the government is again blocked by its failure to appeal the
dismissal of Count 1.
I simply do not see that the record sustains the government’s position.
According to the government, the district court accepted the plea agreement
despite its complete failure to follow the formal requirements of Fed. R. Crim. P.
11(e)(3), namely that the district court “inform the defendant that it will embody
in the judgment and sentence the disposition provided for in the plea agreement.”
But if the government would have us adopt such a finding, it is incumbent upon
them to explain why or how the district court’s refusal to hold Biggs to the agreed
sentence and its statement that it was “going to permit Mr. Biggs to withdraw his
sentencing agreement,” III Tr. at 15, does not also amount to rejection of the plea
agreement. The government never even attempts to explain why the district court
need not formally follow Rule 11(e)(3) to accept a plea agreement, but it must
follow Rule 11(e)(4) to the letter in order to reject one.
Instead, the government attempts to argue that the dismissal of Count 1 was
“pursuant to the plea agreement,” Appellant’s App. at 7, which must therefore
have been in force. That argument fails, not least because dismissal of Count 1
-2-
could only be pursuant to the plea agreement had the government moved for such
dismissal, see Plea Agreement at 4, and the government concedes it never made
such a motion. The closely related argument that the district court only enforced
the plea agreement against the government, but not against Biggs, is similarly
flawed. The government nowhere explains how it was “held” to the plea
agreement. See Appellant’s App. at 13. Indeed, it is hard to see how it could.
The district court never forced—nor even requested—the government to file a
motion to dismiss Count 1. And, as noted, the government never moved to
dismiss that count as required under the plea agreement. The district court simply
dismissed Count 1.
In short, the record can only support two possible conclusions about the
acceptance and rejection of the plea agreement: the agreement was either not
accepted, or, if was accepted, it was subsequently rejected. Under either of these
scenarios, Biggs’s sentence is not in error. It is certainly possible—even, to my
mind, highly probable—that the dismissal of Count 1 was erroneous. But the
government has failed to appeal that dismissal. Because I believe the majority
fails to accord that failure appropriate significance, I would affirm the judgment of
the court below.
-3-
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[Cite as State v. Eberhart, 2014-Ohio-3259.]
IN THE COURT OF APPEALS OF OHIO
SECOND APPELLATE DISTRICT
MONTGOMERY COUNTY
STATE OF OHIO : Appellate Case Nos. 26045
: Appellate Case Nos. 26046
Plaintiff-Appellee :
: Trial Court Nos. 13-TRD-4313
v. : Trial Court Nos. 13-TRD-3776
:
JASON A. EBERHART : (Criminal Appeal from
: Miamisburg Municipal Court)
Defendant-Appellant :
:
...........
OPINION
Rendered on the 25th day of July, 2014.
...........
CHRISTINE L. BURK, Atty. Reg. #0050559, 10 North First Street, Miamisburg, Ohio 45342
Attorney for Plaintiff-Appellee
JASON A. EBERHART, 9477 Eastbrook Drive, Miamisburg, Ohio 45342
Defendant-Appellant, pro se
.............
HALL, J.
{¶ 1} Jason A. Eberhart appeals pro se from his conviction and sentence in two related
cases for failing to display a license plate on his car, both misdemeanor violations of R.C.
4503.21.
{¶ 2} In his sole assignment of error, Eberhart challenges the trial court’s personal
jurisdiction over him.
{¶ 3} The record reflects that police twice observed Eberhart driving on a public road
without a license plate on his car. One incident occurred in Miamisburg. The other occurred in
Miami Township. On each occasion, a police officer stopped Eberhart and issued him a traffic
citation. Each citation charged a violation of R.C. 4503.21. Each citation also bore the signature
of the issuing officer, summoned Eberhart to appear in Miamisburg Municipal Court, and stated
that the issuing officer personally had served it on Eberhart.
{¶ 4} At his arraignment, Eberhart refused to enter a plea and challenged the trial
court’s personal jurisdiction. The trial court found that it had jurisdiction and entered a not-guilty
plea on his behalf. Eberhart subsequently filed a motion in which he again contested the trial
court’s jurisdiction over him. Therein, he identified himself as a “common-law citizen” and
claimed, among other things, that he was domiciled in Ohio but was not a resident of this state.
The trial court overruled the motion, concluding that it possessed both personal and
subject-matter jurisdiction. The issue of jurisdiction arose again at Eberhart’s December 2, 2013
bench trial on the two charges. At that time, Eberhart made clear he was not contesting territorial
or subject-matter jurisdiction. Rather, he was challenging only the trial court’s personal
jurisdiction. The trial court rejected his argument, and the case proceeded. Based on the
testimony of the officers who had issued the citations, the trial court found him guilty on both
charges of failing to display a license plate. The trial court sentenced Eberhart accordingly, and
he timely appealed.
{¶ 5} Eberhart’s assignment of error states: “The Trial Court erred in finding the
appellant guilty because the Trial Court incorrectly proceeded as an administrative hearing. There
was no evidence to conclude that there was a civil breach, there was no corpus delicti, and
3
therefore no crime had been committed, it was solely an administrative proceeding where the
judge was acting outside of a judicial capacity.”
{¶ 6} Despite the foregoing language, the body of Eberhart’s appellate brief plainly
challenges the trial court’s personal jurisdiction. He contends the trial court “failed to
acknowledge” his jurisdictional argument and failed to require proof of personal jurisdiction. We
are unpersuaded. The record reflects that Eberhart resided in the Miamisburg area. He committed
one offense in Miamisburg and the other in Miami Township. More importantly for present
purposes, the officers who observed him driving without a license plate both personally served
him with a complaint and summons in the form of a uniform traffic ticket. See Traf.R. 3(A) (“In
traffic cases, the complaint and summons shall be the ‘Ohio Uniform Traffic Ticket[.]’”). Service
of these tickets on Eberhart gave the Miamisburg Municipal Court personal jurisdiction over him.
See, e.g., Maryhew v. Yova, 11 Ohio St.3d 154, 156, 464 N.E.2d 538 (1984) (recognizing that
personal jurisdiction may be acquired by service of process on a defendant); State v. Gunnell,
10th Dist. Franklin No. 13AP-90, 2013-Ohio-3928, ¶ 10 (observing that service of a complaint
and summons in the form of a traffic ticket gives a municipal court personal jurisdiction);
Cleveland v. Kutash, 8th Dist. Cuyahoga No. 99509, 2013-Ohio-5124, ¶ 11 (“Personal
jurisdiction goes to the court’s authority to render judgment against a party to an action. In
contrast to subject-matter jurisdiction, which is conferred by statute, the court * * * acquires
personal jurisdiction over the defendant when * * * service of process is completed over the
defendant[.]”); State v. Zipfel, 6th Dist. Wood No. WD-89-45, 1990 WL 71574 (June 1, 1990)
(“Appellant was charged with violations of both state and municipal laws and properly served
with notice of these offenses by the issuance of traffic citations (summons). * * * Therefore, the
4
municipal court had personal jurisdiction over the person of the appellant.”).
{¶ 7} Eberhart’s assignment of error is overruled. The judgment of the Miamisburg
Municipal Court is affirmed.
.............
FROELICH, P.J., and DONOVAN, J., concur.
Copies mailed to:
Christine L. Burk
Jason A. Eberhart
Hon. Robert W. Rettich, III
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Opinions of the United
2005 Decisions States Court of Appeals
for the Third Circuit
12-20-2005
Kirk v. Roan
Precedential or Non-Precedential: Non-Precedential
Docket No. 05-4436
Follow this and additional works at: http://digitalcommons.law.villanova.edu/thirdcircuit_2005
Recommended Citation
"Kirk v. Roan" (2005). 2005 Decisions. Paper 75.
http://digitalcommons.law.villanova.edu/thirdcircuit_2005/75
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CPS-69 NOT PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
NO. 05-4436
________________________________
NELSON KIRK,
Appellant
v.
SGT. KENNETH ROAN; MR. KERSTETTER, Unit Manager;
MR. J. RACKOVAN, Grievance Coordinator;
MAJOR FRANK TENNIS, Superintendent; MAJOR SNEDEKER;
ROBERT MYERS; GRIEVANCE REVIEW OFFICER TSHANNA KYLER;
H. CLIFFORD O’HARA, Department of Corrections Office of Professional
Responsibility
_____________________________________
On Appeal From the United States District Court
For the Middle District of Pennsylvania
(D.C. Civ. No. 04-cv-01990)
District Judge: Sylvia H. Rambo
_______________________________________
Submitted For Possible Dismissal Under 28 U.S.C. § 1915(e)(2)(B) or Summary Action
Under Third Circuit LAR 27.4 and I.O.P. 10.6
December 8, 2005
BEFORE: BARRY, SMITH and NYGAARD, CIRCUIT JUDGES
(Filed: December 20, 2005)
____________________
OPINION
_______________________
PER CURIAM
In September 2004, Nelson Kirk, a state prisoner proceeding pro se, filed the
underlying complaint in the United States District Court for the Middle District of
Pennsylvania alleging violations of his First, Eighth, and Fourteenth Amendment rights.
Specifically, Kirk alleged that: defendant Roan subjected him to a pattern of unwanted
sexual comments and threats; the defendants transferred him to a smoking unit in
retaliation for filing a prison grievance; and Pennsylvania’s three-level administrative
review process is unconstitutional because “it create[s] a maze of steps to safeguard state
officials from liability, while subjecting inmates to retaliat[ion].” Kirk alleged in his
complaint that he filed inmate grievance # 24096 in 2002 complaining about Roan’s
alleged harassment.
The defendants filed a motion to dismiss Kirk’s complaint for failure to state a
claim pursuant to Federal Rule of Civil Procedure 12(b)(6). In their 12(b)(6) motion, the
defendants alleged that Kirk failed to properly exhaust his administrative remedies with
respect to inmate grievance # 24096 because he never submitted the documentation
necessary for final review by the Secretary’s Office of Inmate Grievances and Appeals.
Kirk filed a response to the defendants’ motion in which he asserted that on August 26,
2002, he mailed the appropriate documentation for final review to Grievance Review
Officer Tshanna Kyler, thereby exhausting his administrative remedies. On September 1,
2005, without considering the allegations in Kirk’s response, the District Court granted
2
the defendants’ motion and dismissed Kirk’s complaint for failure to exhaust. This timely
appeal followed.
We have jurisdiction pursuant to 28 U.S.C. § 1291. We exercise plenary review of
the District Court’s dismissal of Kirk’s complaint pursuant to Fed. R. Civ. P. 12(b)(6).
Spruill v. Gillis, 372 F.3d 218, 226 (3d Cir. 2004). Because we are reviewing the grant of
a motion to dismiss, we accept as true the factual allegations in the complaint and view
them in the light most favorable to Kirk. Doug Grant Inc. v. Greate Bay Casino Corp.,
232 F.3d 173, 183 (3d Cir. 2000).
The Prison Litigation Reform Act of 1995 (“PLRA”) prohibits an inmate from
bringing a civil rights suit alleging specific acts of unconstitutional conduct by prison
officials until the inmate has exhausted available administrative remedies. 42 U.S.C.
§ 1997e(a). The exhaustion requirement of the PLRA applies to grievance procedures
“regardless of the relief offered by the administrative procedures.” Booth v. Churner, 523
U.S. 731, 741 (2001); see also Nyhuis v. Reno, 204 F.3d 65, 78 (3d Cir. 2000). To satisfy
this requirement, a prisoner must properly exhaust all available administrative remedies
prior to filing suit. Spruill, 372 F.3d at 228, 231. Failure of a prisoner to exhaust
administrative remedies is an affirmative defense that must be pled and proven by the
defendants. Ray v. Kertes, 285 F.3d 287, 295 (3d Cir. 2002) (holding that failure to
exhaust is an affirmative defense and finding that the District Court erred in imposing an
improperly heightened pleading standard that required the prisoner not only to plead, but
3
also to prove, exhaustion in the complaint); see also Mitchell v. Horn, 318 F.3d 523, 529
(3d Cir. 2003).
The defendants alleged in the District Court that Kirk failed to exhaust inmate
grievance # 24096 because he failed to include with his appeal to the Secretary’s Office
of Inmate Grievances the documents required for “a proper appeal to final review.” DC-
ADM 804, Part VI.D.1.h. In support of their motion to dismiss, the defendants submitted
the declaration of Tshanna Kyler, the Grievance Review Officer in the Secretary’s Office
of Inmate Grievances and Appeals. In her declaration, Kyler stated that “Kirk attempted
to appeal grievance no. 24096 without submitting to our office the documentation
required by DC-ADM 804.” Kyler further stated that by letter dated August 20, 2002, she
notified Kirk that his appeal was incomplete and granted him ten working days to comply
with the procedural requirements for pursuing his appeal. According to Kyler, “Kirk
failed to submit the required documentation in a timely manner.”
Kirk, however, has contested the information contained in Kyler’s declaration.
Specifically, Kirk alleged in the District Court that on August 26, 2002, he mailed the
additional documentation necessary for final review to the Secretary’s Office of Inmate
Grievances and Appeals. Kirk supported this contention by submitting to the District
Court a photocopy of a mail receipt indicating that on August 26, 2002, he sent mail to
the Department of Corrections. Neither the defendants nor the District Court addressed
Kirk’s specific allegations regarding exhaustion of this particular grievance.
4
Because this is an appeal from an order granting a motion to dismiss, we view the
facts in the light most favorable to Kirk. Doug Grant, 232 F.3d at 183. On this record,
we conclude that there is insufficient evidence to find that Kirk failed to exhaust his
administrative remedies with respect to inmate grievance # 24096.1 See Ray, 285 F.3d at
297 (explaining that “[w]ithout further inquiry, the District Court was not in a position to
reach the conclusion that Ray failed to exhaust his administrative remedies”).
Accordingly, because the defendants did not meet their burden of proving the affirmative
defense of failure to exhaust, the District Court erred in granting their motion to dismiss.
For the foregoing reasons, we will summarily vacate the order of the District Court
entered September 1, 2005, and remand for further proceedings consistent with this
opinion. See 3rd Cir. LAR 27.4 and I.O.P. 10.6.
1
It is undisputed that Kirk did not file inmate grievances as to the remaining
allegations in his complaint. Because any attempt by Kirk to now exhaust these claims
would be untimely, the claims are procedurally defaulted. See Spruill, 372 F.3d at 230
(holding that the PLRA’s exhaustion requirement contains a procedural default
component).
5
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173 Ga. App. 494 (1985)
326 S.E.2d 849
BOSTIC
v.
THE STATE.
69429.
Court of Appeals of Georgia.
Decided February 15, 1985.
Richard T. Taylor, Samuel A. Hilbun, Karl M. Rice, for appellant.
Beverly B. Hayes, District Attorney, William T. McBroom, Assistant District Attorney, for appellee.
McMURRAY, Presiding Judge.
Defendant was convicted of selling cocaine in violation of the Georgia Controlled Substances Act. He appeals, setting forth four enumerations of error. Held:
1. Defendant contends the trial court erred in overruling his general and special demurrers to the indictment. The indictment charged and accused defendant "with the offense of VIOLATION OF THE GEORGIA CONTROLLED SUBSTANCES ACT (SALE OF COCAINE) for that the said [defendant] in the County [Laurens] and State aforesaid, on the 24th day of September, in the Year of Our Lord Nineteen Hundred and Eighty Three, did unlawfully SELL A CONTROLLED SUBSTANCE, TO WIT: COCAINE, IN VIOLATION OF THE GEORGIA CONTROLLED SUBSTANCES ACT, Contrary to the laws of said State, the good order, peace, and dignity thereof."
It is defendant's contention that the indictment is insufficient because it fails to allege the time of the sale, the amount of cocaine sold, or to whom the sale was made. In testing the sufficiency of an indictment, it must be borne in mind that the indictment need not quote literally the exact language of the statute which the defendant allegedly violated. Farrar v. State, 187 Ga. 401 (2) (200 SE 803). Nor is it necessary that the indictment specify the crime allegedly committed by name or Code section. Allen v. State, 120 Ga. App. 533, 534 (2) (171 SE2d 380); Curtis v. State, 80 Ga. App. 244, 246 (55 SE2d 758). With regard to the particulars of the offense, the indictment need not state the time of day the offense was committed. Miller v. State, 224 Ga. 627, 630 (3) (163 SE2d 730). And, where the indictment alleges an illegal sale, it is not necessary that it allege to whom the sale was *495 made, the amount sold or the price received. Herrin v. State, 138 Ga. App. 729 (1) (227 SE2d 498), disapproved on other grounds, Patterson v. State, 238 Ga. 204, 207 (232 SE2d 233). See Stinnett v. State, 132 Ga. App. 261 (208 SE2d 16). See also Faircloth v. State, 69 Ga. App. 441, 444 (26 SE2d 118); Bell v. State, 14 Ga. App. 425 (1) (81 SE 253).
"[T]he true test of the sufficiency of the indictment is not `whether it could have been made more definite and certain, but whether it contains the elements of the offense intended to be charged, "and sufficiently apprises the defendant of what he must be prepared to meet, and, in case any other proceedings are taken against him for a similar offense, whether the record shows with accuracy to what extent he may plead a former acquittal or conviction."' Walker v. State, 146 Ga. App. 237, 241 (246 SE2d 206) and cits." State v. Black, 149 Ga. App. 389, 390 (2) (254 SE2d 506). We think the indictment sub judice alleged an offense which was easily understood by the jury and enabled the defendant to plead a former acquital or conviction. Herrin v. State, 138 Ga. App. 729 (1), supra. See Fletcher v. State, 157 Ga. App. 707 (2) (278 SE2d 444). Moreover, in view of defendant's alibi defense, it does not appear that the failure to allege the time of sale, to whom the sale was made or the amount sold, materially affected defendant's ability to prepare his defense. See State v. Eubanks, 239 Ga. 483 (238 SE2d 38); Massengale v. State, 164 Ga. App. 57, 58 (1) (296 SE2d 371). The trial court did not err in overruling defendant's demurrers. The first enumeration of error is without merit.
2. In his second enumeration of error, defendant contends the trial court erred in allowing the State's forensic chemist to testify that the substance which defendant allegedly sold was cocaine. In this regard, defendant argues the trial court failed to determine whether the tests employed by the chemist reached a scientific state of verifiable certainty or rested upon the laws of nature. See Harper v. State, 249 Ga. 519, 523 (1) (292 SE2d 389).
"It is for the trial court to determine whether a given scientific principle or technique is competent evidence. Harper v. State, 249 Ga. 519 (1) (292 SE2d 389) (1982)." Williams v. State, 251 Ga. 749, 750 (1) (312 SE2d 40). See also Smith v. State, 250 Ga. 438, 440 (4) (298 SE2d 482). "The trial court may make this determination from evidence presented to it at trial by the parties; in this regard expert testimony may be of value. Or the trial court may base its determination on exhibits, treatises or the rationale of cases in other jurisdictions . . . . Once a procedure has been recognized in a substantial number of courts, a trial judge may judicially notice, without receiving evidence, that the procedure has been established with verifiable certainty, or that it rests upon the laws of nature." Harper v. State, *496 249 Ga. 519, 525, supra.
In the case sub judice, the forensic chemist testified he used four screening tests to determine the nature of the drug allegedly sold by defendant: Scott's test, the Marquis test, the Mecke test and the Dilly companion test. The chemist averred further that he employed other standard procedures to identify positively the substance: ultraviolet spectrophotometry, thin layer chromatography, gas chromatography and infrared spectrophotometry. In describing his laboratory approach, the chemist made it clear that the tests are scientifically reliable. In reading 3 Criminal Defense Techniques, § 57.05 [2] (Matthew Bender & Co., 1984), it is reflected that cocaine responds to the Marquis reagent and Mecke's test; and that the drug "can be identified by chromatography and spectrophotometric tests." Accordingly, any failure on the part of the trial court to expressly determine the admissibility of the test results in accordance with Harper v. State, 249 Ga. 519, supra, must be deemed harmless. Defendant's second enumeration of error is without merit.
3. In his third enumeration of error, defendant asserts the trial court erred in refusing to fund the appointment of an independent forensic chemist to analyze the drug which defendant allegedly sold. "The granting or denial of a motion for appointment of an expert witness lies within the sound discretion of the trial court and will not be overturned on appeal unless there has been an abuse of discretion. Holsey v. State, 235 Ga. 270 (3) (219 SE2d 374) (1975). See generally Patterson v. State, 239 Ga. 409 (238 SE2d 2) (1977); Welch v. State, 237 Ga. 665 (8) (229 SE2d 390) (1976)." Dampier v. State, 245 Ga. 427, 431 (4) (265 SE2d 565). In view of defendant's alibi defense, defendant has made no showing of how he was harmed by the court's failure to appoint an independent forensic chemist. See Norley v. State, 170 Ga. App. 249, 252 (4) (316 SE2d 808). No contention was made that the State's expert was biased or incompetent; and defendant was permitted a thorough and sifting cross-examination of the State's expert. We find no error here.
4. During the trial, the district attorney elicited the following testimony from the undercover agent to whom defendant sold the cocaine: "He [defendant] leaned into the car and he said I want to make sure I get a good look at you because I've been put in jail several times before for selling drugs and if you're the police I'm going to kill you." In his final enumeration of error, defendant asserts the trial court erred in failing to exclude this evidence because it impermissibly placed his character in issue. We disagree. The statement was properly admitted as part of the res gestae. Bradley v. State, 154 Ga. App. 333 (268 SE2d 388). Moreover, there was a sufficient similarity between the independent crimes (selling drugs) and the offense charged. Kraus v. State, 169 Ga. App. 54, 55 (1) (311 SE2d 493); *497 Thomas v. State, 156 Ga. App. 286 (274 SE2d 684). Compare Walraven v. State, 250 Ga. 401, 408 (297 SE2d 278). The remaining enumeration of error is not meritorious.
Judgment affirmed. Banke, C. J., Birdsong, P. J., Pope and Benham, JJ., concur. Sognier and Beasley, JJ., concur in the judgment only. Deen, P. J., dissents. Carley, J., concurs in the judgment of the dissent only.
DEEN, Presiding Judge, dissenting.
The majority opinion seems to take judicial notice of the fact that cocaine responds to the Marquis reagent and Mecke's test and that it can be identified by chromatography and spectrophotometric tests.
While this court can and has taken judicial notice of scientific knowledge of which the trial judge did not first notice, Cornett v. Agee, 143 Ga. App. 55, 56 (237 SE2d 522) (1977), the knowledge in this cited case, however, was of the two best known laws of physics, the law of entropy and conservation (2nd and 1st laws of thermodynamics). This type scientific knowledge is of the highest quality of exact science which no one questions and meets the rigid verifiable certainty and laws of nature requirements of Harper v. State, 249 Ga. 519 (292 SE2d 389) (1982). The Marquis reagent, Mecke, chromatography and spectrophotometric tests, in our opinion, have not attained the verifiable certainty status allowing us to judicially notice it as a matter of fact or law.
We must reverse this case for retrial so that the trial court can initially determine the admissibility of the particular tests under the verifiable certainty requirements of Harper, supra. The trial court has the initial responsibility to pass on these questions. Then this court may subsequently determine whether or not the trial judge abused his discretion as to the admissibility issues.
I must respectfully dissent. I am authorized to state that Judge Carley concurs in the judgment of this dissent only.
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735 F.Supp. 974 (1990)
Terrence L. WETMORE, Plaintiff,
v.
Booth GARDNER, et al., Defendants.
No. C-86-168-JLQ.
United States District Court, E.D. Washington.
April 6, 1990.
*975 Terrence L. Wetmore, Walla Walla, Wash., pro se.
Leo J. Driscoll, Winston & Cashatt, Spokane, Wash., for plaintiff.
John Scott Blonien, Linda A. Dalton, Pat L. De Marco, Glenn L. Harvey, Asst. Attys. Gen., Olympia, Wash., for defendants.
*976 QUACKENBUSH, District Judge.
Before the Court is the defendants' Motion for Judgment Notwithstanding the Verdict or in the Alternative Motion for New Trial (Ct.Rec. 63), heard with oral argument on December 26, 1989. John Scott Blonien appeared on behalf of the defendants. Leo J. Driscoll entered an appearance on behalf of the plaintiff. Having reviewed the record, heard from counsel, and being fully advised in this matter, IT IS HEREBY ORDERED that the defendants' motion is DENIED.
BACKGROUND
This case is one of more than 100 filed in this district by prisoners at the Washington State Penitentiary who were subjected to digital rectal cavity probe searches. The general background of these cases is set forth in Tribble v. Gardner, 860 F.2d 321 (9th Cir.1988). However, some additional factual information was presented during the trial of this and other cases.
In 1984, the State of Washington completed construction of an Intensive Management Unit ("IMU") at the Washington State Penitentiary ("WSP") at Walla Walla, Washington. The IMU contains some 96 single-bed cells. Prisoners are housed at the IMU for a number of reasons, including the protection of the inmate(s) himself.
Prior to the opening of the IMU, the defendants instituted a Department of Corrections regulation, see WAC 137-32-005, which gave the Superintendent (Warden) complete discretion to order a prisoner transferred to the IMU if, in the judgment of the Superintendent, the presence of an inmate in general population would constitute a serious threat to the inmate himself, another inmate, or "the orderly operation of the institution."
In 1984, the defendants also instituted the policy at issue in these cases, that being that every inmate transferred to the IMU would be subjected to an involuntary digital rectal cavity probe search, without any showing of any suspicion or cause to believe that the inmate might be smuggling any contraband whatsoever. Once it was determined that a prisoner was to be taken to the IMU, the search and escort squad, composed of at least five prison guards, was assembled for the purpose of chaining the prisoner, taking him to the digital rectal probe area of the main institution and requiring him to submit to an involuntary search of his anal cavity by a nurse or physician's assistant.
In each instance, the search and escort squad, prior to taking the prisoner to the area of the digital rectal probe, required him to discard his regular denim prison garb and dress in orange coveralls. They then secured him in leg irons, placed another chain around the prisoner's waist, and cuffed his hands behind him. Testimony in the great majority of these cases, including this one, was that the prisoners were taunted by the search and escort officers with such statements as: "Today, you meet Mr. Big Finger...." The large number of guards assigned to transport each chained prisoner to the rectal probe is evidence of the distaste the prisoners held for this procedure, but also gives some credence to the claims of taunts.
The escorted prisoner was taken by the search and escort squad through the general population areas to an examining room, where the digital probe was performed. When the prisoner was dressed in orange coveralls, it was obvious to everyone that he was being escorted for the purpose of having a digital rectal probe conducted. After the prisoner arrived at the examining room, the orange coveralls were forcibly pulled down to his knees and the prisoner, while still chained, was forced to lie on or across an examining table with his anus exposed. A nurse or physician's assistant then came into the room, placed a rubber examining glove on his hand, and proceeded to probe the prisoner's anal cavity in search of alleged contraband.
As indicated, this digital rectal probe of the prisoner's anal cavity took place while the prisoner was still chained, and in the presence of the entire search and escort squad. At times, a member of this squad would video-tape the digital rectal probe search. The evidence indicated that even *977 though hundreds of such searches were performed, no contraband was ever found in any of the prisoners' anal cavities.
Terrence L. Wetmore, an inmate incarcerated at the WSP, brought this civil rights action alleging that he was deprived of his fourth and eighth amendment rights when he was subjected to a digital rectal probe search on January 17, 1986, prior to his placement in the prison's IMU.
On October 30, 1989, after a jury trial in which Mr. Wetmore appeared pro se, the jury returned a verdict for the plaintiff and against four of the five defendants, awarding the plaintiff nominal damages of $1.00. The four defendants found to be liable were administrative personnel who were instrumental in the implementation of the digital probe search policy. The fifth defendant, Robert Zabor, the registered nurse who performed the search on the plaintiff, received a verdict in his favor.
The defendants now move for judgment notwithstanding the verdict or, in the alternative, for a new trial. The focal point of their attack is on certain jury instructions that either were given over the defendants' objection or were requested by the defendants and ultimately rejected. Defendants maintain that the effect of the challenged instructions was to shift the burden away from the plaintiff and, thus, force them to prove that their conduct did not violate the plaintiff's constitutional rights. The defendants also challenge various evidentiary rulings.
Discussion
The defendants base their motion on Rules 50(b)[1] and 59[2] of the Federal Rules of Civil Procedure. The two rules serve distinct functions and are governed by different standards. "The function of the directed verdict and the judgment n.o.v. is to order a final verdict for the moving party, whereas the function of the new trial is to order a redetermination of the issues before a new jury." Urti v. Transport Commercial Corp., 479 F.2d 766, 768 (5th Cir. 1973).
The authority to grant a new trial is "confided almost entirely to the exercise of discretion on the part of the trial court." Allied Chem. Corp. v. Daiflon, Inc., 449 U.S. 33, 36, 101 S.Ct. 188, 191, 66 L.Ed.2d 193 (1980). This discretionary power is useful in correcting prejudicial errors at trial and, under certain circumstances, may be used to remedy the harsh consequences of erroneous evidentiary rulings, see Chalmers v. City of Los Angeles, 762 F.2d 753, 761 (9th Cir.1985); Alma v. Manufacturers Hanover Trust Co., 684 F.2d 622, 625 (9th Cir.1982), improper jury instructions; see Rinker v. County of Napa, 831 F.2d 829, 832 (9th Cir.1987); and verdicts that are against the clear weight of the evidence, see Landes Constr. Co. v. Royal Bank of Canada, 833 F.2d 1365, 1371 (9th Cir.1987).
In contrast, the trial court's discretion when ruling on a motion for judgment notwithstanding the verdict is quite limited. "JNOV is appropriate only when the evidence, viewed in the light most favorable to the non-moving party, could not reasonably support the verdict." Dean v. Trans World Airlines, Inc., 893 F.2d 1123, 1226 (9th Cir.1990). In reviewing the motion, the court is not permitted to weigh the evidence or the credibility of the witnesses, *978 and may not reach a contrary result simply because it is thought to be more reasonable. Rinker, 831 F.2d at 831.
A. Burden of Proof
The defendants assign error to the court's Instruction No. 7. That instruction states:
You are instructed that on January 17, 1986, the date of the digital rectal probe performed on Mr. Wetmore, the law was clearly established that a prisoner could not be subjected to a digital rectal probe unless it was based upon a legitimate penological purpose.
You are instructed that the plaintiff is entitled to recover from the defendants unless the defendants establish by a preponderance of the evidence their affirmative defense that the digital rectal probe of Mr. Wetmore was performed for a legitimate penological purpose, that being the prevention of the smuggling of contraband into the I.M.U. building. The burden is upon the defendant(s) to establish this affirmative defense by a preponderance of the evidence.
Ct.Rec. 52, No. 7. The defendants' concerns are two-fold. First, they maintain that the instruction impermissibly shifts the burden of proof to the defendants without any initial showing on the plaintiff's part that he was deprived a right of constitutional magnitude. Secondly, they contend that the instruction is formulated in such a way that the jury must apply a heightened standard of scrutiny something more substantial than a "reasonable relationship" test. The court disagrees.
In Tribble v. Gardner, 860 F.2d 321 (9th Cir.1988), the Ninth Circuit recognized that if the digital rectal probes were conducted for purposes unrelated to security considerations, such procedures would violate the fourth amendment as a matter of law. Id. at 325 n. 6. The court acknowledged that the rectal probes burden fundamental rights. The Tribble court stated: "As noted above, when a prison regulation burdens fundamental rights the government must show that the regulation is reasonably related to a legitimate penological goal." Id. (emphasis supplied).
The defendants correctly note that prison administrators are accorded wide-ranging deference in the adoption and execution of policies that are thought necessary to preserve institutional order. See Bell v. Wolfish, 441 U.S. 520, 547, 99 S.Ct. 1861, 1878, 60 L.Ed.2d 447 (1979). Equally as correct, however, is the principle that "convicted prisoners do not forfeit all constitutional protections by reason of their conviction and confinement in prison." Id. at 545, 99 S.Ct. at 1877; see Michenfelder v. Sumner, 860 F.2d 328, 331 (9th Cir.1988). Inmates retain all constitutional rights that are not inconsistent with their status as prisoners or "`with the legitimate penological objectives of the corrections system.'" Turner v. Safley, 482 U.S. 78, 95, 107 S.Ct. 2254, 2265, 96 L.Ed.2d 64 (1986) (quoting Pell v. Procunier, 417 U.S. 817, 822, 94 S.Ct. 2800, 2804, 41 L.Ed.2d 495 (1974)). Thus, "when a prison regulation impinges on inmates' constitutional rights, the regulation is valid if it is reasonably related to legitimate penological interests." Id. 482 U.S. at 89, 107 S.Ct. at 2265. This suggests an initial inquiry, even before reaching the "reasonably related" issue, whether the particular conduct would impinge on an inmate's constitutional rights if it were wholely unrelated to a legitimate penological interest. If that question is answered in the affirmative, then the subsequent showing of reasonableness must be made to save the policy.
In the present case, the regulation at issue is a blanket requirement that all prisoners transferred to IMU be rectally probed, without any cause predicate. In considering this very policy, the Ninth Circuit has held that the digital rectal probe procedure, if performed without probable cause and for purposes unrelated to security considerations, would violate the inmate's fourth and eighth amendment rights. Tribble, 860 F.2d at 325 & n. 6; see United States v. Lilly, 576 F.2d 1240, 1246 (5th Cir.1978); Sostre v. Preiser, 519 F.2d 763, 764 (2nd Cir.1975). The reasons are quite obvious; such searches are highly intrusive and humiliating. The Supreme *979 Court in Bell, when considering a visual body-cavity search, stated: "Admittedly, this practice instinctively gives us the most pause." Bell, 441 U.S. at 558, 99 S.Ct. at 1884; see also Kennedy v. Los Angeles Police Dept., 887 F.2d 920, 928-28 (9th Cir.1989) ("The intrusiveness of a body-cavity search cannot be overstated. Strip searches involving the visual exploration of body cavities are dehumanizing and humiliating."). Here, we have more than a visual search of body cavity areas. The search in this case involved the probing of the anal cavity, without any cause to believe or even suspect the secreting of contraband. This invasive procedure took place while Mr. Wetmore was chained at the legs, waist, and hands, and while the members of the "escort" squad were present and observing.
The law is clear that, absent justification, a digital rectal probe deprives an inmate of his constitutional rights. The only real inquiry in this case, therefore, was whether the policy could be saved from constitutional infirmity by reason of legitimate penological objectives. The collateral question, one which is dispositive for purposes of the present motion, is which side of the courtroom has the burden of persuasion on the issue of justification. The court finds that Instruction No. 7 properly placed the burden on the defendants to justify the existence of the digital probe policy and the anal cavity searches performed pursuant to that policy.
The Tribble court stated that it is the government's burden to show that the regulation and search was reasonably related to a legitimate penological need. Tribble, 860 F.2d at 324, 325 n. 6. Stating that were it faced with the issue of the constitutionality of anal searches it would have reached the same result, the Ninth Circuit cited the Fifth Circuit's decision in United States v. Lilly, 576 F.2d 1240 (5th Cir. 1978). Similarly, this court finds the Lilly decision to be, in most respects, sound and persuasive.
At issue in Lilly was whether the government should bear the burden of establishing the reasonableness of a digital rectal probe search. The court first noted that, historically, "whenever the government has invaded an individual's privacy, the government has been required to justify its invasion by proving that it was reasonable under all the facts and circumstances." Lilly, 576 F.2d at 1245. Indeed, in analogous, noninstitutional situations in which neither a warrant nor probable cause are necessary to conduct a search and seizure, the government must justify its conduct. See e.g., United States v. George, 883 F.2d 1407, 1411 (9th Cir.1989) (showing of exigent circumstances to excuse lack of search warrant); United States v. Delgadillo-Velasquez, 856 F.2d 1292, 1295 (9th Cir.1988) (same). This shift in the burden not only serves to place a check on the actions of governmental agents, Lilly, 576 F.2d at 1245, but also has practical underpinnings the "prison administration is in a better position to prove reasonableness than a prisoner is in to prove unreasonableness." Id. (citing Cohen v. Norris, 300 F.2d 24, 32 (9th Cir.1962)). Taking all of these factors into consideration, and finding no reason to make an exception when such searches are carried out in the prison context, the Lilly court ultimately held that "the government necessarily must carry this burden [of showing the reasonableness of the digital probe searches]." Id.
This court finds that Instruction No. 7 properly instructed the jury on the relevant law as stated in Tribble and Lilly. The defendants admitted that the digital probe of Mr. Wetmore was not based upon any belief or suspicion that he was secreting contraband in his rectal cavity. Absent a showing of a legitimate penological justification, the digital rectal probe search of Mr. Wetmore was clearly unconstitutional. The burden of establishing a legitimate penological justification was properly placed on the defendants. Thus, the court finds nothing erroneous in the instruction which directed a finding for the plaintiff unless the defendants established a legitimate penological purpose for the search.[3]
*980 Finally, the defendants contend that the wording of Instruction No. 7 requires that they show more than a mere "rational relationship" between the policy and a legitimate penological objective. Apparently, the defendants would require that the court use the term "reasonable relationship" and no other.
The court is satisfied that Instruction No. 7 correctly and adequately stated the pertinent law and did not mislead the jury, as suggested by the defendants. As written, the instruction informed the jury that the policy must be "based upon" a legitimate penological purpose. The court finds nothing fundamentally different between this statement and saying that the policy must be "reasonably related" to a valid need. Indeed, it could be argued that the term "based upon" is in reality an easier standard to meet because it suggests that any relationship at all is sufficient. At the very least, the court cannot say that the failure to use the term "reasonably related" constitutes error warranting a new trial. See Benigni v. City of Hemet, 853 F.2d 1519, 1524 (9th Cir.1988) ("[E]rror in instructing the jury in a civil case does not require reversal if it is more probably than not harmless."). Accordingly, the defendants' motion for judgment notwithstanding the verdict or, in the alternative, a new trial based on Instruction No. 7, is HEREBY DENIED.
B. Sufficiency of the Evidence
The defendants contend that the plaintiff did not present sufficient evidence to satisfy his initial burden of establishing the deprivation of a right of constitutional magnitude. The discussion above, however, is dispositive of that issue. The extreme intrusiveness of the digital rectal probe procedure renders it suspect; the fact that it occurred without any probable cause whatsoever is sufficient to shift the burden to the defendants to establish reasonableness. Tribble supports this ruling. The defendants admitted that the anal probe did occur and that the plaintiff was in restraints at the time. More importantly, however, the defendants conceded that, at the time of the probe search, there was no probable cause or belief that the plaintiff was secreting contraband.
In light of the testimony and admissions, the court finds that the plaintiff's evidence was more than adequate to make out a prima facie case that his constitutional rights were violated, thus shifting the burden to the defendants to show that the search was performed in furtherance of a legitimate penological need. Absent such a showing, it is clear that the plaintiff was denied his fourth and eighth amendment rights. See Tribble, 860 F.2d at 325 n. 6. Accordingly, the defendant's motion for judgment notwithstanding the verdict or, in the alternative, a new trial based on insufficient evidence, is HEREBY DENIED.
C. Alternative Means
Prior to trial, the defendants submitted a proposed jury instruction that read as follows: "Prison administrators need not choose the least restrictive or intrusive means to accomplish a legitimate penological goal. This is but one factor to be considered." Ct.Rec. 46, No. 41 (citing Turner v. Safley, 482 U.S. 78, 107 S.Ct. 2254, 96 L.Ed.2d 64 (1986)). They contend that the court's failure to give this instruction amounted to prejudicial error that mandates judgment notwithstanding the verdict or a new trial. The court disagrees.
The general rule is that "[j]ury instructions, viewed as a whole, should adequately instruct a jury on each element of a case." Ragsdell v. Southern Pacific Transp. Co., 688 F.2d 1281, 1282 (9th Cir.1982); see Kennedy, 887 F.2d at 924; Benigni, 853 F.2d at 1524; Brown v. Link Belt Corp., 565 F.2d 1107, 1110 n. 8 (9th Cir.1977). The trial court has broad discretion in formulating instructions, Benigni, 853 F.2d at 1524, and a failure to give a requested jury instruction is not reversible error so long as the instructions adequately cover the principles involved, Van Cleef v. Airoflex Corp., 657 F.2d 1094, 1098-99 (9th Cir. *981 1981); see also Ragsdell, 688 F.2d at 1282-83 ("Instructions need not be faultless.... If the instructions given allow a jury to determine intelligently the questions presented, a judgment will not be disturbed simply because further amplification was refused.").
The court finds that the instructions given the jury in this case, when viewed as a whole, adequately apprised the jurors as to the relevant law. Indeed, at no time did the court offer an instruction that would have required the jurors to apply a "least restrictive alternative" test. In harmony with the Court's holding in Turner, the jury was left to decide for itself what weight should be given the various alternatives and whether the offered alternatives were sufficiently "obvious" or "easy" to negate a finding of a legitimate penological purpose. See Turner, 482 U.S. at 90-91, 107 S.Ct. at 2262-63.
The defendants point to certain questions propounded to the court during the jury's deliberations as evidence that the jurors were confused on this issue. The note in question stated:
TO: Judge Quackenbush
FROM: Jury
1. What technology/methods existed on Jan. 17, 1986 to accomplish the discovery of contraband secreted in anal cavities
The basic question being if an alternative to digital probes existed outside of W.S.P. would that mean that WSP's use of digital probes was not for legitimate penological purpose....
2. Re: exhibit # 114 item # 5 was a "laxative" a viable option....
Ct.Rec. 54. After consultation with counsel, the court responded as follows:
Your questions address the ultimate issues which you must decide and therefore I cannot respond to the questions.
Ct.Rec. 56.
Here again, the court simply left the question to the judgment of the triers of fact. The questions submitted by the jurors involved matters that were the subject of testimony presented at trial. A substantial amount of evidence was introduced regarding the various methods considered for detecting contraband, including the use of low-level radiation X-rays. At that time, the defendants were given the opportunity to explain why those methods were rejected in favor of the digital probe procedure. Several witnesses testified that they were under the impression that the use of low-level X-rays would violate state statutory and regulatory provisions.
The jury was fully aware of the pros and cons of the various options, and the court's instructions simply left the matter to the jurors' respective memories and judgments. Anything more in response to the jurors' question would have amounted to inappropriate judicial comment on the evidence presented. A reasonable person could not even infer from the instructions that the least intrusive means were required. The jury was told to determine whether the procedure was adopted for a legitimate penological purpose. Because the court finds nothing in the initial or supplemental instructions that conflicts with the Court's holding in Turner, and because the jury was adequately advised as to the relevant law to be applied, the defendants' motion for judgment notwithstanding the verdict or a new trial based on the court's refusal to propound the defendants' jury instruction is HEREBY DENIED.
D. Qualified Immunity
The defendants next contend that they are entitled to a verdict in their favor or a new trial based on the doctrine of qualified immunity. The gravamen of the defendants' argument is that the issue of qualified immunity was bifurcated from the issue of liability at trial and, therefore, was never fully and fairly litigated.
The court finds that, in light of the jury's express findings as to lack of legitimate penological purpose, the defendants are precluded, as a matter of law, from further litigating the qualified immunity issue. To understand the court's ruling, one must first consider what was necessarily decided by the jury in this case.
*982 In determining what was necessarily decided the court should "`examine the record of [the] prior proceeding, taking into account the pleadings, evidence, charge, and other relevant matter.'" Ashe v. Swenson, 397 U.S. 436, 444, 90 S.Ct. 1189, 1194, 25 L.Ed.2d 469 (1970) (citation omitted). "The inquiry `must be set in a practical frame and viewed with an eye to all the circumstances of the proceedings.'" Id. (quoting Sealfon v. United States, 332 U.S. 575, 579, 68 S.Ct. 237, 239, 92 L.Ed. 180 (1948)). Such an exercise ultimately leads this court to conclude that the specific factual findings made by the jury, as borne out by the verdict, necessarily preclude the defendants from raising the qualified immunity defense.
The Ninth Circuit in Tribble held that, at the time Wetmore and Tribble were subjected to the anal probes, the law was clearly established that such a procedure must be reasonably related to legitimate penological needs. Tribble, 860 F.2d at 325. In view of the jury's findings that the defendants' adoption and use of the rectal probes were not for legitimate penological purposes, no reasonable person, under those circumstances, could have believed that the anal probes were proper. Id. at 328.
In the present case, the only logical inference that can be drawn from the jury's verdict is that the digital probe policy was not enacted for a legitimate penological purpose since the instructions made such a finding a condition precedent to recovery by the plaintiff. The bulk of the defendants' case at trial consisted of testimony pertaining to the perceived need and justification for the policy's enactment. Numerous defense witnesses testified as to the alleged problems associated with the smuggling of contraband into the institution, prison conditions that existed prior to the construction of the IMU, and the asserted need to conduct the probe searches as a matter of course, without any belief or suspicion whatsoever that the inmate was secreting contraband in his rectum. Furthermore, the jury instructions forced the jury to concentrate exclusively on the issue whether the search was performed for a legitimate penological purpose. Instruction No. 7 framed this very question by instructing the jury that the plaintiff was entitled to recover unless the defendants established that the probe search was performed in furtherance of such a goal. By their verdict, the jurors rejected the claims of the defendants that they were motivated by legitimate reasons. That answer was in the form of a verdict for the plaintiff.
Of added significance is the fact that the jury ruled in favor of Robert Zabor, the registered nurse who performed the probe search. This finding rules out any possibility that the verdict was based on the jury's belief that the search itself was conducted in an abusive manner. The jury simply rejected the defendants' asserted justification for enacting the policy. Therefore, taking all these factors into consideration the testimony offered at trial, the jury instructions, and the result the only rational interpretation is that the jury found the policy to have been enacted without a legitimate penological purpose.
In terms of qualified immunity, the import of the jury's finding is significant. In Tribble, the Ninth Circuit recognized that the digital rectal search procedure is "highly intrusive and humiliating," id. at 324, a description that this court adopts without hesitation. Indeed, as stated above, the search is so invasive that the burden is on the state to show that it was conducted pursuant to a legitimate penological purpose. Id. at 324-25 & n. 6; Lilly, 576 F.2d at 1246; see also Ruiz v. Estelle, 503 F.Supp. 1265, 1372 n. 207 (S.D.Tex.1980) (burden on state to show that "strip search" was necessitated by a legitimate penological need); accord Turner, 482 U.S. at 89, 107 S.Ct. at 2261 (prison regulation that infringes inmates' constitutional rights must be reasonably related to legitimate penological goal). Moreover, the Tribble court expressly held that this rule that the digital probe search policy must be reasonably related to a legitimate penological need was clearly established law during the relevant period. Tribble, 860 F.2d at 325.
*983 Because it was clearly established law that the policy could be found constitutional only by a showing of legitimate penological need, the policymaker defendants were entitled to qualified immunity only if it was shown that the searches were "reasonably related to a legitimate penological goal, or that the defendants reasonably could have believed that the searches were conducted to further such a purpose." Tribble, 860 F.2d at 328; see Anderson v. Creighton, 483 U.S. 635, 641, 107 S.Ct. 3034, 3039-40, 97 L.Ed.2d 523 (1987); Harlow v. Fitzgerald, 457 U.S. 800, 818, 102 S.Ct. 2727, 2738, 73 L.Ed.2d 396 (1982). The jury's finding that the policy was without a legitimate penological justification is fatal to the defendants' qualified immunity claim.
Obviously, a regulation so adopted, with such invasive results, cannot be "reasonably related" to any valid purpose. Furthermore, because it was found that the policy was enacted by the defendants without a legitimate objective, the court concludes that no rational trier of fact could thereafter find that the defendants reasonably could have believed that the rectal probe policy was implemented to further such a goal. Accord Kennedy, 887 F.2d at 931 (directed verdict is proper if there is only one reasonable conclusion a jury could reach on the issue of qualified immunity). The latter finding would be in direct conflict with, and is therefore precluded by, the former. Thus, the defendants' argument that these precise issues were not submitted to the jury is without merit given that the findings made by that jury preclude the qualified immunity defense. The issue was necessarily decided by the jury after the defendants were given a full and fair opportunity to prove that the policy was justified by a legitimate penological objective. Accordingly, the defendant's motion for judgment notwithstanding the verdict or, in the alternative, for a new trial based on the qualified immunity issue is HEREBY DENIED.
E. Evidentiary Rulings
Finally, the defendants argue that the court erred in excluding from evidence certain photographs and a display board depicting representative samples of contraband recovered from within the confines of the Washington State Penitentiary and that allegedly were capable of being secreted in an inmate's anal cavity. The defendants concede now, as they did at trial, that the offered items were not necessarily found "keistered" in any inmate's rectum. They contend, however, that the mere fact that these items are capable of being keistered, as supported by the testimony of their colon rectal specialist, makes them relevant and admissible.
Rule 403 of the Federal Rules of Evidence provides:
Although relevant, evidence may be excluded if its probative value is substantially outweighed by the danger of unfair prejudice, confusion of the issues, or misleading the jury, or by considerations of undue delay, waste of time or needless presentation of cumulative evidence.
Fed.R.Evid. 403. The weighing of the various factors set out in the rule lies within the sound discretion of the trial court. Cohn v. Papke, 655 F.2d 191, 194 (9th Cir.1981).
After again considering the display board evidence offered by the defendants, the court is of the firm conviction that its limited probative value was substantially outweighed by the danger of unfair prejudice to the plaintiff. The court considers it significant that none of the proffered items was shown to have been removed from an inmate's anal cavity. The fact that such items may be capable of being "keistered," although lending some support to the argument of relevancy, simply does not outweigh the probability that the jury would have been misled and improperly influenced by the defendant's "board of horrors." Moreover, the evidence would have been cumulative. From the testimony of Dr. Medwell, the defendant's colon/rectal expert, the jury was well aware of the varying types and sizes of items that could be concealed in an individual's anal cavity. The demonstrative items only would have served to mislead the jury, with few reciprocal probative benefits. Accordingly, the defendant's motion for a new trial based on *984 alleged improper evidentiary rulings is HEREBY DENIED.
IT IS HEREBY ORDERED:
1. The defendants' Motion for Judgment Notwithstanding the Verdict (Ct.Rec. 63) is HEREBY DENIED.
2. The defendants' Motion for a New Trial (Ct. Rec. 63) is HEREBY DENIED.
IT IS SO ORDERED. The Clerk is hereby directed to enter this Order and furnish copies to counsel.
NOTES
[1] Fed.R.Civ.P. 50(b) provides in part:
"(b) Motion for Judgment Notwithstanding the Verdict. Whenever a motion for a directed verdict made at the close of all the evidence is denied or for any reason is not granted, the court is deemed to have submitted the action to the jury subject to a later determination of the legal questions raised by the motion. Not later than 10 days after entry of judgment, a party who has moved for a directed verdict may move to have the verdict and any judgment entered thereon set aside and to have judgment entered in accordance with the party's motion for a directed verdict.... A motion for a new trial may be joined with this motion, or a new trial may be prayed for in the alternative...."
[2] Fed.R.Civ.P. 59 provides as follows:
"(a) Grounds. A new trial may be granted to all or any of the parties and on all or part of the issues (1) in an action in which there has been a trial by jury, for any of the reasons for which new trials have heretofore been granted in actions at law in the courts of the United States....
"(b) Time for Motion. A motion for a new trial shall be served not later than 10 days after the entry of the judgment."
[3] Mr. Wetmore represented himself in the trial of this matter. The defendants themselves testified as to the penological need for the anal search policy. In addition, the defendants called penological experts to justify the searches.
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609 F.Supp.2d 813 (2009)
ORLANDO RESIDENCE LTD., Plaintiff,
v.
GP CREDIT CO., LLC, et al., Defendants.
GP Credit Co., LLC, Counterclaimant-Third-Party Plaintiff,
v.
Orlando Residence Ltd., Counterclaim Defendant,
Orlando Residence General, et al., Third Party Defendants.
Susan B. Nelson, Plaintiff,
v.
Orlando Residence Ltd., et al., Defendants.
Case Nos. 04-C-439, 07-C-436.
United States District Court, E.D. Wisconsin.
April 23, 2009.
*814 Eugene N. Bulso, Jr., Boult, Cummings, Connors & Berry, PLC, Nashville, TN, for Plaintiff/Third Party Defendants/Counter Defendant.
Gary A. Ahrens, Michael, Best & Friedrich, LLP, Milwaukee, WI, for Defendants/Counter Claimant.
DECISION AND ORDER
RUDOLPH T. RANDA, Chief Judge.
These matters come before the Court on remand from the Seventh Circuit. In a series of orders, this Court dismissed all of the claims and counterclaims in these cases and entered judgment accordingly. On appeal, the Seventh Circuit affirmed in part, reversed in part, and remanded with instructions, holding that "the judgment of the district court is reversed insofar as it rejected Orlando's alter ego claim against GP Credit but in all other respects is affirmed." Orlando Residence, Ltd. v. GP Credit Co., LLC, 553 F.3d 550, 558, 559 *815 (7th Cir.2009). Not surprisingly, the parties do not agree upon the scope and impact of the Seventh Circuit's mandate.
The mandate rule "requires a lower court to adhere to the commands of a higher court on remand." United States v. Polland, 56 F.3d 776, 777 (7th Cir.1995). This rule is a stricter corollary of the "law of the case" doctrine. Id. at 779. When a "court of appeals has reversed a final judgment and remanded the case, the district court is required to comply with the express or implied rulings of the appellate court." Waid v. Merrill Area Public Schools, 130 F.3d 1268, 1272 (7th Cir.1997). The mandate is only controlling "as to matters within its compass." Moore v. Anderson, 222 F.3d 280, 283 (7th Cir.2000) (citing Sprague v. Ticonic Nat'l Bank, 307 U.S. 161, 168, 59 S.Ct. 777, 83 L.Ed. 1184 (1939)). On remand, the district court retains authority to dispose of other issues not addressed. Id. To determine what issues were actually decided by the mandate requires a "careful reading of the reviewing court's opinion." Creek v. Village of Westhaven, 144 F.3d 441, 445 (7th Cir.1998).
Defendants (GP Credit Co., Nashville Lodging Co., Kenneth Nelson and Susan Nelson) argue that the Seventh Circuit's mandate does not require entry of judgment with regard to Orlando's alter ego claim. According to defendants, the Seventh Circuit only rejected the specific reasons this Court gave for dismissing the alter ego claim, so all of the other arguments presented by defendants but not addressed by the Court are fair game on remand. This cannot be correct. If any of defendants' other arguments were meritorious, the Seventh Circuit would have affirmed. By reversing the Court's ruling with respect to Orlando's alter ego claim, the Seventh Circuit impliedly held that there was no basis in the entire record to justify dismissal. The Seventh Circuit did not contemplate reconsideration of the arguments presented on summary judgment. The clear import of the Seventh Circuit's decision is that Orlando's alter ego theory is meritorious.
On the other hand, Orlando argues that the Court should order the sale of GP Credit's property in satisfaction of its judgment immediately. The Seventh Circuit's opinion was strongly worded in many respects with regard to defendants' evasive maneuvers. The key language in the opinion is as follows:
The basis on which Orlando seeks to add GP Credit as a defendant is not that Orlando owns the Metric lawsuit but that GP Credit is the alter ego of Kenneth Nelson . . . so that the property of GP Credit, including therefore the Metric lawsuit, is available for satisfaction of Orlando's judgment against Nelson. . . . [B]y suing GP Credit, [Orlando] is simply trying to collect its judgment against Nelson from Nelson's alter ego. That is entirely proper, and so its claim should not have been dismissed.
Orlando Residence, 553 F.3d at 555. Accordingly, Orlando moves the Court for entry of judgment and to proceed with writs of garnishment and execution against various bank accounts that are personalty located in the Eastern District of Wisconsin. See Fed.R.Civ.P. 69(a). Orlando also moves the Court to direct the U.S. Marshal to sell two parcels of real property and to apply the proceeds of sale to Orlando's judgment. See 28 U.S.C. § 2001(a).
However, as the Seventh Circuit was aware, Orlando is simultaneously pursuing an action in Ozaukee County Circuit Court to collect its judgment against Kenneth Nelson. On November 18, 2008, the circuit court issued an order directing that all of the assets owned by Susan Nelson, Kenneth Nelson, GP Credit, and other Nelson entities are available to apply to this judgment. See Orlando Residence v. Nelson, *816 No. 07-FJ-00001 (Ozaukee County), November 18, 2008 Order (No. 04-C-439, D. 302-2). These are the assets that Orlando now asks this Court to seize in satisfaction of the same judgment.
In a previous order, the Court applied the doctrine of "prior exclusive jurisdiction" to dismiss Susan Nelson's quiet title action in deference to the Ozaukee County action. See Nelson v. Orlando Residence, No. 07-C-436, 2007 WL 4305549 (E.D.Wis.) (D. 27). When the jurisdiction of a state court has first attached, a federal court is precluded from exercising jurisdiction over the same res to defeat or impair the state court's jurisdiction. See Kline v. Burke Construction Co., 260 U.S. 226, 229, 43 S.Ct. 79, 67 L.Ed. 226 (1922). The court "first assuming jurisdiction over the property may maintain and exercise that jurisdiction to the exclusion of the other." Penn General Casualty Co. v. Pennsylvania, 294 U.S. 189, 195, 55 S.Ct. 386, 79 L.Ed. 850 (1935). The purpose of this rule is to "avoid unseemly and disastrous conflicts in the administration of our judicial system, and to protect the judicial processes of the court first assuming jurisdiction." Id.
The Ozaukee County order is currently stayed pending appeal in the Wisconsin Court of Appeals. However, the circuit court's continuing jurisdiction over the relevant assets is without question. Pending the outcome of the appeal, the circuit court directed that the bank accounts would be held in trust by the Nelsons in custodia legis under penalty of contempt. The circuit court also issued a lien lis pendens to Orlando on the parcels of real property. More generally, the circuit court ordered the Nelsons "not to transfer, pledge, encumber, or otherwise alienate any interest" in the real and personal property subject to the order. See No. 04-C-439, D. 302-2, Ozaukee County Order, pp. 5-8. So long as this arrangement exists, the Court cannot allow Orlando to pursue in rem proceedings in execution of its judgment. Compare United States v. One Oil Painting Entitled "Femme en Blanc" by Pablo Picasso, 362 F.Supp.2d 1175, 1183 (C.D.Cal.2005) ("a lien is an alternative manner by which a court may exercise dominion or control over property"); FG Hemisphere Associates, LLC v. Republique du Congo, 455 F.3d 575, 589 (5th Cir.2006) (garnishment is a quasi in rem proceeding by a creditor to reach property of the debtor that is in possession of a third party, the garnishee).
This conclusion does not run afoul of the Seventh Circuit's mandate. The statement that "the property of GP Credit . . . is available for satisfaction of Orlando's judgment against Nelson" is general and cannot be read in derogation of the "prior exclusive jurisdiction" doctrine. In any event, this property is available to satisfy Orlando's judgment against Nelson, just not at this time before this Court. Orlando can return to this Court to execute on its judgment if the circuit court relinquishes its control over the relevant assets. Currently, Orlando's rights are being protected by the Ozaukee County order.
Finally, the Seventh Circuit concluded its opinion by declaring that the "time has come to put an end to the defendants' stubborn efforts to prevent Orlando from obtaining the relief to which it is entitled." Orlando Residence, 553 F.3d at 558. The Seventh Circuit then directed the Court to consider "enjoining the defendants from further maneuvers to evade the judgments that Orlando has obtained against them. The authority for issuing such an injunction (a `bill of peace,' as it is called) is well established." Id. at 559 (citations omitted).
Under the All Writs Act, 28 U.S.C. § 1651(a), district courts retain the "inherent power to enter pre-filing orders against vexatious litigants." Molski v. Evergreen *817 Dynasty Corp., 500 F.3d 1047, 1057 (9th Cir.2007); see also Newby v. Enron Corp., 302 F.3d 295, 301 (5th Cir. 2002) (district courts may enjoin vexatious litigants from filing future state court actions). To determine whether such a prefiling injunction is appropriate, courts examine (1) the history of vexatious, harassing or duplicative lawsuits; (2) the litigant's motive in pursuing the litigation; (3) whether the litigant was represented by counsel; (4) whether the litigant caused needless expense or posed an unnecessary burden on the courts and their personnel; and (5) whether other sanctions would be adequate. See Safir v. U.S. Lines, Inc., 792 F.2d 19, 24 (2d Cir.1986).
The history of defendants' efforts to evade Orlando's collection efforts is well-established. See Orlando Residence, 553 F.3d at 554 (Orlando's "challenge was to collect these judgments"). For example, the Court made note of the "rather transparent motivation . . . to divest the Ozaukee County Circuit Court of its jurisdiction over Susan Nelson's assets" when it dismissed her quiet title action, Case No. 07-C-436. D. 27 at 4. The quiet title action was actually the third in a series of attempts to avoid jurisdiction in Ozaukee County. See Orlando Residence v. Nelson, No. 07-C-138 (E.D.Wis.) (remanding case removed from Ozaukee County) (D. 8); No. 04-C-439, D. 275 (denying motion to amend counterclaim). Defendants' attempts to avoid the satisfaction of Orlando's judgment caused needless expense. Nothing short of an injunction will be an effective deterrent. See Case No. 04-C439, D. 284 at 15 (denying Orlando's motion for Rule 11 sanctions because "an award of sanctions is unlikely to deter either party from pursuing claims in this or any other forum, frivolous or not").
NOW, THEREFORE, BASED ON THE FOREGOING, IT IS HEREBY ORDERED THAT:
1. Orlando's motion for judgment [D. 300] in Case No. 04-C-439 is GRANTED-IN-PART and DENIED-IN-PART, consistent with the foregoing opinion, such that GP Credit Co., LLC is the alter ego of Kenneth E. Nelson, and is liable for Orlando's Judgment (D. 83-10) filed September 25, 2000 against Kenneth E. Nelson in the principal amount of $797,615;
2. GP Credit, Kenneth Nelson and Susan Nelson (the "Enjoined Parties") are ENJOINED from filing any further legal actions or claims against Orlando, Samuel Hardage, or any member of his family, without prior approval of this Court. Before taking any such action, the Enjoined Parties must file a motion for leave captioned in Case No. 04-C-439. The motion for leave to file must include a copy of this Order and a copy of the proposed filing; and
3. The Clerk of Court is directed to enter judgment accordingly. Both of the above-captioned matters should be CLOSED.
SO ORDERED.
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F I L E D
United States Court of Appeals
Tenth Circuit
UNITED STATES COURT OF APPEALS
July 18, 2005
TENTH CIRCUIT
PATRICK FISHER
Clerk
UNITED STATES OF AMERICA,
Plaintiff-Appellee,
No. 05-1026
v. (District of Colorado)
(D.C. No. 02-B-1907)
DAVID L. JACKSON,
Defendant-Appellant.
ORDER
Before BRISCOE, LUCERO, and MURPHY, Circuit Judges.
David L. Jackson, an inmate appearing pro se, seeks to appeal from the
district court’s denial of his 28 U.S.C. § 2255 motion to vacate, set aside, or
correct his sentence. The matter is before this court on Jackson’s request for a
certificate of appealability (“COA”). See 28 U.S.C. § 2253(c)(1)(B) (providing
that no appeal may be taken from a “final order in a proceeding under section
2255” unless the movant first obtains a COA). Because Jackson waived his right
to appellate review by failing to file timely objections to the magistrate judge’s
report and recommendation, 28 U.S.C. § 636(b)(1), this court denies his request
for a COA and dismisses this appeal.
Following a jury trial, Jackson was convicted of seven counts of
kidnapping, in violation of 18 U.S.C. § 1201(a)(5), and one count of using a
firearm during the commission of a crime of violence, in violation of
18 U.S.C. § 924(c)(1). This court affirmed Jackson’s convictions on direct
appeal. United States v. Jackson, 248 F.3d 1028, 1029, 1032 (10th Cir. 2001).
Jackson then filed the instant § 2255 motion, asserting that his trial and appellate
counsel were constitutionally ineffective. The matter was referred to a magistrate
judge for initial proceeding pursuant to 28 U.S.C. § 636(b) and Rule 8(b) of the
Rules Governing Section 2255 Proceedings for the United States District Courts.
The magistrate judge concluded that an evidentiary hearing was necessary to
resolve Jackson’s § 2255 motion and, therefore, appointed counsel to represent
Jackson. See Rule 8(c) of the Rules Governing Section 2255 Proceedings for the
United States District Courts (“If an evidentiary hearing is warranted, the judge
must appoint an attorney to represent a moving party who qualifies to have
counsel appointed under 18 U.S.C. § 3006A.”).
After conducting an evidentiary hearing, the magistrate judge entered an
extensive and well-reasoned report, which recommended that the district court
deny Jackson’s motion. The magistrate judge concluded Jackson’s account of the
events surrounding his plea negotiations and the presentation of his defense at
trial was not credible. As to the plea negotiations, the magistrate judge found: (1)
-2-
Jackson had never been offered a plea wherein he would plead guilty to the
weapons charge and the government would dismiss the kidnapping charges and
(2) counsel had adequately discussed the likely Guidelines sentence with Jackson
should Jackson proceed to trial and be convicted. As to counsel’s conduct at trial,
the magistrate judge found: (1) counsel investigated all plausible lines of defense
and was ready at trial to present his chosen defense; (2) counsel effectively cross-
examined prosecution witnesses; (3) counsel reviewed all discovery provided by
the prosecution and other documents obtained independently by the defense team;
(4) counsel did not arbitrarily agree with the prosecution to limit the length of the
trial; (5) counsel did pursue mental state defenses, the only viable defense
theories supported by the evidence; (6) counsel’s refusal to object to minor
matters at trial was a strategic decision and Jackson failed to identify any
prejudice flowing from the decision; and (7) it was Jackson’s decision not to
testify at trial. Finally, the magistrate judge concluded appellate counsel was not
ineffective in failing to raise non-meritorious issues on appeal.
Despite a warning in the magistrate judge’s report and recommendation that
failure to file timely objections with the district court would waive appellate
review of both legal and factual determinations, no objections were filed.
Accordingly, the district court adopted the report and recommendation and denied
Jackson’s § 2255 motion. In response, Jackson personally filed a belated request
-3-
for extension of time to file objections to the report and recommendation. The
district court denied the request, noting that the Tenth Circuit strictly adhered to
the ten-day rule for objecting to a magistrate judge’s report and recommendation
and that Jackson’s counsel could have filed objections or a request for an
extension, but had decided not to do so.
This court has adopted a “firm waiver rule when a party fails to object to
the findings and recommendations of the magistrate” judge. Moore v. United
States, 950 F.2d 656, 659 (10th Cir. 1991). This rule does not apply, however,
when (1) a pro se litigant has not been informed of the time period for objecting
and the consequences of failing to object, id., or (2) the interests of justice require
review, Wirsching v. Colorado, 360 F.3d 1191, 1197 (10th Cir. 2004). Neither of
the exceptions to the firm waiver rule apply in this case. Jackson did not proceed
pro se in the district court, but was instead represented by appointed counsel. Nor
do the interests of justice require review. The magistrate judge thoroughly
analyzed Jackson’s motion and, after conducting an evidentiary hearing at which
it found Jackson’s testimony lacking in credibility, recommended that Jackson’s
motion be denied. This court observes no fundamental or obvious error in the
report and recommendation that would support disregarding the firm waiver rule.
-4-
Jackson’s request for a COA is DENIED and this appeal is DISMISSED.
Entered for the Court
PATRICK FISHER, Clerk of Court
By
Deputy Clerk
-5-
| {
"pile_set_name": "FreeLaw"
} |
RECOMMENDED FOR FULL-TEXT PUBLICATION
Pursuant to Sixth Circuit Rule 206
File Name: 07a0443p.06
UNITED STATES COURT OF APPEALS
FOR THE SIXTH CIRCUIT
_________________
X
Plaintiff-Appellee, -
UNITED STATES OF AMERICA,
-
-
-
No. 06-3288
v.
,
>
DAVID GARNER, -
Defendant-Appellant. -
N
Appeal from the United States District Court
for the Northern District of Ohio at Cleveland.
No. 05-00392—James S. Gwin, District Judge.
Argued: April 17, 2007
Decided and Filed: November 7, 2007
Before: MERRITT and GRIFFIN, Circuit Judges; LAWSON, District Judge.*
_________________
COUNSEL
ARGUED: Edward G. Bryan, FEDERAL PUBLIC DEFENDER’S OFFICE, Cleveland, Ohio, for
Appellant. Kelly L. Galvin, ASSISTANT UNITED STATES ATTORNEY, Cleveland, Ohio, for
Appellee. ON BRIEF: Edward G. Bryan, Vanessa F. Malone, FEDERAL PUBLIC DEFENDER’S
OFFICE, Cleveland, Ohio, for Appellant. Kelly L. Galvin, Laura McMullen Ford, ASSISTANT
UNITED STATES ATTORNEYS, Cleveland, Ohio, for Appellee.
MERRITT, J., delivered the opinion of the court, in which LAWSON, D. J., joined.
GRIFFIN, J. (pp. 10-12), delivered a separate dissenting opinion.
_________________
OPINION
_________________
MERRITT, Circuit Judge. David Garner appeals his conviction after a jury trial for one
count of carjacking pursuant to 18 U.S.C. § 2119(1) and one count of using a firearm during a crime
of violence in violation of 18 U.S.C. § 924(c). Specifically, Garner contends that the district court
erred in denying his motion for a new trial based on a violation of Brady v. Maryland arising from
the government’s failure timely to turn over cell phone records prior to trial. Alternatively, Garner
*
The Honorable David M. Lawson, United States District Judge for the Eastern District of Michigan, sitting
by designation.
1
No. 06-3288 United States v. Garner Page 2
contends that the district court erred in denying his motion for a continuance to allow him time to
investigate the information contained in the cell phone records.
This appeal raises a possible issue of mistaken identity. Defendant was convicted of
carjacking based primarily on the testimony of (1) his codefendant, Bryce Smith, who, because he
pled guilty and did not go to trial, had motivation to lie about both his role in the carjacking and the
identity of his co-hijacker to minimize his role and possibly to exonerate his friend, Deandrew
Foster, who may have been Smith’s actual accomplice in the carjacking and (2) Shalonda Melton,
the former girlfriend of codefendant Bryce Smith. Ms. Melton maintained a close relationship with
Smith and had the motivation to lie both to help minimize the role of her ex-boyfriend, Bryce Smith,
in the carjacking and to help their friend Deandrew Foster by implicating David Garner, whom she
did not know, as the co-hijacker instead of Foster.
A cell phone belonging to the victim was in the truck at the time it was stolen and was used
to make and receive calls by the hijacker or hijackers. Garner’s counsel did not have timely access
to the cell phone records that may well have impeached the testimony and credibility of Shalonda
Melton and cast doubt on her identification of Garner as the co-hijacker. These records were in the
government’s possession for five days before they were turned over to Garner’s counsel the morning
the trial began. Recognizing the importance of the cell phone records to identify who was in the
truck and using the stolen cell phone, Garner’s counsel requested a continuance of trial to investigate
further the outgoing and incoming calls on the stolen cell phone. The district court denied the
motion for a continuance without giving adequate reasons for why a short continuance to allow
Garner’s counsel to investigate the cell phone records was unreasonable. The cell phone records
provided strong evidence to support defendant’s theory that he had been framed by Melton, Smith
and Foster.
For the following reasons, we reverse the judgment of the district court and remand with
instructions to conduct a new trial.
I.
Defendant David Garner was charged along with Bryce Smith of a vehicle theft that occurred
on May 10, 2005, in violation of 18 U.S.C. § 2119 and use of a firearm during a vehicle theft in
violation of 18 U.S.C. § 924(c). Garner alone was also charged with vehicle theft in a separate
incident that occurred on June 4, 2005. The two thefts were tried together in a jury trial that began
on November 7, 2005. Garner was found not guilty of the June 4 theft, but the jury could not reach
a verdict regarding the May 10 theft and the firearm charge. On November 9, during the first trial,
Smith changed his plea to guilty. Retrial on the two remaining counts against Garner was set for
November 21, 2005, 11 days after the end of the first trial. The facts that follow come from the
testimony given at the second trial.
Shortly after midnight on May 10, 2005, Kareem Dotson of Cleveland, Ohio, was carjacked
by two men in the driveway of the home of his girlfriend, Shalonda Melton. Dotson had arrived at
Melton’s home about 11 p.m. after she called him and asked him to come over after work. Dotson
stayed only about an hour and then Melton accompanied him to the side door of her house and she
watched him walk to his truck in the driveway. Before Dotson could unlock his truck, a masked
man ran from the back of the house and hit Dotson on the head with a gun. The attacker forced
Dotson to the ground at gunpoint and started to go through his pockets. The attacker took Dotson’s
cell phone and $10 cash.
Melton then noticed a second person on the back porch of the house who had his shirt pulled
over his face. Melton testified that this person was also armed. Melton testified that she recognized
the second individual as her former boyfriend, Bryce Smith. Smith then held a gun on Dotson while
No. 06-3288 United States v. Garner Page 3
the other attacker continued to rifle through Dotson’s pockets. At this point, Melton’s younger sister
emerged from the house and started to yell “Stinker stop! Stinker stop!” She believed the initial
attacker to be her ex-boyfriend, Deandrew Foster. Both Melton and her sister testified that they
initially thought the other person was Foster because Smith and Foster are “always together.” At
this point, Melton testified that Smith said “I can’t do this,” and walked away.
Melton, thinking the other person was Foster, tried to take the truck keys away from him and
told him to “quit playing.” The person pulled his mask off and pointed the gun at Melton telling her
that his name was “Pel Pel” not Foster. Melton testified that she was not acquainted with Pel Pel
but only knew who he was because he was from the neighborhood. Several witnesses testified that
defendant David Garner is known as “Pel Pel” in the community. Melton gave the assailant the
truck keys and she testified that he drove away alone in Dotson’s truck. The truck was not recovered
until October 25, 2005, more than four months after the carjacking.
Melton went into her home and called 911 on her cell phone. The call was recorded. Melton
told the 911 operator that her boyfriend had been “gunned down.” She explained at trial that what
she meant by this was that Dotson had been robbed at gun point. She initially told the operator that
she did not know the carjacker’s name, but her sister can be heard in the background saying “His
name is Pel Pel” and Melton eventually told the operator that the carjacker’s name was Pel Pel. She
never identified or mentioned the name of Bryce Smith, her former boyfriend, or in anyway
indicated that a second person had been involved.
The victim, Kareem Dotson, also testified. After being robbed, he ran down the street, away
from Melton’s house and called 911 from a friend’s cell phone. He initially identified his attackers
to both his friend and to the 911 operator as Smith and Foster. He believed the attackers to be Smith
and Foster based on hearing Melton and her sister address the two attackers and his knowledge that
Smith and Foster were always together. Although he testified that he heard the name “Pel Pel”
during the carjacking, he did not give this name to the 911operator as one of his attackers. Dotson
testified that he did not see the face of the first attacker because the attacker had something covering
his face (J.A. at 150, 154-55), but that he did see the second attacker and identified him as Bryce
Smith. Dotson testified that he “can’t say for sure” that his first attacker was Garner. (J.A. at 156-
57) Dotson did not change his story and identify the second attacker as “Pel Pel” until after he had
spoken with Shalonda Melton later that night when she told him the attacker was “Pel Pel,” not
Deandrew Foster.
During the first trial, Bryce Smith pled guilty and he testified for the government at Garner’s
retrial. Smith testified that his mother and brother picked him up from work on the night of the
attack and on the way home they passed Melton’s house, which is in his neighborhood. He saw a
truck with “nice-looking” rims in her driveway. Smith testified that he knew it was Dotson’s truck
because Melton had told him what kind of truck Dotson owned and he knew that Dotson and Melton
were dating. He testified that he was still friends with Melton and that she had called him twice at
work earlier that day and asked him to come over that evening.
Smith testified that after going home briefly, he went “cruising” in a nearby housing project.
Smith said that although Foster was at his house when he arrived home, Foster did not accompany
him. Smith also testified at trial that it was a weekend night, but in fact it was a Tuesday night.
Smith testified that he encountered Garner at the projects, who was drunk and had a gun. He told
Garner he had a “lick,” which means he knew a way to make some money, usually by stealing.
Garner agreed to accompany Smith. The two men then went to Melton’s house and waited for the
owner of the truck to leave, even though Smith testified that he did not know when, or even if, the
truck’s owner would emerge from Melton’s house.
No. 06-3288 United States v. Garner Page 4
FBI Special Agent Douglas Williams testified at the second trial that on Wednesday,
November 16, 2005, he received Dotson’s cell phone records for May 9 and 10, 2005. The
government had been trying for several months to obtain the records from Nextel and had issued
three subpoenas before receiving the records. The records contained a list of incoming and outgoing
phone calls for the hours immediately before and after the midnight carjacking. The records listed
only the numbers, not the name of the subscribers to the numbers. Agent Williams began to call the
numbers in an attempt to find out if subscribers to the numbers knew David Garner. He asked only
about Garner; he did not ask the people he was able to contact if they knew Bryce Smith, Deandrew
Foster, “Stinker” (Foster’s nickname) or anyone else. (J.A. at 338-44)
The records were turned over to the defense at the start of the second trial on Monday,
November 21, 2005, five days after the government received them. Garner’s lawyer filed a motion
in limine at the start of trial concerning the phone records on the ground of the late disclosure. He
argued that if they had been provided earlier to him, he, like the government, could have learned the
names of the people associated with the numbers and possibly learned relevant information about
the identity of the person who stole the phone and used it that night. The district court tentatively
denied the motion provided that the government disclose to the defense the names of 1any people
identified as placing or receiving a call on the cell phone during the relevant time period. In accord
with the district court’s directive, the government provided counsel with several names
corresponding to numbers on the phone record and explained that it was unable to obtain names for
the remaining numbers because the information was “too old to retrieve.” One of the numbers on
the record during the relevant time period was that of Shalonda Melton’s cell phone, but her name
was not one of the names identified to Garner’s counsel before the start of the trial. The record does
not reflect that Melton ever told anyone that she had called Dotson’s cell phone and spoken with
someone after the carjacking, leaving the phone record as the only evidence of this call.
The government introduced the phone records through Dotson so he could identify any
numbers familiar to him. Garner’s lawyer renewed his objection to admitting the records and also
requested a continuance of trial to allow him time to research the phone numbers in the records. The
objection was overruled and the motion for continuance denied. In denying the request for a
continuance, the district court stated that the government had “provided in a timely fashion what
they have. It’s just . . . they didn’t get it until late.” J.A. at 160-61. The court told the defense that
it could do whatever research it needed during the trial and that night and allowed the introduction
into evidence of one page containing the relevant time period of the multi-page phone records.
The government introduced the phone records to show that Dotson’s stolen cell phone had
been used to call a Yolanda Gott. Ms. Gott was the roommate of Jennifer Love, a woman with
whom Garner had an “intimate” relationship, as described by Ms. Love. Ms. Love did not have a
cell phone and Garner sometimes called Gott’s cell phone to reach Love, although Love testified that
Garner also frequently called her land line phone or just stopped by her house without first calling.
The call made to Ms. Gott’s cell phone that night shows that the call lasted for 0 minutes, indicating
the call did not connect. Love testified that in addition to knowing Garner, she also knew Bryce
Smith. She testified that she did not know Deandrew Foster or anyone named “Stinker.”
Dotson, who testified after Melton, then identified numbers in the records he knew, including
a call from Melton’s cell phone to Dotson’s cell phone while it was in the possession of the person
or persons who took the phone. The conversation lasted about three and one-half minutes. Because
Dotson testified after Melton, defense counsel was unable to cross-examine Melton about the call
and the record does not reflect to whom she spoke during those three and one-half minutes or about
1
Dotson had the service to his cell phone turned off within a few hours of the carjacking.
No. 06-3288 United States v. Garner Page 5
the substance of the conversation. As to the call to Yolanda Gott’s phone, Dotson testified that he
did not know Gotts or Love.
All testimony was concluded that day leaving only closing arguments for the next morning.
During jury deliberations the jury asked for “the phone numbers of Shalonda Melton and Kareem’s
friend Greg who were called from Kareem’s cell phone . . . , and any other phone numbers whose
owner is known that was presented as evidence.” J.A. at 363. The court denied the request, telling
the jury it “need[ed] to rely upon . . . its own recollection as to what the evidence was.” The jury
entered a verdict of guilty on both counts and Garner appealed to this court.
II.
Garner first argues that the government’s failure to disclose the cell phone records in a timely
manner constitutes a violation of Brady v. Maryland, 373 U.S. 83 (1963), thereby requiring a new
trial pursuant to Federal Rule of Civil Procedure 33 based on newly-discovered evidence. A district
court may grant a new trial pursuant to Rule 33 “if the interest of justice so requires.” Specifically,
Garner contends that by failing to turn over the phone records before trial, he was denied the
opportunity to put on a complete defense. He was unable to contact subscribers listed on the record
to ask if they knew Bryce Smith, Deandrew Foster, anyone named “Stinker” or any other relevant
information. The late disclosure of the records also prevented him from identifying Shalonda
Melton’s three and one-half minute phone call to the stolen cell phone, thereby denying him the
opportunity to try to impeach Melton’s testimony and question her credibility.
Pursuant to Brady, “the suppression by the prosecution of evidence favorable to an accused
upon request violates due process where the evidence is material either to guilt or punishment,
irrespective of good faith or bad faith of the prosecution.” 373 U.S. at 87. Likewise, Brady also
applies to the failure to disclose evidence affecting the credibility of a witness whose “reliability . . .
may . . . be determinative of guilt or innocence.” Giglio v. United States, 405 U.S. 150 (1972).
Brady requires a showing that there is a “reasonable probability” that had the evidence been timely
disclosed to the defense the outcome would have been different. See United States v. Blood, 435
F.3d 612, 627 (6th Cir. 2006) (delay may violate Brady when the delay itself causes prejudice). If
previously undisclosed evidence is disclosed during trial, no Brady violation occurs “unless the
defendant has been prejudiced by the delay in disclosure.” United States v. Word, 806 F.2d 658, 665
(6th Cir. 1986).
Courts consider undisclosed evidence material “if there is a reasonable probability that, had
the evidence been disclosed to the defense, the result of the proceeding would have been different.”
United States v. Bagley, 473 U.S. 667, 682 (1985). A “reasonable probability” is a probability
sufficient to undermine confidence in the outcome. United States v. Hawkins, 969 F.2d 169, 175
(6th Cir. 1992).
The cell phone records are material because the person or persons who attacked Kareem
Dotson and took his truck also had his cell phone, which was taken from Dotson’s pocket during the
attack. The cell phone was used to make and receive calls during the time it was out of Dotson’s
possession, presumably by the person or persons who attacked Dotson and took his truck. The
failure of the government to turn over the records within a time frame that would allow Garner’s
counsel to investigate them prejudiced defendant. The government’s characterization of the
evidence of Garner’s guilt as “overwhelming” is incorrect.
The identifications of Garner as the perpetrator by Dotson, Smith, Melton and Melton’s sister
are all subject to question. Melton and her sister may have had personal motives to identify Garner,
a stranger to them, instead of their friends and ex-boyfriends, Bryce Smith and Deandrew Foster.
Melton also had inconsistencies and omissions in her stories, some of which are related below, that
No. 06-3288 United States v. Garner Page 6
call her credibility into question. Smith, as a codefendant, may have been trying to minimize his
role by placing most of the blame on Garner; in fact, asked Melton at one point not to identify him
at all. Dotson conceded at trial that he never saw the first attacker’s face and relied primarily on
what Melton told him after the carjacking about his attacker’s identity.
Shalonda Melton’s testimony was the primary evidence tying Garner to the crime, but when
she first spoke with the 911 operator she said she did not know who the perpetrator was. Later in
the conversation she identified the perpetrator as “Pel Pel,” but she never told the 911 operator about
her friend Bryce Smith’s involvement. Melton concedes that when she saw Bryce Smith in her yard
during the attack she presumed the other man was Deandrew Foster. Kareem Dotson testified that
he also thought his attackers were Bryce Smith and Deandrew Foster and those are the two names
he gave to the 911 dispatcher when he called from a friend’s house after the attack. He also testified
that he never saw his attacker’s face. His only knowledge that his attacker was Garner came from
Melton, who told him later that night that the attacker was “Pel Pel” after he asked “Was it Stinker?”
Several other facts also demonstrate that the evidence against Garner is weak. The
government makes much of the fact that two phone calls were made from Dotson’s cell phone to a
Yolanda Gott after Dotson’s attacker took his cell phone. The calls are both recorded as outgoing
at 1:43 a.m.: one of the calls never connected and the other lasted only .13 minutes, making it
unlikely that anyone answered the phone. Yolanda Gott’s roommate, Jennifer Love, was a girlfriend
of Garner’s. Love did not have a cell phone and Love testified that Garner would sometimes call
her on Gott’s phone. On cross-examination, however, Love testified that she also knew Bryce
Smith.
In addition, Agent Williams testified that the fingerprints on Dotson’s truck when it was
recovered did not match Garner’s, but the government never compared the prints to Bryce Smith or
Deandrew Foster. Agent Williams testified that based on Shalonda Melton’s testimony he believed
that only Garner was in the truck when it was stolen and he could not justify investigating anyone
else’s involvement. J.A. at 338-44. Garner had been wanted by the police before the carjacking
and, once he was identified by Melton as the attacker, it is clear that the police ceased investigating
any other suspects or probing the witnesses’ stories too deeply.
Due to the relative weakness of the identification of Garner and the government’s heavy
reliance on the testimony of Melton to convict Garner, Melton’s credibility was paramount. The
importance of the denial of an opportunity to impeach this witness cannot be overstated. Had
Garner been able to impeach Melton’s testimony by demonstrating that she made a three and one-
half minute call to Dotson’s cell phone after the carjacking, the verdict may have been different.
Melton testified that she never talked to Garner after the carjacking, yet the phone records
demonstrate that she placed a three and one-half minute call to Dotson’s phone after the carjacking,
so she either talked to Garner or to someone else who had Dotson’s phone. She never mentioned
this phone call in any of her recitations of the events of that evening. Had Garner’s counsel been
given time to investigate the records, he may have been able to impeach Melton’s credibility by
demonstrating the discrepancy between her testimony and the evidence of the call in the phone
records or perhaps even argued that the evidence was exculpatory by suggesting that it was Bryce
Smith she was actually talking to that night and not Garner because Garner was never in the truck
and was not involved in the carjacking.
The district court also found that because the prosecution did not get the records until just
before trial they could not have been turned over earlier. Although the prosecution may not have
received the phone records until shortly before the start of trial, the records were in the possession
of law enforcement investigators since the previous Wednesday, five days before the start of trial.
This possession is imputed to the prosecution regardless of whether it had actual possession of the
records. The government used those five days to check the phone numbers to try to make
No. 06-3288 United States v. Garner Page 7
connections to Garner and concedes that it took “an extensive amount of time” to check the phone
numbers in the records. The defense should have been afforded at least the same amount of time
to conduct its own investigation, particularly because the FBI investigator concedes that he only
asked about connections to David Garner – he did not ask any questions about connections to Bryce
Smith, Deandrew Foster or any other individuals. J.A. at 158-61. When asked about this, he
testified that he couldn’t justify asking about anyone else because there was no evidence to support
that it was anyone but Garner alone in the truck. J.A. at 338.
The government also points out that during his testimony, Kareem Dotson identified
Shalonda Melton’s cell phone number on the log. However, Dotson testified after Melton, so the
only way to question Melton would be to request that the court recall her so Garner’s counsel could
ask about the call. However, Garner’s counsel may have been reluctant to recall the government’s
key witness and ask crucial questions relating to his client’s case without the ability to do his own
investigation first. As he explained to the court, he should not be prejudiced by the government’s
violation of the discovery order for failure timely to turn over the records; he was entitled to conduct
his own investigation into the records and should not be forced to rely solely on the government’s
one-sided investigation.
The government also states that Shalonda Melton’s cell phone number had been revealed
during the first trial so Garner’s counsel should have recognized it in the phone records, despite the
fact that it was buried on a log of multiple pages with many other numbers. The government also
argued that Melton’s number was in the record from the first trial and therefore should have been
accessible to Garner’s counsel during the second trial. However, Garner’s counsel had not yet
received the transcript from the first trial, despite putting in an expedited order with hopes of
receiving it before the second trial. Given that the issue of the cell phone records was not present
in the first trial and Garner’s counsel had no other way of knowing at the time that Melton had
spoken with the person who had Dotson’s cell that night, he would have had no reason to record or
recall Melton’s cell phone number from the first trial.
By failing to turn over the records sooner, Garner did not receive a fair trial. Defendant’s
theory at trial was that Bryce Smith and Deandrew Foster committed the crime together and Garner
was not involved in any way. The defense argued that Smith and Shalonda Melton, who had been
romantically involved previously, lied about the events to protect Smith and Foster, who used to date
Melton’s sister. The defense also implied that Shalonda Melton may have set up Kareem Dotson
to be robbed by calling Smith earlier in the day and telling him that Dotson would be at her house
that evening and leaving around midnight. This theory has some support in that Melton talked to
Smith by phone earlier in the day of the carjacking and apparently talked to Smith by phone after
the carjacking as well, despite the fact that the two were no longer dating. She also called Dotson
around 11 p.m. to invite him to her house only to tell him to leave an hour after he arrived.
That a reasonable probability existed that the outcome of the trial might have been different
had Garner been able to investigate the cell phone records before trial is demonstrated by the fact
that the jury sent out a question during deliberations asking about Shalonda Melton’s cell phone
number. This request shows that the jury recognized the importance of the cell phone records to
Garner’s guilt case. Had Garner’s counsel had the information in a timely manner, Garner’s defense
could have been more complete and the credibility of Shalonda Melton, the key government witness,
likely diminished.
III.
Alternatively, even if the late disclosure of the cell phone records does not amount to a Brady
violation, the denial of the request for a continuance to enable Garner’s counsel to conduct the
necessary investigation into the records was an abuse of discretion warranting a new trial. We
No. 06-3288 United States v. Garner Page 8
review denial of a motion for a continuance for abuse of discretion. Ungar v. Sarafite, 376 U.S. 575,
589 (1964); United States v. Crossley, 224 F.3d 847, 854 (6th Cir. 2000). To demonstrate reversible
error, the defendant must show that the denial resulted in actual prejudice to his defense. Actual
prejudice can be shown if the continuance “would have made relevant witnesses available or added
something to the defense.” See, e.g., United States v. King, 127 F.3d 483, 487 (6th Cir. 1997)
(emphasis added); United States v. Frost, 914 F.2d 756, 765 (6th Cir. 1990) (citing United States
v. Wirsing, 719 F.2d 859, 866 (6th Cir. 1983)).
As the Supreme Court instructs, “[t]here are no mechanical tests for deciding when a denial
of a continuance is so arbitrary as to violate due process. The answer must be found in the
circumstances present in every case, particularly in the reasons presented to the trial judge at the
time the request is denied.” Ungar, 376 U.S. at 588-91. The question before the district court judge,
and the question that now faces us, was whether admission of the cell phone records by the
government without giving Garner adequate time to review the same records might have so affected
the defensive ability of Garner’s counsel as to necessitate a continuance to enable additional
preparation and ensure a fair trial. A reasonable time for adequate preparation of the accused’s
defense is the first essential of trial fairness, Ungar, 376 U.S. at 588-91; United States v. Ploeger,
428 F.2d 1204, 1205-06 (6th Cir. 1970), and “a myopic insistence upon expeditiousness in the face
of a justifiable request for delay can render the right to defend with counsel an empty formality.”
Ungar, 376 U.S. at 589.
At trial, the district court erroneously found that “defense counsel had adequate time to
investigate each of the numbers . . . and could have discovered that one of the numbers belonged
to Melton through numerous sources,” including web-based cell phone directories. FBI Agent
Williams had the records for five days and was able to identify only some of the subscribers during
that time; it is difficult to see how a defense lawyer with a trial starting immediately would have
time properly to investigate the records without neglecting the trial. Garner’s counsel did have an
investigator start to look at the records right away, but one day was not enough time for the
investigator to identify and call the numbers on the log. In an argument that actually bolsters
Garner’s point in this regard, the government attorney countered that the reason the government did
not know the subscribers to all the numbers was because the “subscriber information [is] too old to
retrieve.” She went on to explain how difficult it was for Agent Williams to obtain the information
from the cell phone company and that is why the information was received so late. If even the FBI
could not get the subscriber information timely and easily, it is difficult to see why the trial judge
ruled that Garner’s attorney should be able to get the information within a day.
This ruling did not adequately consider the time pressures faced by counsel during a one-day
trial: we see no way Garner’s counsel could have given his full attention to the trial and investigated
the phone records at the same time. Furthermore, contrary to the district court’s recommendation
to Garner’s counsel that he use a web-based cell phone directory, we know of no accurate web-based
cell phone directories that are easily accessible to the public – the only way counsel could have
adequately investigated the records was through old-fashioned foot work and calling of each of the
numbers on the log.
Due to the importance of the phone records, Garner’s counsel was entitled to time to
investigate the records. A short continuance – perhaps only of a week – would have been adequate.
Garner’s counsel argues that had he had access to the phone records for the five days that Agent
Williams had them without disclosing them, he would have investigated other potential connections
between individuals listed on the phone records and Smith, Foster and Melton. For the same reasons
discussed in more detail above, Garner was prejudiced by the failure to obtain a continuance to allow
more time to fully investigate the cell phone records and put on a complete defense, including the
possible impeachment of a key witness.
No. 06-3288 United States v. Garner Page 9
Here, we are left with the firm conviction that a continuance would not have been
burdensome on the government or the trial court while it would have provided the defendant with
an opportunity to prepare an adequate defense against the government’s entire case against him –the
arguably suspect testimony of Smith and Melton. The cell phone records could have been reviewed
and an important defense theory possibly bolstered had a short continuance been granted. Under
the circumstances it was an abuse of discretion not to do so.
CONCLUSION
It is clear that the police investigation was conducted in a manner to support what the police
believed – that David Garner was the primary attacker in this carjacking. This belief arose based
almost solely on Shalonda Melton’s identification of Garner as the attacker, despite her possible
motive to protect two friends well known to her – her former boyfriend, Bryce Smith, and her
sister’s former boyfriend, Deandrew Foster. Given the initial uncertainty of the identity of the
attacker by all the witnesses, combined with Melton’s possible motivation to protect two friends at
the expense of someone unknown to her, the opportunity to fully investigate the phone records may
have provided counsel valuable evidence to exonerate his client or to at least raise a reasonable
doubt as to his guilt.
For the foregoing reasons, the judgment of the district court is reversed and the case
remanded for a new trial.
No. 06-3288 United States v. Garner Page 10
_______________
DISSENT
_______________
GRIFFIN, Circuit Judge, dissenting. I respectfully dissent.
Contrary to the majority’s characterization, the evidence that defendant Garner was the
carjacker was not “weak,” but overwhelming. Specifically, the proofs included: (1) co-defendant
Bryce Smith’s testimony that he and Garner committed the carjacking; (2) Shalonda Melton’s
eyewitness identification of defendant as the carjacker; (3) Kareem Dotson’s and Melton’s testimony
that the carjacker identified himself as “Pel Pel”; (4) the testimony of several witnesses that
defendant is known commonly in the community as “Pel Pel”; and (5) the cell phone record that
the carjacker called a roommate of Garner’s girlfriend.
Also, the majority erroneously concludes that “[b]ecause Dotson testified after Melton,
defense counsel was unable to cross-examine Melton about the call . . . .” Although Dotson testified
after Melton, defense counsel was free to recall Melton to testify during defendant’s case. See e.g.
United States v. Schnapp, 322 F.3d 564, 572 (8th Cir. 2003), and United States v. Orlando-Figueroa,
229 F.3d 33, 46-47 (1st Cir. 2000). Defense counsel could have recalled Melton and made a motion
to limit the scope of her testimony on recall, but chose to do neither. On appeal, Garner does not
claim ineffective assistance of counsel.
My colleagues hold that a Brady v. Maryland, 376 U.S. 83 (1963), violation occurred
because the police possessed the cell phone records for five days before they were given to defense
counsel, and had they been timely1disclosed, a “reasonable probability” existed that the jury would
have rendered a different verdict. I disagree with both conclusions. First, I view the disclosure
within five days to be timely. On this issue, I agree with the ruling of the district judge:
Dealing first with the issue of timeliness, the prosecution could have disclosed the
phone records to defense counsel at a slightly earlier date. However, the delay was
not egregious, as the government itself did not obtain the phone records until five
days before the second trial. Moreover, the government maintains that it was
unaware of any potential evidentiary value, let alone any exculpatory value, that the
records may have held until the day before the trial was to commence. When it did
determine that the records provided relevant evidence, the government provided
copies of the phone log to the defense.
It is noteworthy that the majority cites no authority that a five-day delay in providing records under
similar circumstances amounts to a Brady violation. Cf. United States v. Bencs, 28 F.3d 555, 561
(6th Cir. 1994) (“Brady generally does not apply to delayed disclosure of exculpatory information,
but only to a complete failure to disclose.”). “Delay only violates Brady when the delay itself causes
prejudice.” Bencs, 28 F.3d at 561 (quoting United States v. Patrick, 965 F.2d 1390, 1400 (6th Cir.
1992), vacated and remanded on other grounds 113 S. Ct. 1378 (1993)).
1
It is unclear whether the majority reviews the Brady issue de novo or for an abuse of discretion. See United
States v. Heriot, 496 F.3d 601 (6th Cir. 2007), and the cases cited therein, on the conflicting standards of review. Under
either standard, I would hold that the trial court did not commit error requiring reversal.
No. 06-3288 United States v. Garner Page 11
On the issue of prejudice, I also agree with the trial judge:
Evidence is considered material only if there is a “reasonable probability that, had
the evidence been disclosed to the defense,” the outcome would have been different.
Zuern v. Tate, 336 F.3d 478, 484 (6th Cir. 2003). The defendant is not necessarily
required to show that the introduction of the evidence in question would have led to
a different verdict. Rather, the appropriate inquiry is whether in the absence of the
evidence the defendant “received a fair trial, understood as a trial resulting in a
verdict worthy of confidence.” Kyles v. Whitley, 514 U.S. 419, 434 (1995). In the
instant case, the Court must answer this question in the affirmative.
Defense counsel, who was also trial counsel, has now possessed the cell phone records for
over twenty-two months. However, no newly discovered evidence was cited to the trial court or to
us on appeal that would affect the outcome of a new trial. Absent some showing of prejudice or
evidence that the verdict was not worthy of confidence, no error requiring reversal occurred in the
disclosure of the cell phone records. Kyles, 514 U.S. at 434.
Next, we review the denial of a motion for a continuance for an abuse of discretion. United
States v. Crossley, 224 F.3d 847, 854 (6th Cir. 2000). As the Supreme Court stated in Morris v.
Slappy, 461 U.S. 1, 11 (1982):
Trial judges necessarily require a great deal of latitude in scheduling trials. Not the
least of their problems is that of assembling the witnesses, lawyers, and jurors at the
same place at the same time, and this burden counsels against continuances except
for compelling reasons. Consequently, broad discretion must be granted trial courts
on matters of continuances. . . .
Although I might have granted defendant’s motion for a continuance, I cannot conclude that
the trial judge abused his discretion in refusing to do so. At oral argument, defense counsel
conceded that his investigator was available to assist him in evaluating the cell phone records. Thus,
even if defense counsel was preoccupied in the trial of this case, his investigator was not and had
over twenty-four hours to investigate the records. Before the conclusion of the trial, had defendant
thought that the time to investigate the records was inadequate, a second motion for a continuance
could have been filed. It was not.
Regarding the efforts of the defense investigator to track the persons to whom calls were
made or received, the trial judge made the following findings:
[D]efense counsel had adequate time to investigate each of the numbers that
appeared on the record for the relevant time period, and could have discovered that
one of those numbers belonged to Melton through numerous sources. For example,
defense counsel could have interviewed witnesses about their possible knowledge
of the numbers or consulted a web-based telephone directory. While Garner claims
that Defense Investigator Gambetta conducted an investigation into the numbers for
which the prosecution provided identification information, he gives no indication of
the investigator’s attempts to identify the holders of the remaining numbers. More
importantly, Defendant Garner fails to show that the investigator was unable, or
lacked the capability, to identify Melton’s number.
Moreover, defense counsel was aware from Melton’s testimony in the first trial that, on the
night of the carjacking, she spoke to co-defendant Smith, who asked her not to press charges. A
reasonable inference known to defense counsel, but never asked, is that the record of the call
between Melton and Dotson’s cell phone was this phone conversation between Melton and co-
No. 06-3288 United States v. Garner Page 12
defendant Smith. If an uncertainty exists on this factual issue, it arises from defense counsel’s
strategic decision not to ask the question.
For these reasons, defendant has failed to sustain his burden of establishing that the trial
judge abused his discretion in denying the motion for a continuance. Moreover, absent a showing
of prejudice, error, if any, in refusing to grant the motion is harmless error. FED. R. CRIM. P. 52(a);
Williams v. Stewart, 441 F.3d 1030, 1057 (9th Cir. 2006) (finding that district court did not abuse
its discretion in denying motion for continuance where petitioner did “not demonstrate[] that he
suffered prejudice as a result of the failure to grant the continuance”); HC Gun & Knife Shows, Inc.
v. City of Houston, 201 F.3d 544, 550 (5th Cir. 2000) (noting that appellate court “will not substitute
[its] judgment concerning the necessity of a continuance for that of the district court, unless the
complaining party demonstrates that it was prejudiced by the denial”) (internal quotations and
citation omitted); Ahern v. Scholz, 85 F.3d 774, 792 (1st Cir. 1996) (holding that “even if” the
district court abused its discretion in denying appellant’s motion for a continuance, “the error was
harmless”); see also United States v. Tinson, 23 F.3d 1010 (6th Cir. 1994) (holding that “any error
in [district court’s] granting the continuance was harmless”).
I would affirm and respectfully dissent. In my view, the reversal of defendant’s convictions
and remand for a new trial is an unwarranted futile exercise and a waste of valuable judicial
resources.
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395 So.2d 916 (1981)
Elizabeth BUSH et al., Plaintiffs-Appellants,
v.
STATE of Louisiana, Through the DEPARTMENT OF HIGHWAYS, Defendant-Appellee.
Cora MOCK et al., Plaintiffs-Appellants,
v.
STATE of Louisiana, Through the DEPARTMENT OF HIGHWAYS, Defendant-Appellee.
Claude DRODDY et ux., Plaintiffs-Appellants,
v.
STATE of Louisiana, Through the DEPARTMENT OF TRANSPORTATION AND DEVELOPMENT et al., Defendants-Appellees.
Nos. 14455 to 14457.
Court of Appeal of Louisiana, Second Circuit.
February 16, 1981.
Writs Refused April 27, 1981.
*917 Broussard, Bolton & Halcomb by Daniel E. Broussard, Jr., Alexandria, for plaintiffs-appellants, No. 14455.
Craven & Scott by John W. Scott, Alexandria, for plaintiffs-appellants, No. 14456.
D. G. Brunson, Jonesboro, for plaintiffs-appellants, No. 14457.
Philip K. Jones, Marshall W. Wroten, Robert J. Jones and Doran & Kivett by William J. Doran, Jr., Baton Rouge, for defendants-appellees.
Before PRICE, HALL and MARVIN, JJ.
PRICE, Judge.
These are consolidated tort suits in which the primary issue presented on appeal by appellants is whether the defendant-appellee, Department of Transportation and Development, Office of Highways of the State of Louisiana, was guilty of fault which was a legal cause of the automobile accident resulting in the deaths of David Bush and Lloyd Mock and injuries to Mrs. Dolline Droddy. Secondary issues include the negligence of David Bush and the amount of damages awarded to Mrs. Droddy.
*918 The accident occurred on U. S. Highway 167 in Winn Parish, Louisiana, approximately 3.4 miles north of Dodson on March 24, 1976, at approximately 12:45 p. m. A steady rain had fallen all day and it was raining at the time of the accident with some water accumulation on the road surface. Mrs. Droddy was driving north in the direction of her home in Wyatt on a return trip from Winnfield. Approaching Mrs. Droddy in the southbound lane was a 1972 Buick being driven by David Bush. The Bush vehicle suddenly spun to its left across the center line, striking the car driven by Mrs. Droddy. This collision resulted in the deaths of Bush and Mock, a passenger in the Bush vehicle, as well as the severe injuries sustained by Mrs. Droddy.
Mrs. Droddy, joined by her husband, brought suit against the estate of David Bush (who was uninsured) and the State of Louisiana through the Department of Transportation and Development, Office of Highways. (An original defendant, State Farm Mutual Automobile Insurance Company, was dismissed from the action.) The petition charged the highway department with negligence in failing to adequately maintain and repair the site in question which resulted in the formation of depressions and ruts in the highway which filled with water during a rain. The Droddys contend that these failures to maintain and repair resulted in a dangerous and defective condition which caused the injuries of which they complain. The Droddys' petition alternatively alleged that their damages were caused by the combined negligence of the highway department and David Bush. The alleged negligence of Bush consisted of failing to maintain control, crossing the center line, operating his car in an unsafe manner under the circumstances, and failing to see what he should have seen or drive as he should have driven.
The highway department answered the petition denying any negligence and claiming that the accident was caused solely by the negligence of Bush and Mrs. Droddy. The department filed a third party petition against the estate of Bush for contribution in the event it was cast for damages.
In a separate action Elizabeth Bush (widow of David Bush), appearing individually and as natural tutrix of seven minor children of the marriage between herself and decedent, joining with three other children of the marriage, brought suit against the highway department for the wrongful death of Bush allegedly caused by the negligence of the department. The department denied any negligence and alternatively contended that Bush was guilty of contributory negligence which was a bar to recovery.
In a third suit arising from this accident, Cora Mock (widow of the guest passenger in the Bush vehicle, Lloyd Mock) brought suit against the department in her own behalf and on behalf of one of her minor children seeking damages for the wrongful death of Lloyd Mock. Joining as parties-plaintiff in this suit were seven other children of the decedent, Lloyd Mock.
The department answered the Mock suit by denying liability and filing a third party demand against the Bush estate.
These three suits were consolidated for purposes of trial. After trial, the district court held that the sole cause of the accident was the negligence of Bush in operating his vehicle at a speed greater than was reasonable and prudent under the conditions existing at the time. Accordingly, judgment was rendered in favor of the highway department and against plaintiffs in all three cases rejecting their demands at plaintiffs' costs. Judgment was rendered in favor of Mrs. Droddy and against the Bush estate in the amount of $75,000 as compensation for her pain and injuries and in favor of Mr. Droddy in the sum of $6,849.50 in medical expenses and property damage.
From this judgment appeals were perfected by Mr. and Mrs. Droddy, the Bush estate, and the Mock heirs. The central issue on appeal is the alleged fault and liability of the highway department. Appellants specify that the district court erred in failing to find that (1) a dangerous situation existed at the scene of the accident as a result of the condition of the highway; (2) *919 this dangerous situation was a legal cause of the accident; (3) the highway department was negligent in failing to correct or warn motorists of the dangerous condition; or (4) the department is strictly liable for damages caused by the defective road which presented an unreasonable risk of injury to motorists.
U.S. Highway 167 had been resurfaced from Jonesboro south to the Jackson Parish line, and from Winnfield north to a point approximately two miles south of Dodson. The accident occurred on a section of the highway lying between the resurfaced areas which had not been resurfaced since 1960.
Rain had been falling all day and each lane of the highway near the scene of the accident contained depressions or ruts in which water had accumulated. Mrs. Droddy testified that she knew that the highway collected water in these ruts when it rained, and that a driver had to slow down and pay close attention. She stated that rain was still falling at the time of the accident. Mrs. Droddy testified she was going approximately 30 to 40 miles per hour immediately prior to the collision. Although she was knocked unconscious, she remembers seeing the Bush vehicle sliding sideways in its lane. Mrs. Droddy was watching her rearview mirror as she slowed down when the collision occurred.
Donnie Bonnette was traveling north behind Mrs. Droddy when the collision occurred. He testified that he had come to a stop in order to turn left as he watched the Bush vehicle "come over a little rise like deal and it looked like they just ... the car took off and flew in front of the lady and collided." Bonnette testified that he knew the Bush vehicle had hit the ruts filled with water because he could see water spray up on the windshield when they hit it. "It looked like all four wheels come off the ground and it just went over in the lady's lane. There wasn't nothing she could do but hit it."
Bonnette testified that he also was aware that the road held rainwater in the ruts when it rained, and that it was raining at the time of the accident. He stated that the ruts were clearly visible on the road surface and the highway contained these water-filled ruts all the way back to the Jackson Parish line. Bonnette testified that he was aware of several prior unreported accidents in which cars had left the road because of the water in the ruts. He testified that Mrs. Droddy was driving approximately 35 to 40 miles per hour, and that Bush appeared to be driving too fast under the conditions because he "lost control."
In an attempt to establish the speed of the Bush vehicle, both sides introduced experts in the fields of accident reconstruction and hydroplaning. Both Herman Warkentin and Dr. Don Ivey agreed that the most important variables utilized in determining the speed at which a car would hydroplane were tire pressure, tire tread depth, depth of water on the road, and texture depth of the pavement. However, the methods used by these experts to determine these variables and the application of them in arriving at the speed of the Bush vehicle at the moment it hydroplaned differed markedly.
Mr. Warkentin assigned a figure of .018 inch for the texture depth of the pavement based on the type of pavement at the accident scene as derived from a publication, whereas Dr. Ivey actually made silicone putty measurements of the pavement along the road surface north of the crash site and at the spot where the cars came to rest following the collision. Dr. Ivey's measurements revealed that the texture depth at the accident scene varied from .065 to .079 inches, or more than three times the texture depth figure used by Mr. Warkentin in arriving at the hydroplaning speed. This is significant because Dr. Ivey testified that the higher the texture depth, the faster a car has to be moving before it will hydroplane. Dr. Ivey utilized the lowest measured figure or .065 inches in his computation.
Both Mr. Warkentin and Dr. Ivey arrived at their figures for tire pressure and tire tread depth from published results of accident studies. However, Mr. Warkentin utilized *920 27 PSI as being the average tire pressure cited in the studies, whereas Dr. Ivey utilized 30 PSI as the most frequently observed tire pressure. Again, Mr. Warkentin used the average tire tread depth cited in the accident studies and Dr. Ivey used the most frequently observed.
Both experts utilized a cross sectional survey of the highway prepared by Richard Smith, civil engineer, in arriving at a figure for water depth. The survey showed that the depressions in the lane occupied by the Bush vehicle were as deep as .455 inches. Both Warkentin and Ivey made allowances for the fact that the depressions were slanted and tended to drain and traffic was continually splashing water out of the ruts. Warkentin assigned a depth of .25 inches and Ivey 1/8 inch to their respective computations of hydroplane speed. Warkentin calculated a minimum hydroplane speed of 48 miles per hour for the Bush vehicle. It was his opinion, however, that Bush was traveling between 45 and 50 miles per hour when his car began to hydroplane. Ivey's opinion was that the minimum speed Bush would have been traveling in order to hydroplane at the accident scene was 59 miles per hour.
Both experts again differed in their approaches at determining the speed of the two cars at impact. Mr. Warkentin first approximated the amount of energy expended in the deformation of the two vehicles by utilizing a method which was originated to determine closing speed of vehicles and not energy absorption. Dr. Ivey testified that the method used by Mr. Warkentin to determine energy absorption of the vehicles may have been "... the only way to go 20 years ago, but it is completely subjective and really based ... is based on the talent of the individual to imagine something happening. And the variation in that sort of a scheme is just incredible." Dr. Ivey arrived at his figures for the energy expended during the collision by the application of coefficients derived from many vehicle tests which in his opinion "represented the latest technique in determining energy losses during collisions."
Tuley Wells, highway maintenance superintendent for Winn Parish at the time of the accident, testified that the ruts or depressions in the highway were caused by the heavy trucks which used this particular stretch of road. Wells stated that his crews covered all roads in the parish and were aware of the depressions in this particular area of Highway 167. If the depressions became deep enough to warrant repair, Wells testified that his crews would place a "skin patch" over the rut. Wells stated that unless the depressions were approximately ½ inches deep, it was impractical to apply a patch because the patch itself would not adhere to the road surface unless it was ¾-1 inch thick. Applying a patch to a depression less than ½ inches deep resulted in a patch creating a high spot in the road. As Wells stated, "I mean, sometimes you are in worse shape after you finish up than you was before you started, but you try."
The following legal principles govern our resolution of this case:
... The law is settled that the Department of Highways is not responsible for every accident which may occur on the state highways, nor is it a guarantor of the safety of travelers thereon, or an insurer against all injury which may result from obstructions or defects in such highways.... Generally, it is the duty of the Highway Department to construct and maintain the highways in a condition reasonably safe for persons exercising ordinary care and reasonable prudence.... (citations omitted)
United States Fidelity and Guaranty Co. v. State, Department of Highways, 339 So.2d 780 (La.1976).
... However, reasonable care requires, and the Department does owe, a duty to the traveling public to erect barricades, signs and adequate markings to warn against extremely dangerous, trap-like hazards, unusual obstructions, perilous conditions or defects in the road.... Whether the warning is required, reasonable, or adequate is determined by the place where the danger exists, the nature of the road and the general situation and *921 circumstances surrounding it. All of these factors, together with the kind and speed of vehicles, are to be taken into consideration to determine whether the Department has discharged its duty.... (citations omitted)
Vervik v. State, Department of Highways, 302 So.2d 895 (La.1974).
There is no fixed rule for determining what is a dangerous defect in a public way; the facts and surrounding circumstances of each particular case control. The test usually applied, however, requires an answer to the question: Was the public way maintained in a reasonably safe condition for persons exercising ordinary care and prudence? ... (citations omitted)
Pickens v. St. Tammany Parish Police Jury, 323 So.2d 430 (La.1975).
The plaintiffs' evidence falls short of establishing the existence of a dangerous defect in Highway 167 at the scene of the accident. Rain collecting in depressions on an old highway is not an unusual situation. There is no evidence of any particular unusual defect or depression in the highway at the scene of the accident other than the same type of ruts and depressions found on this particular stretch from the Jackson Parish line north of the accident scene to an area some distance south of the site. Bush had already traveled a considerable distance south of the Jackson Parish line over the highway containing these ruts and must be deemed to have noticed that which was plainly visible to other motorists.
The trial judge accepted the opinion of Dr. Ivey that Bush was traveling at least 59 miles per hour at the moment he lost control as his car began to hydroplane. Although the two expert witnesses differed in their opinion as to the speed of the Bush vehicle, the trial judge accepted that of Ivey as being entitled to greater weight because of his training, experience, studies, and research. The record adequately supports this evaluation of the expert testimony by the trial judge. The trial judge receives expert testimony and assigns the weight to it he feels it deserves based on such factors as the qualification and experience of the witness. See e. g. Gleason v. City of Shreveport, 393 So.2d 827 (La. App.2d Cir.1981).
the most likely inference to be drawn from the evidence is that the accident resulted from Bush's failure to maintain control due to his driving too fast under the conditions prevailing at the scene of the accident and not from any defect or dangerous condition of the highway. Although the road surface was not perfect, it was capable of being negotiated during a heavy rain by persons prudently taking the necessary precautions. The testimony relating to prior accidents along the highway does not lend credence to the theory that the roadbed was defective because the location and cause of these accidents was not clearly established.
We conclude that the plaintiffs have failed to establish the existence of a dangerous condition or defect at the scene of the accident, or that any condition found in the road surface was a cause in fact of the accident. Consequently, there was no warning sign required and the absence of such warnings cannot be a legal cause of the accident. Cf. Petree v. Crowe, 272 So.2d 399 (La.App.2d Cir.1973), writ refused 274 So.2d 709 (La.1973). Accordingly, we affirm the trial court's holding absolving the department of highways of liability based on negligence.
The appellants contend that the department should be held liable even if no breach of duty is established. This contention is based on La.C.C.Art. 2317 which imposes liability without a showing of negligence on those who have a thing in their custody which causes damage to another.
Having concluded that the roadbed was not dangerous to motorists exercising ordinary care and prudence, it follows that there was not a defect presenting an unreasonable risk of injury to those motorists. Therefore, we hold that La.C.C.Art. 2317 is not a basis for imposing liability on the highway department in this case.
*922 The Bush and Mock appellants contend that the trial court erred in finding that David Bush was negligent in the operation of his vehicle.
La.R.S. 32:64 provides:
A. No person shall drive a vehicle on the highway within this state at a speed greater than is reasonable and prudent under the conditions and potential hazards then existing, having due regard for the traffic on, and the surface and width of, the highway, and the condition of the weather, and in no event at a speed in excess of the maximum speeds established by this Chapter or regulation of the department made pursuant thereto....
The record supports the trial court's conclusion that Bush was operating his car in a negligent manner. Mrs. Droddy and Mr. Bonnette both saw the ruts filled with water and slowed their speed accordingly. Regardless of the exact speed of the Bush vehicle when it began to hydroplane, the trial judge correctly held that the speed was greater than was reasonable and prudent under the circumstances. A motorist is under a duty to avoid such occurrences and maintain control by keeping a lookout for possible hazards that are plainly visible to those exercising ordinary care and observation. Sinitiere v. Lavergne, 391 So.2d 821 (La.1980). We are in accord with the trial court's conclusion that David Bush was negligent.
The last issue for our consideration concerns the damages awarded Mrs. Droddy. She contends that the damages awarded were inadequate. The trial judge summarized her damages as follows:
... Mrs. Droddy sustained severe, painful and permanent injuries in the accident. She received cerebral concussion with hematoma about both eyes; bruising of the anterior chest wall and abdomen, hematoma of the anterior wall, headache and lacerations and abrasions of the left forearm and both knees. As a result, she had retrograde amnesia and was unable to remember anything for some days after the accident. The headaches continued for almost one year, her thinking was "fuzzy" and she was unable to keep her mind on anything. She was still on prescribed medication and suffering from mental lapses on the day of the trial. She was forced to drop out of trade school, unable to perform household duties and suffered much anxiety from her memory lapses. Personality changes resulted.
The trial judge awarded Mrs. Droddy $75,000 as general damages for her injuries. This award is within the range of discretion which is vested in the trial court and we will not disturb that award. See Reck v. Stevens, 373 So.2d 498 (La.1979).
For the reasons herein assigned, the judgment appealed is affirmed in all respects. The costs of this appeal are to be assessed equally to all appellants.
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970 N.E.2d 628 (2008)
386 Ill. App.3d 1128
PEOPLE
v.
HINTON.
No. 3-07-0279.
Appellate Court of Illinois, Third District.
November 3, 2008.
Affirmed.
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172 F.3d 866
U.S.v.Arriola*
NO. 98-50349
United States Court of Appeals,Fifth Circuit.
February 04, 1999
Appeal From: W.D.Tex. , No.SA-96-CV-315
1
Affirmed.
*
Fed.R.App.P. 34(a); 5th Cir.R. 34-2
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IN THE COURT OF CRIMINAL APPEALS
OF TEXAS
NO. WR-78,270-01
EX PARTE RICKEY DON WILLIAMS, Applicant
ON APPLICATION FOR A WRIT OF HABEAS CORPUS
CAUSE NO. 17440-B IN THE 104TH DISTRICT COURT
FROM TAYLOR COUNTY
Per curiam.
O R D E R
Pursuant to the provisions of Article 11.07 of the Texas Code of Criminal Procedure, the
clerk of the trial court transmitted to this Court this application for a writ of habeas corpus. Ex parte
Young, 418 S.W.2d 824, 826 (Tex. Crim. App. 1967). Applicant pleaded guilty to possession of
marijuana in a drug free zone, and originally received ten years, probated. His probation was later
revoked, and he was sentenced to ten years' imprisonment. He did not appeal his conviction.
Applicant contends, inter alia, that his trial counsel rendered ineffective assistance because
counsel failed to investigate, failed to object to a defective indictment, and advised Applicant to
plead guilty. Applicant alleges that he would not have pleaded guilty but for counsel's erroneous
advice.
Applicant has alleged facts that, if true, might entitle him to relief. Strickland v. Washington,
466 U.S. 668 (1984); Ex parte Patterson, 993 S.W.2d 114, 115 (Tex. Crim. App. 1999). In these
circumstances, additional facts are needed. As we held in Ex parte Rodriguez, 334 S.W.2d 294, 294
(Tex. Crim. App. 1960), the trial court is the appropriate forum for findings of fact. The trial court
shall order trial counsel to respond to Applicant's claims of ineffective assistance of counsel. The
trial court may use any means set out in Tex. Code Crim. Proc. art. 11.07, § 3(d).
If the trial court elects to hold a hearing, it shall determine whether Applicant is indigent.
If Applicant is indigent and wishes to be represented by counsel, the trial court shall appoint an
attorney to represent Applicant at the hearing. Tex. Code Crim. Proc. art. 26.04.
The trial court shall first supplement the habeas record with copies of the plea documents in
this case, including the admonishments, waivers and stipulations, judicial confession, any evidence
introduced to support the plea, and any written plea agreement that exists. The trial court shall make
findings of fact as to how the quantity of marijuana that Applicant was charged with possessing was
determined, and as to how the drug free zone allegation was proved. The trial court shall make
findings as to whether the enhancement allegations charged in the indictment were abandoned or
waived by the State, and if so whether this was done as part of the plea agreement. The trial court
shall make findings of fact and conclusions of law as to whether the performance of Applicant's trial
counsel was deficient and, if so, whether counsel's deficient performance prejudiced Applicant. The
trial court shall also make findings of fact and conclusions of law as to whether Applicant's plea was
knowingly and voluntarily entered. The trial court shall also make any other findings of fact and
conclusions of law that it deems relevant and appropriate to the disposition of Applicant's claim for
habeas corpus relief.
This application will be held in abeyance until the trial court has resolved the fact issues. The
issues shall be resolved within 90 days of this order. A supplemental transcript containing all
affidavits and interrogatories or the transcription of the court reporter's notes from any hearing or
deposition, along with the trial court's supplemental findings of fact and conclusions of law, shall
be forwarded to this Court within 120 days of the date of this order. Any extensions of time shall
be obtained from this Court.
Filed: October 3, 2012
Do not publish
| {
"pile_set_name": "FreeLaw"
} |
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